7 minute read
Dealer’s Diary
Peter Simpson provides us with an insight into the automotive sales trading world – and beyond.
The demise of the main dealer?
Advertisement
Please be in no doubt about it; the retail motor industry is changing more now than at any time in the 40+ years that I’ve been involved with it. Can you imagine the reaction of the average late-1990s/early noughties car dealer, complete with his leatherbound printed copy of Glasses Guide or CAP, or the average car buyer in the early noughties if they were told that, by 2022, around half the retail car sales in the UK would be ‘unseen’, British Car Auctions would have switched to online-only buying with no opportunity for pre-sale viewing and that even where live viewing is available, many cars are bought by the trade purely on the auctioneer’s description.
That, though, is the world in which we are living, and with the switch from face-to-face to online/distance selling, so the role of the main dealer is diminishing still further.
Once upon a time, they were in every respect a manufacturer’s local representative – they were in effect solely responsible for new-car sales within their area, generally kept a good stock of late used cars (mostly ones which they’d supplied new), had a well-stocked spares department and a service/repair operation which could basically tackle anything.
These days though, separate parts departments rarely exist, pretty-much anything you need has to be ordered (if a dealer keeps stock of something it’s usually a pretty good indicator that the item in question is a common weakness!) and with increased service intervals there’s less work for the service department. That leaves only retailing cars, and with new cars there’s less and less need to actually see a car before buying it; you can find pretty-much all you need to know online!
Therefore, the recent announcement by Stellantis of a massive cut in dealer numbers wasn’t actually a massive surprise to me. It’s a big cut though – by May 2023 138 dealerships across the Stellantis brands (that’s Vauxhall, Peugeot/Citroën/DS, Fiat, Alfa Romeo and Chrysler/Jeep in the UK) will have lost their franchised dealer status, leaving just 176 across the UK. Stellantis have also hinted pretty strongly that this won’t be the end of it, either.
It’s been suggested that the bulk of the losses will be among the solus GM/ Vauxhall franchises. Stellantis are keen to stress that the dealer network remains important, but it seems likely that the way forward is to be larger franchises offering the full range of Stellantis products from one site. A further nail in the coffin of the few remaining familyrun independents then, though perhaps one that isn’t that surprising.
What really matters to us, though, is the effect of all this on the aftermarket motor trade – those of us who basically feed on the crumbs which main dealers don’t want. Well, I see a number of things which might or might not happen. Firstly, the main dealer’s role in parts supply is likely to be further diminished; I can see a time when manufacturers parts operations find it easier to simply supply customers direct rather than through dealers.
The biggest changes, though, are likely to be in how part-exchanges that aren’t suitable for retail are disposed of. It’s likely that disposal routes for part-exchanges will become more streamlined, with far more ‘everything goes to auction’ arrangements than now. It’s also possible that the age of cars retailed by main dealers will become younger – with a greater number of potential part-exchanges being offered from across the range of franchises they can afford to be choosier – and older, lower-priced cars generally mean smaller profit margins. We might even see a situation where dealers decide not to take part-exchanges that they don’t want themselves at all, and instead direct customers to the likes of webuyanycar.com
None of this is certain. But what I am sure of is that the next decade will see car retailing right across the vehicleage spectrum continue to change and evolve – and wise dealers will need to change with it.
TOP TIP
Though traders
usually look to breakers yards as a source of cheap parts, nowadays they may not be much, if any, cheaper than new or remanufactured aftermarket items. New parts, if available, are usually easier to fit, look better and, generally speaking, there’s less likelihood of inadvertently buying the wrong item. It’s always worth spending a few minutes checking, though be aware that new stuff listed by onlineonly suppliers isn’t always the best quality.
DS divorce?
Talking as we were a moment ago, about Stellantis, it seems that as well as the dealer network, the brand structure is also coming under review. Specifically, Alfa Romeo and DS are to form the Premium Division and, consequently, DS is going to be removed from its Citroën parent. I recently came across evidence of how seriously they are taking this change…
About a year ago, I signed up to the ‘Corgi Model Club’ – basically they are, in conjunction with brand-owners Hornby, re-releasing some of the classic Corgi toys of the 1960s, and though I’m not normally a fan of things like this, I do like getting a new-old Corgi model every month. The most recent re-release is the Citroën DS Monte Carlo rally car from 1965. Except that Stellantis won’t allow Hornby to call it a Citroën DS, as the two brands are now separate, and no amount of discussion could persuade them to change their mind! Consequently, the re-released model’s box, and baseplate, now describe it as a DS19 and despite the DS being almost certainly the finest Citroën ever made, Corgi can’t call their model a Citroën!
Half & half
This is the time of year when, typically, a car battery may fail – and these days once a battery starts not holding charge it soon fails completely. It’s also far from unknown when this happens to someone who bought the car three or four months ago in the summer to ask the supplying dealer to contribute towards, or cover completely, the cost of renewal. Something like this is a grey area – on the one hand a battery failing could be construed as coming under the usual trader’s ongoing responsibility for up to six months after sale. Equally though a new battery on, say, a ten-year-old car, could be considered normal wear and tear and a routine replacement.
My approach, when this happens, is to offer a 50% contribution. Most people will accept that, especially if you also offer to obtain it for them from a nationwide chain such as GSF Car Parts or Halfords – others are, of course, available. That way your customer has the advantage of a worthwhile guarantee which is valid at any branch.
There is also, though, a benefit to you. Here’s an example of how it can work. Let’s assume a battery costs £90 retail from, say, Halfords. If, though, you’ve got a Halfords Trade Card, you get 20% off that, and actually pay £72. However, your customer is not trade, so they are not entitled to the trade discount. You are therefore quite justified in charging them the retail price for their half – £45 – meaning you pay just £27 for your half, saving you £18. OK, £18 isn’t a fortune. But in these times every pound counts, and the difference between £45 and £27 might just be enough to tip the scales between you feeling justified in making a “50% goodwill contribution” and saying no.
Green slip only?
Thankfully, the days of goodness-knows-how-long delays in processing an application for a duplicate/ replacement V5C Registration Document do now seem to have ended – these days the typical turnaround time seems to be about five weeks, though this certainly isn’t guaranteed. Personally, I tend to avoid cars without a V5C anyway. It’s hassle that I don’t need, and it also means putting the car into my name for a short time, which quite apart from being something that might need explaining to buyers, brings with it the responsibility to either tax or SORN the car, and then process the sale as a private transaction.
There is, though, a potential trap if buying a car with only the green ‘new owner’ V5C2 section of the V5C. This is intended for use by a new keeper to tax a vehicle which is going through a change of ownership. But it can only be used once. So if, as is often the case, a ‘green slip only’ vehicle is at auction because a recent change in ownership hasn’t been processed properly, then chances are the V5C2 won’t be useable. You also won’t be able to use it if it’s been superseded – in other words if the V5C that it came from has been replaced by another, later issued one.
Of course, a car like this is suspicious anyway – why would someone be getting rid of something so soon after buying?
