The management of retail motor yards appears very simple and straightforward but the performance level differences achieved by outwardly similar businesses, are great.
This paper examines the retail motor industry to establish its significant economic worth to the community and, by taking a small business viewpoint, show the management areas that if handled well become the "reasons for success" and if handled poorly become the reasons for failure.
Analysis of the industry is made difficult by the fact that there is very little written on the management of car yards, interfirm comparisons are of little use and published data from the Australian Bureau of Statistics lacks substance and can be misleading. Also very few professionally trained people are attracted to the retail motor trade as owner/managers (particularly in used-cars) because of the low social status and mundane nature of the business even though the economic barriers to entry are low and the earning potential is much greater than in most other professions.
Specific operational areas are discussed using a case study to determine their importance to the financial health of used car yards. These important management areas include marketing management, demand forecasting and operations, inventory control, accounting and financial management, most importantly people management. This paper concludes with financial and management reports that could be of considerable benefit to Motor dealers as a means of comparison and/or provide a starting point for a professional manager to develop his own system for greater control and profitability.