::Barloworld ::New vehicles dealer
How things change. And how it has affected the new vehicles dealer. Nobody could quite have foreseen the 180 degree about turn the market made, and it makes for ironic reading.
There once was a time when a new vehicles dealer would thank his lucky stars that he had huge SUVs in his portfolio and he made handsome money off these high-margin vehicles when there was still money around, credit to be had and interest rates were low. Housewives loved plodding around town in these huge juggernauts as much as men enjoyed imagining that they needed the vehicle’s abilities, which, of course, they almost never did. A new vehicles dealer made money and breathed a sigh of relief that they did not have to deal with small, low-margin econoboxes that needs to sell by the thousand to bring in good money.
Today, those self-same dealers have those self-same SUVs crowding their bulging stockyards as people scurry for cover and, yes, for econoboxes, in the wake of global financial crises. Suddenly, it is the dealer that are selling the cheap, economical hatchbacks that are smiling, because they might make a lot less money off each one, but they probably sell more than ever and in many cases it is business as usual for these dealers. They now find themselves in exactly the right part of the market. Their cars are in demand, they do not have to discount them so much and if they buy a tiny 1100 on a trade-in, they know they will sell it easily and for a good price.
However, dealers of lower volume niche brands and fledgling brands are having sleepless nights. They used to be quite smug only a year ago, telling their friends how, despite having to flog the products of a little-known brand, adventurous consumers that considered themselves enlightened, bought their products by the dozen and that they were making a decent living off it. Yes, people feel adventurous when things are going well…
Now, people are fleeing to what they know best – the reliable, established top-sellers. When times are bad, that is the kind of new vehicles dealer you want to be.
