Get on with changes to car tax, urges dealership boss

-Chris-

independent.ie wrote: »

Sunday March 15 2009

The appalling figures for car sales in the first two months of the year provoked Paraic Mooney to write to the Taoiseach and Minister for Finance -- again -- last Friday.

He wrote: "I do appreciate that you are both busy, but an acknowledgement to my last mail of January 22 is the least I would have expected, even if you totally disagreed with the content.

"However, given the unfolding events in my industry over the last seven weeks, I feel compelled to write to you again:

"White Bishop Motors, Dublin 12, GM dealer closed with the loss of 40 jobs;

"Winfield Motors, Dublin 4, and Dun Laoire, Honda dealers closed with 30 job losses;

"Westland Motors, Liffey Valley, Peugeot dealers closed with 25 job losses;

"Pat Keogh Motors, BMW, Limerick in voluntary liquidation with the loss of 40 jobs;

"Chapmans Garage, Volvo and Rover dealer closed with the loss of 40 jobs;

"BK Motors, Balbriggan, Hyundai and Skoda dealers closed with loss of 35 jobs;

"And HB Dennis motors, Dublin, resigning their franchises and becoming used car importers.

"All of the above events were forecast in my mail of January 15, all of these companies (RIP) were collectors of VRT and major employers.
"We all know there is pain to be shared, we need action faster than you are moving, the workforce and consumers are tired of the uncertainty, get on with the decisions on tax changes and people will know where they are and adjust."

Paraic Mooney, the managing director of EP Mooney and former president of the Society of the Irish Motoring Industry, goes on to call for a scrappage scheme to be introduced with some urgency as well as changes to the tax clawback system, which, he says, might mean "many more dealers will go out of business after May 19 due to an inability to pay this tax, which has arisen as a direct result of 2008 VRT changes".

Mr Mooney adds: "This is a plea for survival, it's time for brave action."

http://www.independent.ie/lifestyle/motoring/get-on-with-changes-to-car-tax-urges-dealership-boss-1673555.html

Gumbo

ive dealth with PM in the past through my old job, (we were the engineers for alot of his showrooms), and he is a very nice guy. maybe, just maybe if enough of these high profile employers start putting pressure on the gov, they will act.

Chris, whats your opinion on a proposed scrappage scheme, do you think it could work?

Johnboy Mac

AudiChris wrote: »

http://www.independent.ie/lifestyle/motoring/get-on-with-changes-to-car-tax-urges-dealership-boss-1673555.html

And the sad thing is we ain't seen the last of main dealers etc closing.

-Chris-

kceire wrote: »

Chris, whats your opinion on a proposed scrappage scheme, do you think it could work?

I'm not sure really. I think if scrappage was offered (say €3k) on any cars over x years old, it would slightly stimulate new car sales.
I think the proposal shouldn't make any mention of NCT - the current idea is to only offer scrappage on cars with valid NCTs afaik. If this is true, then the scheme will serve to remove roadworthy vehicles from the roads, while doing nothing to remove unroadworthy vehicles.


Unfortunately, I think the problem is too large to be solved with an incentive scheme.
I sell new Audis (no used, just '09 stuff). I think that, even if we dropped our prices by 25% across the board, we wouldn't see a massive increase in sales.

The problem now is that people are finding it hard to get loans from their banks, and that they're not confident in their circumstances.
If they're not confident borrowing €30k to buy a new car (because they're expecting a pay reduction, are in negative equity on their home, or are just plain fearful for their job), I don't think reducing that amount to €25k will change their thinking - you need to increase their confidence rather than decrease their borrowing requirement.


A scrappage scheme is good for encouraging people who can afford a new car, but don't see the value in buying one, into making a decision - you offer them a "bargain" in essence.

Johnboy Mac

Also the mindset is that no matter what price a dealer here is selling car for people will still consider it cheaper or better value to buy from the U.K.. It getting like the time when everybody & their dog was buying property abroad - sheep mentality can set in quickly here.

Blazer

Good riddance to Pat Keogh...absolutely brutal dealership who didn't want to know you after buying a car off them.
Had several run ins with them after buying a brand new car and another one of my friends had the same crap after buying a €40,000 BMW of them.
If the recession gets rid of all the crap robbing dealers I'm all for it.
The good dealers will keep their business running through this.

-Chris-

If the recession closes the doors on every business that's given me crap service in the last 10 years, Dublin's going to be a bit of a ghosttown.

There have been very few really well-run retail businesses in operation. Those that are really good are remarkable for that fact.

I'd rather see the poor retailers be forced to pull their socks up, rather than lose their businesses and make all their staff unemployed tbh...

Tony Broke

Johnboy Mac wrote: »

Also the mindset is that no matter what price a dealer here is selling car for people will still consider it cheaper or better value to buy from the U.K.. It getting like the time when everybody & their dog was buying property abroad - sheep mentality can set in quickly here.

Its set in quickly because its true, dealers just dont want to know!!

90% of them just want to keep what they have, instead of taking a loss like the rest of ous.Sneaky one's are even using the UK against ous by buying diesel's in bulk and selling them on at a decent mark up.They are suppose to be vrt'd in 24 hours and yet loads of dealers have yokes lying around the yards for weeks, even months!

