Bedford dealers must play their cards right
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There is no shortage of people after a slice of the franchise action, but wanting's one thing, getting's another. Mike Rutherford has been looking at the requirements that candidates must meet
Would you, in the middle of an economic slump, invest your capital in a vehicle dealership? There must be more attractive ways of earning a living, you might have thought.
It may therefore come as a surprise to learn that Bedford Commercial Vehicles attracts a healthy number of hopeful applicants who are looking to become Bedford dealers.
It stands as a compliment to the company and its product range that such enthusiasm and interest exists. Certainly, it's true that Bedford has fared better than many of its competitors of late. During 1982 the company took 13.4 per cent of the 3.5tonnes-and-over market and 12.8 per cent of the medium/ heavy van sector. In both sectors Bedford's market share was second only to Ford 'S but, significantly, ahead of Leyland/Freight Rover.
According to Vic Wright, Bed ford's general sales manager for the UK all who apply for a Bedford franchise are considered.
"We don't reject any out of hand, and always talk to people even if we know we've already got a satisfactory dealer in the area. Despite the downturn in business, there are still plenty of applicants."
The sort of people that Bedford receives enquiries from are usually those with a service background, those with an existing franchise and looking for a better one, or businessmen who simply wish to invest their talents and capital in a Bedford franchise.
The quality of the applicants is impressive, says Vic.
In regions where it has only a few dealers Bedford will often ask an already successful dealer to open up, say 30 miles away, rather than appoint a newcomer who would obviously be something of an unknown quantity.
"We look at people who are already franchised — people who have built up a good local reputation for service. There's no better way of selling commercial vehicles than through a good service reputation. Backup is paramount," says Vic.
Before a dealer is appointed, and during his five-year agreement (which is renewable), Bedford vets him constantly. Initially, he completes an official application booklet in conjunction with the local Bedford sales development manager.
The prospective dealer's financial standing is then closely examined, and his proposed site, parts handling and vehicle stock capabilities are studied.
His general circumstances are also assessed, as is the sales potential for his area. Bedford forecasts the number of customers that the dealer should attract and estimates the percentage of those customers who will be returning their vehicles for servicing.
A time scale to rectify any shortcomings is also worked out. For example, if a dealer plans to employ two salesman and Bedford insists on three, a period of, say, six months will be given for the third sales person to be appointed.
A site with easy access and
3dequate space for the display 3 nd servicing of vehicles are important requirements. A showroom is not an essential requireTient, though adequate parking Facilities for customers are.
Industrial estates with the right mix of open and parts/service space are ideal sites for locating a new dealership. Located here, they are often next door to the very customers they are trying to reach.
Bedford has a total of 473 dealers throughout the UK, all of whom are franchised to sell vans up to 3.5 tonnes. Some of the dealers sell more than one type of vehicle, so the following cate gories overlap. Three hundred sell only vans; 70 are franchised to sell Bedford KB pick-ups; 168 have a medium duty truck franchise (Trs, TL's); 39 are "heavy duty" dealers; and 10 have bus and coach franchises. (Of that ten only two deal solely in buses and coaches, the remaining eight having truck franchises in addition to their bus/coach franchises.) The majority of the 473 dealers also sell Vauxhall/Opel cars too. There are only about 20 "out and out" commercial vehicle dealers who do not (officially) handle cars at all, but I get the distinct impression that cars are also available from those "out and out" commercial dealers too.
With such a wealth of dealers selling so many vehicles, there is an obvious danger of dealers treading on each other's toes. Each dealer, though, has his own primary area of responsibility.
Bedford spells out to him that his main duty is to serve his allocated post-coded areas (it is satisfying to know that at least vehicle manufacturers, can find a use for the post code "system") and generally the company is not happy if he neglects his local area. Even if his sales performance outside his allocated patch is good, Bedford might still not be satisfied.
All Bedford dealers are given regular sales, parts and service objectives which they can readjust with the company if they disagree.
Bedford and its dealers, says Vic, are constantly in touch about parts-availability and the standard of housekeeping.
"It's not a Big Brother relationship. When there is a problem we try and work things out with the dealer, and are not just critical. Then we agree, jointly, a plan of action to resolve things."
Bedford dealer agreements are renewable every five years. If, as occasionally happens, a dealer's agreement is not renewed after five years he is given about nine months notice, during which time his circumstances may change, and possibly his agreement is renewed.
The number of Bedford
dealers has decreased rather than increased in recent years, according to Vic Wright. That is partly because of the downturn in business activity and is also due to the company actively reviewing the number and locations of its franchise holders: Indepth surveys of metropolitan areas are carried out all the time.
Understandably, Vic Wright is reluctant to talk in too much detail about those dealers whose agreements are terminated because of poor performance.
In fact, it is debatable whether the company actually gets rid of any at all. Usually, dealers admit defeat before Bedford are forced to get rid of them. The decision to close a franchise is, more often than not, an amicable one, arrived at after a long-running sequence of problems, says Vic.
How conscious is Bedford of the fact that shoddy dealers could give the company a bad name and affect its (as well as the dealer's) sales? "We're very concerned. It's the worst possible situation," says Vic.
Having said that, it is not, in his opinion, a common problem. But if such a situation does exist, Bedford very rapidly becomes aware of it. Customers are quick to notify manufacturers and every single complaint is noted.
Vic Wright is confident that his local sales development managers get a feel for the dealers who are not up to scratch. Each aspect of every dealership is monitored, sales figures being only one area for concern. Spot checks — a common motor trade practice — are sometimes made on dealers but more common are the telephone checks which are made in an effort to gauge how dealers react to customer enquiries (how long does one wait for a reply? does the • salesman attempt to note the customer's name and address?) The breadth of the Bedford range is a major reason for the success of its dealers, old and new. Quite simply, while certain heavy vehicles are not selling well, Bedford dealers at least have an extensive range of light/medium commercials which they can rely on to boost sales. It is not every manufacturer, British or foreign, that has such an extensive range of vehicles to help see it through.
So it's clear that before a franchise holder is appointed, a great deal of work is carried out behind the scenes.
"We don't want to appoint someone who isn't going to be viable," says Vic. "There's nothing worse than having a dealer going out of business."