APRIL 8, 2016 THE BUSINESS PAGES OF ...goautomedia.cdn.on.net/gan_premium/GoAutoNews_Premium...EDITION 1 APRIL 8, 2016 THE BUSINESS PAGES OF GOAUTONEWS Dealer opportunity in Masters’

Mercedes diesel blow to VolkswagenFor Mercedes-Benz it is payback time for VW snubbing its diesel engine technology

Singapore group eyes Aussie dealershipsMajor Asian prestige car retailer transforms Mazda store in Perth and casts around for more

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Dealer opportunity in Masters’ demiseCar retailers could consolidate operations in one facility at fire-sale prices

GM boss outlines auto jobs of the future… and offers insights into the people the auto giant sees working on its future in automobiles

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The business pages of GoAutoNews 2

EDITION 1 APRIL 8, 2016

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Carsales strategy: Treasure ships from

the New World

Chile joins Brazil, Mexico, SE-Asia and South Korea as carsales.com

looks for global opportunities.

Page 12

Singapore group eyes Aussie dealerships

after Mazda purchase

Major Asian prestige car retailer transforms Mazda store in Perth

and casts around for more

Page 7

Masters closure is a big opportunity

Car retailers could consolidate operations in one facility at

fire-sale prices

Page 4

Mercedes diesel blow to Volkswagen

For Mercedes-Benz it is payback time for VW snubbing its diesel

engine technology.

Page 10

WRONG WAY, GO BACK

Expert breaks down fleet costs to show why NSW government should retain its

fleet and save taxpayers money

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PUBLISHER: John Mellor

EDITOR: Neil Dowling

JOURNALISTS: Tim Nicholson, Daniel Gardner, Ron Hammerton, Byron Mathioudakis, Ian Porter, Terry Martin

PRODUCTION: Luc Britten, William Vicente

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GM BOSS OUTLINES AUTO JOBS OF THE FUTURE

… and offers insights into the people the auto giant sees working on its

future in automobiles

MANAGEMENT BRIEFING BY PANCHO MEHROTRA

Pancho Mehrotra looks at structuring a business to attract the best performers

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John MellorPublisher and editorial directorGoAutoMedia Pty Ltd

Welcome to GoAutoMedia’s new publishing initiative - GoAutoNews Premium - a weekly business publication aimed at the hugely important Australian automotive retail industry.

For readers of GoAutoNews - your free weekly newsletter - nothing will change. You will continue to receive your free copy of GoAutoNews as usual every Wednesday.

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GoAutoNews’ focus on the car manufacturers/importers and the products they field in the Australian market will continue to keep our readers up-to-date with the latest competitive information and continue to keep all industry players briefed as they go about their daily work. The supply industry, regulators and political scene as it affects the industry at large are also the subjects you have come to value in our coverage.

But something has been missing. It has been my ambition for some time to expand the level of coverage our Newsroom devotes to the retail car industry. Readers have seen examples of elements of that new coverage in the past months in GoAutoNews but from today you can read this new weekly Premium newsletter which will be available to Premium members for a nominal fee of a dollar a week.*

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* The first issue of the Premium newsletter will be available free. ** In special circumstances, we may occasionally link major stories from GoAutoNews to the membership section of GoAutoNews Premium.

Join the Premiumconversation

GOAUTONEWS Premium is designed to generate conversations about the issues that inhabit the lives of those who work in the retail car industry and those who supply the car retailers with the products and services they use.

We could have chosen to add comments below stories as is the norm these days but we believe that never-ending lists of comments below stories drown out thoughtful remarks and bury valuable ideas.

Since the internet has proven the value of editors, we intend to take your comments as letters and publish your contributions in a weekly Letters to the Editor page. We will select the most appropriate, thoughtful and interesting letters.

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By JOHN MELLOR THE impending closure of

the Woolworths-owned Masters hardware chain is providing a unique window-of-opportunity for car dealers to upgrade their facilities right across Australia.

The closure of the ill-fated tilt at Bunnings will mean that about 100 Masters stores will become available potentially at fire-sale prices. The stores are in every state and strategically located across

major metropolitan areas.Dealers say that facilities like

Masters or Bunnings can make an ideal platform for a car retailing operation because so much of the core building, car display areas and customer parking are already in place.

Real estate analysts have told GoAutoNews Premium that the stores would be ideal for dealers wanting to consolidate a disparate

number of franchise sites into the one consolidated facility with separate

showrooms facing out from common administration, parts, service, pre-delivery and storage areas.

