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Blog Entries about "blog"
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Small percentages add up to bigger percentages
We make no apologies for returning to the subject of parts wholesaling again because it appears, judging by our workload, that this sector is seeing a real renaissance in the franchised sector. However our work with several vehicle manufacturers, looking at network performance on their behalf, has highlighted one interesting problem – staff lacking basic knowledge.
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Automotive Mark-ups & Margins
If you buy something for £100, what do you have to sell it for to make a gross profit margin of 33%? The answer is, of course, £150. Certainly every reader of Auto Retail Network’s Bulletin where this article was first published, would have got this simple example of ‘mark-ups and margins’ correct. However, our experience running training courses for sales executives and aftersales personnel is that the mathematical skills of dealer staff are often sadly lacking, and many would come up with £133 as the answer – how would yours fare? Furthermore, our research on gross margins strongly suggests that this lack of knowledge has an impact on profits.
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Range Rover Evoque
From time to time, former Trend Tracker analyst and now business academic Dr. Michael Wynn-Williams delivers us his personal view of events and issues in the automotive sector. Happily this week sees Michael letting us air his view of the Evoque, the latest extension to the Land Rover brand portfolio. Whatever road-bound 4x4s in general evoke to you, I hope you’ll enjoy his robust critique of a company that has “thrown off its old mud-plugging ways,” but has nevertheless “slowly become bogged down in its models and brands.”
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Pricing strategies for a declining market
In a month's time, Ford is cutting the RRPs on all its medium and small cars, as it did in April with its large ones. And it has cut dealer margins too, with the stated aim of making “the whole purchase process more transparent and the value of Ford cars more obvious."
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Are new cars overpriced?
Last month in this column, we shared our views on the scrappage scheme and how this had influenced new car sales in the short-term. New car sales volumes are, of course, important in their own right but also exert a crucial influence on the used car market and aftersales. Longer term we believe that new car sales volumes will respond in a similar fashion to the recoveries experienced after previous recessions. One potential obstacle to this recovery is the possibility that new cars have become overpriced - something that What Car? magazine raises in its latest issue.
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Do Quangoids Dream of Electric Cars?
(With apologies to Philip K. Dick.) In July six electric Mitsubishi i-MiEVs will arrive in the North East for trials run by Cenex's Low Carbon Vehicle Procurement Programme at a leasing cost of £137,450 over four years, plus (we guess) around £6.5m for installing 1,300 charging points. The latter approximate figure is included in the last government's 'Plugged in Places' programme, channelled via the regional development agency One North East. In London, 20 Toyota Prius plug-in hybrids on lease will arrive on the fleets of various public bodies in London, courtesy of Toyota and EDF Energy. Similar trials are under way in the Midlands, funded by the Technology Strategy Board and Advantage West Midlands. Correction: funded by all of us.
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Charting The Decline in SMR Work
Download and read our latest aftersales article, published in the June 2010 issue of Auto Retail Networks' Bulletin.
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Black and Blue in the Bayou
Dr Peter Wells of Cardiff Business School's Centre for Automotive Industry Research (co-author of Car Futures - Rethinking the automotive industry beyond the American model”, available from Trend Tracker), speculated recently in Automotiveworld.com's Environment Weekly that BP's fiasco could prove a tipping point in the evolution of a market for electric vehicles. Market and public sentiment can turn bad on a dime, and BP's bonds have dropped to junk status, although with oil at $75 a barrel, BP is still gushing cash flow and can easily afford the $billion+ Gulf clean-up cost, and pay a dividend to its US shareholders.