Tough times

11 Jul 2008

Businesses must change to beat the credit crunch, says consultancy

FRANCHISED dealers are being urged to adopt a “credit crunch plan” to help them through the economic downturn, by industry consultancy Network Automotive.

The business advisory group says there are many potential profit opportunities that dealers have ignored during the last few years which could now prove lucrative.

Managing director Colin Bruder said a clear strategy was key to getting through the credit crunch successfully.

“One way of beating the credit crunch is to take a structured approach where dealers look at their business, identify where more profits can be generated, put a plan in action and monitor the results,” said Colin.

“For most dealers, it is becoming clear that they will not ensure future profitability by doing more of the same of what they have done in recent years. They need to find new avenues to maximise their potential.”

Strategies suggested by Network Automotive to dealers include:

Selling more service hours

Increasing average parts invoices

Cleansing databases

Redoubling their efforts on Motability sales

Reconsidering or developing further profitable dealer rental business

Re-examining driving school efforts

Colin added: “This is just a short list and most dealers will have many more ideas. These are areas that most dealers did not consider when the economy was better but which could ensure survival in a downturn.

“However, making advances in these areas needs a structured approach. It is not enough to just tell staff that they should be doing more,” added Colin.

“You need a credit crunch plan with in-put from across your dealership where the responsibility for putting the key elements of the plan in place and seeing how well it works is clearly allocated and regularly reviewed. Everyone needs to know their role.”

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