Car care products continue to wait for dealer focus

Car care products, particularly paint sealant protection, can help protect and maintain a vehicle's body, giving it better residual value. Paint sealant is essentially a plastic coating which is durable to the effects of road salts, environmental pollution, or acid rain. It can last for years, compared to wax which evaporates in weeks. Most car care products can deliver substantial profit opportunities and if dealers sold these products with the majority of their cars, there is a strong argument that this would reflect on overall profits. David Kendrick, business development manager at Trevor Jones, the specialist motor trade accountancy firm, believes that too many dealers are missing a revenue earning opportunity. “Car care products are a massive opportunity that a number of dealers don't exploit. This is often because sales staff tend to sell what they believe the customer wants rather than offering every product to every customer every time.” He said that the best dealers generally have a structured and monitored sales process that ensures that sales staff exploit these profit opportunities. Kendrick acknowledged that following the introduction of tighter FSA regulations on selling finance products, dealers had turned more to selling car care add-ons but there was still scope for significant improvement. He also believed that management all too often applied weekly incentives on different products which actually hindered generating maximum sales. “One week there may be incentive to sell polish, the next week it could be mats. This often results in staff ignoring all products other than those that have incentive attached to them.” “Dealers need to focus their sales process and incentive across the whole car care product range to make sure salespersons are maximising each opportunity. Quite simply, if you don't offer the product to a customer how can you expect to sell it?” The Retail Automotive Alliance believes that car care products can help boost profit margins. Chief operating officer Paul Knight said: “New and used vehicle margins are under intense pressure and paint and fabric is a huge opportunity for our members as well as a strong customer attraction.” Detrimental factors But Toby Procter, from independent analyst Trend Tracker, believed there were other issues that impacted negatively on the car care sector. “When I go to dealerships I do see accessories such as roof racks but very little in terms of car care products. Maybe the sales staff believe customers don't want car care products.” But he insisted the issue could not be narrowed down to just the attitude of sales staff and incentives. “Dealerships often do not have enough space at their premises for displaying car care products. Additionally, franchised dealers generally will not display or promote a third party product, and often do not have a selection of their own products,” he said. Additionally, he believed there was a problem of perception with customers who believed that two or three-year-old car's paintwork would not deteriorate significantly, and that it would be covered by warranty. Options on the market GardX provides a range of vehicle protection systems which can deliver substantial profit to motor dealers. Victor Coutin, managing director, said the key to ensuring protection packs are successfully sold at dealerships is effective account management and disciplined training. “Any company can deliver a dealer a box of products, but that does not get it sold. We have developed a simple but very effective sales process, which together with our training module, produces powerful sales results. “Our process fits neatly in with any dealer's selling system and has no detrimental effect on dealers sales of other F&I products.” Coutin said if dealers followed the correct disciplines and processes they will achieve a minimum of 40 per cent GardX sales versus new or used vehicle sales. Supaguard is another successful paint protection system available on the market, packaged with additional products to maintain car interiors. “The market is buoyant this year with a need for dealerships to enhance profit with every vehicle sale,” said commercial director Graham Higton. “We are looking at sales increases year on year through improved point of sale and better joint marketing campaigns with our dealer groups and car manufacturer customers.” He was pleased with the way point of sale leaflets, videos and CD Rom's were being used at dealerships to promote Supagard products, and was focused on ensuring sales staff were adequately trained. “The quality message is clear to consumers, this is a key priority for Supagard and we have worked extremely hard to ensure there is a consistency of sales approach across the country and no misleading statements are made.” Higton felt dealers generally produced a good display of point of sale and visual aids, but said the training of sales executives needed to be improved. He said: “This needs to be controlled so that consumers get clarity of offer and have the opportunity to make an informed decision based on the facts. “We have a substantial consumer base loyal to our products who wish to make repeat purchases and we often have to clarify routine product information with them – something that correct training of sales executives would obviate.” However, he resented the growth in what he described as “poor quality” paint protection products available at high retail prices. “This is a high profit sector for the car retail industry. Care must be taken that consumer backlash against rip-off prices, poor quality products and shoddy application do not destroy the market,” he warned. He was adamant about the importance of sealant and naturally wanted customers and retailers to take these products more seriously. “We believe that every car should have paint sealant, and in a sane world, every car would come readily supplied with a paint sealant!” Down to the retailers Sales of car care products are ultimately determined by the degree to which dealers take them seriously. Neil Wilson, managing director of Trade Sales, the Slough-based car supermarket, claims to have reached around 40 per cent of sales penetration with Permashine paint sealant. “If applied correctly, a car looks a lot more cared for when selling on as a part-exchange. When you see the car two to three years later it looks fresh, and will get better residuals. And for us it helps in retaining customers,” he said. Wilson has introduced a practice whereby every customer ready to buy a car is shown a short video of the sealant. He said: “They get an idea of the quality and the importance of the product. This has helped sales, as customers become aware that it is used on aeroplanes and yachts, so can withstand considerable tolerance. It is also fire repellent.” He acknowledged that not all in the industry were focussed on selling car care products. He said: “It is not everyone's cup of tea, but any salesman worth his salt will try to sell what is available to him.” He also agreed with Kendrick, and did not alternate sales incentives each week, preferring to offer the same bonus on products all the time. “If you start running differing incentives you don't know if the product is working as salespersons will wait for the incentives and then sell it.” Trade Sales has also begun to sell a bundled car care bag that includes Permashine sold at a discounted rate. Wilson said Permashine was also a standalone product and good enough to make a profit, and could be sold to customers irrespective of whether they were making a car purchase or not. But he did not overestimate the importance. “This is not an untapped goldmine. If I didn't have it to sell it would not be the worst news in the world for me, but I like to be able to offer it to customers. You can say it's the icing on the cake of our operations here,” he said. Dealer group penetration Jewelultra is another major player in the car care sector, selling Diamondbrite paint protection and sealant products. Diamondbrite is made from refined rock oils and builds up to create a durable glaze, and is guaranteed for six years from the date the product is applied. Lance Boseley, sales and marketing director, is generally happy with the relationship with dealers around the country but pointed out interesting facts regarding the scale of penetration varying between dealer groups. “We are busy meeting dealers every week. Our focus is on making sure sales staff are trained adequately to sell the products and that they are well stocked.” He said there were mixed performances from dealers. For example, the Bristol Street group achieves 35-40 per cent sales penetration, with 10,000 units sold earning over £1m annually. Boseley said some major groups with hundreds of dealers only achieve around 10 per cent penetration, “but Bristol Street, which has around 40 dealers, is hitting up to 40 per cent levels.” He went on to say that penetration has been increasing recently, and looked forward to expanding business with various dealer groups. The Retail Automotive Alliance recently announced it has chosen Diamondbrite as its preferred choice, believing it addressed quality and on-going support concerns. despite the proven benefits it is probably inevitable that some dealer groups and some sales staff will never see car care products as a priority. However, those that may consider investing time and training into these products need to note the healthy return of profit and customer satisfaction. These retailers should consider investing in training and adapting promotional techniques such as bundled car care packages as well as consistent incentive schemes for sales staff.

