Adding 4.0% Gross Vehicle Margin, Achievable?
May 15, 2025
Sounds like a Stretch?
Maybe this is closer than many realise...
Automotive Solutions Group and our specialist team has for over Twenty Years operated full F&I (Finance & Insurance) programs across the MEA region, helping to grow revenues, sell more vehicles and differentiate from other Retailers. Our team started their F&I journeys in the early 1990's and have enjoyed huge success as Individual Franchisees, Managing Directors of Automotive Retailing, Owner Operators of Product supply chains, and represented some of the largest and most respected brands, insurers and banks in the world.
While our Focus has and continues to be to provide the Strongest Warranty programs across all sectors of Transportation (from Passenger Cars to Construction) with Manufacturers and Retailers being our esteemed partners, what many don't realise is the secondary profit channel we support through enhanced Customer Experience and Engagement.
So, while every $ of discount costs your business the same $ in profitability, offering an alternative value through a free product may not have the same profitability impact, while for a customer it certainly does represent a stronger value proposition, one that drives retention and loyalty. Then when possible the upsell of additional products generates significant Gross Profitability.
"Let's look towards the case study" - leading a organisation selling well over 150,000 vehicles pa, 55% Retail and 45% SME/Fleet and Corporates, with some worrying operational control gaps across Customer experience, it seemed a herculean task to reshape the model, drive out revenue leakage and provide some consistency around the customer journey, not to forget every Bank & Insurance company had done a great job infiltrating the sales team with a combination of cash and other direct incentive payments.
What we achieved was remarkable, and today this remains the greatest example of what can be achieved if you are prepared to Drive Change for good. I am not suggesting this should be the model for every Automotive Retailer in the MEA Region, but what I am advocating is Retailers should start the journey, preferably with Automotive Solutions as your product supplier and where appropriate F&I consultant.
The Case Study.
This snapshot does not mention:
- The impact on vehicle sales (+17% increase in sales conversions) through the management of the customer journey.
- Driving down the payment cycle from 12 days to 3 days from Banks and insurers.
- The introduction of Loss Participation programs with banks to drive loan acceptance.
- The numerous F&I promotions which featured across the brands every month, while rewarding the best performers and substituting the $ for a product that cost 35% of each $ of perceived value.
- While every product ensured the cycle returned the customer back to our Workshop, Body Shop and Sales team
Today, ASG operates the following Product frameworks:
These products simply provide an alternative to a $ Discount and help differentiate your product offering to your Customer.
The Real Value, better Process and Operational management across your Vehicle Retailing & SME sectors, control of the customer journey ensuring the experience that you are currently measured by is controlled by you, obviously the increase in vehicles sales and profitability is the tangible measurable upside, but reputationally and financially the idea of Selling Vehicles and allowing Banks, Insurers and product suppliers to control the customer outcomes is not a sound practice.
While Automotive Solutions continues to provide real differentiation through its market leading Warranty proposition, and outstanding digital video & web solutions, we truly see an opportunity to support you in your product requirements, across any Transportation sector - Passenger Cars, Truck, Material Handling, Construction, Marine and Two-wheeler.
While our focus is the MEA Region for these products, we also supply all Value Add Products in the UK & Europe through our partners VisHUB, what this space for more info and our VisHUB blog very soon.
Simply Contact Us, and we guarantee a confidential level of engagement from our team.
