Motor Trade RIP (1888-2008)

-Chris-

cancan wrote: »

Which is in a nutshell is why the motor industry is bolloxed in ireland.


So if anyone out there is feeling mechanical, and is able to use the internet, I would suggest the following.

Wait a few months for the dealers not to change their ways.

Rent an old dealership that goes wallop for peanuts, and no-one will want one.

Stock your parts dept with stuff from the internet.

Provide a good honest cheap service to people with the savings from above.
(ie: bring irish profit margins and costs in line with the rest of the world)

Make your profit from volume, not gouging.

Watch the money roll in.

Either current dealers get on the blower to their distributors and demand change, or they are screwed.

Yeah Darragh, why didn't you think of this????

You'd be rolling in dough right now if you had only tried to be honourable and fair - oh wait....

Hellrazer

cancan wrote: »

(A lad on these very boards paid 22 euro for an oil filter for a polo from a main dealer to fit himself.
That would be somewhere in the region of 400% possible markup.)

Jesus-does no one listen to Eddie Hobbs.

cancan

Come back to me in a year and tell me I was wrong.

Anyway, enough from me on this subject.

Ye wanted to know what was wrong with your industry.
I tried to explain some of it.

I need to get some work done now, as I am still busy

Owen

I think the last few points are very valid. Garages do not make 100% markup on a price, the same as any HiFi store selling a TV for 300 Euro does not make a profit of 300 Euro. A garage at best is making 35% profit on parts, which is the same as most industries.

Anan1

Hellrazer - Don't you think €100/hr for labour is taking the piss? It's a Volvo S40, not a Saturn V rocket.

Drummerboy08

I'm still busy anyway.......

We just got an order for 11 cars today... Happy days

Hellrazer

Anan1 wrote: »

Hellrazer - Don't you think €100/hr for labour is taking the piss? It's a Volvo S40, not a Saturn V rocket.

The 100 an hour covers rates,esb,gas,insurance etc etc.


Audichris already answered that question.

What about light, heat, rent, insurance, support staff, insurance etc. etc.
Your sums above are too basic to be of any use to the conversation.

Anan1

Hellrazer wrote: »

The 100 an hour covers rates,esb,gas,insurance etc etc.


Audichris already answered that question.

I'm afraid I don't accept the explanation. €40/hr from an independent covers all those things too.

Drummerboy08

An independant doesnt have the same level of premises to up keep, same level of staff to pay, etc.

Doesnt work that way im afraid.

maidhc

Drummerboy08 wrote: »

An independant doesnt have the same level of premises to up keep, same level of staff to pay, etc.

Doesnt work that way im afraid.

We are going around in circles here.

If you are overstaffed and your overheads are too big, then... well....

Hellrazer

Anan1 wrote: »

I'm afraid I don't accept the explanation. €40/hr from an independent covers all those things too.

You dont have to accept it--The facts speak for themselves.A small independant has a smaller premises,less heating,lighting--Altogether less overheads.

Owen

Anan1 wrote: »

I'm afraid I don't accept the explanation. €40/hr from an independent covers all those things too.

An independent has nowhere near the same costs, nor equipment as a franchised Dealer. Nor do they have to send their technicians on pretty darn expensive training courses abroad either.

Anan1

Drummerboy08 wrote: »

An independant doesnt have the same level of premises to up keep, same level of staff to pay, etc.

Doesnt work that way im afraid.

Without meaning to be rude, so what? If it can be done well (and presumably profitably) for €40/hr, what right does an outfit charging €100/hr have to expect the business?

Owen

Anan1 wrote: »

Without meaning to be rude, so what? If it can be done well (and presumably profitably) for €40/hr, what right does an outfit charging €100/hr have to expect the business?

Of course it can be done well and professionally for 40 Euro and hour, no one is disputing that. You're asking for 100 Euro plus to be justified by the main Dealers, and it's easy to justify, as the costs are vastly superior compared to someone operating on a smaller scale. It doesn't mean that the quality of service is better or worse in either case in case anyone thinks I'm inferring that either.

maidhc

ned78 wrote: »

Of course it can be done well and professionally for 40 Euro and hour, no one is disputing that. You're asking for 100 Euro plus to be justified by the main Dealers, and it's easy to justify, as the costs are vastly superior compared to someone operating on a smaller scale. It doesn't mean that the quality of service is better or worse in either case in case anyone thinks I'm inferring that either.

