Many dealers would not be profitable if they stripped out revenue generators like paint protection and insurance products.
That’s the view of Eastern Wester Motor Group managing director Keith Duncan, who said dealer needed to focus on the profit they make from selling the core product.
“Is it time to start a debate about the profitability derived from JUST the goods franchises are contracted to sell?
“That is cars (let’s include used as most sales are via part exchanges) sold hours and parts.
“We all invest millions in our businesses and we’re all very proud of the franchises we represent.
“But I’m lying on a sunbed last week, reflecting on just how much is now earned from non-core activities.
“This could be finance, insurance products, paint protections, various ‘fees’ environmental charges, oil, air con servicing, tyres etc etc. You get the idea. If we stripped all non-core income from our business, are we still profitable?
“Many will be. Good quality retailing might save the day. But many won’t.”
“Via our partners and dealer councils, is it time to put more focus on the ability of JUST our core products to produce an acceptable profit level? A new measure of absorption if you like.
“And wouldn’t it be great if the non-core activities returned to being the cream and not a lifeline? Thoughts?”
