Vfacts september 2022

[jpd80]

Originally Posted by Bossxr8

Think about everything they have to spend to sell cars here. Spare parts, advertising, rent, electricity/gas, salesmen, backroom employees etc etc etc.

And then they might only make a few thousand dollars on a sale.

The 107 sales of one of the french brands mentioned earlier. How is that even feasible to sustain? Even spreading costs across a few brands, it's not much to work with.


Even if they are making 5k profit per sale (highly unlikely with those cars) that's only $500,000 a month. How can you run a business on that?

The answer to all of the above is price transferring, the vehicles that come here are sold to Australia at near full retail so most of the profit stays in the “home room” which offsets any profit against the billions spent on new factories and development costs…..

[BENT_8]

When I worked for Toyota dealerships 20yrs ago the departments that kept the dealership afloat was parts and service.

I'd say the same applies now.

[Vesper Martini]

At least Toyota are selling in volume, if they are making hardly any profit, what are the small players doing.

no amount of price transferring would cover the rent of the car yards selling 7 cars a month let alone the sign out the front.

[Franco Cozzo]

Originally Posted by BENT_8

When I worked for Toyota dealerships 20yrs ago the departments that kept the dealership afloat was parts and service.

I'd say the same applies now.

Was the same deal 10 years ago, workshop kept the lights on with churning out the most profitable work but sales got all the rewards.

I guess if you got spuds in sales you have less work coming through the workshop

Being in sales would be a dicey game I reckon, your potential income is limited by a small sales area, the manufacturers range, marketing and promotion efforts.

Who the **** would be a Renault or Citroen sales person? Wouldn't do it even if it was the last job on earth.

I don't understand the need for car sales people when there's fixed pricing models.

Hats off to car sales people, you're a better person than me

[BENT_8]

Originally Posted by Franco Cozzo

I don't understand the need for car sales people when there's fixed pricing models.

Agreed to a point, I still like to see, touch and drive anything I buy, so keeping cars on forecourts is fine.
Being hassled by a salesman before you've even shut your own car door is what I hate.

Few weeks ago my Daughter asked me to look at an ASX with her after work. Got to the dealership, jumped out of my car and before I'd walked a full lap of the ASX the sycophant was attached.
'What you looking for mate?'
Pretty obvious I thought considering I went straight to the ASX.
'Whats your budget?'
Pretty obvious considering im looking at your $23k ASX.
Turns to my Daughter, l'ooking for something for you love?'
My Daughter says yes.
Notices the company insignia on my uniform, 'I know your employer, let me do you a great deal'.
'Do you like it?'
Its ok says my Daughter.
'Great, I'll grab the keys and you can take it for a drive'.
No thanks we're just looking today.
'We sell 80 cars a month and have already discounted this one, wont last at that price'.
Oh well, says my Daughter, if its not meant to be its not meant to be.
Thats my girl.
'But its what you want, you like it and its priced right, whats the problem?'
I turned, looked him straight in the eye and said 'your pushy bull**** sales tactics, thanks for your time, we'll keep looking.

As we walked away another salesman stopped him and asked what the go was, I heard him make a comment about wasting his time.
The other salesman said who, Steve?
I sold him a Mazda last month, signed within half an hour.
Old mate mumbled and walked off.
Matt then came over and asked how the Mazda was, I said Wife loves it.
He says thats great, if I can help in future hit me up.
Thanks mate I said.

See he knew what to expect, when I bought the Mazda I walked in, looked at it, checked the books and approached him for a drive. Wife drove it, signed the contract, gone in half an hour.

He said he liked customers like me who know what they want.
I said I like salesmen like you who give buyers space.
He agreed but said their practice is to approach the customer asap and would have done the same with me if not for being busy at the time.
I said if you did it'd still be for sale and explained why.
He understood and said it was obviously meant to be.
Thats right.

If old mate had kept his distance there'd probably be another digit on his target/sales board.

