Navan car dealer blames liquidation on VRT change

WHITE_P

Navan car dealer blames liquidation on VRT change.

http://www.meathchronicle.ie/articles/1/31332

L1011

His lack of websites for his Mazda and Fiat dealerships cannot have helped in this day and age when most second hand sales are web-lead....

Owen

Most sales are not actually webbased. I did the stats for my work place recently on lead generation, 28% were walk ins, 53% phone ins, and only 19% came from the web, and we have a very active web presence.

Victor_M

As in only 19% of people sussed the car out on line before either calling or visiting the showroom?

I find that hard to believe, I would have thought a huge %age of initial research is web based and only when you have whittled out the cars you don't want does the leg work and phoning begin.

Edit: just reread your post, most SALES are not web based, you'd be mad to buy a car without seeing it/test driving it first, but it's commercial suicide in this day and age not to have a up to date stock list on a web site.

fletch

ned78 wrote: »

Most sales are not actually webbased. I did the stats for my work place recently on lead generation, 28% were walk ins, 53% phone ins, and only 19% came from the web, and we have a very active web presence.

I suspect that the majority of those which phoned in, did so because they saw the ad on the web?

L1011

Even ignoring those that walked in and called in due to seeing cars on the web, 19% is a huge amount of sales to ignore for relatively minimal outlay (mostly once-off) in getting a website.

FuzzyWuzzyWazza

+1

Owen

Just because we're all web savvy people who use boards, etc, doesn't mean everyone is. Most of my friends look at cars online, but that's because most of the people I know and surround myself with are reasonably tech savvy - however the lions share of the Irish population have difficulty with the TV remote, let alone 'teh interwebs'.

Surprisingly, out of the phone enquiries, only a tiny percentage express interest in a specific car. The majority, and by majority I mean 90%+, of phone enquiries are general enquiries, looking to find out what stock we have, which models, and ball park prices of the car they're trying to narrow down, and for their part exchange.

BTW, in case you think I'm pulling this out of my ar*e, AFAIK, I think I'm the only full time employee in Ireland who is specifically involved in online development of my workplace. I don't sell cars.

VH

ned78 wrote: »

JI think I'm the only full time employee in Ireland who is specifically involved in online development of my workplace

you're not!

Owen

VH wrote: »

you're not!

I meant specifically in the Motor Trade, but if I'm wrong, it'd be a very cool thing if someone else was out there doing the same thing. No harm to learn from the experience of others!

kluivert

Thats the biggest load of bull****.

The reason why people are not buying second hand has no more got to do with VRT changes than the man on the moon.

In my own opinion people are either buying new cars or nearly new cars.

Cars between 03-05 are not selling and why is that?

Because there stuck in a gap that people dont buy in.

People tend to either buy lower costs cars or buy higher cost cars, for some reason there is a gap in which people would prefer to spend a little more to get the 06/07 and there are people who are not willing to spend big money on an 03-05 car and tend to spend a little less on pre - 03 cars.

This is called knowing your consumers needs.

July 08 saw the biggest increase in new car sales for July records.

I just put it down to poor management at the end of the day.

The managers should take a 6 month review of the market and conduct a PEST analysis

Policitical
Environmental
Social
Techincal

Straight away under policitical and envirnomental changes in VRT was on the radar since December 2006 when this was first mentioned and I believe the SIMI where involved in the changes. In December 2007 the changes where annouced and then given 6 months to be introduced.

Social factors - a credit crunch was hitting consumers and thus there would be less lending and thus less sales.

Technical - I read the lack of a proper website, very few people will travel around from dealer to dealer looking at cars, now a days people will re search the cars on the web and then visit the dealer. Failure to implement a proper website is another failure of management.

When this review was done then they do a SWOT analysis. This examines the
Strenghts
Weakness
Opportunities
Threats

Strenghts - established dealership in a busy town. Marketing campaigns should have been established to welcome the introduction of the VRT changes and presuade the sale of diesel cars to customers especially the Mazda 3 1.6 diesel - lovely little car.

Weakness - address the issue of no or poor website and then market this website. Address the issue of to much second hand stock. Implement a sales strategy for second hand cars. Address areas within the dealership that are weak.

Opportunities - Introduce new diesel model cars at the fore front the range. Increase your capacity for parts and servicing, as less people are trading up, they will be holding onto the cars for longer. Develop this market and advertise it. Put in a small tea and coffee area with a tv so people can wait while their car is being serviced.

