Fleet News

Fair dealer campaign: dealers respond to dealer complaints

TWO weeks ago, Fleet News launched its Fair Dealer campaign – a call for garages to give better services to fleet customers. Now, dealers have their say on what fleets can do to help them improve:

Fleet decision-makers have painted a graphic picture of nightmare service levels from dealerships throughout the country, but only by understanding the problems facing garages will they ever have a true vision of what needs to be done to solve the indusry's problems.

That is the message from dealers this week, responding to the Fleet News Get Trained campaign, which has highlighted the best and worse of dealer service over the past fortnight.

While dealerships have come under fire for failing to meet fleet demands for high service levels, there is clear evidence that a punishing drive to keep costs down among fleet operators is starving the industry of the cash it needs to improve.

At Nidd Vale, the Harrogate-based dealer group, terms and conditions placed on the company by fleets were so great, it withdrew from the volume market, slashing 1,500 vehicles from its annual sales, equivalent to about £20 million at showroom prices.

But as Colin Hainstock, chairman and managing director of Nidd Vale points out, the value of the vehicles bore no relation to the value of the business.

He said: 'My experience covers delivering new cars, rather than service. But the general concern about dealers needs to be looked at in the light of the extremely tight profit margins they operate on.

'Fleet customers screw dealers down to the last penny and they should look at the situation they are in within the context of how much can they expect for what they are prepared to pay.'

A telling example is the basic cost to a supplier to get a new vehicle to a customer once it has been received.

'By our calculations it costs £200 to supply a fleet car. That covers the car coming in, having its pre-delivery inspection and being delivered to the customer. That is absolute net cost.

'Clearly you need to take account of interest and money outstanding. Bear in mind it will cost that much to repair slight damage in transit. But when dealing with volume business, there are very few dealers making that out of their cars. So fleet dealers could be losing money on every car they do.'

As a result, volume fleet business has to migrate to smaller numbers of dealers, making tiny profits on huge volumes of vehicles, which eventually adds up to an acceptable profit.

But fleets, in the main leasing suppliers, know what retailers make and they 'make the game', Hainstock claims.

He said: 'They dictate the terms that you supply them at. They make the game. A lot of dealers are making no money on the deals they are doing. Some of the contract terms leasing companies impose are mind-blowing. You might well be expected to collect a car from a customer and deliver it somewhere else at no extra cost to them. Or they want cars delivered in covered transporters, but don't want to pay for it.

'If you are making no profit, how can a fleet rightly expect to receive a mind blowing customer service exceeding their expectations?'

The decision to move away from volume fleet business led to a drop in sales at the firm to 5,000 units, but with little financial effect, he claims. We now sell 5,000 cars a year. Although we used to sell a further 1,500 to fleets, there was no money in it at all. The department just didn't justify itself.

'It was nothing to do with the relationship with customers, which was extremely good. It is just that the terms were too onerous for us. However, we still do local fleet work on a smaller scale.'

His view was backed this week by Mike Turner, director and general manager of Cuff Miller & Co, based in West Sussex.

He told Fleet News sister-title AM: 'I thought a glance at the issues from a dealer perspective might be useful. I don't believe the issue is customer handling skills, or lack of them, though none of us has any room for complacency about that.

'It is more about reinforcing the loyalty of local customers, who are likely to replace their vehicle with another of our marque, pay on the nail and are easy to reach.

'If the issue is not struggling to fill a workshop on a daily basis but rather keeping lead times for our loyal customers to an acceptable minimum, then maybe those people who have been used to having sometimes unreasonable demands met by dealers and manufacturers need to ask themselves whether their attitudes and expectations are not just a little unreasonable and due for review.'

Hainstock's decision has allowed the dealer group to focus more on other areas of the business.

It is ploughing more than £400,000 into four Yorkshire dealerships, upgrading its Harrogate and Wetherby businesses and buying a new storage site. Overall, Nidd Vale has invested more than £600,000 to improve various aspects of its business.

Boycott garages that give bad service, fleets urged

FLEETS have been urged to 'vote with their feet' if they want better service and find a new garage to support their fleet needs.

Shopping around, controlling drivers and determining which garages they should use can make fleet operations more efficient and less stressful.

Lyn Peperell, owner of SMR Fleetcare, an independent servicing agent, said: 'To accept sub-standard customer service is inexcusable, to accept upselling on items is inexcusable, to do nothing about it is reprehensible.

'For peace of mind, fleet managers should make themselves known to the garage, should request old parts, should ask for a bottom line total when discussing the charges for work, and if the eventual paperwork does not match the amount quoted then fight your corner.'

She said that when working for leasing companies, along with most other garages, replaced parts are kept as standard, bills are itemised and a bottom line price is quoted.

She added: 'This price is then only altered with the agreement of the leasing company.

'Most garages who deal with fleets are quite used to this scenario and there is no reason why a fleet manager should not insist upon getting the same facility.

'The new Carwise scheme to be launched by the RMI and Office of Fair Trading should help those fleet managers who find it difficult to get a fair deal from a garage.

'Membership of the scheme will give some assurances as to the credibility of the garage and its customer service standards as well as giving an independent arbitration service in difficult situations.'

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