Analysts are saying that Woolworths will be under massive

pressure to offload the stores as soon as possible and will be keen to hear from anyone with a serious offer.

There are presently more than 60 Masters stores operating and, of

these, Woolworths owns about 40. The remaining stores are owned by around 20 different landlords.

There is huge pressure on Woolworths to quit ownership of its Masters stores to get the wholly-owned properties off its books as soon as possible. Meanwhile the landlords are sitting on lucrative long-term leases of around 15 years so Woolworths will be keen to see new tenants or owners in those stores to stop the on-going obligation to pay rent from bleeding cash from its bottom line.

Continued next page

Car retailers could consolidate operations in one facility at fire-sale prices

“Up to 100 Masters stores will potentially become available at fire-sale prices.. The stores are in every state and strategically located across major metropolitan areas.”







Continued from previous pageAstonishingly there are said to be

another 40 properties where Masters stores are either under construction or earmarked for construction and 25 per cent of those are under landlords as well.

According to real estate analysts, some of those lease agreements require Woolworths to build a Masters store even if it is not going to be used.

Meanwhile the concept of converting

Masters or Bunnings-style facilities has received a strong endorsement from Melbourne dealer, Paul Hopper, who converted a Bunnings store into a Hyundai and Chrysler-Jeep-Dodge store in Werribee in Melbourne’s west at a cost of $31 million.

Mr Hopper told GoAutoNews Premium: “These stores are good value because you can recycle a lot of the property.

Continued next page


Paul Hopper engaged an architect to make the conversion of the warehouse fit in with Hyundai’s

design requirements for the showroom.

Paul Hopper turned this former Bunnings store in Werribee in Melbourne’s east into a Hyundai and Chrysler Jeep Dodge store (above). He says these stores are easily adaptable to a dealership and the conversion is straightforward. The cost is in the fit-out within the building shell.

Paul Hopper






Continued from previous page“They are very easily adaptable

and the conversion was very straight forward. They are still expensive because it is just a great big warehouse with a concrete floor and a steel structure. So you still have to do your fit-out, the showroom glazing, heating and cooling, office partitions, workshop fit-out and so on,” he said.

“But you have the car park out the front which you can adapt reasonably affordably (for stock display and customer parking). The workshop is very adaptable because it is a big open space and therefore you are not restricted in what you want to do. With parts it is easy to utilise the open plan space for the

racks and for installing the secure separation walls and cages.

“You still have to spend fairly serious money on the showroom and where we have installed wash bays we had to cut out the concrete floor to instal the plumbing.”

The design followed Hyundai’s international guidelines and Mr Hopper engaged his own architect for engineering and to adapt the Hyundai design into the building.

Asked if converting the Bunnings building saved money, Mr Hopper said that in his case he was not sure if it was less expensive “than if I was starting from scratch”.

“The Bunnings store we bought was in an absolutely prime location

and is a prime property that was not easy to secure for purchase in the first place. So we would have paid over the odds for it,” he said.

“We paid $31 million for the site and for what we spent on the conversion.”

Mr Hopper said one big advantage that became clear was the size of the Bunnings site.

“The good thing that we did end up with was a very big site. If we had done a conventional car yard it would have been a 10,000 square metre site but we have ended up with a 13,000 - 14,000 square metre site for Hyundai and Chrysler Jeep Dodge.

“So you end up with very big spaces which means we are able to

do all our pre-delivery onsite for both franchises.

“These big stores also come with onsite truck access which we can use for vehicle unloading which is very helpful because that is a big issue with councils. So the trucks unload and the cars go straight into the pre-delivery centre. I think most dealers would understand the value of having that.”

Mr Hopper added that “all your issues around council requirements are taken care of because the site in Werribee was in commercial zoning for retail and there was no problem at all transitioning across (from hardware to car retailing).

“That’s perfect for it,” he said.


Masters stores are located in high-exposure localities. This one at Keysborough in Melbourne’s south east is across the road from a Bunnings warehouse and exposed to Springvale Road - the busiest north-south thoroughfare in the city.

The store has its own traffic lights at the entrance and comes with plenty of paved areas for outside car displays and customer parking. Paul Hopper points out that his store includes onsite unloading areas for car transporters. Picture: Google

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by NEIL DOWLING MAJOR Singapore car retailer

Eurokars Group has made its first foray into the Australian automotive market, buying a prominent Perth suburban Mazda dealership and announcing its intention to make more Australian acquisitions.