They have played ous for fools for too long and now its our turn!

Owen

Tony Broke wrote: »

They are suppose to be vrt'd in 24 hours and yet loads of dealers have yokes lying around the yards for weeks, even months!

The 24 hour rule doesn't apply to Dealers.

Tony Broke

ned78 wrote: »

The 24 hour rule doesn't apply to Dealers.

Why is that?

Just another way to screw ous I suppose.

Owen

Tony Broke wrote: »

Just another way to screw ous I suppose.

Actually, it's to make things better for you. If the Dealer had to register the car within 24 hours, they would be added as an additional owner to the vehicle's history. By not having to worry about the 24 hour rule, it means when someone buys the car - they become the new registered owner instead.

TomMc

The motor trade are just going to have to face up to the fact that they had their day, invested fortunes in plate glass palaces / retail parks and now the market isn't going to support the repayments. Like much of society they thought that the boom years was now the norm, and it would last indefinitely.

And the number of jobs losses is small, compared with the wider jobs market. But most of these job losses are just numbers as they do not have any trade bodies or organisations to represent them or highlight their plight.

Dealers will have to trim their belts like the rest of us. If they were profligate in the past they are all but doomed. It they were prudent and didn't do anything outlandish, well then they can survive. The motoring public will always need cars serviced, so a good dealership can still have a viable business. They just need to offer value for money and stop the rip off pricing.

_________


As for the number of dealers in the marketplace, the motoring public will still buy the same number of cars, regardless of the volume of dealerships. They are merely dividing up their individual slice of the pie. If most new cars were bought on credit for the last decade or so, well things will and are drying up. You can have all the incentives you like, but if the money or credit isn't available, well nothing is really going to work. The only thing I thought of and it may be illegal (even if VRT is as well, at least in the spirit of things and the EU market and so on) would be to keep VRT on new/used imports as of now and maybe scrap it on new car sales and phase in a system of tax on fuel.

But alas, the trade are in for hard times, it will certainly separate the good, the bad and the ugly fairly quick. Those with the most to offer the consumer will be the only ones with a future and can still be successful.

Tony Broke

ned78 wrote: »

Actually, it's to make things better for you. If the Dealer had to register the car within 24 hours, they would be added as an additional owner to the vehicle's history. By not having to worry about the 24 hour rule, it means when someone buys the car - they become the new registered owner instead.

Its more like a safety net so they can wait until the car is sold before doing it, thus sparing themselves loads of € incase they have to hold on to the car for a while, we on the other hand..

carface

Tony Broke wrote: »

Why is that?

Just another way to screw ous I suppose.

tony mate do a bit of reading on T.A.N. (traders account number) on ros.i.e

take note of requirements for obtaining a TAN number you may wish to edit
your comments when you think about it.

all the best

Owen

Tony Broke wrote: »

Its more like a safety net so they can wait until the car is sold before doing it, thus sparing themselves loads of € incase they have to hold on to the car for a while, we on the other hand..

Eh no. You're quite entitled to do the same Tony Broke, if you'd like to trailer in a car from the UK and park it up in a yard, you don't have to pay VRT either if it's not being used on the Irish road network. You could really do with reading up on the topic before getting your pitchfork out.

Tony Broke

ned78 wrote: »

Eh no. You're quite entitled to do the same Tony Broke, if you'd like to trailer in a car from the UK and park it up in a yard, you don't have to pay VRT either if it's not being used on the Irish road network. You could really do with reading up on the topic before getting your pitchfork out.

Yeah I should really

Didnt know you could dodge the vrt.

ninty9er

TomMc wrote: »

The motor trade are just going to have to face up to the fact that they had their day, invested fortunes in plate glass palaces / retail parks and now the market isn't going to support the repayments. Like much of society they thought that the boom years was now the norm, and it would last indefinitely.

The difference is nobody forced individuals to build family homes the size of a community centre.

Tony Broke wrote: »

Its more like a safety net so they can wait until the car is sold before doing it, thus sparing themselves loads of € incase they have to hold on to the car for a while, we on the other hand..

...use the car straight away....yes. Grow up.

TomMc

ninty9er wrote: »

The difference is nobody forced individuals to build family homes the size of a community centre.

Well any dealer who borrowed millions to upgrade or re-locate to keep a marque hasn't much of a business brain. It is different for those who sold an old premises to property developers which largely financed the move. There were enough successful independents around to highlight the fact that you do not need to be a main franchised dealer to be successful. The distributors led many up the garden path, but if people hadn't the foresight, they have to share the blame as well for their predicament.

Johnboy Mac

Tony Broke wrote: »

Its set in quickly because its true, dealers just dont want to know!!

90% of them just want to keep what they have, instead of taking a loss like the rest of ous.Sneaky one's are even using the UK against ous by buying diesel's in bulk and selling them on at a decent mark up.They are suppose to be vrt'd in 24 hours and yet loads of dealers have yokes lying around the yards for weeks, even months!

They have played ous for fools for too long and now its our turn!

I'll grant you this much. Irish dealers are dreadful overall. Customer service does not exist (as with most thing here), professionalism is a joke and aftercare is..................'whats aftercare'?