Threats - down turn in the economy. Prepare for a 20% drop in sales for this year and plan on how to tackle this. Develop a plan to cut costs right across the board.

Laize Faire approach to business does not work in todays times and you need to be pro active to keep your head above water.

furtzy

As posted before I had a long chat to a mate in the trade who runs a large multi-brand dealership. He said it was down to two main things i.e people have 05,06 and even 07 cars which are now worth a lot less because of a number of reasons VRT changes, market supply etc. These people now owe more than the car is worth and so are therefore holding on to what they have. The other reason is a lack of available credit a la the credit crunch. He said he lost out on 8 sales alone last week of second hand cars because of credit refusal. These people had reasonable incomes and had good finance records but were still refused.

He doesn't see any upturn in the market any time soon and has 100+ trade-ins to clear before year end as they'll be worth even less in january 09.

PattheMetaller

If only the decision makers could see further than the end of their noses.

There is a sizeable proportion of car owners out there, myself included, who may be screwed on their trade in due to the VRT change. This will have a knock on effect on the sales of new cars in January, and may force customers to downsize.

What a pity a consumer group can't kick up a fuss now for those looking for a trade in the way the SIMI kicked in for the industry in the first half of the year regarding tax rates for diesels bought Jan - June 30th

knifey_spoonie

PattheMetaller wrote: »

What a pity a consumer group can't kick up a fuss now for those looking for a trade in

Well im afraid that its the consumers who have caused this problem for themselves, Its all the people who have bought/but English cars (Which i have no problem with)

That fact is that this has now set the bench mark for prices in ireland this now means that our used car prices are coming down in line with the uk prices, and will have to fall in line in the next year or two. This means you will be asked alot more to change you 06 to 08 than you were to change your 04 to 06

So if you were to kick up a fuss all you could be giving out about is the other people who got up of there arse and bought in england.

@ kluivert

Believe me that the Vrt changes have had a huge effect on used sales,
People knew cars were coming down in price, the average person was confused, and ill informed of which way car prices would fall or go up, so they decided to do the safe thing (nothing at all) This has effected the rate of used car sales

im off to England to import a car thats nearly 8 years old and its still cheaper by over a thousand euro, including flight, ferry and VRT. A thousand euro is not to be laughed at.

So its not just new cars. Used car imports jumped too.
If they reduced tax on all old cars it would be more green and help the second hand car market.
Gormely isnt green at all:mad:

PattheMetaller

PattheMetaller wrote: »

If only the decision makers could see further than the end of their noses.

There is a sizeable proportion of car owners out there, myself included, who may be screwed on their trade in due to the VRT change. This will have a knock on effect on the sales of new cars in January, and may force customers to downsize.

What a pity a consumer group can't kick up a fuss now for those looking for a trade in the way the SIMI kicked in for the industry in the first half of the year regarding tax rates for diesels bought Jan - June 30th

Take an average diesel for comparison. Who will want a 07 when its nearly 600 a year to tax when they can get a 08 and tax it at 150 a year.
It will screw motorists who cant afford new cars. And with a recession who the hell will be buying a new car. We lost nearly 2,000 jobs a week over the summer and the banks are not going to be in a position to lend out money for new cars at the level they were before.

E92

knife_fighter wrote: »

Well im afraid that its the consumers who have caused this problem for themselves, Its all the people who have bought/but English cars (Which i have no problem with)

While it is absolutely true to say that the fact that everyone going to the UK is bound to bring down prices(simple economics tells us that when there's more supply prices have to go down), the real reason people go to the UK is because cars over there are far better maintained, offer way higher levels of equipment, and most of all there is far better value to be had over there.

A lot of car enthusiasts seem to buy from the UK too, because most of the really interesting cars either were never sold here, or were sold in such small volumes that they're rarer than hen's teeth.

Basically the SIMI are offering Irish people cars with poorer equipment, cars that have spent their time on inferior road networks, with inferior maintenance(anyone who has ever been to the UK will see how move more they look after their cars than we do, we regard them merely as devices for moving you from A to B and that's it), and charge a helluva lot more for the privilege.

Now, back on topic, but that dealer has given the worst set of excuses I've ever heard. I shall explain why below:

Meath Chronicle wrote:

“Last year, I restructured and put an injection of cash into the business and, two weeks later, he announced the changes to VRT. If I had known what he was going to do I would not have done what I did.”


It’s believed the personal loan Mr Brady took out for this restructuring has left him with a debt of several hundred thousand euro.

