Dealers only make a little on car sales, I'm not having it!

[Grandfondo]

daemon said:

Grandfondo said:

daemon said:

Grandfondo said:

That's a bit like your guess you could make money as a car trader?

I did. Just not enough to support our flamboyant lifestyle.

Of used golfs and rented Beemers!

You mean like you're thinking of doing? You're being a bit hypocrytical are you not?

Grandfondo said:

Timbola said:

xmd5a said:

Been looking at getting a M235i myself, what sort of monthly figure will you be paying?

PM sent with details.

Me to please!

As you know that the best discounts available are if you take manufacturer finance and then if you are in the fortunate position to pay it off straight away then you don't get hit with the interest!

So not hypocritical just sensible.

[daemon]

Grandfondo said:

As you know that the best discounts available are if you take manufacturer finance and then if you are in the fortunate position to pay it off straight away then you don't get hit with the interest!

So not hypocritical just sensible.

Ah right. But he was asking about the monthly payments, not how much incentive he got? You seemed very interested.

Keep digging....

Genuinely laughed out loud when i found that.

Edited by daemon on Monday 8th December 19:54

[Wacky Racer]

As this thread seems to have gone off tangent into school playground stuff.. and it's not even the holidays yet.....

Re sump plugs or the "suction method".......

I think I would much rather remove the oil via a plug, I'm sure any metal swarf which has drained to the bottom of the sump is more likely to be removed this way.

[Grandfondo]

daemon said:

Grandfondo said:

As you know that the best discounts available are if you take manufacturer finance and then if you are in the fortunate position to pay it off straight away then you don't get hit with the interest!

So not hypocritical just sensible.

Ah right. But he was asking about the monthly payments, not how much incentive he got? You seemed very interested.

Keep digging....

Genuinely laughed out loud when i found that.

Edited by daemon on Monday 8th December 19:54

Had to go back and read the thread and there was talk about discounts as I thought but if it makes you feel better about your financial position then I am happy to help!

[Fast Bug]

oldnbold said:

I've just hopped over from the leasing thread blown2cv, and it would seem that somebody else is saying exactlty what I said to you over there. If memory serves me fast bug is in the trade.

So two independent sources telling you the same thing, but we're obviously lying, just to wind you up.

18 years in the trade, 16 of those in sales.

I feel old now....

[daemon]

Grandfondo said:

Had to go back and read the thread and there was talk about discounts as I thought but if it makes you feel better about your financial position then I am happy to help!

Its just so funny...

Grandfondo said:

Me, me, me too please!!!!!

I want to finance a BMW too!

Can i use my ropey old six as a deposit???

[Deerfoot]

Gents, you're both starting to look a bit silly now.

[TankRizzo]

I meet a lot of different people in the industry. Most are lovely and you get the occasional sneery knobhead.

There are examples of both on this very thread.

[oldnbold]

Fast Bug said:

oldnbold said:

I've just hopped over from the leasing thread blown2cv, and it would seem that somebody else is saying exactlty what I said to you over there. If memory serves me fast bug is in the trade.

So two independent sources telling you the same thing, but we're obviously lying, just to wind you up.

18 years in the trade, 16 of those in sales.


I feel old now....

Thought I remembered you from the old car salesmans thread.

[robinessex]

Ok. Read all of that. So you win say £100,00,000 on the lottery. Would you buy a car dealership @2.2% profit, or just give to an investment broker who'd guarantee you 10% with no work? The answer is bloody obvious. So why aren't the shareholders screaming blue murder ? I finding it difficult to see the ecconomics of a business that makes less than you can get just investing your money.

[robinessex]

unrepentant said:

Yazar said:

unrepentant said:

oyster said:

unrepentant said:

hondansx said:

That's a pretty naive review of things!

The profit you see is what their accounting has engineered.

You're the naive one. Lookers is a plc and Sytner is a division of a US public company.

Actually the truth is probably somewhere in the middle.

Pre-tax profit is not a true measure of margin in a company where large amounts of costs come in the form of performance-related bonuses or commission. For this, operating profit is a better measure.

After all, if Sytner paid their CEO a £100m bonus then the pre-tax profit suddently doesn't look so bad.

Someone else who doesn't understand how public companies are run.

Would this require understanding that public companies exist to create maximum value make as much short term money as they can for the exec bonus and shareholders, and keep as much of this money as they can from the taxman?

As I pointed out previously on this thread most plc directors are on LTIP's and their biggest chunk of cash usually comes from exercising share options which are usually 3-7 years in the future when they are issued. Long term sustainable growth in both profits and share price is what drives wealth for both shareholders and directors. Tax is tax, if you are an international company you can choose to make more in markets where the tax regeime is easier but the EU has rules about that as well. Public companies are audited extremely closely.

"Public companies are audited extremely closely." Oh yea ? Read a few issues of Private Eye to be informed what complete bks that is. PWC ? KPMG ? Remember Anderson consulting and the Enron scandal. And of course Tesco who have now found circa £250M error in their profits. Auditors PWC.

[anonymous-user]

robinessex said:

Ok. Read all of that. So you win say £100,00,000 on the lottery. Would you buy a car dealership @2.2% profit, or just give to an investment broker who'd guarantee you 10% with no work? The answer is bloody obvious. So why aren't the shareholders screaming blue murder ? I finding it difficult to see the ecconomics of a business that makes less than you can get just investing your money.

Because the shares are generating a healthy return? Lookers currently trades on a low P/E of 11.87 and made 40 million pounds on turnover of 1.6 billion in the first half of the year. Market cap is 520 million pounds. They are expecting to make 60 million for the year which makes their shares look a steal.

I think you're confusing value with turnover, a common mistake for the uninitiated.