Before anybody comments on what I've just said, I also stated 'overall'.

-Chris-

This is such rubbish, I'm not sure if it's worth comment...

Tony Broke wrote: »

90% of them just want to keep what they have, instead of taking a loss like the rest of ous.Sneaky one's are even using the UK against ous by buying diesel's in bulk and selling them on at a decent mark up.They are suppose to be vrt'd in 24 hours and yet loads of dealers have yokes lying around the yards for weeks, even months!

EVERY car in Ireland is an import. No cars are built here.
If VRT was paid on every car the second it was imported, the cashflow issues for the dealer/imported would be crippling. Instead VRT is paid when the car is sold - the customer pays the VRT to the dealer as part of the purchase price, the dealer pays the VRT to the revenue.

Also, if your system was in place, and all VRT was paid at the time of import, then none of the cars imported before 1/7/08 (but sold after that date) would have benefitted from the reduction in VRT - they'd be completely unsellable right now.

Tony Broke wrote: »

They have played ous for fools for too long and now its our turn!

Your turn for what, exactly??

Tony Broke wrote: »

Didnt know you could dodge the vrt.

NO VRT IS DODGED, it's just deferred until the car is registered for road use.

Damien360

Johnboy Mac wrote: »

I'll grant you this much. Irish dealers are dreadful overall. Customer service does not exist (as with most thing here), professionalism is a joke and aftercare is..................'whats aftercare'?

Before anybody comments on what I've just said, I also stated 'overall'.

That is a bit harsh. I know you said "overall" they are poor, but I have found that the dealer who only sells new cars and is not interested in anything else is poor. They always seem like the TV salesman from Harvey Normans. Have'nt a clue and just quote the brochure. Find the salesman that is there before the boom and you get a true diamond. He knows hard times and good times and knows how to sell and knows his stuff. Lots of them around. Servicing has fallen on its arse in the last few years but I saw a huge change in attitude of the service manager in my local Ford garage when the boom went bust. A change for the better !

I said it here before and I will say it again. Nothing like a good recession to remove the crap dealers from the market. Treating people poorly will always be remembered and buyers hold grudges.

AudiChris wrote: »

I sell new Audis (no used, just '09 stuff).

Chris, I hope you are not the stereotype mentioned above.

Saab Ed

Johnboy Mac wrote: »

I'll grant you this much. Irish dealers are dreadful overall. Customer service does not exist (as with most thing here), professionalism is a joke and aftercare is..................'whats aftercare'?

Before anybody comments on what I've just said, I also stated 'overall'.

:rolleyes: I hate everybody too...everybody cause they're all crap, everyone .

Just the fact that you said what you said shows how much you know on the subject.

-Chris-

Damien360 wrote: »

Chris, I hope you are not the stereotype mentioned above.

I'm not allowed to sell anything but new cars, we have separate new and used car departments.

I didn't sell cars in the boom, I've only been selling cars for the last 2 years. I missed all the fun.
I'm not at it long enough to know if I'm an order taker or a proper salesman. I guess the acid test will be, if I still have a job next year then I'm a proper salesman.

Damien360

AudiChris wrote: »

I'm not allowed to sell anything but new cars, we have separate new and used car departments.

I didn't sell cars in the boom, I've only been selling cars for the last 2 years. I missed all the fun.
I'm not at it long enough to know if I'm an order taker or a proper salesman. I guess the acid test will be, if I still have a job next year then I'm a proper salesman.

Fingers crossed

pburns

AudiChris wrote: »

I'm not allowed to sell anything but new cars, we have separate new and used car departments.

I didn't sell cars in the boom, I've only been selling cars for the last 2 years. I missed all the fun.
I'm not at it long enough to know if I'm an order taker or a proper salesman. I guess the acid test will be, if I still have a job next year then I'm a proper salesman.

Going on the quality of your participation on the forum I think you're more than an order-taker Chris...

If you don't mind me asking - what's it like at the coalface (and no problem if you feel it imprudent to elaborate)? Is it busier than ever chasing up any prospective sales or have you more time to chat up the pretty receptionist? Have profits from the service dept become more important to the overall business? Not trying to be facecous, just curious as to how things have changed day-to-day...

I had a service with a dealer recently and the service manager couldn't do enough, I was quite impressed (although it was a little dear I thought!) I was left wondering if the service was always this good or whether the downturn has forced them to up their game (never used this garage before).

Anan1

Saab Ed wrote: »

:rolleyes: I hate everybody too...everybody cause they're all crap, everyone .

Just the fact that you said what you said shows how much you know on the subject.

Come on, surely you know what 'overall' means?:)

Johnboy Mac

Saab Ed wrote: »

:rolleyes: I hate everybody too...everybody cause they're all crap, everyone .

Just the fact that you said what you said shows how much you know on the subject.