[prydey]

Originally Posted by BENT_8

'We sell 80 cars a month .

I'm surprised you didn't reply, 'big deal, so do I'

I expect your ranger will be just about the longest you've owned a car...

[Fordman1]

Originally Posted by BENT_8

Agreed to a point, I still like to see, touch and drive anything I buy, so keeping cars on forecourts is fine.
Being hassled by a salesman before you've even shut your own car door is what I hate.

Few weeks ago my Daughter asked me to look at an ASX with her after work. Got to the dealership, jumped out of my car and before I'd walked a full lap of the ASX the sycophant was attached.
'What you looking for mate?'
Pretty obvious I thought considering I went straight to the ASX.
'Whats your budget?'
Pretty obvious considering im looking at your $23k ASX.
Turns to my Daughter, l'ooking for something for you love?'
My Daughter says yes.
Notices the company insignia on my uniform, 'I know your employer, let me do you a great deal'.
'Do you like it?'
Its ok says my Daughter.
'Great, I'll grab the keys and you can take it for a drive'.
No thanks we're just looking today.
'We sell 80 cars a month and have already discounted this one, wont last at that price'.
Oh well, says my Daughter, if its not meant to be its not meant to be.
Thats my girl.
'But its what you want, you like it and its priced right, whats the problem?'
I turned, looked him straight in the eye and said 'your pushy bull**** sales tactics, thanks for your time, we'll keep looking.

As we walked away another salesman stopped him and asked what the go was, I heard him make a comment about wasting his time.
The other salesman said who, Steve?
I sold him a Mazda last month, signed within half an hour.
Old mate mumbled and walked off.
Matt then came over and asked how the Mazda was, I said Wife loves it.
He says thats great, if I can help in future hit me up.
Thanks mate I said.

See he knew what to expect, when I bought the Mazda I walked in, looked at it, checked the books and approached him for a drive. Wife drove it, signed the contract, gone in half an hour.

He said he liked customers like me who know what they want.
I said I like salesmen like you who give buyers space.
He agreed but said their practice is to approach the customer asap and would have done the same with me if not for being busy at the time.
I said if you did it'd still be for sale and explained why.
He understood and said it was obviously meant to be.
Thats right.

If old mate had kept his distance there'd probably be another digit on his target/sales board.

Good post Bent,

I agree, the dealer we use (for new cars) has staff that “stay back” and work with customers when they’re “ready”.

There are no “Hyenas” looking for “flesh” when they see someone coming in the door, and it’s all very respectful (after a few minutes there might be a “can I help you”).

The dealer in question, has multiple franchises (including premium German, and other premium brands), these are all run brilliantly, the staff are absolutely professional and they know EVERYTHING about their new car specifications. There is also zero pressure for “a sale”.

[DFB FGXR6]

Originally Posted by Fordman1

Good post Bent,

I agree, the dealer we use (for new cars) has staff that “stay back” and work with customers when they’re “ready”.

There are no “Hyenas” looking for “flesh” when they see someone coming in the door, and it’s all very respectful (after a few minutes there might be a “can I help you”).

The dealer in question, has multiple franchises (including premium German, and other premium brands), these are all run brilliantly, the staff are absolutely professional and they know EVERYTHING about their new car specifications. There is also zero pressure for “a sale”.

I'm in sales part time, although not with cars. Staff are expected to greet customers almost instantly to acknowledge their presence. Staff are expected to be seen doing this or you are otherwise not serving customers.

I hate it when I walk into a business, and then instantly hounded by sales staff. And I hate doing that to other people. I prefer to nod, say hello or offer a smile and then give the customer a chance to walk in and around. I then like to approach them in passing, rather dive bombing them the second they step into my space.

From my experience, if a customer is in a hurry to be served, then they will approach you directly themselves. If a customer wanders through in a relaxed manner, then generally they are just looking or willing to take time to consider purchases. Sure, I approach people, but only when I feel like it's appropriate.

