Traders must develop and implement a business strategy which responds to today’s intensifying car market, says Glass’s.
Given that 2016 continues to outperform new car registration expectations and the used car market is now feeling greater pressure from the increase in used car stock volume, the importance of devising a comprehensive and competitive business strategy is essential.
For many senior management teams the plans agreed towards the end of 2015 are now looking a little off balance and flexibility is the key, as the World, European and UK economies evolve in less measurable ways.
For the UK motor trade, uncertainty and a level of confusion over Brexit has not helped matters either, with concerns growing over the real short and mid-term impact of significant political and commercial change.
With this in mind, the need for accurate market insight has never been greater and embracing business intelligence in the form of weekly and monthly market analysis must not be underestimated.
Understanding minor nuances in market trends and conditions can give the operational and buying teams the competitive advantage needed to be able to make what, on the face of it, may seem to be minor changes to daily operations or purchasing procedures, but that, when compounded over the course of a month, quarter or a year could make a significant financial difference.
There are three key areas that will influence profit and performance for the dealer whether large or small and these sectors could heavily alter the “margin” made on each and every vehicle sold. Proactively managing Purchasing, Preparation and Pricing in the coming months will make a big difference in profit terms.
Whilst it is not essential to address all three, shrewd operators are already working on changes that will move the margin needle by the end of the trading year. It is worth highlighting that where one person gains, inevitably another loses and, as such, staying informed is business critical.
The latest set of registration data released by the SMMT shows that new car activity has continued to set records with the market, growing by a further 5.3% over the same period last year.
This heralds a year to date increase of 5.1% over the first quarter results posted for 2015 with 771,780 cars registered. This level of activity is unprecedented and the 518,707 cars registered in March 2016 represent the largest month since the introduction of the dual plate system in 1999. It is worth noting that concern remains about the level of pre-registration activity taking place.