It seems you are blind to the standards of service in this country especially at main delaer level or you are so use to spending huge sums on your Scab (sorry, Saab) and you thus get excellent service from the main dealer.

eamon234

I'm not one for praising dealers normally but I have to say our local Ford dealer which are one of the biggest in the country are spot on. OK they're not the cheapest but they certainly give good aftersales and servicing. My wife's bought her last 5 cars (used usually 2-3 years old)from them precisely for that reason although I don't think we'll be buying for a while again due to the ol' credit crunch.
She had a crash last year and was due her driving test while it was being repaired (by a different garage) she wanted the same car to do the test in.
A quick phone call and they gave her the use of a courtesy car for the test no charge. I thought it was good form considering the car wasn't sent to them for repair (insurance company didn't have them registered as a repairer)

-Chris-

pburns wrote: »

Going on the quality of your participation on the forum I think you're more than an order-taker Chris...

Like most salesmen, I'm probably a better talker than a do-er... :P

pburns wrote: »

If you don't mind me asking - what's it like at the coalface (and no problem if you feel it imprudent to elaborate)? Is it busier than ever chasing up any prospective sales or have you more time to chat up the pretty receptionist?

I've loads of time to chat up anyone I want, the footfall through the door is probably a third of what it should be. We've let people go over the last while, so our staffing levels are dropping to meet demand, but it's still quiet.
As for chasing up people, I've loads of time to chase people up, but I'm finding myself disheartened by the way things are gone - when the cost to change is €4-10k more than they expected, I find it hard to think that any amount of chasing will give them an extra €4k into their budget...

My boss says "well, they have to buy somewhere, Chris". My trainer says "there'll be 50,000 new cars sold this year probably - that's 1,000 per week! Isn't that worth fighting for??".
Meanwhile, I'm sitting in my empty showroom, telling people their car isn't worth anywhere near what they thought it was, listening to my colleagues tell me how they can't afford to feed their family on the money they're making, reading how the stealers are finally getting their comeuppance that they so sorely deserve.

It's hard to keep your head up at the moment, but I'm giving it a shot.

</violin music>:P:D

pburns wrote: »

Have profits from the service dept become more important to the overall business? Not trying to be facecous, just curious as to how things have changed day-to-day...

If you were sales only, you wouldn't be making enough money to keep the garage open (depending on your overheads, of course).
Cashflow is king, and a busy service department will keep the cashflow going.

pburns wrote: »

I had a service with a dealer recently and the service manager couldn't do enough, I was quite impressed (although it was a little dear I thought!) I was left wondering if the service was always this good or whether the downturn has forced them to up their game (never used this garage before).

I think service comes more from the personality of the service-giver and the management. I don't believe in my heart-of-hearts that a recession is going to make negligent or lazy people any less negligent or lazy.

If you're good at service, you're good at service - you'll have loyalty and support from your customers and you'll hopefully get enough referrals to keep you going.

I personally think the survivors will owe their thanks more to the business brains who managed costs and cash flow, than the carers who made the customer feel cared for.

Darragh29

AudiChris wrote: »

I'm not sure really. I think if scrappage was offered (say €3k) on any cars over x years old, it would slightly stimulate new car sales.
I think the proposal shouldn't make any mention of NCT - the current idea is to only offer scrappage on cars with valid NCTs afaik. If this is true, then the scheme will serve to remove roadworthy vehicles from the roads, while doing nothing to remove unroadworthy vehicles.


Unfortunately, I think the problem is too large to be solved with an incentive scheme.
I sell new Audis (no used, just '09 stuff). I think that, even if we dropped our prices by 25% across the board, we wouldn't see a massive increase in sales.

The problem now is that people are finding it hard to get loans from their banks, and that they're not confident in their circumstances.
If they're not confident borrowing €30k to buy a new car (because they're expecting a pay reduction, are in negative equity on their home, or are just plain fearful for their job), I don't think reducing that amount to €25k will change their thinking - you need to increase their confidence rather than decrease their borrowing requirement.


A scrappage scheme is good for encouraging people who can afford a new car, but don't see the value in buying one, into making a decision - you offer them a "bargain" in essence.

Chris I don't think the problem here is the consumer. I think the problem is with the PM's and other dealer princpials in the country that haven't changed their business model to adapt to the new economic reality. First of all, there is far too much emphasis being put on new car sales.

The way a lot of dealerships have been run in recent years, aftersales was just there to keep the distributor happy, sales was where the serious money was made and nothing else mattered. The one thing I'm noticing now with dealer principals I know, is that all of a sudden, they have developed a huge interest in their service/aftersales departments, and what some have found, is that these departments were making a loss and because sales were making so much money, nobody bothered looking at the contribution that service departments were making in the context of the overall business operation. And these are outlets charging around 100 Euro an hour labour, and they still are losing money, even with workshop loadings up at 80%!!! It's no wonder some of them are going to the wall because they were badly run, it's as simple as that I think.

Should these departments not have been making a profit all along???

The reason a lot of these businesses are in the manure business now is because they have problems with the capitalisation of recently bought fixed assets. All those glass showrooms now have to be paid for out of current income, and no amount of fiddling around with motor tax is going to resolve that, and in any event, I'd imagine the wider economic disaster would prohibit that type of action even if there was an appitite for it which I don't believe there is.