[DFB FGXR6]

https://www.carexpert.com.au/car-new...ambitious-plan

[kypez]

Originally Posted by DFB FGXR6

https://www.carexpert.com.au/car-new...ambitious-plan

Didn't we read similar about Holden...

[Adamz Ghia]

My favourite sales people are the ones who come over, ask if I need a hand, and if I don’t, just give me a ‘my name’s Shazza, if you need a hand I’ll be over there if you need anything’. That’s perfect. But when they won’t leave me alone I get mad straight away and nine times out of ten will just leave without making a purchase.

[b0son]

Originally Posted by Adamz Ghia

My favourite sales people

dont exist (for me). I do my research before I buy, I find sales people just get in the way of a quick sale. If I could buy a car online, I would. It's the worst part of the buying experience.

[Dr Smith]

Originally Posted by kypez

Didn't we read similar about Holden...

More than we realise...Citroen brought in some Mid size vans for press & demo work before official release and then changed tack and decided at the stroke of mid-night here Peugeot would sell their branded version instead...Holden brought in Cadillacs ready to sell and dropped the whole thing, iirc sending the cars here to NZ....except with no Holden now I wonder if GM will ever bring in Cadillacs for rhd conversion?

[BENT_8]

Originally Posted by Adamz Ghia

My favourite sales people are the ones who come over, ask if I need a hand, and if I don’t, just give me a ‘my name’s Shazza, if you need a hand I’ll be over there if you need anything’. That’s perfect. But when they won’t leave me alone I get mad straight away and nine times out of ten will just leave without making a purchase.

Agreed, i dont have a problem with them saying hello and acknowledging my presence as quite often in a car sales situation with multiple sales people that first contact makes you their prospect, but thats it, dont start badgering me with questions, im doing the buying, i'll ask the questions when and if im ready.
Time is precious and theres a lot of yards and cars to sort through, if you stopped and had a chat to every salesman you come across and take everything for a spin you limit your opportunities.
Truth is its a tactic they use to limit you as the longer you spend with them the less time you spend with the opposition.

At the end of the day I would have sought out Matt who sold me the Mazda as I consider myself his customer and appreciated his work. If old mate had stopped for breath Id have made that quite clear but once he annoyed me it was done.

[Dr Terry]

Originally Posted by Dr Smith

Holden brought in Cadillacs ready to sell and dropped the whole thing, iirc sending the cars here to NZ....except with no Holden now I wonder if GM will ever bring in Cadillacs for rhd conversion?

That change of tack was brought about by the GFC. GM were geared up to sell Cadillac, SAAB & Opel, but the GFC shot the whole thing down.

Holden & SAAB no longer exist & Opel was sold to PSA.

Dr Terry

[lra]

Originally Posted by Dr Smith

..Holden brought in Cadillacs ready to sell and dropped the whole thing, iirc sending the cars here to NZ....except with no Holden now I wonder if GM will ever bring in Cadillacs for rhd conversion?

As GM is on the nose with the previous Holden buyers, I would wonder how many GMSV would sell of RHD conversions.
The Camaro sold in bucket loads ........ not.
The Silverados are for what I would call 'Special People' with strange needs.
The Corvette ? For drug dealers and ultra rich 'look-at-me' poseurs.

Australia is a lost cause for any GM offering.

[Big_Daz]

Originally Posted by lra

As GM is on the nose with the previous Holden buyers, I would wonder how many GMSV would sell of RHD conversions.
The Camaro sold in bucket loads ........ not.
The Silverados are for what I would call 'Special People' with strange needs.
The Corvette ? For drug dealers and ultra rich 'look-at-me' poseurs.

Australia is a lost cause for any GM offering.

