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Focusing On Profit Is The Big Challenge For 2020 Says Independent Dealer

Putting the focus on making money from a deal rather than just moving metal, absorbing the new FCA restrictions on finance commission, sourcing quality stock as competition hots up and watching the possible impact of disruptors such as Cazoo entering the market will be the main challenges for dealers in 2020, says one of the best-known independents.

Umesh Samani, who runs Specialist Cars in Stoke-on-Trent and is a founder member of the IMDA, says that this year retailers should concentrate more than ever on doing deals that make them money as structural shifts in the car industry look set to fuel even stiffer competition.

Umesh said:

“We see too many dealers putting their main effort into shifting volume rather than doing what any business has to do, which is making a profit. I think 2020 presents us with several challenges, some we have seen before and some new, but building a sustainable business means building profit.

“Looking to the year ahead, many people will have to get their heads around how the new regime on finance commission set down by the FCA will affect their trading; certainly it will be harder to add bolt-on profit into a deal.

Doing deals that make you money

“I think that franchised dealers will be in for an even tougher year than the last one. Their manufacturers will be pulling back from throwing so much money at getting people into a new car halfway through a PCP term. With new sales getting harder we’ll see the big groups and retailers holding onto more of the used cars and vans coming back and that will make it harder for independents to source proper stock. This was a growing issue in 2019 and could be bigger this year.

“And I think we will all be watching what impact new players like Cazoo have. Many of us already do what it promises, such as the home delivery convenience, but not on their scale so it will be interesting to see what effect it has. Is it just PR or is it a serious new player? Time will tell.

“There is nothing new in businesses facing challenges, but for 2020, my message would be to concentrate on doing deals that make you money.”

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