Also, I've yet to see a single dealership introduce new innovative products like evening/weekend/night time servicing, internet booking, this is 2009, if I was running a dealership, my customers would be able to see their car being serviced on my website, if my local creche can implement this technology and it is only running a year, why can't my local dealership!?!?!

Innovations like this in aftersales and parts would make a huge difference, I don't think there will be, or should be, a return of dealerships turning out 5-10 cars a day. The solutions are in finding a new business model, the old model, based on a site upgrade at the whim of a distributor, costing millions, was simply not sustainable, dealers with private helicopters, houses worth a couple of million and shareholdings in racehorses, sorry lads, but who's payin' for it???

pred racer

Darragh29 wrote: »

Chris I don't think the problem here is the consumer. I think the problem is with the PM's and other dealer princpials in the country that haven't changed their business model to adapt to the new economic reality. First of all, there is far too much emphasis being put on new car sales.

The way a lot of dealerships have been run in recent years, aftersales was just there to keep the distributor happy, sales was where the serious money was made and nothing else mattered. The one thing I'm noticing now with dealer principals I know, is that all of a sudden, they have developed a huge interest in their service/aftersales departments, and what some have found, is that these departments were making a loss and because sales were making so much money, nobody bothered looking at the contribution that service departments were making in the context of the overall business operation. And these are outlets charging around 100 Euro an hour labour, and they still are losing money, even with workshop loadings up at 80%!!! It's no wonder some of them are going to the wall because they were badly run, it's as simple as that I think.

Should these departments not have been making a profit all along???

The reason a lot of these businesses are in the manure business now is because they have problems with the capitalisation of recently bought fixed assets. All those glass showrooms now have to be paid for out of current income, and no amount of fiddling around with motor tax is going to resolve that, and in any event, I'd imagine the wider economic disaster would prohibit that type of action even if there was an appitite for it which I don't believe there is.

Also, I've yet to see a single dealership introduce new innovative products like evening/weekend/night time servicing, internet booking, this is 2009, if I was running a dealership, my customers would be able to see their car being serviced on my website, if my local creche can implement this technology and it is only running a year, why can't my local dealership!?!?!

Innovations like this in aftersales and parts would make a huge difference, I don't think there will be, or should be, a return of dealerships turning out 5-10 cars a day. The solutions are in finding a new business model, the old model, based on a site upgrade at the whim of a distributor, costing millions, was simply not sustainable, dealers with private helicopters, houses worth a couple of million and shareholdings in racehorses, sorry lads, but who's payin' for it???

+1
I dont often agree with you Darrragh but this post is spot on!

cnocbui

VRT is largely to blame for all this. A greedy tax if ever there were.

I think It is no coincidence that New car sales here have almost ceased, while in the Uk they have 'merely' declined drastically. The big difference of course is that VRT makes cars 20-36% more expensive here so when times get tough, there is 20-36% more incentive for people to defer a purchase.

The use of finance to purchase cars makes it a lot worse, because essentially people are borrowing 20-36% more, and of course paying interest on it, just to pay a tax.

Saab Ed

Johnboy Mac wrote: »

It seems you are blind to the standards of service in this country especially at main delaer level or you are so use to spending huge sums on your Scab (sorry, Saab) and you thus get excellent service from the main dealer.

What are you talking about ?

JimmyCrackCorn!

Hasn't the Dealer network always stated that they do not make large profits on selling cars. That they actually make there money on servicing.

If the above was true then how would new car sales bolster the industry?

No matter what incentive you provide people are not going to spend money on a new car when they have very little job security.

If someone in the motoring industry could explain how dealerships went belly up id appreciate it. I can only assume that they ate their cash flow with cars sitting there going nowhere.

Drummerboy08

The majority of dealers went under because they could not meet repayments to the finance houses for their stock. I.e, they had not got the cashflow to pay for it.

Hellrazer

That letter is just free advertising for PM.I love the way the media make him out to a "saviour" of the industry.

A while back he condemned some dealers for buying cars up north and in the UK and selling them down here while the majority of his garages were doing the same thing.

That letter is only because hes trying to save his own bacon.

-Chris-

Darragh29 wrote: »

Chris I don't think the problem here is the consumer. I think the problem is with the PM's and other dealer princpials in the country that haven't changed their business model to adapt to the new economic reality. First of all, there is far too much emphasis being put on new car sales.

If you're asking me whether dealerships in general could be run more efficently, I'd say "definitely".

If I'm answering kciere's question about the scrappage scheme, I'd say consumer confidence is more important than vehicle incentivisation.

As for new car sales, I've heard a saying that says "Volume is vanity, profit is sanity".
I'd say a lot of businesses get caught up in that trap - the fight to be number 1 for sales, or to beat last years sales target.
Sales is easier to measure and improve than service dept efficiency or parts dept turnover, also most DPs are ex. salesmen rather than ex. mechanics. I think that's why sales gets more than its fair share of attention.

Darragh29 wrote: »

The way a lot of dealerships have been run in recent years, aftersales was just there to keep the distributor happy...
...And these are outlets charging around 100 Euro an hour labour, and they still are losing money, even with workshop loadings up at 80%!!! It's no wonder some of them are going to the wall because they were badly run, it's as simple as that I think.

