Europeans Borrow U.S. Trick: Making Car Buyer Feel Special
Here’s the U.S. auto industry’s latest export to Europe: no-hassle sales techniques.
Dealers from Lisbon to Leipzig are adopting ideas _ including being nice to customers rather than just competing on price _ that were pioneered in the U.S. by General Motors Corp.’s Saturn division and others. That means car dealers in Europe are erecting new signs, sprucing up showrooms, figuring out how to get new cars to customers faster and setting up quick-lube centers.
These are big changes in a retail network characterized by cramped and surly salesmen. ``In the U.S., customers are the kings,″ says Guillaume de Montalier, a 24-year-old Parisian who has spent a lot of time in the U.S. ``That’s not the same thing here. You’re not respected as a customer.″
Which isn’t to say that American car salesmen are such great role models. Surveys show that most Americans would rather go to the dentist than shop for a new car. And among U.S. car dealers, the no-haggle selling fad is actually slowing down.
Nonetheless, the big car makers say changes in sales techniques are long overdue in an increasingly cutthroat European market. The leading auto makers all offer ``well-designed cars with good engines, good brakes and the same technology,″ observes M.A. Razaq, the executive director of sales for GM’s European unit. ``The difference now is going to be: Who serves you best for your money?″
Ford Motor Co.’s German unit encourages dealers to make customers feel special when they take possession of a new car. With German women making more of the buying decisions, top executives say, they are experimenting with having dealers hand bouquets of flowers or glasses of champagne to women customers to celebrate car purchases.
In the United Kingdom, Rover has tinkered with its distribution system so that dealers can operate with low inventories and still deliver vehicles to customers quickly, says Philip Wade of Harbour Wade, an auto-industry consultant in England.
Meanwhile, Renault SA is beefing up services in its dealerships in France and other European countries. The French auto maker is trying to respond to a clientele that ``expects a lot more,″ says spokesman Edward Lepu. Among other things, Renault is encouraging dealers to get into the quick-service market _ oil changes and brake and wheel adjustments _ as part of a program called the ``Renault Minute.″ In addition, more dealerships have a ``Renault Boutique,″ a section of the showroom devoted to car accessories such as stereo equipment.
Renault has also set up a national hot line in France that motorists can call _ regardless of whether they own a Renault _ for emergency roadside assistance. The purpose, says Mr. Lepu, is to reward Renault owners and impress drivers of rival vehicles with quick, courteous, low-cost service. In the U.S., auto companies have experimented with offering roadside service as a benefit to customers.
In general, Mr. Lepu says, European car-retailing methods are catching up with those in the U.S. ``American dealerships were oriented to client services earlier than we were,″ he says.
European dealerships are quite different from those in the U.S. There are many more of them per capita, and they’re typically smaller than the average U.S. dealership. Harbour Wade, the consultant, estimates Western Europe has 105,000 dealerships, compared with about 23,000 in the U.S. Moreover, dealerships in Europe tend to sell only one brand. In the U.S., multifranchise dealerships are increasingly common.
Mr. Wade says auto makers in Europe are opposed to combining brands at the showroom level, though manufacturers are under increasing pressure from the European Commission to relax rules that restrict dealers from owning more than one franchise.
GM has made the biggest strides in Europe. Its European unit, which sells Opel and Vauxhall cars, is pushing many of the ideas developed in the U.S. by GM’s Saturn division. Saturn has helped GM Europe set up a training facility in Cadiz, Spain, where dealers and salespeople participate in bonding exercises like scaling tall walls together.
``Cadiz is designed to bring the whole organization into a common understanding of what we want to accomplish in Europe and what we have to do to exceed customer expectations,″ says Darwin E. Clark, vice president of sales and marketing for GM Europe.
Several executives and dealers from GM Europe spent time at Saturn dealerships in New York and New Jersey, and went to Spring Hill, Tenn., where Saturns are made, ``to understand how that whole culture works,″ Mr. Clark says. Out of that came a collaboration between GM Europe and its dealers. ``We’re not interested in Saturn-izing Europe,″ Mr. Clark says. ``We’re interested in using the experience with Saturn as a piece of learning.″
GM Europe is encouraging dealers to refurbish their stores by making exterior signs more attractive and modern and by updating their showrooms. Dealer franchise boards _ similar to those in the U.S. _ have been set up to write retailing standards for each country. There’s talk of an effort to speed up delivery of new cars to dealerships, a move that would permit dealers to reduce inventories and fill customer orders faster. Down the road, GM may expand dealership parts and service centers _ high-margin businesses for dealers and auto makers.
There’s only so much GM can ask European dealers to do, though. First, the company has to understand the retailing habits in dozens of countries. Moreover, there are some things European dealers simply won’t agree to. They may be willing to participate in teamwork exercises at the Cadiz training center. But try asking them to wear a professional-looking uniform.
``Those things are not very well accepted by Europeans in the way you can get everybody in the U.S. to do certain things,″ says Mr. Razaq, the GM sales executive. ``They still want to be much more independent in deciding what color shirt they want to wear.″