While new vehicle sales dropped by 2.8% in April 2008 versus the same month last year, Burchmore’s posted triple digit growth, and yet another record month.
According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), a total of 42 359 units were sold in April this year. The total vehicle market dropped by 2.8% while new car sales declined by 7% over April 2007.
Sales at Burchmore’s can be divided into two categories: auction sales and off-the-floor (retail) sales, and both of these sectors grew substantially last month. When it comes to the former, the Sandton branch reported a 50% increase, while auction sales rose 29 and 31% in Durban and Cape Town respectively.
Retail sales at Burchmore’s also bucked the trend last month, with off-the-floor sales rising by a whopping 127%. In April 2007, the company achieved 193 retail sales; in April 2008 this figure rose to 438.
According to Brand Pretorius, chief executive officer of McCarthy Limited, the success of Burchmore’s demonstrates that it is ably meeting customer demand, by providing a wide selection of vehicles at keen prices. “All the branches are applying this same recipe, in a consistent manner. Their marketing efforts are focused and the sales teams know how to close deals,” he notes.
Machiel Adendorff, dealership manager at Burchmore’s Cape Town, explains that this may mean specially seeking out a specific vehicle for a customer. “We offer a huge variety of vehicles – we have thousands of vehicles on our floors around the country. As such, most customers will find their ideal vehicle at one of our branches. If not, however, because of our infrastructure, can source just about anything a customer could possibly want,” he explains.
Keith Green, dealer principal at Burchmore’s Durban, concurs. “Our branches offer an immense variety but, if we don’t have the ideal vehicle on our floor, we can source just about anything that moves,” he notes.
Just one of the sourcing channels is within the McCarthy group. According to Pretorius, this is paying dividends at Burchmore’s. “An important reason for the sales growth across all branches is the fact that they are sourcing a lot more stock from fellow McCarthy dealers. Quality vehicles are bought from McCarthy dealers at good prices (in the past, those vehicles were sold to independent traders),” he reveals.
Naturally, in typical Burchmore’s tradition, those vehicles are offered to customers at wholesale prices – and this has also boosted sales. “Given the new car price increases, more and more buyers are turning to used – they simply cannot afford a new car. This situation has been exacerbated by the crippling fuel price, which has meant that motorists are seeking to limit their monthly car repayments. This means that they want the best possible used vehicle deal, and they know that Burchmore’s sells at wholesale prices. Right now, affordability is a huge factor – and it will continue have a significant impact on car sales throughout this year,” he predicts.
Yet another factor that has boosted sales has been the access of used car buyers to credit. “There is more equity in a used car sold at a wholesale price; therefore it is easier for buyers to get finance,” Jacobson explains.
“Burchmore’s is the South African Wal-Mart, offering motorists wholesale prices and a massive selection. Our customers are able to compare cars, their prices and their features under one roof, while physically viewing the car in the metal. They find this experience – as opposed to an exhausting search, traipsing from one dealership to the next – to be most rewarding.”
While the rest of the year is expected to be tough for new car retailers, Burchmore’s doesn’t expect to share their woes. “We are upbeat about prospects for the rest of the year,” concludes Jacobson. “In fact, if the interest rate rises again (and it appears as if this will happen), our turnover and sales will be boosted even further.”
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