Sales is easier to measure and improve than service dept efficiency or parts dept turnover, also most DPs are ex-salesmen rather than ex-mechanics. I think that's why sales gets more than its fair share of attention.

Darragh29 wrote: »

Should these departments not have been making a profit all along???

IMHO, every department should be able to stand on its own two legs. Everything (including advertising etc.) should be able to have a measurable ROI.

Darragh29 wrote: »

The reason a lot of these businesses are in the manure business now is because they have problems with the capitalisation of recently bought fixed assets. All those glass showrooms now have to be paid for out of current income, and no amount of fiddling around with motor tax is going to resolve that, and in any event, I'd imagine the wider economic disaster would prohibit that type of action even if there was an appitite for it which I don't believe there is.

True, but anyone who's overextended themselves recently is overextended. There's not much they can do about that. They need to turn to the things they can control - demand stimulation!

Darragh29 wrote: »

Also, I've yet to see a single dealership introduce new innovative products like evening/weekend/night time servicing, internet booking, this is 2009, if I was running a dealership, my customers would be able to see their car being serviced on my website, if my local creche can implement this technology and it is only running a year, why can't my local dealership!?!?!

I think we're way behind as a nation on web-enabling. Why isn't every dealer on Google Maps? Why don't we have webcams into the workshop? Why haven't more dealers signed up to Carshowonvid? Why do so few dealerships have blogs or do email newsletters?

Darragh29 wrote: »

Innovations like this in aftersales and parts would make a huge difference, I don't think there will be, or should be, a return of dealerships turning out 5-10 cars a day. The solutions are in finding a new business model, the old model, based on a site upgrade at the whim of a distributor, costing millions, was simply not sustainable, dealers with private helicopters, houses worth a couple of million and shareholdings in racehorses, sorry lads, but who's payin' for it???

Innovations like these will make the difference between the top and bottom garages - the innovators and the dinosaurs, but it won't be what saves the industry and the sales figures.

I could implement all these ideas today where I work, but it wouldn't fix the fact that footfall is down. It wouldn't make people come to my garage from two counties over to experience our wonderful service.

I absolutely agree with you everytime you push the idea for fresh thinking and a new business model and the ineffectiveness of the "fear of change" thinking that's prevelant at the moment. I'd love to be at the vangard of that change, and hopefully someday I will.

In the meantime though, it's not going to fix the fact that footfall and spending is down in virtually every retail environment (except maybe Aldi/Lidl).

-Chris-

cnocbui wrote: »

VRT is largely to blame for all this. A greedy tax if ever there were.

I think It is no coincidence that New car sales here have almost ceased, while in the Uk they have 'merely' declined drastically. The big difference of course is that VRT makes cars 20-36% more expensive here so when times get tough, there is 20-36% more incentive for people to defer a purchase.

The use of finance to purchase cars makes it a lot worse, because essentially people are borrowing 20-36% more, and of course paying interest on it, just to pay a tax.

Car sales are through the floor in the US too, do they have VRT?

VRT inflates new car prices, but also inflates used car prices because the two are relative.

Car sales are down worldwide, car makers are in dire financial trouble.
In Irenald you can pin a certain amount of the loss of momentum in car sales on the way the VRT change was introduced, but VRT is only a bit player in the current situation.

Hellrazer

Darragh29 wrote: »

The way a lot of dealerships have been run in recent years, aftersales was just there to keep the distributor happy, sales was where the serious money was made and nothing else mattered. The one thing I'm noticing now with dealer principals I know, is that all of a sudden, they have developed a huge interest in their service/aftersales departments, and what some have found, is that these departments were making a loss and because sales were making so much money, nobody bothered looking at the contribution that service departments were making in the context of the overall business operation. And these are outlets charging around 100 Euro an hour labour, and they still are losing money, even with workshop loadings up at 80%!!! It's no wonder some of them are going to the wall because they were badly run, it's as simple as that I think.

Darragh I couldnt agree with you more on that post bar the bit where you say sales make the serious money.For example last year I sold over 1.4 million worth of parts.With a profit before costs of 22%.
Sales will not make 22% on a car before costs--well if they do Ive never seen it.
Its only now that sales have dropped that dealer principals see the value of aftersales and thats why theyre suddenly interested in it.

Should these departments not have been making a profit all along???

I think you`ll find that they were.

Also, I've yet to see a single dealership introduce new innovative products like evening/weekend/night time servicing, internet booking, this is 2009, if I was running a dealership, my customers would be able to see their car being serviced on my website, if my local creche can implement this technology and it is only running a year, why can't my local dealership!?!?!

Ive put across a lot of these ideas to my bosses but theyre so stuck in their ways theyre not willing to change.Ive suggested night time servicing.We do have internet booking.The webcam in the workshop would be a great idea but it would have to have no sound--Im on the nortside of Dublin and the language is choice out there :D
In a previous place we had a glass wall between the customer waiting area and the workshop and customers thougt it was a great idea.

Innovations like this in aftersales and parts would make a huge difference, I don't think there will be, or should be, a return of dealerships turning out 5-10 cars a day. The solutions are in finding a new business model, the old model, based on a site upgrade at the whim of a distributor, costing millions, was simply not sustainable, dealers with private helicopters, houses worth a couple of million and shareholdings in racehorses, sorry lads, but who's payin' for it???