Boosting residual value through refurbishing alloys An increasingly important area of customer car care is the provision of an alloy wheel refurbishment service. Dent Wizard, the smart repair specialist, operates a mobile alloy wheel refurbishment service under the Wheel Wizard banner. The company claimed each mobile workshop has all the facilities to recondition a damaged or corroded alloy wheel back to an “as new” condition in a quick and cost-effective process. “Evidence over the past few years shows clearly that the poor quality of a car's alloy wheels can have a negative impact on residual values,” explained David Mercer, managing director. “Additionally, traditional approaches require the wheels to be removed and sent to a supplier for repair, which delays the vehicle being made available for sale.” Dent Wizard claims that alloy wheel repair can increase residual value by £200, as can a full mop to remove fine scratches. Additionally, the company offers the Dent Wizard service which specialises in the removal of dents, dings, creases and other minor flaws from a car's bodywork. Carried out with partner company Flying Colours, this can be a cost-effective solution to rectify any bumper scuffs, paint scratches, chipped bonnets, damaged windscreens and interior damage.

Computerised car valeting system Motorclean has been valeting cars for the motor trade for over 30 years. The company works alongside major dealer networks across the UK. Its core business is the preparation of vehicles at import centres, dealerships, vehicle refurbishment centres and auction houses. The bespoke Vali-data system is installed on terminals on the floor, with a straightforward web-based interface in the office. Workflow can be analysed and jobs scheduled by date and time by administrators. Valeters check the schedule at a touch-screen terminal and report their progress, while an accurate record is kept for each vehicle, to enable precise reporting and paperless billing over a link to Motorclean. Additionally the company also offers other products including solutions for minor cosmetic damage such as Smart Repair, odour repellent Aroma Care, and enhanced car washing service through Car Care Plus. Marshall Motor Group, number 18 in the Motor Trader Top 200, uses the service to care for around 20,000 vehicles a year. “They have has not only proven adept at meeting our basic needs but have also shown a real insight into our business. I look forward to collaborating with them on the opportunities for improvement it continues to identify at Marshall,” said senior regional director Ian Mitchell.