Eurokars Group is Singapore’s biggest privately-owned car distributor. It is owned by executive chairman Karsono Kwee and has dealerships in Singapore, Indonesia and China.

The group bought the 55-year-old Wood Bros Mazda in the north-eastern suburban Perth corridor at Bayswater and has just reopened it as Bayswater Mazda.

Mr Kwee said the acquisition

“is the first stepping stone to the Eurokars future in Australia”.

The dealer principal for Bayswater Mazda is Peter Merks who has been responsible for upgrades to the premises. He told GoAutoNews Premium that Eurokars was “actively looking” for new acquisitions in Australia. It was targeting Japanese and prestige brands.

Mr Merks said that since taking over the Bayswater premises, the building was renovated and expanded; adding used cars to the premises. But he said still more room was required.

“We have been surprised and delighted by the reception from

customers since we opened,” he said. “Sales of new and used are already up about 50 units a month on previous figures.

“The plan has always been to maximize customer service in line with the car-buying experience in

Singapore, and we’re achieving early goals,” he said.

Mr Merks is the son of Perth car dealer identity Hans Merks. He has worked for WA dealerships

and groups including WA BMW distributor Auto Classic and retailer AHG. He was involved in car retailing in Singapore for three years before moving to the Perth Mazda outlet.

Mr Merks said that staff changes at Bayswater Mazda included increasing the number of women employees.

“We’d like more,” Mr Merks said. “About 65 per cent of Mazda sales are to women. A lot of our women clients prefer

to deal with women in sales and service and we agree that it’s an important part of car ownership.”

Eurokars was started in 1985 by Mr Kwee, first as a Porsche

distributor in Singapore. It retained its links with the prestige edge of the car market and expanded with dealerships in China and Indonesia.

It now has 26 dealerships and employs more than 1300 people.

In Singapore it distributes Porsche, Rolls-Royce, Mini, Mazda and McLaren.

In Indonesia it has five Mazda outlets and distributes BMW (including a shop exclusively for BMW ‘M’ brands), Porsche, Rolls-Royce and Maserati. It is also Indonesia’s national distributor for 3M products.

Eurokars has an equity stake in a Rolls-Royce dealership in Nanning, China.

Major Asian prestige car retailer transforms Mazda store in Perth and casts around for more

Singapore group eyes Aussie dealerships after Mazda purchase

“The acquisition is the first stepping stone to the Eurokars future in Australia … and is targeting

Japanese and prestige brands ”






COMMENT by NEIL DOWLING and JOHN MELLOR

THE damage that Volkswagen Group has inflicted upon itself with the diesel emissions scandal continues to grow with the company now facing a severe competitive disadvantage in the diesel engine market which was to be so important in its drive to become the world’s top car-maker.

This is because the car-maker on which VW turned its back

when seeking a solution to a low-emissions diesel engine - Mercedes Benz - has just revealed a hugely competitive four-cylinder diesel engine that leaves Volkswagen wallowing in its dishonesty. It is a huge vindication of Mercedes and a punishing lesson for VW.

The new four-cylinder diesel engine, which is the first of a series of modular engines, will see duty late this year in the Mercedes-

Benz E-Class sedan before being shared with other models. It leap-frogs Volkswagen’s diesel engine offerings.

Mercedes-Benz’s 2.0-litre versions are streets ahead of VW’s current 2.0-litre diesel on all

measures - power, torque, fuel economy and emissions.Volkswagen has responded that

it will launch an all-new 1.5-litre turbo-diesel (and 1.5-litre turbo-

petrol) for production in early 2017 - still a year away. The new diesel replaces the existing and contentious 1.6-litre unit and will have ancillary

equipment - the same as used by Mercedes - in its bid to reduce emissions.

But why is the Mercedes engine so important?

Because it exposes the sheer foolishness of the path VW chose to follow with the defeat devices, leaving it years behind in the diesel

engine stakes and potentially forcing it to swallow its pride and adopt the Mercedes technology or something similar - something it should have done in the first place back in 2008.

Readers will recall that in the mid-2000s, VW needed a clean four-cylinder diesel engine in order to meet United States fuel economy standards and drive a surge in North American sales as part of the plan to become the top car-maker in the world.

