How Automotive dealers can maximise profits in 2021 - Financial Services blog | Deloitte Australia has been saved
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As motor dealers grapple with the economic impact of Covid-19 and think about the rebound opportunities and how to improve margins, they recognise the need to both streamline overheads and improve decision making through data delivered insights.
Deloitte has been supporting the Motor Industry for over 25 years so when the pandemic hit, we knew that it was going to be a difficult journey for dealers across Australia. Pressure built up on dealers to cut costs, manage stock and streamline processes in an effort to offset the downturn in sales. Timely and accurate financial information became key to making agile decisions. The key questions were how utilising finance information to predict sales, improve margins and cut costs. There are also the questions around finance function efficiencies, how to truly understand the numbers to make impactful and profitable decisions around selling and servicing vehicles and ring fencing the family business.
In April 2020, Rhys Stewart (Dealer Principal and Director of Hornsby Mazda) engaged Deloitte to assist him solve his one burning platform being speed of decision making due to the lack of information. Rhys was already a user of the Deloitte eProfitFocus platform, designed specifically for the motor industry, targeted at developing sustainable and long-term profitability through Performance Reporting & Benchmarking via bespoke reporting dashboards. This data helped identify the gaps and identify the opportunities, yet he now needed support on how to execute these through his finance function. By engaging the Deloitte Finance Managed Services team, he was able to blend the accurate daily financial information with the predictive information from EPF resulting in agile and clever decision making.
Rhys says: “Our partnership with Deloitte has resulted in all departmental managers and me getting access to reliable and easy to understand financial performance data to drive the business. This enables us to be aware of issues on a timely basis and take actions to correct them leading to gradual improvements in all parts of the business. I now have a customized suite of management reports delivered to me daily and access to Deloitte finance, tax and automotive experts to help me execute and drive changes to improve the bottom line. The profitability of the business has improved significantly as a result and so has our understanding of the overall cost of our operation and the consequences of management decisions. This could not have been possible without Deloitte and my total confidence in the administration function at the dealership”
Deloitte has been delivering Finance Managed Services to clients in Australia for 5 years and have leveraged our existing services and operating models to develop a Managed Services offering specific for the motor industry. Through our flexible Shared Services operating model that focuses on providing our clients access to our extensive experience, knowledge, data and people who support and are passionate about the motor industry, our clients are reaping not only monetary rewards but are able to focus on client service excellence rather than the back office of the dealership.
What are the benefits of working with us?
Our Managed Services offering has been developed to deliver full and flexible business support through a shared services model to dealerships and motor industry allowing our clients to focus on their core business.
Our extended subject matter experts can work with us, as your finance team, and you to identify opportunities for growth, manage transformation or exit. Our offering includes a dedicated advisor to support your Finance, Automotive Operations, Tax and Family needs.
We have successfully advised on the sale of more than 30 dealership transactions in the last 5 years achieving multiples most recently of 6.5 times FY 2019 normalized PBT. Your finance team would run modelling scenarios on up to date information which is clean and ready to be subjected to a due diligence at any time.
In addition to ensuring you maximise your profitability, we will ensure that your tax and compliance requirements are covered. Being the market leaders providing audit and tax compliance services to the industry, we audit and advise on compliance matters of all the listed retail automotive businesses, all of the large (>$1b turnover) non listed retail dealership businesses and the majority of the family groups and small single franchise operators, making us perfectly placed to help you.
How can we help you?
A one stop shop of Deloitte professionals who have the skills and passion to help you succeed.
Brandon has over 20 years experience working across Finance and HR Functions for Global and Australian organisations in the Listed and Public Sectors and has significant experience in Utilities, Medical, Rail and Logistics and Financial Services where he has been a key leader in Organisational and Finance Transformation programs. Brandon has deep experience in leading operations, outsourcing, implementing appropriate systems for financial management and reporting, assisting management with budgeting and cost control.
Dale McCauley leads Deloitte’s National Motor Industry Services practice and has over 21 years’ experience within the automotive industry. He works alongside retail motor dealers, manufacturers, financiers and legal advisors within the motor industry to provide specialist services ranging from benchmarking, to performance improvement, to specialist coaching and talent development programs. His key achievements include the development of Profit Focus industry benchmarks and the first motor industry CRM benchmarks.