I think you are explaining, rather than justifying.

Anan1

ned78 wrote: »

Of course it can be done well and professionally for 40 Euro and hour, no one is disputing that. You're asking for 100 Euro plus to be justified by the main Dealers, and it's easy to justify, as the costs are vastly superior compared to someone operating on a smaller scale. It doesn't mean that the quality of service is better or worse in either case in case anyone thinks I'm inferring that either.

Vastly superior costs for no better service is a recipe for bankruptcy, particularly in a recession.

R.O.R

Anan1 wrote: »

Vastly superior costs for no better service is a recipe for bankruptcy, particularly in a recession.

And when all the main dealers go bust who's going to train all these indy mechanics who will service your car cheaply?

Lack of competition from the main dealers will enable indy's to put up their pricing and we are back to square one......

Owen

Anan1 wrote: »

Vastly superior costs for no better service is a recipe for bankruptcy, particularly in a recession.

What's the solution so?

As far as I can see, the only way to do what you're suggesting is to scrap internal parts departments, and send out to the local motor factors for parts every morning, throw out the manufacturers diagnostic equipment and make do with third party software running on laptops, make all staff sign a disclaimer that if they have an accident it's on their own heads, and do away with the hierarchy of Master Technicians-Technicians-Apprentices and have fewer people wearing many hats, some of which they're unqualified for. Then while you're at it, throw out other expensive equipment such as KDS tracking machines, all but 1 hydraulic lift, and instead of one big compressor feeding the workshop, use a small single unit that everyone can share.

Oh, and stop sending technicians on training courses so that they can learn all the latest methods for maintaining the latest cars.

Drummerboy08

We are going around in circles, yes.

You asked why main dealers rates are more expensive, you got an answer, then pick the answer to pieces. Its already been explained why dealers have high over heads - the showroom they had to build, parts they have to buy from the manufacturer etc.

Good point from R.O.R. too. Who would train the indy mechanics if there are no main dealers.

Its a no win situation by the look of things.

fightin irish

Hellrazer wrote: »

Darragh--Theres not one main dealer anywhere making 90% on a part.

Ive worked for Ford : 25%-50%
Citroen : 25%-35%
Hyundai : 25%-27.50%
Mitsubishi : 25%-27.50%
Honda : 27.50%
Volvo : 27.50-50%

This is the dealer net prices off the retail price.
We give away 10%-17.50% to trade customers.We also run a loyalty scheme where service customers get 10% off their parts in the workshop.

Id love to be making 90% on parts sales

Ok i have to throw my oar in here. Im a pm for one of Irelands biggest dealers. I've just pulled my figures for July which i got a roasting over.

Total parts sales for July 2008. €155,957
Gross profit made. €43,614 (27.97%)

Now wait for the kicker...Total indirect expenses€24,750.
Indirect expenses which an indy garage would run to the hills if it had costs like we main 'stealers'

Actual profit (and this is for all those looneys claiming were makin a fortune)
€18,864

12.10% !!
And trust me we aint overstaffed. Were run off our feet all day long. Im not justifying main dealers but alot of people here are running around spouting pure ****.
At the same time i'm not lookin for anyone to feel soory for the main dealers.
I just hope this factual figures give some of you an idea of the high costs main dealers carry.

Anan1

ned78 wrote: »

What's the solution so?

As far as I can see, the only way to do what you're suggesting is to scrap internal parts departments, and send out to the local motor factors for parts every morning, throw out the manufacturers diagnostic equipment and make do with third party software running on laptops, make all staff sign a disclaimer that if they have an accident it's on their own heads, and do away with the hierarchy of Master Technicians-Technicians-Apprentices and have fewer people wearing many hats, some of which they're unqualified for. Then while you're at it, throw out other expensive equipment such as KDS tracking machines, all but 1 hydraulic lift, and instead of one big compressor feeding the workshop, use a small single unit that everyone can share.