Continued next page

For Mercedes-Benz it is payback time for VW snubbing its diesel engine technology. VW is now generations behind from the pursuit of its financially-crippling diesel engine lie.

Mercedes diesel blow to Volkswagen

COMMENT






Continued from previous pageThey had arranged to buy

technology from Mercedes that would provide the performance and fuel economy needed as well as meet stringent US emissions standards. But in “a fit of Peich” heads at the top of Volkswagen were rolled and the Mercedes deal was called off, leaving VW without a suitable engine. The boss, Ferdinand Piech, did not like the fact that they had to go to Mercedes for their clean engine solutions.

So they lied. And lied. And lied for years and years.

They were not even smart enough to figure out that the defeat device had actually bought them some time.

Why did they not scramble to get a replacement engine to meet the US standards in 2009? Or 2010? Or 2011? But no. They just kept operating under the lie when they should have been

working to solve the problem.So they have lost all this time

and are now forced to cobble up a solution for the existing cheat engine that is more a legal and regulatory solution that a technology solution. This is certain to compromise VW’s

ability to compete in the US diesel engine market in future.

And now, of course, the company is facing such gigantic financial restraints because of the penalties

and fines that are coming at them from all sides that they are unlikely to have the budget to develop the ideal diesel engine solution they need.

But it gets worse.Volkswagen faces more hurt as

the all-alloy Mercedes OM654

turbo-diesel 2.0-litre engine is the first in a family of high-tech diesels and is poised to be shared with VW’s direct rivals.

Mercedes has an agreement

for technology sharing with Volkswagen competitors Nissan, Renault and Infiniti. It is very likely this advanced new emission-legit diesel family will wind up in cars fielded by these brands.

And if VW is wondering if the

diesel engine does not have a future then they need to think again.

Mercedes-Benz’s alloy diesel engine meets future US emissions rules and may just be the candle

in the Volkswagen-inspired gloom that has globally cast doubt about the future of diesel engines as a competitive power source for passenger cars.

The Mercedes engine shows that diesel is back in the low-emissions race.

For Volkswagen, it’s an embarrassing thumping.

For Mercedes – which offered Volkswagen its coveted key to unlock the stringent US diesel emission regulations, but was dismissed – it’s vindication.

Mercedes-Benz E-ClassCLICK HERE


Volkswagen: The countdown

to disaster

OUTPUT FUEL USE EMISSIONS2014 Volkswagen EA189 2.0-litre 103kW 320Nm 5.9 L/100km 159g/km CO22014 Mercedes E220 2.1-litre 125kW 400Nm 4.9 L/100km 132g/km CO22016 Mercedes E-Class 2.0-litre 143kW 400Nm 4.3 L/100km 116g/km CO2The VW difference .. -40kW -80Nm -1.6l/100km -43/km CO2



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By NEIL DOWLING THE move by the New South

Wales government to outsource the running of its fleet of 25,000 vehicles to a raft of Australia’s leading fleet-leasing operators will not save taxpayers money and will do little to stem any inefficiencies, an expert in the field has warned.

Derrick Bishop, a global fleet expert, also disputed claims made by the NSW minister for finance, services and property, Dominic Perrottet, who promised $1.2

billion of savings would flow from privatising the government’s extensive vehicle fleet.

Mr Bishop questions this benefit, saying that all the NSW government was doing was shifting the cost from its books to “what could be a more expensive model”.

He said that ultimately taxpayers would not see any savings and claimed that many observers “including government insiders doubt if this is a responsible use of public funds”.

Last month the NSW minister

released a list of fleet managers and vehicle leasing companies that will control the privatised fleet.

He has appointed SG Fleet and Smartfleet as fleet managers and lease companies Alphabet Fleet (BMW Australia Finance Ltd), Custom Service Leasing, FleetPartners, Interleasing (McMillan Shakespeare), LeasePlan and Toyota Fleet Management (Toyota Finance Australia). The new outsourcing group starts from July 1 this year.

Continued next page

Expert breaks down fleet costs to show why NSW government should retain its fleet and save taxpayers money

Wrong way, go back

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Continued from previous pageMr Perrottet said when flagging the

move last year: “The government shouldn’t be competing with the private sector for fleet leasing and management services.”

“This arrangement will be more cost-effective, increase competition and allow government to access best practice in fleet management.”