[anonymous-user]

robinessex said:

"Public companies are audited extremely closely." Oh yea ? Read a few issues of Private Eye to be informed what complete bks that is. PWC ? KPMG ? Remember Anderson consulting and the Enron scandal. And of course Tesco who have now found circa £250M error in their profits. Auditors PWC.

Yeah, the auditors found the Tesco error. You can always find isolated cases but plc's are audited very closely and when the auditor signs off he's putting himself on the line.

[berlintaxi]

Deerfoot said:

Gents, you're both starting to look a bit silly now.

Starting? They passed that point about 2 days ago.

[Terminator X]

unrepentant said:

You've obviously never been a director of a plc. A lot of dealers (Lookers for instance) are plc's or subsidiaries of plc's. Those companies are under pressure to increase profitability on a 6 monthly (quarterly in the US) basis. Directors LTIP's are based on profitability and the share price and their options are all based on increasing share prices. There is no question whatsoever of "minimizing profits" as that does nothing for either the shareholders or the directors. In fact the opposite is true and auditors are looking for areas where the profits may have been padded (see Tesco). When I was on a plc board half my income was based on increasing profitability and a big chunk of wealth was generated by increasing the share price so that my options were worth more.

So why are margins so low?

TX.

[anonymous-user]

Terminator X said:

unrepentant said:

You've obviously never been a director of a plc. A lot of dealers (Lookers for instance) are plc's or subsidiaries of plc's. Those companies are under pressure to increase profitability on a 6 monthly (quarterly in the US) basis. Directors LTIP's are based on profitability and the share price and their options are all based on increasing share prices. There is no question whatsoever of "minimizing profits" as that does nothing for either the shareholders or the directors. In fact the opposite is true and auditors are looking for areas where the profits may have been padded (see Tesco). When I was on a plc board half my income was based on increasing profitability and a big chunk of wealth was generated by increasing the share price so that my options were worth more.

So why are margins so low?

TX.

It's a relatively low margin business relative to turnover. If you look at the example of Lookers though it's still a very good business relative to the share capital of the company. If you have a company with a share capital of $550 million and you make $60 million you are bloody profitable, in fact your share value will rise because your P/E will be off the charts. Because of the way stock is financed the cash flow requirements can be less than for a conventional retail business that finances all it's own stock and may only turn it 2-3 times a year. You need to look at those businesses in terms of ROI rather than net margin % IMO.

[Fast Bug]

Terminator X said:

So why are margins so low?

TX.

The internet.

[ralphrj]

robinessex said:

Ok. Read all of that. So you win say £100,00,000 on the lottery. Would you buy a car dealership @2.2% profit, or just give to an investment broker who'd guarantee you 10% with no work? The answer is bloody obvious. So why aren't the shareholders screaming blue murder ? I finding it difficult to see the ecconomics of a business that makes less than you can get just investing your money.

You are confusing Return on Sales with Return on Investment.

From my example posted earlier in this thread:

ralphrj said:

So, a well run dealership may have results that look like:

Vehicle sales: £20m turnover. £0 profit before target bonus, £200k profit after target bonus.

Aftersales: £5m turnover. £1m profit.

Overheads: £1m cost

Profit before dealer standards bonus: £200k

Dealer standards bonus: £300k

Profit: £500k

Return on sales (profit as percentage of turnover): 2.0%


However, return on sales is perhaps not the most meaningful measure of a dealership performance. If you were the owner of a dealership you would be more interested in how much money you were making on your investment.

If the example dealership above cost £5m to set up then the return on investment (profit over investment) is 10.0%.

[Rincewind209]

The figure of 2.2% as Sytners net profit is no indication of the profit return on a new car. Sytners business model means some fairly hefty financial gearing, in excess of 60% in 2013 I believe. This has to be paid for and is why gross profit is so much lower than net. What this means for Sytner (Penske) is that the business expands for free. A new dealership is immediately sold and leased back along with most of the equipment. As long as Sytner has a good credit rating, which it does, it can continue to expand with little outlay. So that 2.2% is very nice indeed, and Mr Penske is a very rich man.

[anonymous-user]

unrepentant said:

greggy50 said:

dme123 said:

greggy50 said:

V8RX7 said:

unrepentant said:

I wouldn't trust a new car to anyone other than a factory trained expert.

You clearly haven't met the monkeys working in a Dealership.

You'll be lucky to have one mechanic who knows what he's doing - the rest haven't got a clue

I nearly spat my coffee out in the office reading that

As said most people in dealers don't have a clue just plug a computer in and lack any common sense at all. You would be far better off at a decent independent garage to be honest unless it was less than 3 years old and want to keep a warranty.

Yeah if this is even remotely true I wouldn't even consider buying another Jaguar. If you need the dealer equipment just to change the oil then that means you are stuck with dealers forever as the car ages and actual things start going wrong with it. My experience of Jaguar dealerships is that they are totally clueless and incompetent at anything more complex than changing oil so you're effectively restricted to take your car for repair to someone who absolutely does not have the technical ability to diagnose and repair it properly. When it starts fking up in complex ways (and it will when it's a few years old of course and the thin veneer of JLR quality wears away) you really will be high and dry.

Dealer equipment must be a load of bks

Not sure how you need special equipment to remove a sump nut, change a filter and then fill a car back up with oil...

Ahh... the ignorance of PH. This used to be a car site you know. Now.......

DME - no need to worry mate, it'll be a long long time until the modern stuff gets down to your price level.

Ha ha, I feel justified because I would say it to your face but you are a fking . Anyway, JLR products are such a lot of flimsy old magpie attracting st that they depreciate to practically anyone's price level within a couple of years of new.

Edited by dme123 on Tuesday 9th December 10:21