JOHANNESBURG, South Africa – The South African retail motor industry is getting to grips with the “new normal” caused by Covid-19 countermeasures with most dealers having right-sized and tightened financial controls to counter the downturn in vehicle sales, service appointments, and parts sales.
However Mark Dommisse, chairman of the SA National Automobile Dealers’ Association, believes that if a dealer is not at least breaking even now (Oct 2020) heading into the last quarter of the year then its management should act quickly with remedial action.
”The term ‘Retail Darwinism’,” he added, ”is more appropriate than ever now. If we take a page from the book on evolutionary theory and apply it to business then it really is survival of the fittest. Businesses need to adapt and evolve.
“It’s really tough out there and we can’t now bob and weave our way out of trouble. We must face the challenges,” he advised. “Think of it as being in the relegation zone in the English Premier League… you don’t want to be there but, if you are, you’d better be quick with a concrete action plan to get out of the danger zone.”
Even if dealers weremaking some profit, he added, it was not a time to rest on laurels.
”There’s still worrying economic news – a shrinking car park with relatively few sales to rental companies and a wave of unemployment in the middle class – an important component for vehicle sales. We must hope, operating in Level 1 of the lockdown, that retrenchments will be stemmed.”
Lessons learned from lockdown, he believed, were changing business methods and some media headlines were over-zealous with claims that South African dealers were old-fashioned.
‘DIGITAL TRADING WILL GROW’
”It’s important to not let trends in global markets influence expectations in the unique South African environment.”
Digital channels had, and would continue, to grow, Dommisse said, but should not be considered an alternative to personal interactions at showrooms.
”The bottom line,” he claimed, ”is that the final stages of a transaction should be through a sales executive and qualified F&I manager. The personal factor is still important, particularly when arranging a trade-in and selling used vehicles.
”Motor dealers are still best for the trading environments and I don’t see that well-proven approach changing drastically any time soon.”
…AND A WORD FROM THE CHAIRMAN
Marcia Mayaba, CEO of Barloworld Motor Retail, told The Corner via a media release: ”We will continue to build on relationships fostered by key industry stakeholders in government departments over the past seven months.
“I have full confidence in members’ ability to adapt under the ‘new normal’, particularly by using far more digital methodology while maintaining relationships with our customers.”