Mr Bishop is the managing director of Bishop Fleet Optimisation (BFO) which is a fleet utilisation consultancy with offices in the United States, Australia and New Zealand. His studies of fleet usage show the large government fleets can cost hundreds of millions of dollars a year by

running far more cars than they need. Mr Bishop has been opposed to

the outsourcing. He claims that his company’s efficiency studies carried out with government agencies around the world showed that the NSW model “would not reduce the cost burden on taxpayers”.

“Simply cost-shifting $1 billion from the government’s capital expenditure is not a saving,” he said. “Taxpayers will have to pay more for private companies to own and manage the fleet.”

Speaking to GoAutoNews Premium from his US office he said: “The chances of (outsourcing) success are very low” because of the

cost structure of vehicle fleets.“Depreciation (50 per cent) and

finance charges (19 per cent) make up almost 70 per cent of light fleet costs in the first three years of ownership.

“The numbers vary by fleet but it is the magnitude of each cost component that is important.

“Depreciation, at 50 per cent, is the elephant in the room.

“For a company to be more cost-effective than a government agency, it has to reduce costs by buying the vehicles cheaper, sell the vehicles at the end of term for more, and get rid of surplus vehicles.”

^ CONTINUE ONLINE

Wrong way, go back

Surfers to ‘feel the warmth’ as cold days close in

By NEIL DOWLING INDIAN-OWNED and UK-built

Jaguar Land Rover is bringing a bit of Swedish therapy to Australian beaches with an innovative portable sauna for swimmers.

Together with its partner agency Spark44 Sydney, Land Rover Australia has come up with a beach-side way to treat autumn and winter adventurers to some summer warmth.

Towed behind a Discovery Sport, the Land Rover Adventure Sauna started its tour at Jan Juc Beach near Torquay at the 2016 Rip Curl Pro Bells Beach event where Land Rover ambassador Sally Fitzgibbons was competing.

Land Rover said the portable sauna would return to Sydney via Bateman’s Bay and Wollongong.

Jaguar Land Rover general

manager communications and public relations Tim Krieger said the sauna would be for people who need a warm-up after a surf or a swim and would have room for them and their mates.

“We know how much Aussies love the outdoors and cold weather is not going to stop them doing what they love,” he said.

“We want to reward these winter adventurers with luxury in unexpected places and with the Land Rover Adventure Sauna, we can do just that.”

Spark44 Sydney managing director Jasmin Bedir said: “Not only will the Land Rover Adventure Sauna act as an eye-catching piece of outdoor advertising, it will provide our target audience with a unique brand experience.”



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Carsales strategy: Treasure ships from the New WorldBy NEIL DOWLING and JOHN MELLOR

AUSTRALIAN online vehicle classified advertising site Carsales has expanded its offshore interests to five countries after buying a majority share in Chilean automotive classifieds website, Chileautos, ignoring headwinds in the economies of Latin America in return for gaining scale in Spanish-speaking markets.

Chileautos is the second Spanish-language auto website in the Carsales stable with management keen to roll out the Carsales web engine in Spanish across the region and build on its investment in Spanish versions of its classified intellectual property.

Carsales also has a 65 per cent share in Mexico’s SoloAutos. Mexican car sales were just north of one million cars last year.

Its other South American online motoring classified acquisition was a 30 per cent share in the leading Webmotors site Brazil in April 2013 although Brazilians speak Portuguese. The Brazilian market runs at about three million units a year.

Across the Pacific, Carsales has a 22.9 per cent interest in South-East Asian site iCar Asia; and 49.9 per cent of South Korea’s SKencarsales.

Carsales CEO Greg Roebuck said the Chilean purchase was “a prime strategic opportunity to take another Spanish speaking business to the next level”.

“Our Latin-American investments are still at an early stage, but Carsales is excited by the medium and longer-term opportunity.”

^ CONTINUE ONLINE

Chile joins Brazil, Mexico, SE-Asia and South Korea as Carsales looks for global opportunities. Argentina might be next Spanish acquisition.



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By JOHN MELLORTHE newly-appointed chairman of General Motors, Mary Barra, has spelled out the types of skills the car industry is going to need as it transforms over the next five years.

In a remarkable insight from such a senior motor industry executive into how GM sees its future products unfold, Ms Barra said GM has identified 10 jobs, including engineers, inventors, designers and marketers that would “change the world”.

In a recent post on the business social network site, LinkedIn, she said that

the motor industry will change more in the next five years than it did in the previous 50 years and that she sees car-makers like GM playing a greater role in the daily lives of its customers.