Oh, and stop sending technicians on training courses so that they can learn all the latest methods for maintaining the latest cars.

I don't know what the solution is. All i'm saying is that charging €100/hr labour for an oil change that someone else can do equally well for €40/hr is no longer a viable business strategy.

Owen

Anan1 wrote: »

I don't know what the solution is. All i'm saying is that charging €100/hr labour for an oil change that someone else can do equally well for €40/hr is no longer a viable business strategy.

But it is a viable business strategy, quite simply because in the morning, if the whole country decided that they wanted to go to independent mechanics, they couldn't. Smaller independent mechanics while excellent, can usually only handle 1 or 2 cars at a time. It's about capacity, and that's what keeps the machine going.

Also, if I take a car to an independent mechanic in the morning, and he needs a special tool to [insert mad service job here], and he has to go and borrow that from a main Dealer, it could be an extra day that I'm without my car. And while that's okay for some people, for most, it's a pain. When they bring their car to a main Dealer, unless that Dealer is a complete muppet, they usually get their car back the same day.

-Chris-

fightin irish wrote: »

I just hope this factual figures give some of you an idea of the high costs main dealers carry.

Thanks for this - very informative.

Anan1

ned78 wrote: »

But it is a viable business strategy, quite simply because in the morning, if the whole country decided that they wanted to go to independent mechanics, they couldn't. Smaller independent mechanics while excellent, can usually only handle 1 or 2 cars at a time. It's about capacity, and that's what keeps the machine going.

What we might see is a gradual bleed of mechanics from the dealer network over to independent outfits. Or main dealers lowering both costs and charges. Probably both. People are being a lot tighter with the cash these days, subsidising the €180k wheel alignment machine is a cost the average Joe will be increasingly tempted to cut from his or her oil change bill.

cancan

Just as a final note, based off the figures that all those in the know are spouting.

Why are Irish dealers specifically not able to keep their costs under control?

The UK seem to be able to manage it to keep it fairly resonable.

Bad management?
Lack of business skills?
Gross ineptitude?

This main dealer has higher costs stuff is rubbish.

Like saying that dunnes has to charge a tenner for milk 'cos it's shop is bigger, and they have more staff, where as your shop on the corner can sell it for a fiver cos they are small, which is bull.

Sorry lads - ye'll have to do a hell of a lot better than that if ye wish to still be in business down the line.

Stop making excuses and figure out how to modify your business model to make your business viable.

All we have seen here are a bunch of excuses and no real interest in changing or surviving into the future.

Are ye that blind to yere own possible demise that a bunch of people on a web forum have to spell it out to ye?
Are ye going to sit around and wait for the end, or come to a consensus for change and do something about it.

Darragh29

Anan1 wrote: »

What we might see is a gradual bleed of mechanics from the dealer network over to independent outfits. Or main dealers lowering both costs and charges. Probably both. People are being a lot tighter with the cash these days, subsidising the €180k wheel alignment machine is a cost the average Joe will be increasingly tempted to cut from his or her oil change bill.

What you'll see is decent mechanics doing more and more nixer work. I've a mate who is after noticing such a surge in requests for him to do nixers, he's putting a lift in his shed and doing a nixer a night.

Darragh29

cancan wrote: »

Just as a final note, based off the figures that all those in the know are spouting.

Why are Irish dealers specifically not able to keep their costs under control?

The UK seem to be able to manage it to keep it fairly resonable.

Bad management?
Lack of business skills?
Gross ineptitude?

This main dealer has higher costs stuff is rubbish.

Like saying that dunnes has to charge a tenner for milk 'cos it's shop is bigger, and they have more staff, where as your shop on the corner can sell it for a fiver cos they are small, which is bull.

Sorry lads - ye'll have to do a hell of a lot better than that if ye wish to still be in business down the line.

Stop making excuses and figure out how to modify your business model to make your business viable.

All we have seen here are a bunch of excuses and no real interest in changing or surviving into the future.

