At the root of DaimlerChrysler SA’s new dealership strategy is a desire to improve its level of customer satisfaction. According to the manufacturer’s divisional dealer development manager, Theo Swanepoel, DCSA wants to have the best dealer network in the country by 2005, and this is how it plans to do it…
At the root of DaimlerChrysler SA’s new dealership strategy is a desire to improve its level of customer satisfaction, which the manufacturer admits is currently not up to scratch. According to the manufacturer’s divisional dealer development manager, Theo Swanepoel, DCSA wants to have the best dealer network in the country by 2005, and this is how it plans to do it…
Speaking at a media conference in Cape Town on Wednesday, Swanepoel said that DCSA had fallen behind in terms of image and customers’ service expectations – this was partly due to the multi-brand marketing strategy employed by dealers.
“An ever increasing range of models and derivatives has heightened the need to bring passion back into the way brands are marketed,” Swanepoel said. “Up to now, dealers have had to effectively ‘wear three hats’ and the new dealer network strategy aims to bring back focus on particular products and their own systems.”
According to Swanepoel, the company also recognised that there was a need to embrace social and political change and accommodate burgeoning black empowerment players in the dealership network. Furthermore, DCSA realised that it had to “forge stronger partnerships in the retailing sector in order to be flexible and adapt to global retailing trends and the way in which DaimlerChrysler AG was doing business.”
The strategy seeks to set up two new types of dealership – a Brand Centre concept for metropolitan areas, and a Market Centre for country districts.
The Brand Centre would require dealers to separate their current multi-franchise operations into separate Mercedes-Benz and Chrysler/Jeep and Mitsubishi units, each with their own completely independent servicing operations. In a Market Centre, however, there could be a single operation for all the brands – but the dealers would be required to carry all the brands.
In addition, independent dealers would fill certain niche areas. Swanepoel said the move would result in a rationalisation of the current 33 metro dealerships into 15, but total dealer representation would rise from the current 59 to 69.
There would be three Brand Centres in Gauteng, one in Cape Town and one in Durban, with Sandton Motors Group – which is 75 per cent owned by DCSA – controlling one of the Gauteng areas and Cape Town, and Imperial Motors and McCarthy Motors taking the other two Gauteng territories.
In order to make this restructuring possible, DCSA had to undertake a process of “balancing the book”, Swanepoel said. “Some dealers were required to swap facilities with their competitors in order to fit into DaimlerChrysler’s targets for maximised profit, volume and turnover generation.”
The decision to implement the new deal was not unilateral and was the result of negotiating a process that culminated in the signing of a memorandum of understanding between dealer groups. “The future of ownership was a difficult issue and negotiations were undertaken to find a solution that would be acceptable to most retailers,” Swanepoel said.
As a result, DaimlerChrysler had to give notice to certain dealerships. “DaimlerChrysler evaluated current franchises and, with a view to the future, sought to continue relations with franchisees that could accommodate future growth and warranted capital investment in the new dealer network,” Swanepoel said.
“Wholesale and retail are still separate divisions of DCSA,” Swanepoel said. “However, the company has created a team to facilitate the implementation of the new dealership strategy within DCSA.
“This team will compile representation models, facilitate the transition to the new network structures and endeavour to find brand-focus solutions,” Swanepoel said. “Improvements and adaptations to the strategy are being brought about before the actual implementation of the new strategy.”
DCSA plans to make a single submission on the new strategy, which will comprise 17 mergers and acquisitions, to the Competition Commission next week, Swanepoel said.
The manufacturer is confident that the document will be approved, and that this will be forthcoming by the end of July or early August.