Camaro SS didnt sell because of the price they had to sell for after conversion (Near on $100k on the road). Especially competing with the Mustang GT for $30k less... Cant really blame people... Thats on GM for not building them RHD like Ford does with Mustang. A factory RHD Camaro SS at Mustang $$$ would of sold quite well.. Typical GM being GM though I suppose.... Agree re: silverado (though I feel the same about F150/Ram in Aus as well).

Originally Posted by Adamz Ghia

My favourite sales people are the ones who come over, ask if I need a hand, and if I don’t, just give me a ‘my name’s Shazza, if you need a hand I’ll be over there if you need anything’. That’s perfect. But when they won’t leave me alone I get mad straight away and nine times out of ten will just leave without making a purchase.

Mine too... Im all for the initial greeting, thats just makes sense. Im the type that generally knows more than the salesman about the car I am looking at so want to left alone to look at/sit in/etc the car. I will then seek out the salesman if I want a test drive or to purchase. The dealers that leave me to my own devices, will get my business, and I'll come back again. Those who hang around like a bad smell and try all the sales BS from me see me bugger off elsewhere...

When I bought wifey's Kia, the first (and my local) Kia dealer where a pain.. I told them I just wanted to look at it, and I would come see them for more info/test drive if I was interested. Bloke would NOT go away.. Kept at me about how hard they are to get, the wait time, etc. I dont care.. If I like it, I'll buy it, regardless of wait time. I left pretty quickly... Dealer I bought from, left me alone to look as long as I needed. Took it for a drive and signed the deal that day, all within an hour. At least with the ranger, when I put my $$$ down they didnt have something for me to look at/drive so it was as simple as Deposit and then phone calls from there....

[Poetic Justice]

Originally Posted by BENT_8

When I worked for Toyota dealerships 20yrs ago the departments that kept the dealership afloat was parts and service.

I'd say the same applies now.

It's the whole business now.

Non luxury car dealerships in general pre COVID ran at approx 2% return overall with the exceptions of Toyota and Mazda dealerships being a bit higher (around 4% on average.) You could say service & parts were percentage wise holding up few dealerships with the front end profitability on new car sales being absolutely in the toilet.

These days post the tougher parts of COVID, a combination of vehicle supply for myriad of reasons means your minnow dealership is now running at anywhere up to 5% return which was unheard of.

What COVID enabled car dealers to achieve was a highly reduced level of stock meaning demand climbed as we all know - but instead of carrying 3+ months worth of stock at any given time, some are barely able to get through a month without having to submit backorders. This has in turn, again as we know, driven profitability on carsales through the roof.

Will it last? I don't think it will return to pre 2020 levels but it won't continue to ride this high for the long term.

[Franco Cozzo]

Originally Posted by Big_Daz

At least with the ranger, when I put my $$$ down they didnt have something for me to look at/drive so it was as simple as Deposit and then phone calls from there....

Imagine if you didn't even need to leave the house and you just paid your deposit via credit card/visa debit/bank transfer/paypal on their website, then your local Ford dealership contacted you for progress updates/ETA's then delivered it to your driveway at home or your work when came in stock? All done from the comfort of your couch or office.

You're an example of a group of people who put down money without needing to drive/see a car first, so why couldn't they offer online as an option?

I feel like a car dealership could basically be a workshop with a small sales showroom attached where they just have one of each of the range and let people who want to look at/test drive take em out on test drives/look at and feel them.

Then you basically have one sales guy who also helps out the service department and runs admin when there's no customers around.

So we have a couple people here who want to do the traditional method of car buying process with the sales guy, but you also cater to the customer who doesn't want to leave the house but knows what they want to buy before they've even come to the dealership and one of the workshop guys and the sales guy can come out and deliver the car to this type of customer.

So much less overheads - they don't need that huge showroom with a bazillion sales guys in suits waiting for you to step foot on the yard before they start pestering you and using high pressure sales tactics from the Donald Trump 1980s playbook.

