16/10/08

Birmingham 16th October 2008 - The credit crunch which has arisen over the last few months has made vehicle loans hard to obtain and as a consequence dealers are being forced out of business as nervous buyers hold off making large purchases. New car registrations in the UK have already fallen 3.8 percent - year to date - and are forecast by the SMMT to plummet further to 10 percent by the end of 2008, as the consumer spending downturn deepens. Record fuel prices have also affected the car market, and while prices on the forecourts have now eased slightly as the cost of crude has started to fall, recent reports have spelled out more economic misery for the automotive sector.

Commenting on the state of the automotive retail industry, Mr. Patrick Sheedy, Media & PR Director for the Institute of Transport Management, suggests that dealerships which are at the receiving end of this slowdown in sales need to look after their aftersales business to drive their revenue and profits:

“The volume of used-car sales in the UK is still around three times as large as new-car sales and the number of cars on UK roads looks set to rise further, this should provide a firm base for future growth in the automotive services market. The difference between success and failure in the aftermarket business is being in possession of the right information and having the ability to take action. As a result we (the ITM) undertook to research the aftersales and aftermarket vehicle repair industry and sought to identify companies which offer innovative solutions to dealers to enable them to build profit within their service departments.

Mr. Sheedy goes on to say: “Many dealers are failing to recognise the importance of the service department in improving customer satisfaction and profitability – regularly turning down profitable opportunities due to a lack of knowledge and training. In many cases, service department remains a largely untapped resource, neglecting the fact that this part of the business accounts for around 70 percent of dealer profits and plays a critical role in customer retention."

It has been found that by offering an automatic vehicle health check system to customers an average size dealer can increase its bottom line profit by up to *£40,000 with very little investment required. In light of this discovery, and additional findings, the Institute has decided to Award autoVHC, the new internet health check system from BTC Solutions, the title for ‘Innovation in Automotive Management 2009’. The autoVHC is the first fully electronic health check system in the global market and is set to revamp business in the aftersales arena.

Mr. Sheedy concludes by saying: “As the credit crunch bites, it is more important than ever for dealers to maximise all profit streams. It is widely accepted that After-Sales provides the greatest opportunity for dealers to increase their bottom line profit. By employing a strategic health check on vehicles passing through the dealership it can only be a win-win situation for all the participants: A health check can lead to extra sales of parts and workshop time. It’s also good for customer satisfaction, offering a more convenient service than advising about jobs and leaving them to go elsewhere. And finally, if the car can be collected with all immediate problems fixed, it conveys a professional image for the dealership. It only remains for me to congratulate BTC Solutions on winning this ITM Award for the impressive autoVHC product.”

*The finding was uncovered by an audit of 100 dealerships by AutoVHC.

For more information see: www.autovhc.com