Clive Goldthorp’s recent article about the closure of his local Honda dealer spurred me on to think about the state of play in general with regard not just to fringe marque dealers, but the volume outlets as well. Sadly, the closure of Clive’s local agent comes as no real shock to me partly because of the difficult times presently and partly owing to the nature of the product.
Honda once commanded an enviable brand loyalty, only coming behind the likes of Rolls Royce and BMW, simply because they nailed together impressive, technology-based cars which functioned and performed with efficiency and steadfast reliability.
This is, quite simply, much of the reason why Honda became the darling of the affluent blue rinse motorist or the better class minicab operation. I knew of a taxi operator in Northampton who ran a brace of Rover 620 (the Honda Accord in tweed) models on airport work and both covered 45,000 miles per annum without so much as a drop of oil between servicing.
However, I knew that Honda was struggling to sell in decent numbers when I was handed over my Civic i-CDTi as a company steed a little while ago. Working from home, I was asked to visit my own local dealer with a view to opening a servicing account.
My car was sourced from a dealership in Kent which supplied all the cars for the Department Managers and my then employers chose Honda following a disastrous experience with a fleet of 1.9 diesel Astras and Vectras. I asked my dealer in Gatwick to quote for servicing in accordance with requirements not only for them to quote figures that were higher than the supplying dealer by some margin, but also to bombard my Sales Director with prospect calls and mail shots for new vehicles. ‘Fine tune the servicing deal and we may consider purchasing in the future’, came my gaffer’s retort. They didn’t, but the prospect calls kept coming through.
The problem with Honda, though, is more than just inconsistent dealers – hardly anyone bought the NSX and no one bought the Legend. Honda (UK) sells a good few Jazz models and ‘that’s yer whack’, as they say. The new Civic (though not as you’d know it) is so expensive that it’s almost laughable, whilst the Accord, despite how well they function, fails to show on the list of fleet operators or register in the minds of Joe Punter in anywhere near the numbers Honda hoped for and actually deserve. Another major factor that hampers them is the size of the dealers.
When I was still at school, I worked part-time with Mill Garages Honda in Darlington. The dealer was a small, yet smart-looking affair, with just three salesmen – and that sufficed. Today, if I was to take a drive to ‘er indoors father’s in Crewe, the Honda dealer you pass on the way into town is simply colossal – just WHO exactly is paying for all that glass and neon?
Again, another major Honda stumbling block is the customer base. There is a good friend of my very elderly next-door neighbour who purchased a new Jazz last year, but I will bet my last Rolo that her next vehicle will be a mobility scooter or a hearse – many loyal Honda drivers own the cars ’til either it – or they – simply drop.
Don’t misread this as a Honda bashing blog – it’s not, the Civic is a smashing car if you can live with the USS Enterprise styling and knobbly ride. The 2.2-litre diesel is so rapid and torquey that it’s almost silly but would I dip into my pants and buy a new Civic? Well, sadly, no I would not. The problem with the motor trade – not just at Honda, but with other niche brands and volume makers alike – is, in fact, the dealers themselves and their rock solid refusal to adapt to market forces or changes. The future, I believe, is in manufacturer-owned or operated outlets which have no allegiance to greedy corporate shareholders.
Mercedes-Benz operates this system and it works very well while even the South Koreans had a play with the format. Take, for example, Daewoo – with a little bit more initial thought and planning in aftersales, that could have been a winning idea. They had their own ‘Motor Shows’ which were usually situated on busy retail parks and stocked with smart-looking and well-presented motors for your delectation with Sales Advisers on a set salary opposed to commission-hungry staff hell bent on bumping up your finance payments or offering paint/fabric protection. MG Rover also operated a sprinkling of outlets using that business model and they worked well – and I speak from experience, too!
I once (and I swear this is true) was offered a position with a local Peugeot dealership which was then a little while back, and still is now, on its backside. Asking during the interview how many units they were registering, I almost shuddered at the reply so I asked why they were looking to have another chick in the nest, as t’wer. The answer was equally as worrying – they wanted to take on an experienced sales guy to ‘put a rocket’ up the others. Now, I applaud this tactic when times are good because it works and I also have first-hand experience of that, but currently? Utter stupidity…
Huge glass and neon dream palaces cost a fortune in rates, wages and other overheads and the big dealer groups simply blame the staff on the pitch when times get hard and go into a recruitment frenzy – they never ever learn. My take on the current situation, then, is simple: there need to be more dealers operated by the manufacturers and not by middle men – that will make the cars more affordable and the dealerships more profitable and reputable. Oh, and if times are hard, you reduce your headcount – each typical salesman in a volume dealer costs around £10,000-£12,000 yearly before he even sells a car.
Who cares if the local new car showroom resembles Abu Dhabi in terms of size and number of light bulbs? This is where the savings need to be made if dealers are to survive in this seemingly never-ending crunch. Multi-branch dealer groups and fringe brand outlets with over-sized premises only have themselves to blame.