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MikeM Rutherford on why car dealers badly need to evolve
Many customers don’t like visiting showrooms, then dealing face to face with salesblokes on commission
FOR good reason, I’m passionate about The High Street. When my grandfather emigrated from Italy to England in the 1930s, he raised enough dough (no pun intended) to establish his bakery-cummodest deli in Greenwich. He married the lady who owned the corner shop next door. For him at least, it was the ultimate convenience store! Sorry, Grandma.
Later, other family members built different businesses in and around shopping streets. Happily, most seemed to sell up and get out at the right time; that’s a skill some of today’s retailers struggle with. Even before Lockdown 2020, it was near impossible for many High Street restaurant owners, pub landlords, shopkeepers and the like to remain solvent. Now the big, valid question is, will they ever reopen?
But I’ve heard nothing about the possible collapse of another huge and important bunch: traditional franchised car dealers. Many were already struggling and seemingly missed out on the high street/online revolution. They’re not paying enough attention to the growing demands of modern consumers. They still don’t get that the familiar, male-dominated car showroom isn’t conducive to a warm shopping experience for mum, dad and kids. In short and in general, sleepy traders have been left behind by the impressive pace of the makers they represent.
New/used car dealers are horribly expensive to run. Inside or on the edges of cities and towns, the land, buildings, utility and countless other costs are scary. Average annual salaries for managing directors are in the £200,000-£250,000 bracket. Dealer principals typically earn about £100,000. Remuneration packages (excluding management positions) average £40,000. Ultimately, all those real-estate costs and wages, plus business rates, taxes and other hefty bills, are paid for by consumers buying new cars, finance, servicing, parts, et al.
These are the sort of punters who used to pay for their domestic fuels and appliances at gas and electric showrooms in shopping centres; the same people who queued to get movies from Blockbuster stores (RIP). Importantly, they all still buy cookers and heaters, gas, leccy and movies, just not from the archaic high street shops they used to.
Some in the know insist that traditional car dealers will be “extinct” within five years. I disagree. But they must wake up and properly engage with the retailing (and lifestyle) revolutions that are in danger of leaving them behind.
They have to accept that many customers don’t like visiting trad showrooms, before dealing with salesblokes on commission. Those tired, uninviting, barn-like environments have gotta go. It’s time to move out of prohibitively expensive, unfit-for-purpose towns and cities run by iffy councils. Better land with friendlier local politicians awaits.
Also, let’s have far more cars lovingly delivered to the doors or driveways of customers. Or, after buyers remotely sort out paperwork and payments in advance, give them the option to pick up their vehicles from tall, skinny, space-saving, salesman-free, state-ofthe-art vending machines. And before you ask, yes, I am perfectly serious.