Motor Industry KPI and best practice provided by Jeff Smith

Submitted by Steve Phillips

Auction reserve prices are unrealistic and need to reflect the market conditions.

Everyone knows how tough it is in the Motor Industry currently, except the vendors at car auctions.

Come on chaps, face up to what’s really happening in the trade because your dogmatic approach will cost you in the end.

Every week I see the same cars go through the bidding process and guess what…No one reaches the provision. The consequence of this is that auction attendances are in decline and that makes things even worse. This is because we have less fresh stock and we’re being offered the same over-priced cars from previous weeks that didn’t reach the reserve. Wakey, wakey… when we have fewer people bidding we have less competition and prices will become even weaker. One negative factor is feeding the other.

June’s book has dropped by an average of £300.00 per unit from last month so cars are worth less now than before, but the reserves have not changed, what’s going on?

We’re all taking hits on our used car stock, but we have to be proactive and price our cars according to market conditions. I’m afraid you leasing companies will have to do the same!

As Jeff Smith says, “Just because you buy a car expensive doesn’t mean that you can sell it expensive”.  

The market sale price of around £6/7000 is the most dominant profile with most people looking to trade down, obviously driven by escalating fuel prices and the current economy. The independent non-franchised dealer will have the flexibility to optimise the opportunity as they are not saddled with aging demonstrators as a result of hitting the first quarter’s manufacturers’ target. 

My advice to the big players (finance providers) is to take the bitter pill now because it’s only going to get worse!

My advice to the retailers is keep on top of the market prices and make sure your products are competitive. Ensure that your Used Car Manager is commercially astute and maximising used car stock turn or you will suffer the financial consequences.

If you visit auctions, you’ll see the same thing going on, please make a comment below, do you feel the same way or is it just me?

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This entry was posted on Monday, June 2nd, 2008 at 10:07 am and is filed under Motor Industry Discussion, Used Bikes, Used Cars, Used Trucks.