The drive for more profit from less volume

With the prospect of fewer new car sales, generating incremental revenue from additional products and services in 2019 is a critical priority.

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Having to deliver more from less could be considered a conjuring act but the reality is that 2019 is likely to be another challenging period for motor retailers (see article “What’s in store for 2019?”). With the prospect of fewer new car sales, generating incremental revenue from additional products and services is a critical priority.

The introduction of the new WLTP emissions testing regime, however, has put something of a spanner in the works, since opportunities to upsell customers with an array of optional extras could be hampered. This is because the addition of non-standard equipment such as a panoramic roof, larger alloys, body kits and tow bars, for example, reduce the vehicle’s fuel efficiency, thereby incurring a tax penalty.

LifeShine is a compelling proposition not just because of its superior performance but also due to Autoglym’s unrivalled support.

A study by Autovista Group found that commonly selected combinations of options can have a negative impact on tax. Just fitting a tow bar can increase CO2 emissions by 1-2g/km because of the impact on weight and aerodynamics. Similarly, trading up to 18-inch wheels over the standard 17-inch rims offered increases both weight and rolling resistance of the car, which adds about 2g/km more in CO2 emissions.

Previously, NEDC emissions testing was based on vehicles with limited equipment fitted as standard but under the WLTP legislations, worst and best-case cars need to be tested with optional equipment fitted, in order to reflect real-life driving emissions and fuel consumption for each level of specification.

Given the huge issues faced by manufacturers in gaining WLTP type approval for all their model variants, the prospect of customers being penalised by the taxman for adding some extras to their new car is a major concern. In fact, a number of OEMs have already made changes to their optional equipment specifications.

BMW, for example, is looking to streamline its manufacturing process, offering fewer engine variants and factory options, whilst SEAT, the UK’s fastest growing volume brand, has scrapped the ability for dealers to upsell optional extras. Instead, it now offers cars with fixed trim levels across its entire model range.

Richard Harrison, Director of Seat UK, said: “Everyone used to think that having loads of choice was a good thing but in fact people find it really difficult to understand all the permutations and options when buying a new car. We realised it was time for a change and if we can help people get what they want in an easier way, then they will enjoy the experience more.”

Unlike mechanical accessories which carry a potential financial penalty, the option of a Vehicle Protection System (VPS) such as LifeShine, means that sales executives can upsell with confidence, knowing that the customer can have all the value and benefit without any effect on WLTP.

According to Paul Caller, Autoglym’s CEO, making sure VPS is mentioned during every sale is critical to moving the needle on penetration rates, as well as adding cash in the till. There’s the added reassurance of a lifetime guarantee with LifeShine, for as long as the owner keeps the vehicle:

“Lifeshine has proven to deliver the complete and most profitable VPS solution for dealers. We’ve seen some premium brand dealers boost uptake by as much as 80%. LifeShine is a compelling proposition not just because of its superior performance but also due to Autoglym’s unrivalled support. Retailers have the benefit of a dedicated Business Manager to help them achieve increased sales and profitability, as well as our LifeShine App, which gives customers all the information they need to make an informed decision.”

Autoglym has ensured that LifeShine remains the front-runner in the VPS market when it comes to ease and speed of application. For vehicle preparation teams, this is a crucial consideration so that productivity is maintained – the single application process can be carried out in just 30 minutes.

As well as guarding the paintwork, LifeShine also includes an interior and a glass treatment. Every LifeShine treatment comes with a complimentary aftercare collection for the consumer to take away, which includes a range of Autoglym products that will lengthen its protective qualities.

To learn more about your dealership can benefit from switching to LifeShine, get in touch.

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