The current shortage of new cars is a “good situation” for dealers, said the boss of a British car manufacturer.
Kia Motors UK President and CEO Paul Philpott believes the shortage of new cars is a positive thing for his dealer network as it allows them to change their business models and learn new ways of managing customer expectations.
“We can’t sweep this under the rug – sourcing is difficult,” Philpott told the car dealership.
“If demand exceeds supply, any economist will know that means prices will go up or your margins will go up, which is good for us and for the dealers.
“It’s about running a different process and not having a complex full of cards that you turn to and say, ‘which one do you want? “
“It’s a good situation, but we have to learn new ways of doing business. “
Philpott said he believed the current shortage of new cars was “certainly here for the medium, if not the long term,” with “below-optimum inventory levels at least until the first half of the year. next year”.
He said this inevitably means longer order banks and sheds new light on customer management.
“We have to manage as efficiently as possible the customers who have to wait for our cars in the showroom. It’s frustrating, there’s nothing a salesperson appeals to more than selling a car and being able to say, “We’ll get it to you in two weeks.”
“Historically, that’s what he’s learned to say, and that’s changing. And you know, the way we pay sales staff in a shortage situation has to change as well. And it is all this learning that we do hand in hand with our dealers.
Philpott was speaking as the car dealership presented the 2021 Manufacturer of the Year Trophy – the highest honor of the annual Car Dealer Power awards. You can watch the full interview in the video at the top of this story.
The Korean automaker took the first gong for the second year in a row, bringing its total number of wins to six, meaning it is the most successful brand in the 10-plus years of operation. ‘investigation.
It received a mighty 96.5% in 13 categories, one of the highest scores ever, beating German giants BMW and Mercedes-Benz for loot. Click on the video above to see which other Kia manufacturers beat in this year’s poll.
The brand scored almost perfect 99% for warranty, but, perhaps more importantly in an automotive market affected by Covid, it scored 99% for accessibility at senior management.
“There was no guide or instruction manual on how to run a business during a global pandemic,” Philpott said. “We went through all kinds of times figuring out what was the best thing to do. We didn’t understand everything, but we made the best decisions possible with the information we had.
He added: “It’s been a roller coaster, and I think we’ve learned a lot. I think that’s demonstrated by the last five months of performance – we’re coming out of it stronger and better able to serve the customer.
“Even in a shortage situation, our dealers are better able to make money from our franchise and profitability is at record levels. And I think, despite all the challenges we face, our partnership is stronger than ever. ‘
He went on to say, “We have each of our franchised dealers for the past 18 months, which we are incredibly proud of, and they are now thriving on our fantastic product line – maybe slightly better deal than some of the other competitors. .
“The future for Kia looks bright – there’s the EV6, which I think is a real game-changer for us, and the new Sportage which has been the backbone of our franchise for the last decade.
“Our dealers have a lot to look forward to. “
Kia topped Car Dealer Power 2021 – click here to see where other manufacturers have been placed