Brand Pretorius, chairman of McCarthy Motor Holdings, spoke about the ever-changing relationship between dealers and car buyers at the Automotive Excellence SA conference on Monday.

Brand Pretorius, chairman of McCarthy Motor Holdings, spoke about the ever-changing relationship between dealers and car buyers at the Automotive Excellence SA conference on Monday.

This changing relationship, Pretorius said, was becoming more evident as an increasing number of people from various demographic and psychographic profiles entered the market.

“Customers’ needs are constantly evolving with increased expectations and a desire to ‘want it all’. In order to adapt to these changing expectations, successful dealers in the future will have to restructure their internal organisations to provide maximum leanness, efficiencies and a shared focus on the well being of the customer,” said Pretorius.

In terms of customer profile, Pretorius said, the increase in real terms of the disposable income of black South Africans was causing the so-called “emerging market” to rapidly become the main market.

Pretorius said that the franchise dealer system of the future would therefore be more flexible and customer driven. “There will be an intense focus on value and customer retention. In order to retain customers in this highly-competitive and price-sensitive market, dealers will have to deliver value for money products and services.”

When it came to sales and service to customers, overall customer satisfaction ratings had been stagnating over the past few years. Proof in point was that customer satisfaction was measured at 81,4 per cent in 1998, and at 81,9 per cent in 2002. Pretorius said that customer expectations were rising almost in line with vehicle price increases, making it increasingly more difficult for dealers to record meaningful increases in customer satisfaction.

One of the new trends currently developing in the South African motor industry was the conversion of multi-franchise dealerships in metro areas into focused single brand operations. A good example of this was DaimlerChrysler South Africa’s new dealer network strategy, which had seen the introduction of separate outlets for Mercedes-Benz, Mitsubishi, Jeep, Chrysler and Smart.

“On the positive side, this will provide customers with a more focused approach to sales and service, as staff at dealerships will be even better equipped and specialised in a particular brand, and therefore be able to provide customers with expert information and assistance,” said Pretorius.

Used vehicles were also playing an increasingly important role in the business composition of dealerships, the McCarthy chairman told delegates.

“The recent increase in the demand for used vehicles can mainly be attributed to the high selling prices of new vehicles, which lead to a buying down trend from new to used vehicles, and even to smaller vehicles. Used car buying is a low-risk transaction these days, with exchange plan options and comprehensive warranties offered by dealerships,” he added.

Original article from Car