Automotive Sales Training

As the marketing in this industry changes so must the marketers. The marketing techniques, products and services change daily. New technology is always on the horizon. Today in the consumer retail environment there is change everywhere. Much of this change is necessitated by the ever increasing number of outlets selling the same products. As it has been often quoted, “the piece of the pie is getting smaller.” Retail neighborhood storefronts of years ago had only to compete with other retail neighborhood store fronts, and only those in the same neighborhood. Then with the advent of shopping malls and centers , large retailers moved from the neighborhoods to the shopping malls. The competition then became centered on shopping malls and centers. Eventually neighborhood stores began to make a comeback by being more customer friendly and service conscious. Automotive, Marine, RV and Motorcycle dealers were no different. Many neighborhood dealers moved to better highway locations, and thus began the auto mall building. Some did this voluntarily and some were forced by the factories. Either way all retailers moving to “bigger and better” facilities also took on a lot more debt to do so. So the question is did taking on more debt to be “bigger and better” really make sense. To many it worked very well. However, I have been involved in working closely with “dealerships” that over spent and had to restructure, sell off parts of their business, or completely sell out. The buyers were almost always large and very well capitalized dealer groups. Many were publicly financed. And of those public companies many of them have also had to eventually restructure and/or sell.

Now today it’s no secret that there are many dealerships in trouble. The competition between the dealerships is phenomenal due to the amount of makes and models available , with more coming. Many domestic manufacturers are making there money overseas. However, here in the USA many dealerships are struggling to stay alive. Many dealerships, mostly domestics, have not been able to find buyers for their franchises and have just closed. Domestic manufacturers have been planning for years to close many operating franchises, so to increase the “share of the pie” for the remaining dealerships.

Franchised dealerships, such as auto dealers, marine dealers, and motorcycle dealers do have an edge over the non franchised business.. The edge is that you must be a franchise to sell and service the product, unlike a clothing store , a restaurant, a food store, etc. With the manufacturers understanding the need to reduce the number of dealers , the future should improve. However , while this is happening another challenge is developing. The internet has brought about an onslaught of non franchised “brokers” for cars, trucks, boats, RVs and motorcycles that compete with franchised dealers on the internet to sell the franchisees products for them for a referral fee or a listing fee. These internet sites operate both inside and outside each individual dealer’s area. The promise of the lowest price drives many of these sites. Dealers find themselves fighting over deals worth a few hundred dollars. It’s ironic that dealers operate in a retail environment where when a $30,000. vehicle is sold the state collects a sales tax around $2,000.00 for doing nothing (depending on state) and the dealer who has stocked this vehicle, maintained it, and paid the overhead to operate the sales organization many times makes less, both on the gross side and the net side.

Ok , so what’s the answer? Well the first thing is that the manufacturers must do a better job with product mix. There have been many management errors in this area. It seems that all manufacturers are aware of this. How well and how quickly they can and will make the necessary changes remains to be seen. Either way it has been and will be a very costly lesson for domestic manufacturers. Many dealers will be better off with leaving the business. Those who, for whatever reason have not kept up the rapidly changing times. The factories and these dealers have got to work the details out between themselves. For the survivors it is imperative that they know and implement the newest products, services and techniques available today and tomorrow and the next day, etc. As the old saying goes; “only the strong will survive.” Actually, the new saying is that only those dealers that are “ knowledgeable, prepared and willing to change will survive”.

Sales training in the Automobile, Marine, RV and Motorcycle dealership is more important today then ever. Training that shows sales personnel how to prospect on their own, how the dealer can maximize the internet to his or her own benefit, how to cut advertising expenses, how to maximize return on investment not only with the fixed assets of the company but with the human assets of the company. As with both they must be developed. Too many dealerships are not maximizing the potential of the human assets. Unskilled owners and mangers are the problem. An owner, manager and salesperson today is dramatically different than an owner, manager or salesperson of twenty year sago. Just ask any dealership owner, manager, or staff of the dealers and dealer groups that have gone out of business and those who will fail in the future. Cutting edge products and services for the dealership of the future is the answer.