Well now wasn't that incredibly stupid? I mean everyone knew back in Christmas 2006 that VRT was changing, and was changing to an emissions based system. Everyone knew that the precise details of the changes wouldn't be announced until the next budget, so that just shows an incredible lack of business acumen.

Meath Chronicle wrote:

It is understood that the main unsecured creditors are banks.

According to Mr Brady, when Minister John Gormley announced last year there would be changes to the VRT on cars, motor dealers had already placed orders for their 2008 stock.

"There was no feasibility study done, no impact study done by the minister on what the changes would mean. It was done without research and he said it would come in the following July.”

This is absolute rubbish. Who asked for the 6 month delay? None other than the SIMI themselves. It would have started in January, like all previous VRT changes did if the SIMI hadn't gotten their way.

Now of course what should have happened was that the changes should have been announced in July 2007 and hence started on time for 2008, and that would have kept a lot more people happy, we could have started lowering the carbon footprint nonsense 6 months earlier when it counted during the peak car buying period. I certainly don't blame dealers for that.

And there was a public consultation during 2007 about what shape the VRT changes should take as well, so if he was as concerned about it as he says he was then he had the opportunity like evryone else to express it to the Department of Finance.

Meath Chronicle wrote:

He said he was trying to find out what price new models like the Mazda 6 would retail at and says neither Mazda nor the Revenue Commission could tell him. “Companies couldn’t give us their new price list until the end of May because they couldn’t get the information off Revenue and Revenue was saying it’s not an exact science. It left me with what had been a good business and a large stock of stocked cars.”

That's all Mazda Ireland's fault, it's not like we're sending a rocket to the moon, after all my good self created an expected July prices thread(with the attatchments since removed because I did a more up to date one here) back in February and it turned out to be extremely accurate if I may say so myself.

Has that dealership not got access to the internet?

Meath Chronicle wrote:

Minister for Transport Noel Dempsey said last week in response to Mr Brady’s criticisms that motor dealers were given several months’ notice of the impending changes in the VRT arrangements.

They sure were, and all they could do was try and sell old stock, cue all the ads about crappy 1.4 petrols here, and 1.6 Mondeos there, no innovation, no effort to get people into the July cars with the far more desirable diesels etc. No innovation, no sign of anyone being proactive, and then they wonder why they can't sell?

Give me a break.

CDfm

You have to agree with him new car sales are down 30 odd per cent

second hand inventory values have plumetted

learner drivers are out of the low car price bracket as they need to be accompanied

vrt changes -nice one icing on the cake

building slump yep

not a nice time to be a car dealer -

i know one car sales guy who is now a postman

me im not changing my motor til next year - a bit insecure with the economy i suppose

Bee

Deleted User wrote: »

im off to England to import a car thats nearly 8 years old and its still cheaper by over a thousand euro, including flight, ferry and VRT. A thousand euro is not to be laughed at.

So its not just new cars. Used car imports jumped too.
If they reduced tax on all old cars it would be more green and help the second hand car market.
Gormely isnt green at all:mad:

Minister for lightbulbs johhny 40 Watts Gormless not being Green!:pac:
Just because he buggered his Green party supporters who bought into the lower C02 myth, paid through their noses for diesels up to 2007 and then he rewards them by devaluing their cars come 2008 whilst increase their tax motor tax but loweringVRT/Motor tax on the same cars post July2008!

How dare you besmirch this Great Politician! After all he found no problem givine Bertie a confidence vote as well as Mary Harney so he must be all right then!!!

Ok political rant over

The VRT changes have screwed the Irish car market coupled with the car dealers greed to extract the max out of purchasers.

PattheMetaller

Deleted User wrote: »

If they reduced tax on all old cars it would be more green and help the second hand car market.

Agreed; but that would be too sensible

Bee wrote: »

The VRT changes have screwed the Irish car market coupled with the car dealers greed to extract the max out of purchasers.

Agreed. A phased implementation would have been better. Our residuals are now on par %wise with the UK

audismelly

Just to go off topic a litle. im a big carzone scanner.was looking at an audi in a vw garage in athlone,to my surprise it jumped from 21950 to 22950 this week,no sale on.
most of there cars have gone up by 500 to 1000 this week.

are they allowing for the couple of grand people are getting off the cars by hiking the price up.


IDIOTS

galwaytt

ned78 wrote: »

Just because we're all web savvy people who use boards, etc, doesn't mean everyone is. Most of my friends look at cars online, but that's because most of the people I know and surround myself with are reasonably tech savvy - however the lions share of the Irish population have difficulty with the TV remote, let alone 'teh interwebs'.