The distributors have a lot to answer for.They pushed dealers to have bigger and better showromms and now the dealers cant pay for them.Maybe the distributors should bail the dealers out.

JimmyCrackCorn!

AudiChris wrote: »

Car sales are through the floor in the US too, do they have VRT?

VRT inflates new car prices, but also inflates used car prices because the two are relative.

Car sales are down worldwide, car makers are in dire financial trouble.
In Ireland you can pin a certain amount of the loss of momentum in car sales on the way the VRT change was introduced, but VRT is only a bit player in the current situation.

VRT on the Japanese polluter i brought in before the changes is only 100 euro more now a year later than it was then. (recent reduction in VRT prices across the Japanese import range it was madness before that)

While the VRT does artificially inflate the price of cars. I dont see it as the main reason for the halt in new car sales.

Consumers are scared they will have no jobs. Ireland is not competitive any more and everyone i seem to talk to of late is either unemployed or the wife/ husband/partner is out of work.

Id personally consider a brand new car a luxury item and well i can say with second had car prices at the moment, The general "doom and gloom" and the shift away from spend money like there is no tomorrow I cant see any pick-up in new car sales with any incentive.

sparklepants

independent.ie wrote:

"All of the above events were forecast in my mail of January 15, all of these companies (RIP) were collectors of VRT and major employers.
"We all know there is pain to be shared, we need action faster than you are moving, the workforce and consumers are tired of the uncertainty, get on with the decisions on tax changes and people will know where they are and adjust.

I don't know anything Padraic Mooney, but I'm not impresssed with his letter-writing skills. The tone of this piece is controntational and slightly agressive. He's clearly not a man who is well-versed in the art of politics. Insinuating that the minister has been sitting on his backside for the last couple of months (however accurate that may be), is hardly a means of encouraging him to act. I hope that the motor trade isn't relying on Mooney's powers of persuasion to get the Government to make changes.

Some of the contributors to this forum would clearly be able to make better, more thought-provoking representations to the minister than he would.

galwaytt

TomMc wrote: »

Well any dealer who borrowed millions to upgrade or re-locate to keep a marque hasn't much of a business brain. It is different for those who sold an old premises to property developers which largely financed the move. There were enough successful independents around to highlight the fact that you do not need to be a main franchised dealer to be successful. The distributors led many up the garden path, but if people hadn't the foresight, they have to share the blame as well for their predicament.

Not so, I'm afraid. The likes of VAG, Mercedes and BMW in particular, forced garages to upgrade to the new 'corporate image' showrooms, or lose their franchise. Don't believe me? Look at Al Hayes Motors in Portumna, once the largest VAG business in the country. He lost Audi over it.

Inside the last week, I have been in a showroom being renovated. This showroom was built, new, inside the last few years, and is fabulous. Yes, it has the tiles/mirrors/glass/coffee machine - but, let's be honest, who doesn't like being in them ? - yet now, in 2009, they have been instructed to change the appearance, including laying NEW tiles.........in an importer-mandated colour and design.........or lose the franchise. Closing the doors, letting people go, and throwing in the towel, is simply not a viable option.

This, in a market on it's knees.

The importers have a lot to answer for.

ninty9er

galwaytt wrote: »

Not so, I'm afraid. The likes of VAG, Mercedes and BMW in particular, forced garages to upgrade to the new 'corporate image' showrooms, or lose their franchise. Don't believe me? Look at Al Hayes Motors in Portumna, once the largest VAG business in the country. He lost Audi over it.

Inside the last week, I have been in a showroom being renovated. This showroom was built, new, inside the last few years, and is fabulous. Yes, it has the tiles/mirrors/glass/coffee machine - but, let's be honest, who doesn't like being in them ? - yet now, in 2009, they have been instructed to change the appearance, including laying NEW tiles.........in an importer-mandated colour and design.........or lose the franchise. Closing the doors, letting people go, and throwing in the towel, is simply not a viable option.

This, in a market on it's knees.

The importers have a lot to answer for.

Is there not no VAG importer anymore. VAG is doing the job itself IIRC.

Darragh29

sparklepants wrote: »

I don't know anything Padraic Mooney, but I'm not impresssed with his letter-writing skills. The tone of this piece is controntational and slightly agressive. He's clearly not a man who is well-versed in the art of politics. Insinuating that the minister has been sitting on his backside for the last couple of months (however accurate that may be), is hardly a means of encouraging him to act. I hope that the motor trade isn't relying on Mooney's powers of persuasion to get the Government to make changes.

Some of the contributors to this forum would clearly be able to make better, more thought-provoking representations to the minister than he would.

It's fashionable now in business circles to try to emulate Michael O' Leary, next thing Mooney will be f*cking and B**ing on the television when you turn on the 9 O' Clock news. It's just that he is copying someone else he saw on the television.

Darragh29

AudiChris wrote: »

I could implement all these ideas today where I work, but it wouldn't fix the fact that footfall is down. It wouldn't make people come to my garage from two counties over to experience our wonderful service.