Ms Barra said that the revolution that will change the way people drive and interact with their cars was “closer than we think”.

She wrote: “Around the world, social and technological changes are redefining personal mobility and

rewriting the rules of vehicle use and ownership.

“I’m talking about huge improvements in connectivity, car-

sharing, electrification, vehicle safety, even cars that drive themselves.

“At GM, we don’t fear this kind of

disruption – we are working to lead it. And, we’re constantly looking for the right people to join our team.

In a connected post she said: “A lot of smart men and women at GM are waking up in the middle of the night - creative juices flowing.

“They’re motivated and inspired to reinvent how customers around

the world will get from Point A to Point B in the future - and how GM can take our customer relationships

well beyond the car and into their daily lives.”

Ms Barra said that GM was “deliberately disrupting its traditional business model”.

“We are intensely focusing on redefining the future of personal mobility through everything from car-sharing – and the connectivity and user experience apps associated with it – to commute-share, e-bikes, affordable EVs, autonomous vehicles and other mobility concepts we haven’t even invented yet,” she said.

Continued next page

… and offers insights into the people the auto giant sees working on its future in automobiles

GM boss outlines auto jobs of the future

GM is hiring men and women from large and small technology

companies and startups “who made their mark by leading disruption”






Continued from previous page“It’s all about being ambidextrous,

too – managing our core business while proactively defining the future.

“We are moving fast because the competition’s desire to win is unrelenting but mostly because our customers want us to make their lives easier and better.”

Ms Barra said she spends time in Silicon Valley and other centers of innovation “to recruit their best disruptors and thinkers”.

“I love talking with candidates from startups because their mentality is that anything is possible – and so they make it happen. They

are passionate about the notion of innovating and winning.

“But there’s nothing unique about the air they breathe, or where the sun rises and sets.

“It’s just about the people … people we are bringing into the auto business, too.

“In our drive to redefine personal mobility, our mantra is access and options. Our two decades of connectivity leadership with OnStar, global scale, product portfolio and customer base give us a strong position,” she said.

Ms Barra said GM was hiring men and women from large and small

technology companies and startups “who made their mark by leading disruption”.

She said that GM was blending employees who inspire fresh and innovative thinking and who “can frame a situation and see solutions others may have overlooked” with “those with the automotive depth to execute with speed”.

She said that GM has identified 10 jobs that would be critical to its plans to define and lead personal mobility (see table above).Ms Barra then went on to outline recent examples of GM innovation:* In 2015, GM sold seven times

more 4G-equipped vehicles than the rest of the industry combined. By the end of this year GM will have 12 million vehicles on four continents connected through the OnStar system.* GM’s Maven car-sharing program is up and running in China, Germany, New York, and Ann Arbor, Michigan, with more locations on the way.* GM has formed an alliance with ride-sharing company Lyft to create an integrated network of on-demand autonomous vehicles.* GM recently acquired Cruise Automation to further accelerate its

development of autonomous vehicle technology.* GM’s Chevrolet Bolt EV, with a range of more than 200 miles (322km), starts production this year.

Ms Barra said GM would need engineers, inventors, designers, marketers and other people with “the passion and talent to reinvent personal transportation and change the world”.

She said that anyone who wanted a career which would challenge their intellect, reward their hard work and give them the opportunity to define the future of personal mobility should give GM a call.

1. ELECTRICAL ENGINEERS – to explore and develop electric vehicles

2. ANALYTICS EXPERTS – to create algorithms to decipher how smart data can best help drivers

3. INTERACTION DESIGNERS – to ensure information and technology within the car can be accessed safely and intuitively

4. WEB PROGRAMMERS – to develop software that allows the next big thing to easily connect to the vehicle and its occupants

5. AUTONOMOUS DRIVING ENGINEERS – to developed advanced sensor and radar systems to make these vehicles and those that follow a reality

6. CUSTOMER CARE EXPERTS – to connect with customers directly and instantaneously via social channels

7. SUSTAINABILITY INTEGRATION EXPERTS – to help us find ways of using less of everything to keep our planet green

8. INDUSTRIAL ENGINEERS – to challenge engineers to build complex vehicles in ways that are sustainable and efficient

9. 3D PRINTING ENGINEERS – to help us innovate and build faster, often allowing us to have more affordable options to test

10. ALTERNATIVE PROPULSION ENGINEERS – to refine and develop new ways for cars to move

Not an auto engineer in sight... Mary Barra’s hit list of the top-ten jobs GM will need in the next five years






By PANCHO MEHROTRA DEALER principals frequently

ask how they can attract the right person to join their sales team; someone who is enthusiastic, wants to learn and gets along with people. But most importantly, someone who can sell.