Are ye that blind to yere own possible demise that a bunch of people on a web forum have to spell it out to ye?
Are ye going to sit around and wait for the end, or come to a consensus for change and do something about it.

Well a main dealer might have higher operating costs but I imagine this is also offset to a large degree by having a much larger customer base than an indy garage. An indy garage has to advertise and invest money to get business in the first place. A main dealer has a permanent supply of new vehicle customers for the first two years...

Darragh29

fightin irish wrote: »

Ok i have to throw my oar in here. Im a pm for one of Irelands biggest dealers. I've just pulled my figures for July which i got a roasting over.

Total parts sales for July 2008. €155,957
Gross profit made. €43,614 (27.97%)

Now wait for the kicker...Total indirect expenses€24,750.
Indirect expenses which an indy garage would run to the hills if it had costs like we main 'stealers'

Actual profit (and this is for all those looneys claiming were makin a fortune)


12.10% !!
And trust me we aint overstaffed. Were run off our feet all day long. Im not justifying main dealers but alot of people here are running around spouting pure ****.
At the same time i'm not lookin for anyone to feel soory for the main dealers.
I just hope this factual figures give some of you an idea of the high costs main dealers carry.

12% net profit is excellent. That represents a figure for yearly pre-tax profit which equals €226,368. If my business was making that a year I'd have been very very happy.

pred racer

Darragh29 wrote: »

Well a main dealer might have higher operating costs but I imagine this is also offset to a large degree by having a much larger customer base than an indy garage. An indy garage has to advertise and invest money to get business in the first place. A main dealer has a permanent supply of new vehicle customers for the first two years...

also while main dealer overheads are higher, the capacity to do work is also higher with 10 ramps vs 1/2.

guys, all the main dealer folk on here (most of whom I have great respect for, having lurked in this forum alot) are justifying their prices, fair enough. what we are trying to say to you is that we are not willing to pay these prices for the level of service we percieve...........
Having said that what do ye reckon could be changed about your industry to change this perception? All the reasons why people have a problem with main dealers have been outlined already so I wont go into them again;)
if you guys bought out a main dealership tomorrow how would you run it?
I personally think that the country is crying out for a jiffy lube setup..... drive in oil change, brake pad, exhaust and tyre check done while you are drinking your coffee. that'll be 50 quid please and bring the repairs to the highly trained well paid mechanics in the dealer. does it make sense to anyone to charge 100 quid an hour for a guy to change brake pads and oil filters......No. does it make sense to pay that rate when your car wont start or the timing belt/ecu/gearbox/etc etc needs replacing........probably

Darragh29

pred racer wrote: »

also while main dealer overheads are higher, the capacity to do work is also higher with 10 ramps vs 1/2.

guys, all the main dealer folk on here (most of whom I have great respect for, having lurked in this forum alot) are justifying their prices, fair enough. what we are trying to say to you is that we are not willing to pay these prices for the level of service we percieve...........
Having said that what do ye reckon could be changed about your industry to change this perception? All the reasons why people have a problem with main dealers have been outlined already so I wont go into them again;)
if you guys bought out a main dealership tomorrow how would you run it?
I personally think that the country is crying out for a jiffy lube setup..... drive in oil change, brake pad, exhaust and tyre check done while you are drinking your coffee. that'll be 50 quid please and bring the repairs to the highly trained well paid mechanics in the dealer. does it make sense to anyone to charge 100 quid an hour for a guy to change brake pads and oil filters......No. does it make sense to pay that rate when your car wont start or the timing belt/ecu/gearbox/etc etc needs replacing........probably

I don't think you understand how the industry works. A good indy garage does timing belts, clutches, any repair work, to the same standard as a main dealer. Contary to what you say above, mechanics wages in main dealerships are the lowest in the industry. Main dealership principals have been making an absolute KILLING in recent years, with apprentices doing most of the volume of work, work which is being charged out at over 100 Euro an hour, while the guy doing the job is probably on equal to or less than the minimum wage!

At the end of the day, only half the problem is within the industry. There is a problem on the customer side as well.