Ya see this is my point exactly Chris! The customer of 2009 doesn't want to come next nor near the garage, not for aftersales anyway! The customer of 2009 can book his holiday online where he used to have to go down to the travel shop. He can do his banking online now where he used to have to queue for parking first at the bank and then queue for the cashier.

I think the customer of 2009 now wants to be able to book his/her car into a garage, prepay by credit card online, the garage collects the car at 6PM as requested via the web booking process, the car is collected at 6PM as agreed, brought down the road to the garage, serviced and service valeted & washed and brought back to the customer for 9PM. The customer wants to see the work being done via a live feed from the garage website while watching Fair City with a glass of wine.

This is what I think the future of aftersales is. As you've said and another poster has said above, the appetite simply is not there for change, but change is going to come as it always will. Look at how the internet has revolutionised almost every other industry in this country, and in the motor trade, you are lucky if your garage can take an e-mail query or has a web booking facility (that actually is used!)...

ninty9er

Darragh29 wrote: »

Ya see this is my point exactly Chris! The customer of 2009 doesn't want to come next nor near the garage, not for aftersales anyway! The customer of 2009 can book his holiday online where he used to have to go down to the travel shop. He can do his banking online now where he used to have to queue for parking first at the bank and then queue for the cashier.

I think the customer of 2009 now wants to be able to book his/her car into a garage, prepay by credit card online, the garage collects the car at 6PM as requested via the web booking process, the car is collected at 6PM as agreed, brought down the road to the garage, serviced and service valeted & washed and brought back to the customer for 9PM. The customer wants to see the work being done via a live feed from the garage website while watching Fair City with a glass of wine.

This is what I think the future of aftersales is. As you've said and another poster has said above, the appetite simply is not there for change, but change is going to come as it always will. Look at how the internet has revolutionised almost every other industry in this country, and in the motor trade, you are lucky if your garage can take an e-mail query or has a web booking facility (that actually is used!)...

I agree with most of that, but do people really still watch Fair City, it's 2009 after all :pac:

Hellrazer

Darragh29 wrote: »

I think the customer of 2009 now wants to be able to book his/her car into a garage, prepay by credit card online, the garage collects the car at 6PM as requested via the web booking process, the car is collected at 6PM as agreed, brought down the road to the garage, serviced and service valeted & washed and brought back to the customer for 9PM. The customer wants to see the work being done via a live feed from the garage website while watching Fair City with a glass of wine.

Darragh,
Can you actually see that happening.Personally Id like to think it can but the problem I see is that there doesnt seem to be anyone with the entreprenarial(sp?) skills to make it happen.Most garages are family run businesses where the son/daughter took over from the parents and have the mentality that if it worked in the fathers day then it should still work now.

Pisses me off big time to keep getting these ideas shot down everytime I suggest one.

Maybe some dealers should start reading here and pick up some new ideas to save their business rather than listen to a rant from someone that I personally think is grasping at straws.

TomMc

galwaytt wrote: »

Not so, I'm afraid. The likes of VAG, Mercedes and BMW in particular, forced garages to upgrade to the new 'corporate image' showrooms, or lose their franchise. Don't believe me? Look at Al Hayes Motors in Portumna, once the largest VAG business in the country. He lost Audi over it.

Inside the last week, I have been in a showroom being renovated. This showroom was built, new, inside the last few years, and is fabulous. Yes, it has the tiles/mirrors/glass/coffee machine - but, let's be honest, who doesn't like being in them ? - yet now, in 2009, they have been instructed to change the appearance, including laying NEW tiles.........in an importer-mandated colour and design.........or lose the franchise. Closing the doors, letting people go, and throwing in the towel, is simply not a viable option.

This, in a market on it's knees.

The importers have a lot to answer for.

Does that not prove my point.

If distributors are (& were) forcing dealers to upgrade to plate-glass palaces, dealer principals should tell them to cop themselves on. Dealers should grow a pair and highlight to these distributors the castastrophe that these policies lead to down the road. It is in nobodies interest not to see the bigger picture and remain prudent. They are playing the dealerships for fools, by getting them to commit financial suicide while they just sit back without any major commitment on their part. A few top selling dealers should call their bluff.

Anyway, I think a dealer who wishes to hold onto main dealer status, quite possible knows that without it, they are not progressive enough to stay in business. It is a testament to the laziness in large sections of the industry. It gives them something to use to rip people off. The consumer would be better off without them.

I know of two salesmen in two of the bigger Mercedes and BMW dealerships in the country, who set up by themselves running (multi-franchise) independent new car sales outlets and were doing very well in the boom. Their experience, contacts and lower overheads mean they are in a better state than the big boys they once worked for.

ninty9er

Never heard of Block Exemption??

TomMc

If an independent dealer has a customer with cash in hand or finance in place, most new "mainstream" cars can be sourced easily enough. Even at the higher end of the market as well. In the current market, I'm sure many main dealers would be fighting over a cash sale without a trade-in involved, to any third party.

Bluefoam

A local body repair shop, near me has sent out price lists for servicing - all standards rates, itemised lists of what is done are - but excluding extras - this is the fist step to creating transparency... I agree, the interweb booking thing would be good.