Unique Opportunities Generate Better Profit MarginsThu, 08/01/2019 - 12:05
Q: How important is boosting the used-vehicle segment in a market focused on contracting new-vehicle sales
A: The used-vehicle market presents a significant area of opportunity for vehicle distributors. The ratio of used to new-vehicle sales in Mexico is low compared to other important automotive markets. Boosting used-vehicle sales does not imply Mexico is an underdeveloped country. On the contrary, if large economies sell larger volumes of used cars, there is no reason why Mexico should not incentivize this market. However, for this to happen, the country should have a better registration system that fosters an environment for transparent transactions in the second-hand market. The used-vehicle market could also be a source for better profit margins. Finding a new car with specific characteristics is not hard and any dealership can comply with clients’ requirements. However, finding a used-vehicle that adapts to key requirements can be challenging and a differentiator for the dealership that is selling it.
Q: How can vehicle registration improve the development of the domestic market?
A: Vehicle registration should be stricter, allowing banks and OEM financing arms to build better plans for used cars. Mexico City has a good registration system but many other states do not pay enough attention to this situation. There is no synergy between vehicle registration agencies in different states, which means that vehicles can go under the radar even when owners fail to terminate their financing agreement. Solving the registration issue could lead to better sales in the used segment because financing companies would have no trouble identifying the status of each vehicle and its location.
Q: How important is the used-vehicle segment for Grupo Gocar and what strategies have you implemented to reach clients effectively?
A: The used-vehicle segment is one of our most important divisions and we invest many resources in its development. We have found that the best way to target customers in this market is through digital means and we invest heavily in marketing campaigns and tools such as AdWords to generate traffic and leads. Grupo Gocar now has a digital center that supports clients looking for a new or used vehicle, offering direct communication through our webpage seminuevosgocar.mx, Grupo Gocar’s corporate site and digital marketplaces where we buy space for our portfolio. Our operators at the digital center communicate the client’s needs to a sales person at the dealership, thus defining the entire sales process before the client arrives to the showroom.
Q: How do sales strategies differ between the new and used-vehicle market?
A: Dealership groups must understand that used-vehicle sales are based on unique opportunities and the only way for clients to find what they are looking for is through digital means. Clients looking for a new vehicle need only to go to their nearest dealership to find what they are looking for. However, for a used vehicle with key elements that fit their requirements, they are even willing to move to neighboring states.
Q: What have been Grupo Gocar’s results in 2018 so far and what are your priorities to strengthen your business?
A: We have had a good year even though 2018 has been difficult for the domestic market. We had much higher sales expectations at the end of 2017 and distributors have had to work under more challenging conditions. Furthermore, inventory surplus has led to higher operational costs with many brands. Grupo Gocar has focused on maintaining healthy, efficient and productive operations, choosing to rely more on established processes and standardization instead of individual expertise. We are also improving our databases and ensuring our digital center standardizes operations for both the new and used-vehicle sales segments. Moreover, we are now growing the digital center to manage our aftersales operations and offer service reminders to clients while marketing other special promotions.