Surprisingly, out of the phone enquiries, only a tiny percentage express interest in a specific car. The majority, and by majority I mean 90%+, of phone enquiries are general enquiries, looking to find out what stock we have, which models, and ball park prices of the car they're trying to narrow down, and for their part exchange.

BTW, in case you think I'm pulling this out of my ar*e, AFAIK, I think I'm the only full time employee in Ireland who is specifically involved in online development of my workplace. I don't sell cars.

+++1.

I'd go further.

Contrary to popular (?) thought - the vast majority of the car buying public have no access to the internet in the first place. And of those, that do, only the minority have broadband. And of those that do, only a % have (reasonably) fast broadband. All of this works against the internet in Ireland as approaching anything like the selling Nirvana many people would like the internet to be.

So, if you take the whole car buying public to be X, then, I wonder how small X is when you factor in my obervations, above? x/100 ? Worse?

And this is the true dilemma: people post on here regularly wondering why their cars don't sell, etc. Well, because, using the likes of the internet, an obvious choice if you're internet-savvy, you are only reaching a % of your target market. For good or ill, print media is still widely and cheaply accessible, and easily....browsed (sic :rolleyes:) .

And I'm not making this up: the (ficititious) broadband penetration figures espoused in this country includes mobile broadband (mobile phones). FFS, talk about deluding oneselves.......have you ever tried browsing on your phone??.....Even as late as Thursday I got a call from a local lady looking for help on her 'slow internet'. Turns out she's using a Vodafone modem. Waste of time, for browsing. In a country where her browsing is competing on a platform handling telephony, it can be nothing other than a backup, or emergency medium. The vodafone and O2 networks are creaking at the seams.....and what do people do?....buy even more cell-based equipment, technology etc.

The lady didn't have a landline, and even if she did, I know for a fact that there's no broadband available there, anyway.

And this is something I'd like the likes (?) of ned78 to keep in mind in web-based development. Like it or not, you have to appeal to the lowest-common-denomintor in terms of web access and speed. Otherwise it's all much brouhaha about............nothing. If you want an example of what not to do, try browsing the Audi R8 introduction site......

And I'm not a techie, but do know my way around the keyboard....I'm a member of a rural group broadband project. One that delivers broadband to rural areas where the incumbents can't/won't go, and we do it voluntarily, so I know all about access points, deliverable speeds (as distinct from wishful-thinking advertised ones...)

And until that is solved, somehow, then, with all due respect, all the analysis in the world isn't worth a hill of beans.

Darragh29

audismelly wrote: »

Just to go off topic a litle. im a big carzone scanner.was looking at an audi in a vw garage in athlone,to my surprise it jumped from 21950 to 22950 this week,no sale on.
most of there cars have gone up by 500 to 1000 this week.

are they allowing for the couple of grand people are getting off the cars by hiking the price up.


IDIOTS

It sounds like they are trying to get the trade in market, with the auld, "we'll give you an extra grand off that car", the customer isn't too bothered because the purchase funds are probably going on finance anyway...

ninty9er

Bumbling Brady Crumbles (BBC wasn't it:rolleyes:)

The proposals for this were made known in December 2006, based on each of them he could (if he had been arsed) have applied a business strategy. He could even have submitted a proposal to the Minister for Finance (as many of the regulars here did). He ast on his arse, took his eye off the market and made an investment based on the fallacy that all would be the same as it has always been...kind of like people buying investment properties in the mid 2000s....based on increases from 1995-2004.

He is a de facto idiot for not taking notice of what was going on. What's even worse is that he was stupid enough to put his family's lifestyle at risk by borrowing personally when he had a limited company. It was either stupidity or a gearing problem, the latter meaning it was coming down the tracks a long time before any VRT effects exerted themselves on the market.

Personally, I think it's got more to do with a lot of the population tiring of getting a new car every 2 years when the one they have is fine. I was talking to a guy who canvassed (for FG before I get berated) a house in west Clare that you would call extravagant (probably €2-€3 million bracket). It had a late 90s Mondeo and Focus outside. The owner was dutch and brought up how it is the norm to see wrecks outside massive houses elsewhere, but you see new 5 series and Lexus outside previously council owned houses here.

I think the Irish are starting to think like the foreigners car wise.

What kind of idiot orders in tones of stock without orders anyway.

Ford and Toyota dealers get away with it, but we're talking Mazda and Fiat here FFS, it's not as if they were even affected massively by VRT.

T-O-O-L