Integrated Services Key for Dealership Success

Q: What are your priorities as a new member of the board of Grupo Surman México?
A: My main goal is to add my experience to the current board to help modernize services in dealerships, thus disrupting traditional models. When talking about innovation in our industry, most advances are made in the product. However, sales and aftersales services are equally important although digitalization in these areas remains lacking. At the moment, I am focused on developing new marketing and communication channels to reach customers more effectively.
In terms of network expansion, we are introducing new brands such as JAC and Land Rover and we expect to close 2018 with more than 100 dealerships, up from the 92 we have at the moment. Our goal is to maintain sales at the same level as in 2017.
Q: What do you see as the best opportunity to improve customer service in dealerships?
A: Talent development is critical to have the right type of employees for every type of client that visits the dealership. Today, 50 percent of our dealership visits originate from a digital lead. Many generations coexist on the sales floor and our sales force must learn to interact with people that prefer digital communication, as well as with those that still favor traditional sales methods. In the end, it is all about learning to cater for the clients’ needs and opening a clear communication channel.
Q: How has Grupo Surman’s business responded to the decelerating sales in the domestic market?
A: Dealership visits have decreased, which is why it is so important to establish a better relationship with the customer. In a contracting market, it is common for new clients to search for the best offer in terms of discounts and rebates. The market becomes more competitive and companies fight for a smaller client base. Most clients carry out their research online nowadays, which means that our best chance to attract more visits is with clients that come for their routine maintenance service. We have to improve our service so they are more inclined to visit the sales floor and get to know the new products in stock. The endgame should be for clients to eventually trade in their used model for a new one.
Q: How important is the used-vehicle segment and how has it helped you generate sales in the new-vehicle segment?
A: Traditional sales models see each part of the dealership as a separate business but to succeed and become more competitive, all areas must be integrated. The used-vehicle business is a key segment because, under the current market conditions, revenue margins are better in used than in new vehicle sales. To boost sales, OEMS are offering many discounts and in most cases, we have to absorb part of this cost. We are working on activating a healthy repurchase cycle in which clients come to service their current car, visit the dealership to find a new one they like and then trade theirs for a new model. We get to keep the used vehicle and market it one more time thus recovering some of the profit we compromise due to OEM discounts. If we combine this with added services like number plate permits, insurance and extended warranties, we end up with better profitability for our business. Our mindset must evolve to see vehicle sales as a means to offer added services.
Q: How is Surman countering the negative results from brands that consistently lose market share?
A: This industry is cyclical. One of our advantages as a large distribution group is that we have a diverse investment portfolio. That means that when one brand is having a bad time, we remain afloat thanks to the success of other brands going through better times. Brands have their ups and downs depending on many factors, including product life cycles, facelifts and new product launches. We cannot control many of these, so the best we can do is make our own operations more efficient.