People are more than just factors and key drivers!

Is it normal in our business environment to treat people in a natural and respectful manner, regardless of whether they are employees, customers, or manufacturer representatives?

Our editor and founder of Managing Transitions, Steffen Karl, is the third generation in automotive retail and stated:

"The human factor should not be seen only as a production factor. More than merely lip service to people is required!"

AutoNews24: What are the key drivers for a dealership's future? Are they different between family-owned businesses and large organisations?

Steffen: "When considering the future of automotive retail, we must also consider sustainability concerning our employees and the planet. Simply measuring by units and profit will not benefit the next generation. These are even dealer principals for international organisations.

When contemplating the future of automotive retail, it's important to consider sustainability with our employees and the planet. Solely focusing on units and profit will not be advantageous for the next generation. This applies even to dealer principals and international organisations.

People make the decisions that impact our environment. They design and execute the strategies that drive results and profits and are ultimately responsible for shaping the future of our planet and our business. An organisation's impact is defined by its effect on every part of its ecosystem: workers, supply chains, communities, and the environment. Yet, less than one percent of organisations today fully consider this impact."

AutoNews24:?How can a car dealer best prepare their dealership for the future by maximising its business value?

Steffen:?"There are several crucial steps that players must undertake to not only facilitate their dealership.

? Ensure all financial statements are up to date and accurate. Focus on refining the balance sheet to present a clear picture of assets and liabilities. This entails thoroughly reviewing accounts receivable, payables, contracts in transit and factory warranties, including assessing their age and status.

? Front office appearance: The front office staff and their Attitudes and Behaviors are crucial for the dealership and the OEM Brand Evaluation.

The Moment of truth- Prospet entire first time with his local dealers- at this point, The Meet and Greet Automarker's Ideas of its brand values face the truth

Shifting towards customer-centricity is inaccessible due to decades of brand and relationship-building, automotive incentive programs, and data-sharing agreements. Business leaders must address critical questions such as securing the best future for their business while maintaining the present, integrating the customer's voice into established systems, and creating a new transportation and mobility model that aligns with changing market and customer dynamics.

Automotive brands focus on the Customer Satisfaction Index (CSI) for aftersales service, which includes the traditional customer handling process, dealer recommendations, repair delay, cost of service, and invoice explanation. Teams work on a high parts fill rate, quick logistics, tech support, customer claims resolution, and fair warranty to make the service best-in-class."

AutoNews24:?What should a dealer consider when hiring a consultant to support a sustainable foundation for the future?

Steffen:?"We suggest that dealers look for an advisor with the following qualities:

- An approach that aligns with your preferences and comfort level to foster a collaborative and productive working relationship.

- The expertise to accurately evaluate your dealership to ensure maximum return.

- A proven track record of successfully navigating dealership transitions, demonstrating expertise and proficiency in the industry.

- High ethical standards to ensure integrity and transparency throughout the sales process.

- A comprehensive and influential network within the motor business that provides access to the best-in-class resources.

- Strong evidence of past successes indicating the adviser’s ability to achieve favorable client outcomes."

AutoNews24: Is the market situation healthy for the next generation?

Steffen: "Finding a successor is essential when a management team's era ends due to age, health, or personal circumstances. There are also strategic reasons for taking over another company. However, many entrepreneurs often need help with day-to-day operations and tend to push succession planning aside. Additionally, when they sense a good opportunity for a takeover elsewhere, they might rush into it without allowing the appropriate time to prepare for the takeover process.

However, a regulated company succession or takeover offers security for the entrepreneur, his employees, and all relevant stakeholders.

Mobility and the environment are closely intertwined, and hardly any market is undergoing such a transformation as the car trade in the face of current social challenges, such as the climate crisis. Customers' requirements are changing and are influenced by many factors. Digitalisation also plays a role: on the one hand, through the increasing power of online trading; on the other hand, through digital elements in the vehicles themselves."

AutoNews24: Given the changing market conditions, is the preparation process for a company's succession or takeover too complex?

Steffen: "Anyone who thinks that setting the purchase price and finding a buyer or the company to take over is enough is wrong. The success of an M&A process depends mainly on the preparation of this process. After all, car dealers want to know that their company and life's work are in good hands and that their employees have a secure employment relationship. On the other hand, car dealers who want to expand through a merger wish to avoid risking their success.

However, an M&A process always entails risks. Possible outcomes include the loss of customers and employees, failure to integrate the takeover process into the original company, and lack of acceptance of the new management in the event of a successor."

AutoNews24: Is a Dealership succession a way of starting a new business?

Steffen: "For most entrepreneurs, however, the prerequisite will be that the applicant has experience in automotive retail and can offer extensive commercial know-how.

In addition to the seller, the bank, as a capital provider, will also have corresponding requirements for the buyer: In addition to desirable equity, the bank will emphasise the potential car dealer's suitability.

To finance such a company succession, a business plan, including a financial plan, is usually necessary.

With this, the applicant demonstrates his industry knowledge and business skills and explains the company's status quo and future change plans.

As market dynamics have shown, agility and the desire to modernise are indispensable in automotive retail."

AutoNews24, July 29, 2024