Last time I bought a new car was a new Colorado on behalf of work when Holden announced its departure, I knew what I wanted and saw the car in the yard, it still took about 4 visits to the dealership and 10 phone calls just to buy the ****ing car in the yard - absolutely ridiculous.

Could have had it done in a couple emails and an EFT transfer without me needing to come back to the dealership, I still had to come out to the dealership to pick it up afterwards, why couldn't they deliver it to me? We were only 10km down the freeway from the dealership.

[Big_Daz]

Originally Posted by Franco Cozzo

Imagine if you didn't even need to leave the house and you just paid your deposit via credit card/visa debit/bank transfer/paypal on their website, then your local Ford dealership contacted you for progress updates/ETA's then delivered it to your driveway at home or your work when came in stock? All done from the comfort of your couch or office.

You're an example of a group of people who put down money without needing to drive/see a car first, so why couldn't they offer online as an option?

Whilst I'm all for your model, the Ranger was an anomaly for me, simply due to not wanting to have to wait forever for a car. I never buy a car without test driving, the contract was conditional on a Test Drive (as well as price/spec and finance). If this same dealer model would bring a car to my house to test drive though, count me in.

I was dealing with a car broker for an I30 N Line that I'm grabbing for my mother and that was good. They arranged for one to be delivered to her place for a test drive and the price from them included delivery to her door (and at a great d/c from retail as well). Dealer contacted us, deposit was paid and the car is due to be delivered to her place in 8 weeks when it arrives. We have never met the salesman, nor even been into their place of business.

[Poetic Justice]

Originally Posted by Franco Cozzo

I feel like a car dealership could basically be a workshop with a small sales showroom attached where they just have one of each of the range and let people who want to look at/test drive take em out on test drives/look at and feel them.

I see the point you're making but some car manufacturers still have high hopes of hitting big volume targets. IE, Hyundai Motor Group wants to continue to build towards being in the top 1-2-3 of global auto manufacturers. I fear if you switch to a model that is more "relaxed" it means that the push for volume sales will drop off.

You still get this from manufacturers whereby they themselves are targeted from a wholesale perspective before the retail perspective even becomes a consideration.

When I started with one of the brands I work for back in 2017, they had thousands of cars unallocated cars sitting in holding yards around the country because they were being pushed so hard by the parent company on volume that they'd receive the cars even without a dealer for it to go to.

Then, you would have incentive payments based on how many vehicles were invoiced to you as a dealership over the course of a month, regardless of what stock position (even if dire) you were in - you simply had to take the payments to stay viable.

Fortunately most of this is changing (mostly in part to what has happened since 2020) but I still struggle to see a large scale switch to agency style selling, ala the Honda strategy.

[jpd80]

Originally Posted by Poetic Justice

It's the whole business now.

Non luxury car dealerships in general pre COVID ran at approx 2% return overall with the exceptions of Toyota and Mazda dealerships being a bit higher (around 4% on average.) You could say service & parts were percentage wise holding up few dealerships with the front end profitability on new car sales being absolutely in the toilet.

These days post the tougher parts of COVID, a combination of vehicle supply for myriad of reasons means your minnow dealership is now running at anywhere up to 5% return which was unheard of.

What COVID enabled car dealers to achieve was a highly reduced level of stock meaning demand climbed as we all know - but instead of carrying 3+ months worth of stock at any given time, some are barely able to get through a month without having to submit backorders. This has in turn, again as we know, driven profitability on carsales through the roof.

Will it last? I don't think it will return to pre 2020 levels but it won't continue to ride this high for the long term.

Luxury car business in Australia will struggle with the arrival of Tesla Y, they are taking a fair bit of the
low hanging fruit, those BMW/MB return buyers who are moving to EVs. Not saying all is lost for those
franchises but without compelling products, they’re in trouble.

People buying those Teslas in the $70k to $90k are the main targets, be that cash sale or lease,
if 6,000/mth of those buyers are off the table, that has huge consequences to other existing brands.