The challenge is finding a sales person who fits not just one but all these criteria.

Often, salespeople are hired with one or more of these attributes. They achieve the numbers to start

off with; but then their other failings surface and the dealer principal realises that they are not a good fit for the business.

For example, a client employed a top salesperson – on paper. The first few weeks there was euphoria; the salesperson was selling a record number of used cars and the bottom line looked good.

But in a couple of months the ‘top salesperson’ had to be let go. He was selling a lot of cars but losing a lot of customers along the way.

The dealership had attracted an undesirable salesperson.

Why did this happen?Let’s look at this from the

perspective of what would have attracted a ‘perfect’ salesperson.

A dealer principal, a sales manager or HR manager needs to ask: what would persuade a top performer to work in our business? What would be our business’ attraction factor?

Businesses that have this “attraction” factor have the best people working for them. They

seem to enjoy what they do and this leads to many benefits for the business owner.

Key benefits of an “attraction car dealership business” are:

• Higher gross per car – higher profitability

• Employee loyalty and low turnover of staff

• Repeat business/client loyalty• Warranty upgrades• Increase in finance penetration,

etc.

An attraction business has a great reputation amongst its clients and partners that is envied by their competition.

So what makes a car dealership attractive and successful?

For the answer to this we need look no further than what makes a happy and fulfilled relationship or a happy and fulfilled family environment. A happy environment encourages people to spend time in the relationship and with their family.

Continued next page

Pancho Mehrotra looks at structuring a business to attract the best performers

What is an ‘attraction’ business?

MANAGEMENT WORKSHOP






Continued from previous pageNow examine what the opposite

of this might be. Think about a relationship that is not working; what do most people want to do? Escape. Conflict and miscommunication are usually the common themes.

So, if a business has a high turnover of staff, low profitability per sale, and, in relative terms, low repeat business with few referrals, it is a business that is ‘unattractive’ to work for. It will have a problem attracting and retaining staff.

Car dealers obviously need to concentrate their attention on the numbers being generated by dealerships but it can be very revealing if they take the trouble to understand what the story is behind those numbers. What are behaviours

that reflect those numbers? A close look at the attitudes

of the people who generate

those numbers might reveal, for example, the silent sabotage that goes on beneath the surface of the business. Unfortunately,

even if they know it is going on, many owners fail to acknowledge that white anting of the business is occurring because denial is less confronting than taking the problem on.

How do you fix this? Or how do you work towards a solution?

To change behaviours and attitudes is not a simple thing and often not accomplished overnight.

The key word is “work” towards it.

To bring about change in the business, the change needs to start with behaviour first.

Changing behaviours that are habitual is the challenge for many people. In psychology it’s called Belief Perseverance. The technical description is: Belief perseverance

is the tendency to cling to one’s initial belief even after receiving new information that contradicts or disconfirms the basis of that belief.

For example, a person has several minor car accidents where they were at fault might still maintain they are a good driver even though the evidence proves otherwise.

Working in my field, I come across this all the time. Senior people in management, as well as those who have just started their career in sales, will defend their existing beliefs even when evidence is provided highlighting the flaws in their thinking.

Is change easy? No. Where does change usually start? At the top.

I refer to a quote from Jack Welch who said: “If the rate of change is happening faster outside your business than inside, then the end is near”.

So what is an ‘attraction’ business environment that encourages the top people to work in your business?

An attraction business has:• Positive leadership• Cares about and invests in its

people• Respects its people• Focusses on outcomes

Summary: A successful business attracts successful people. A successful business has a focus on good behaviours – management and staff. To encourage these good ‘attraction’ behaviours, you need to revisit long-standing beliefs that can be handicapping your business and embrace the means to initiate change.

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Written by: Pancho MehrotraTraining and development

professional Pancho Mehrotra, in his 30+ years’ sales and

training experience has developed and mastered the skills required to effectively

communicate with clients at all levels, thereby understanding the psychology to influence

people at all levels.

www.frontierp.com.auFor further information, please contact: [email protected]

or (02) 9033 8663

Pancho Mehrota

What is an ‘attraction’ business?



http://www.manheim.com.au

http://frontierp.com.au/

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