By reducing the number of dealerships owned by major retail groups, BMW seeks to improve profitability of retail outlets and offer more opportunities for empowerment partners.
By reducing the number of dealerships owned by major retail groups, BMW seeks to improve profitability of retail outlets and offer more opportunities for empowerment partners.
The Rosslyn-based company’s policy of reducing the number of dealerships, which it has implemented over the past five years, will see Barloworld and McCarthy lose a number of BMW dealerships.
But BMW SA spokesman Richard Carter this week said it was in the best interest of both itself and the dealers to reduce the number of dealerships, as limiting the size of the network would boost the profitability of each dealership.
CARtoday.com reported recently that BMW SA had reduced the number of its dealerships to 56, and that it was the manufacturer’s intention that no retail group would contribute more than 10 per cent of its national sales volume.
Carter told that the groups played an important role in its dealer network, but that BMW SA would continue to favour entrepreneurs in its dealerships strategy and reduce the influence of the retail groups.
Limiting the number of dealerships run by groups also gave BMW space to increase empowerment in its dealer networks, he added.
BMW’s director of government affairs and Africa sales, Seth Phalatse, said during a panel discussion at the CAR Conference on the future of dealers in South Africa that car retailers needed to be more representative because of the emerging market.
“Seven BMW dealerships are available to black empowerment groups and we have introduced fast-tracking training programmes,” he said. “We must accept that we do not have blacks with a lot of motor industry experience.”
But he said they did not want passive investors. “We need active investors who need to know the tricks of the trade,” he said.
CARtoday.com recently quoted BMW SA managing director Ian Robertson as saying that whenever a dealership had changed ownership in recent times, BMW SA had encouraged the new owner to have a black economic empowerment (BEE) partner.
For example, BMW’s Midrand dealership had Pomodzi Investment as a BEE partner. Its Nelspruit dealership was also a black empowerment dealership while it had black dealer principals in East London and an Asian business representative as the dealer principal of its Auto Glen dealership in Johannesburg.
In addition, a dealership at Westgate in Roodepoort had been purchased by Athol Quinn, BMW’s general manager for sales and marketing, with Nelson Sosibo, a chartered accountant inside BMW, as his partner and financial director.
BMW SA had therefore decided to create a training academy “to help change the face of its current dealerships”.
Robertson said this programme would not just groom up-and-coming empowerment dealers, but also foster the next generation of sales, service, recruitment and training managers.