[Poetic Justice]

Yeah, agree with that.

I ruled out luxury car dealerships in what I was saying because I haven't had any experience working in them. I'm not sure what their return is like, although I'd expect it to be reasonable.

[jpd80]

Originally Posted by Poetic Justice

Yeah, agree with that.

I ruled out luxury car dealerships in what I was saying because I haven't had any experience working in them. I'm not sure what their return is like, although I'd expect it to be reasonable.

Thanks for clarifying and sorry, I didn’t mean to drill down on your post which I found very informative.
It was just an observation of buyers going to Tesla both here and overseas and that’s why Tesla’s sales success will probably not affect Toyota, Ford or the other main brands as much as say, luxury brands. Ultimately, Tesla needs more than 3 &Y but amazing how much sales penetration those two vehicles have.

If Tesla does start producing Cybertruck in mid and full size, that could start really impacting Ford, GM and Toyota…the fur will fly then.

[Poetic Justice]

Originally Posted by jpd80

If Tesla does start producing Cybertruck in mid and full size, that could start really impacting Ford, GM and Toyota…the fur will fly then.

I think they're under a time threat now. Cybertruck is polarising enough with its looks but it appears that EV utes will make it here within a close enough time frame to be serious competitors. Ford will have F150 here soon enough, Hyundai is rumoured to bypass ICE and finally bring a dual cab to market which will be EV. Rivian might arrive, there's plenty happening!

[jpd80]

Tying that back into our VFacts monthly sales report, the bump in Tesla sales shows what’s
possible when the right types of vehicles are presented to the right buyers.

At the moment, Hilux and Ranger take top sales positions but suddenly Tesla Y is up there too,
so hopefully with more good choices, we will see new players coming into the market and
making significant changes to buying patterns…fuel prices will also play their part….

[Dr Smith]

Originally Posted by jpd80

Tying that back into our VFacts monthly sales report, the bump in Tesla sales shows what’s
possible when the right types of vehicles are presented to the right buyers.

At the moment, Hilux and Ranger take top sales positions but suddenly Tesla Y is up there too,
so hopefully with more good choices, we will see new players coming into the market and
making significant changes to buying patterns…fuel prices will also play their part….

Further to that, if Ford could have received Transit BEV as originally planned they would be on the road by now and Ford would get a better understanding of real demand and potential buyers would be also getting some real world usage feedback from road-testers. OS reviews seem very complimentary....

I wonder if the US will get an EV Ranger before us...and they don't get new gen Ranger until MY2024 so late 2023 sales I assume.

[PooDog]

Originally Posted by Poetic Justice

I think they're under a time threat now. Cybertruck is polarising enough with its looks but it appears that EV utes will make it here within a close enough time frame to be serious competitors. Ford will have F150 here soon enough, Hyundai is rumoured to bypass ICE and finally bring a dual cab to market which will be EV. Rivian might arrive, there's plenty happening!

It is a time threat it's an absolute race to get product to delivery sounds like a huge waiting list for f150 lightning can't see any of them supplying an EV ute or truck in the near future ......especially down here

[Bossxr8]

Originally Posted by PooDog

It is a time threat it's an absolute race to get product to delivery sounds like a huge waiting list for f150 lightning can't see any of them supplying an EV ute or truck in the near future ......especially down here

With the new battery plant and plant upgrades coming, production of Lightning will be well ramped up within 2 years.

Ford are kind of in a holding pattern till their battery plant opens, then they will have the battery supply to really start pushing out EV's. But as it stands now, they are the number 2 seller of EV's in North America.

[PooDog]

Originally Posted by Bossxr8

With the new battery plant and plant upgrades coming, production of Lightning will be well ramped up within 2 years.

Ford are kind of in a holding pattern till their battery plant opens, then they will have the battery supply to really start pushing out EV's. But as it stands now, they are the number 2 seller of EV's in North America.

The time delay seams a familiar pattern for most manufacturers