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Dated: 1 December 2002
No doubt about it, used car dealers are aggressive, especially when it comes to advertising and marketing their product aand the use of humour and gimmicks to give it tht extra push. Companies such as Worldtron, Mack D’s, New Line Motors, Fortune Corporation, GM Challenger and Von’s have become household names in Jamaica, simply because their advertisements are seen and heard so regularly that one can’t help but remember them. Who, for example, can forget comedian Oliver Samuels in the Mack D’s television commercial?
Used car dealers always seem to be having some special going on. Just browse through a newspaper or the Yellow Pages and immediately the used car dealers are in your face with their ads. They offer financing, whether through a credit union or otherwise; special deals are packaged for various categories of workers; special low prices are advertised at certain times of the the month; perks such as cell phones are dangled when customers make a purchase and the creative packages get ever more inventive. They are into the business of selling automobiles, and sell autos they must, whatever the competition and at whatever price.
With the proliferation of used (or should we polish it up by saying “pre-owned”) car dealerships islandwide, and the subsequent competitiveness among the various dealers, it is relatively easy for the consumers to pick up a “reasonably priced” used car, so much so that one wonders if the traditional sector - new car dealers - can still hold on to their once gargantuan share of the market.
Names like John Crook, Motor Sales, Mitsubishi Motors, EuroStar, Island Motors, Fidelity Motors, Kingston Industrial Garage, Sterling Motors, and ATL Motors have been catering to the motoring needs of the Jamaican public for years and have traditionally “owned” the car market. However, despite the fact that they are faced with what one manager described as a “shrinking market”, new car dealers are holding their own and are aggressively seeking to increase their share.
These dealers, while taking advantage of the traditional forms of advertising, have a totally different approach to the selling of vehicles.
According to Christopher McFarlane, Sales and Marketing Manager at Island Motors, one of the main challenges come from Internet sales. “A person can go on the Internet and get really good deals on even 2002, 2003 Japanese cars, but they are not new cars, in that they had a previous owner.”
He also pointed out that the used car market, by its very size alone presented a challenge. “The used car market is at least four to five times the size of the new car market,” he stated, adding that the consumer would more readily be drawn to that sector when contemplating a purchase. He emphasised, however, that the target market for new car dealers is still “everybody that you can think of.” The reason for this, Mr MCFarlane stated is that “first time buyers, young executives, those who have gone through four or five used cars and have felt the pinch and professionals” are all groups which gravitate towards a new car.
And, of course, the Sales and Marketing manager was quick to point out that there are many advantages to buying a brand new vehicle. New car dealers, for example, are the only ones who can offer warranties and since they are part of the Automobile Dealers Association (ADA), they have access to technicians at all level. (New car dealers are offered exclusive membership in the ADA).
Mr McFarlane noted that regarding the sales and marketing of new vehicles, his company prefers to take the direct approach. “We deal with a much more direct marketing strategy; we go directly to a consumer and inform him/her of the cars we have selling. Depending on which vehicle we’re focussing on for that particular month, we then present ourselves to persons in that particular target market,” he stated.
Island Motors is the certified dealer for Peugeot and Daewoo vehicles, among others.
Deputy General Manager of Motor Sales and Services Ltd., Kenry Jackson admitted that there are indeed challenges. “It’s a very competitive environment; the market is really shrinking and consumers would obviously have to be very price conscious.
“Here at Motor Sales, we have a strong advertising campaign; we stage islandwide roadshows and of coursed the good relationship of sales persons to customer is paramount.”
He said that the new car buyers include those companies that still purchase for their senior people; professionals and persons who have access to concession letter. “Customers are definitely shopping around,” he disclosed, adding that women, in particular seemed to have a preference for new cars.
Ms Olive McNaughton of EuroStar Motors, exclusive dealers for the Mercedes Benz stated that “For the new car dealer, it is interesting times but with the consumer confidence building we are able to market our product. Things picked up in the latter part of 2003 and we see signs that consumer confidence. One notable feature is that persons are opting for new cars.
“For the Benz, we have an interesting mix, we have our Mercedes customers for life. We find that professionals and execs are not going for used cars; persons with concessions are also buyers of new cars. We are still selling. The interesting thing that has happened is that the Benz has redesigned and the new, re-designed shape has increasing our target market The concept that the Mercedes is out of range has also changed, and the prices range from A Class for for $2.1M; a C class is $2.9M and at the high end, there is the $15M,” Ms. McNaughton declared.
Mrs Shirley Pagon, Sales and Marketing Manager at GM Challenger, the company which is a bit different from the ordinary car mart since they sell both used and new vehicles, noted that for new cars buyers there are two determining factors -brand and income bracket. “We observe that there is a lot of brand loyalty and of course your income bracket is also very important. New car buyers tend to come from the middle to upper income, and whereas at one time you would have persons having a ‘work’ car and a ‘Sunday’ car, now they just purchase one vehicle.”
It is for this reason that the Avalanche, which GM Challenger markets, is such a good seller. According to Mrs. Pagon, it “gives you more versatility” and therefore it has more appeal.
Although Challenger has taken the somewhat adventurous position by probing both the used and new car markets, their main focus is still on pre-owned vehicles. However, by offering new vehicles as well, the positive statement is being made that there is definitely a market for new cars, even in the midst of all the challenges and the competition offered by the ever growing numbers of used car dealership that have sprung up and are still springing up all over the island.
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