The automotive dealers haven’t changed their core business yet


Photo by pedrosimoes7

Excited by the increasing data related to the 2017, there are, however, automotive dealer, multi-brand, and service operators who are sulky and whiny.

Of course, a positive signal it’s better than a negative one but, as Catalano (italian comic actor), would say, those numbers hide some truths that many pretend not to see.

Dealers complain about the reduction in margins, despite the closure of new businesses and the merging into new companies; indeed the margins of the core business of those who sell to the final customer, whether it B2B or B2C, are increasingly narrow.

Or better, carefully analysing the costs, there aren’t even the margins to go on.

Many other commercial or financial businesses have margins that are certainly more profitable than the capital.
But we know that it’s often more expensive to close, than to continue loosing a bit; hoping that better times will come … or that old times will come back.

Unfortunately, the old times will not return and the reality moves at such speed and with dynamics, which are hardly predictable; due to a change in the paradigms that so far enabled us to predict the economic changes.


Photo by Hugo-90

For the big automotive operator, as well as for the small one, the core business isn’t anymore the sale of the new; this is, rather, one of the contacts the company has with the world outside.

The core business of a company is the long-term customer!

It seems a theoretical and strong statement; it is, instead, an affirmation of a banality and a disarming simplicity.

The sales recovery brought back to the company the customer, who is much shrewd and informed; above all, he is no longer willing to suffer passively.

I am going to make some examples, really happened in these months:

  • The customer who rides 5,000 km per year and has been saddled with a diesel car;
  • The workshop which charges part of job under warranty when the head office has already paid it;
  • The used vehicle that is not restored and is not managed inside the warranty timeline.

Each of us could tell them in droves!

Structuring your own business to change core business and turn your own reality from sales/assistance of cars into mobility services company, at this point, it becomes no longer prospective but survival.

Now the competition is so high that it is no longer acceptable conquering and then losing a customer!

Forcing the sales of an unnecessary product for the customer, has its positive aspect only for a while… and nothing more!


Photo by PinkMoose

So when we speak about the change of our core business, it means we need to turn the sales/assistance business in a mobility one.

We need to interpreter the customer needs (both as single and as group reality) and fill it with solicitations so that the small margin he creates with its purchase decisions will be done only by us.

A service company is by its very nature changeable, because the services are too.

Fifteen years ago it didn’t make sense to offer a satellite coverage for a small car; today the prices are such that they can also be installed on motorcycles.

Today it would make sense to have an insurance broker, rather than an agency.

  • A coachbuilder not equipped for wrapping, fast repair, dark windows … loses business.
  • A tire specialist who is not able to do “light mechanics”, doesn’t offer services to customers but is only a disassembler/reassembler.
  • A mechanic not equipped for LPG/CNG transformations, with financial support, is losing lots of opportunities of loyalty.

All activities that seem complementary but which, if considered together, make margins; they build the long term loyalty of the customer relating to everything is mobility.

If we all agree on this because when a new supplier enters in the company the first thing we tell him … I have no time to waste I have to sell a new car, or I am busy at the reception!

Translated by Federica Izzo

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