When the economic climate is challenging, retail businesses have to look at ways to enhance the service offering to ensure quality and value for money. Such has been the case of McCarthy Toyota Bruma, where 18 months ago a new General Manager came on board and changed the focus of the business and the results are now starting to show.
Etienne Maritz is the General Manager or better known in the industry as the Dealer Principal and has been employed by McCarthy for the past 3 years. Prior to this he was employed by both Land Rover South Africa and Volvo Cars South Africa on the OEM side of the automotive business.
Hailing from a financial background, Maritz immediately saw the need to improve bottom line figures in the business as well as meeting Toyota’s targets.
“We are a large Toyota dealership located in Bruma, just around the corner from Bedfordview. Whilst our premises are rather small we still generate large volumes and we also have an offsite facility where we carry out servicing for a major client of ours.”
“Our primary focus is on selling new and used vehicles and offering full after sales support including parts and service, tyre replacement and realignment, air conditioning servicing and other specialised repairs. Then there is also the financing and insurance element to the business,” he describes.
“Our dealership is over 40 years old and has a strong heritage; McCarthy purchased the operation around 15 years ago and it has grown significantly since then, achieving in the region of R300 million in turnover each year,” he continues.
Whilst to the untrained eye an automotive dealership may seem like a fairly straight forward business, there are a number of key departments within the operation which require vastly different skill-sets, as Maritz explains:
“It is a very complex business; we have 6 departments in all (if you count administration) and each department comes with their own set of challenges and requires a different level of skills and personality type from our employees. On top of the normal sales and customer service skills required for each department we also require as an example technically-qualified personnel for the service department and logistical skills in the parts area.”
Maritz puts an emphasis on the need to train staff, citing the general lack of skills within South Africa and then within the automotive sector itself.
“Training is ongoing for us and the skills shortage (in the industry) is a massive challenge. We invest a huge amount in training and Toyota has a world class programme to development each role within a dealership.
“On the workshop side we have apprentices who carry out on the job training under the supervision of a mentor whilst also spending time at the training centre to develop their technical skills and knowledge. Our technicians are involved in more in-depth product training at Toyota as well as at our McCarthy training centre with a view to becoming a Diagnostics Technician and then progressing on to become a Master Technician.
“One of the issues we all face is retaining employees (the company has approximately 65 employees and this number swells to roughly 80 when one factors in outsourced employees like the cleaning team) and we invest time, effort and funds to train and up-skill people only to see other groups try to poach these employees. It will remain a challenge but we have on the whole been successful in holding on to our guys; we have learned that it is not just about money and we aim to create a good working environment so that they want to stay and fit in with the Bruma culture.
“Much of that has to do with our communications within the dealership and we run recognition and rewards initiatives but also engage in team building activities and run an employee of the month award as well as celebrating birthdays.”
The arrival of the electronic communications age is starting to have an effect on the way vehicles are sold and Maritz says he is increasingly seeing the dynamics of customer location change:
“There is a definite trend towards the online side and that means our clients can be located anywhere in the country, not just in Gauteng,” he affirms. “We have taken onboard the significance of Smart Phone technology and whatever we do on our main website is also available on mobile websites. We have also launched a McCarthy App for the Smart Phone, which is the first in South Africa.
“Technology is also helping to improve customer feedback and customer experiences and whilst we are not where we want to be, there has been a vast improvement over the last couple of years and this will continue into the future.”
At Toyota we currently have 23 different vehicle models and well in excess of 110 different options across the range of products both in the passenger and light commercial vehicles (LCV) ranges. In 2013 we retained our market leadership for 34 consecutive years in South Africa which is driven by a dominance of the local LVC market.
Martiz says that the dealership’s used cars section, or Automark as it is revered to in the Toyota world, is more varied with a combination of various brands but a clear and strong focus remains on the Toyota range of vehicles on the Automark floors.
“We are currently selling 65 new cars per month and around 30 to 35 used vehicles but in the coming year we are striving to stretch that to between 75 & 80 new vehicles and around 45 used vehicles,” he states.
“Trading conditions in the last year was rather tough but overall we had bullish results selling just short of 800 new vehicles and 300 used and assisting around 12 000 customers through our after sales channels. Much of our focus is on return on assets for our investors and in December 2012 this was around 9%, this increased nicely to just over 19% in December 2013. This has further increased in 2014 and we expect to end our financial year in June at around 28%. This is mainly due to a specific focus on the quality of business that we do.”
“The arrival of the new Toyota Corolla is also hugely exciting; the passenger market remains a massive market in South Africa and the new range offers tremendous opportunity and fantastic value for money.
“I think it is about our management approach combined with a good understanding of our overall business results, coming from a financial background I am constantly analysing our performance. Rather than focussing purely on volumes we have focussed on quality and the service we provide to the customer.”
Change has been an important factor since Maritz became General Manager and there has been a significant overhaul of the management team and all other areas of the business, which in turn has resulted in a couple of adjusted versions of the short term business plan which is now reaping its reward.
Being a part of the Bidvest group, representing the Toyota brand who is the global market leader, a solid relationship between the manufacturer (Toyota South Africa) and the dealership and a strong product line up are a couple of key success factors that Maritz points to and he is very excited by the future for McCarthy Toyota Bruma:
“We have a terrific future ahead of us and are excited about the upgrade to our premises which should hopefully commence in Quarter 2 of 2014. This will ensure that we are a “Toyota New Generation Dealership” and includes all areas that influence our customers experience when they visit us. We understand that our people are our biggest asset which we will continue to invest in, in order to drive great customer experiences.”