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How Can Dealerships Make Profit with Low Investment?

by

Rajesh

Auto manufacturers have a love-hate relationship with their dealers today. On one hand, the manufacturers value their dealers for selling all the cars they make, even when the cars aren’t very good or may not be suitable for that market. On the other, manufacturers get annoyed at dealers who can’t deliver good customer service, unable to sell a particular model, can’t (or won’t) invest in their facilities, etc. As a result, there’s a near constant battle between the dealers and the manufacturer, with manufacturers telling dealers what they should be doing and dealers demanding support from manufacturers. This sweet and sour relationship continues.

It’s also amazing during this relationship just how fast any given model can go from hot to sitting unsold on dealer lots, gathering dust. A new sports car might only be hot for a few months before it’s supplanted by another competing SUV car.

With the passage of time, the competition among auto dealers is growing largely. Each manufacturer is aiming to roll out at least 4 5 new models every year. Greatly improved vehicle quality is keeping vehicles on the road longer too (up to nearly 12 years), according to Equifax reports. This older fleet presents attractive service agreement and service repair and maintenance opportunities. Selling a car can gain a dealership a one-time incentive of 2-3% max, but if ever the dealership keeps track of its service and parts department, he can gain 15-25% on service and 35-45% on parts without much effort.

But there are a few challenges which need to be addressed to earn that level of profitability. To name a few, having a proper trained staff (technicians) to handle the service center, knowledgeable service advisors to convince the customers to try the new service scheme launched by the dealership. The parts dept should be able to maintain a lean stock with better controls on items which are in great demand and always ensuring that the procurement of the same is in sync with the requirement of shop floor or external vendors.

The above challenges can be addressed if you have a trained staff which is constantly trained on the latest technology, the dealership should have a DMS (Dealer Management System) which is simple to use, able to record and track all process of the business. And of course, a system to keep the customers always informed who are interacting with the dealership for getting their cars serviced or enquiring for parts.

Having all this info in the app, the dealership will able to track and know the progress of each workshop as well as parts counter at minimal cost. With the deep inbuilt analytics of the solution, the dealership can connect with the interested customers and converts these inquiries into sales orders. There are many features in the app which will reduce the effort required in doing the manual task of tracking some routine jobs.

For details please visit : autodealrz.com/

Article Source:

eArticlesOnline.com

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