Surrey dealership making the most of its opportunities

Andrew Charman
Would you agree that new car sales are no longer the important part of the company, with aftersales just a supporting role?
Years ago that was the case but now aftersales is more relevant to the income of the business, with the much smaller profit margins available on new car sales. The importance of new car sales is to increase our vehicle parc which has dwindled over the last eight years or so as we haven’t had exciting product to sell. The sales people are no longer the golden boys of the company – we are the money-makers now. But at the end of the day sales and aftersales work together as a successful team.

Subaru is going through a great deal of reinvention, both in its existing models, new areas such as the Tribeca SUV and most recently the arrival of the first diesel engine. How does this affect you in aftersales?
It gives us new opportunities. The more product that is developed the better – these days we need to be diverse and get into as many things as possible. If we can have all that under one roof it’s fantastic for us and for the brand.

I noticed outside lots of advertisements promoting the fact that you service makes outside Subaru?
We service anything – it’s down to that diversification again, these days you can’t afford not to.

How do you go about targeting this extra work?
Newspaper advertisements primarily. But what is very relevant is that you tend to overlook the people who are right on your doorstep. So we’ve had some flyers posted through doors in streets within a mile radius, in a bid to improve our servicing levels on a local basis. You have to be proactive – we’re creatures of habit I think, people get in a comfort zone as to what they do. If you go to a specific shop for example it’s very difficult for anyone to change that, unless you give them a specific reason that’s going to help them, particularly in their pocket.

Do you do specific campaigns, such as winter or summer checks?
We do every single check we possibly can. It’s been in the industry a long time, winter checks, summer checks, check your battery, belts, oil levels – I wish they’d come up with something new and different. Customers having any work done get a report sheet on their invoice and we follow them up after a couple of weeks – we get a lot of business from that. It’s important we do, because customers either forget about it and it breaks, costing them more money, or they get it done when they are forced to do, and they go to wherever’s nearest at the time, meaning we may lose the business.

How much of your workshop business is warranty/retail work? Do you get much competition from independents after warranties expire?
The percentage is about 85 per cent retail, 15 per cent warranty. Some 98 per cent of our customers are wonderful people but you do get the odd one for whom nothing is ever right no matter how hard you try. It’s always nice when a customer who has just spent £1,000 with you still walks out of that door with a smile on their face. After the warranty period if you have done your job right they will come back to you. A small element will drift away thinking they can save money, and while actually this is often false economy they don’t think that way.

What do you think of the government idea to go to two-year MoTs for plus-four-year-old cars?
Dangerous – a ludicrous idea. It’s not so bad for the newer car, it’s the vehicles at the other end of the scale, which are always breaking, bits dropping off. You could end up writing someone’s car off, because it will come in for an MoT and you will think it’s got to last two years so it will need brakes, brake hoses… Before long you find they have a car worth around £1,500 needing £1,200 of work done, when they could have split the cost up on an annual MoT.

This is a very affluent area – are you seeing much evidence of the credit crunch?
The industry in general is and I don’t think it’s simply the area that matters. In the last year and a half the motor industry has taken a tumble. It’s the first year I’ve ever had to do a negative budget – you look at your graphs and think “we went up there, achieved that…” but it can’t keep going up – there will be a slump. You have to take stock sooner or later.

Everyone’s feeling the pinch and I reckon there will be more casualties this year – specifically in the body repair industry. The bigger insurance-owned companies are gobbling up all the work. Luckily enough we look after nearly all of them – we did our homework.

It’s competitive around here, with many car dealerships. Do you find it a problem recruiting and retaining suitable staff?
It’s always a hard job. Interviewing involves not necessarily just considering the person’s qualifications – the technique is vital. Say I have a parts adviser opening and a candidate stands out – he has a track record a mile long, he’s done a manager’s job… Take the cream and you are in trouble because often he’s biding his time, awaiting his next manger’s post. So you want the candidate that is most suitable for the post. Look after your staff, make sure the wages and incentives are right, and you shouldn’t have problems. We do well here – we’re especially proud of one of our technicians, Gary McDonald, who won technician of the year in 2006, went to the finals in Japan and was effectively named seventh best Subaru technician in the world.

What percentage of service hours do you aim to sell and what do you achieve?
As much as possible. We have three technicians and one apprentice, so we’ll be looking to sell 24 hours a day plus whatever we can get our apprentice to contribute to. We’re currently working 101 per cent of target, but we’re having to work twice as hard to fill our loading sheet compared to a couple of years ago, due to extending service schedules. We’ve lost the 1,000-mile service, the old 7,500-mile service, we now go from nought to 10,000-mile service and you think do I dare calculate what revenue that’s cost me?

Is there a hidden cost too because the customer comes in a lot less, producing fewer opportunities to show them new models?
It’s very hard to measure – the opportunities are becoming less and less and you have to work much harder on every opportunity to get footfall.

Do you get much fleet business – Subaru traditionally is not a major fleet player?
It’s miniscule. The days of the classic shape Impreza did provide some fleet business as company cars, but with increasing fuel costs and taxation they all jumped into diesel Volkswagens. We might get it back with the new diesel, something we’ve wanted for years, but the way diesel fuel costs are increasing could stop it. But it may give us the opportunity to encourage business people back into a Subaru and maybe then our fleet business will grow.

Have block exemption changes benefited you or have customers gone to independents for their servicing – after all you do a bit of independent servicing yourself?
If block exemption had never been invented no one would have missed it. If you went down to the village now and asked anyone what the block exemption ruling is, they wouldn’t know. They don’t understand the benefit of BER and what it can do for them. We all sat in franchise meetings and thought “What’s going on? They’re going to do us here,” but it’s not made a blind bit of difference.

Is the aftersales industry improving its levels of customer service?
That part of it is very important, yet the level of customer service in the retail industry as a whole is abysmal. Here at Cheam Motors we try to swap positions with the customer the moment they walk in the door – we try and look after people the way we’d expect to be looked after. You’ll never satisfy everybody though and it does have its pitfalls. A customer comes in for a quick diagnostic and you think; chuck a sponge on his car. If when he comes back six months later you don’t do that, for whatever reason, in his eyes do you then go down a couple of notches? You haven’t maintained it. You have to keep exceeding it.