BIG Investments in the motortrade

[umesh 336]

Every day we hear of another big dealer group buying up another business or investing millions building new sites for franchises , i.e Marshalls, Ridgeway , Swansway to name a few spending anything between £5/10 million on JLR sites !

What are your thoughts when you see these massive investments in the motor trade, especially when you hear of how little margins are left on new cars when customers are buying from the likes of carwow ?

Plus the pressure to perform every quarterly with targets and pre-registrations , how /when does it become viable to invest these vast amounts ?

Your thoughts ?

[justina3 518]

I am sure there is someone behind the calculator that knows a lot more than me so it must add up somewhere, not so much these days but back in the day with the various brands emerging it was often a way for a group to take over another group to allow them access to a brand they didn’t have on there books which allowed them to move the new brands across there existing network.

 

Maybe there is value in the land there purchasing with commercial properties making a slight recovery it must add up as an overall percentage instead the alternatives such as banks ect to leave there money.

 

 

 

[Velicular 10]

I have often wondered the same points as to where do they get the money and having spent 5 to 10 million on a new showroom does that not put customers off thinking that they can waste money on building a huge fancy showroom but the prices are inflated because of it. I wonder if customers would rather see less spectacular dealerships and cheaper cars?

 

This article explains quite a lot and sort of ties in with my question earlier about virtual images (360 Panoramic) are worth the cost. By the report it would seem a lot of manufacturers are looking away from the showroom.

[justina3 518]

good article, however i can only ever see that being applied to the new market second hand cars are a world apart from selling new

[Velicular 10]

The question is though how long before you have to follow before being left behind. Look at Imperial Car Supermarket, they are quite a large business now and for them to move in that direction is a huge step. I remember on the Trade Plates TV when the director was interviewed he said all their stock was now 360 (VR) ready. The younger generations have come to expect that sort of interaction and it will only expect more as the years go by. If you ask how many dealers used car customers visit today it is far less than several years ago. They are now willing to travel a greater distance to obtain the car they desire. Customers can now sit at home and brows thousands of ads for what they want before visiting a dealer.

May be in 20 years the car sales lot or forecourt or what ever you want to call it might be obsolete. We might have advanced to a stage where you have a compound where you keep your stock to sell. I dread to think this will happen but it is possible it will go that way. I know there is a dealership in Bristol who deals in a specific offering which is SUV's they have everything you can think of but no sales area. you view everything from the internet with them. They have a thriving business.

[Max Branning 149]

1 hour ago, Velicular said:

The question is though how long before you have to follow before being left behind. Look at Imperial Car Supermarket, they are quite a large business now and for them to move in that direction is a huge step. I remember on the Trade Plates TV when the director was interviewed he said all their stock was now 360 (VR) ready. The younger generations have come to expect that sort of interaction and it will only expect more as the years go by. If you ask how many dealers used car customers visit today it is far less than several years ago. They are now willing to travel a greater distance to obtain the car they desire. Customers can now sit at home and brows thousands of ads for what they want before visiting a dealer.

May be in 20 years the car sales lot or forecourt or what ever you want to call it might be obsolete. We might have advanced to a stage where you have a compound where you keep your stock to sell. I dread to think this will happen but it is possible it will go that way. I know there is a dealership in Bristol who deals in a specific offering which is SUV's they have everything you can think of but no sales area. you view everything from the internet with them. They have a thriving business.

Exactly this. I doubt it will need 20 years to get there though..

[GreenGiant 287]

18 hours ago, justina3 said:

I am sure there is someone behind the calculator that knows a lot more than me so it must add up somewhere, not so much these days but back in the day with the various brands emerging it was often a way for a group to take over another group to allow them access to a brand they didn’t have on there books which allowed them to move the new brands across there existing network.

Maybe there is value in the land there purchasing with commercial properties making a slight recovery it must add up as an overall percentage instead the alternatives such as banks ect to leave there money.

 

Jeez! The pedantry genes in my head are exploding!!!!

I need a lie down now...

[countryman 13]

there they're their - Jolly Green Giant, I share your pain.......

[Becca Chaplin 20]

If you haven't seen the show yet, Nigel McMinn explains how Lookers are able to justify this sort of spend (around the 45 minute mark). I'd love to hear your thoughts on what he says. 

 

[Phil H 124]

some interesting comments, glad to hear his opinions on brokers / middlemen IMHO these are the people who make it hard for dealers to retain decent profit margins.

[James Baggott 227]

I was about to post the same link to Rebecca. It's well worth hearing Nigel's comments on investment in the motor trade 

http://tradeplates.tv/live/tradeplates-tv-live-episode-6/

[umesh 336]

James, really enjoyed the interview with Nigel - anyone not watched it -well worth a watch !

[Velicular 10]

It was very interesting to listen to what he said about dealerships that there are less but they are bigger as they are becoming brand experience centres. He goes on to talk about VR within the showroom to compliment customers experience.

So how long is it going to be before a dealership places a dealership in a high street and you can go experience the vehicle via VR and if you would like to have a real test drive they bring one up from a storage area for you to try?

[GreenGiant 287]

Sounds a bit like Argos to me.

"Here's some pictures of all the stuff we sell, but we've hidden it all downstairs and you can't see it until you buy it"

Should work a treat.

[Tom 164]

1 hour ago, GreenGiant said:

Sounds a bit like Argos to me.

"Here's some pictures of all the stuff we sell, but we've hidden it all downstairs and you can't see it until you buy it"

Should work a treat.

Yes and how successful is Argos! 

Best interview yet, get some more big guns on there becca! 

[Phil H 124]

2 hours ago, TML CARS LIMITED said:

Yes and how successful is Argos! 

 

And how much stuff does argos have to take back because when you get it home you realize you've just paid good money for not very well made cheap imports

[Tom 164]

1 hour ago, Phil H said:

And how much stuff does argos have to take back because when you get it home you realize you've just paid good money for not very well made cheap imports

No idea mate I doubt they take stuff back unless its faulty. You get what you pay for with that kind of outfit it's not Harrods.

Least with cars you know what the brand is and country of origin 

[Phil H 124]

32 minutes ago, TML CARS LIMITED said:

No idea mate I doubt they take stuff back unless its faulty. You get what you pay for with that kind of outfit it's not Harrods.

Least with cars you know what the brand is and country of origin 

Er indoors is always shopping there, all I know about it is when I get a text message to let me know my reservation is ready to be picked up, so I trundle off pay for it and pick it up only to return the next day to get a refund under their 14 day no quibble money back guarantee. Imagine doing this on a new car do you think the manufacturer would assist the dealer in the returns process or just be happy with the extra registration?

[Becca Chaplin 20]

On 5/5/2016 at 0:45 PM, TML CARS LIMITED said:

Best interview yet, get some more big guns on there becca! 

Thanks! Chairman of Perrys Ken Savage is on the next show (March 17). He should have some interesting views  

[Jon Hickey 2]

On 5 May 2016 at 11:03 AM, Velicular said:

It was very interesting to listen to what he said about dealerships that there are less but they are bigger as they are becoming brand experience centres. He goes on to talk about VR within the showroom to compliment customers experience.

So how long is it going to be before a dealership places a dealership in a high street and you can go experience the vehicle via VR and if you would like to have a real test drive they bring one up from a storage area for you to try?

This is already happening with Rockar Hyundai opening stores(!) at Bluewater and Westfield shopping centres https://www.rockar.com/about-rockar