Tom Palmer is the general manager at Monaghan's Galway - a Skoda, SEAT, and Cupra dealership and authorised workshop and parts stockist for Skoda, SEAT, Cupra and Volkswagen located on the Tuam Road.
Tom has been involved in the motoring industry for more than 40 years, and he spoke with the Galway Advertiser to discuss the biggest changes in the industry, how customers are more informed than ever, and why diesel vehicles will become less available in the next ten years in this insightful Q&A.
What has been the biggest change in the industry in the last 20 years?
The most seismic change is the transition from internal combustion engines to the new technologies, primarily electric and hybrid. Purchasing new vehicles with a diesel engine will become less and less available as a powertrain within the next ten years. Existing diesel cars will continue to be able to be used as normal for their lifespan but a lot of manufacturers are already gone away from diesel. You can't get a Toyota diesel, for example. So the biggest change is the technology and the drive towards a greener fuel type.
When did you first start seeing interest in electric vehicles and hybrids?
The early adoptions would have been the Nissan Leaf and the Toyota Prius for hybrids. The early adopters that started the EV train, they would have had limited range because the battery technology hadn't fully developed at that stage. It's really only taken off in the last five years.
Has the shift to electric vehicles impacted the business?
Yes, 100 per cent. This year, one in four cars registered in Ireland are electric vehicles. The change is happening fast and part of the reason behind that is that they're becoming more affordable to the mainstream. If we go back five years, buying an electric vehicle was an expensive option; you could be talking in the region of €50,000 for an electric vehicle. Now, you can buy these electric vehicles for just about €30,000. It's getting cheaper all the time as they develop the battery technology and make savings in the production.
Are customers more or less informed now than they used to be?
Absolutely more informed. Going back 15 or 20 years, we would have seen customers on average four times in a dealership before they made a purchase. That customer journey has come down to a 1.5 ratio of a visit before they purchase. They do a lot of their homework online, and potential purchasers will probably have a shortlist of one to two car types and they're only going to visit one or two dealers during their car journey. Previously you might have somebody that would have done every dealership in town looking at all the models. The availability of information online now is a game changer. When you get somebody into your showroom, these people are committed buyers and we treat them as such.
How important are customer reviews and reputation management for dealerships?
I think the old adage is very true - if you're looking for a restaurant, you want to go to the one that is busy and it's busy because people have heard good things about it or read good things about it online. Dealerships are no different. We have a 4.8-star Google review, and we have hundreds of customers that have left accurate descriptions of how they got on here. It certainly flavours their opinion of your company. If they're new to the business, it gives them peace of mind or a comfort factor. You get the odd bad one, but there might be genuine reasons for that. We try to address the ones that are less favourable and dig into why it happened and if it is something we can rectify.
How big a role does digital marketing play in attracting customers?
I think it's huge. In this modern world, if you're not innovative with your digital marketing, you're missing a trick. People are tech savvy now, and you have to be in the right place on the right platforms and the content has to be engaging. We have a dedicated full-time marketing manager and we're always looking for what's the best platform and what are people engaging with most at this moment in time.
Has the role of the salesperson changed?
It's become more technical and they have to be multi-faceted in their skillbase. It's still a face-to-face interaction and they have to be a good negotiator. A lot of people have vehicles they want to trade in so they have to do appraisals on vehicles and they also have to be a very good administrator because a huge part of our business is behind the scenes with the paper trail, the contracts, and the financing. It is a very precise business.
How does the dealership deal with the tough times?
We've had to move with the times because in our industry there's always peaks and troughs. There are always times where car sales are booming and there are times when there's dips in trade. Our industry is very much front ended; we do 50 per cent of our total sales within the first three months. So you have to make hay while the sun shines to use that old farming adage.
Has the relationship between manufacturer and dealership changed?
It has changed. There's a lot of rules and regulations in dealing with the manufacturers. They have certain criteria that they want followed and you have to roll in with that. At some stage these manufacturers may go direct like Tesla do where you're buying directly off the company. Volkswagen, Toyota, Mercedes-Benz and BMW are all playing with this idea where they sell directly to the customer. There would still be a showroom, but we would become an agent rather than a dealer. So this this change is afoot, it's just not in the Irish market as of yet.
What are some of the most challenging periods that the motoring industry has faced over the last 40 years?
Constantly monitoring the changes in the economic model is the biggest challenge. It's a very good indication of how your economy is based on how car sales are. It's the second biggest purchase after the mortgage so it's a big decision. Ultimately, it's indicative of where the country is at in its confidence, in its unemployment, and in its interest rates. Year on year we tend to see early doors if there's confidence in the economy and even with all the bad news that's going on globally, we can see the confidence is still there in the Irish economy because people are still buying new cars in record numbers. It's something that we constantly have to watch.
What market trends are you keeping an eye on ahead of 252 period?
Electric vehicles and plug-in hybrids are our big thing at the minute. We're lucky enough with the brands that we have because we have five models now that we can show people a model in an electric vehicle. If somebody isn't ready for that transition yet, hybrid is an excellent opportunity to dip your toe in the water of an EV. You can get up to 150km in some of these hybrids and you have the flexibility of a 1.5L petrol engine if you need. In a very short period of time I think it will go from one-in-four to one-in-three cars are going to be electric vehicles.
Where is the industry going in the next 10 to 20 years?
If I knew exactly where it was going, I'd be a very happy man! But the big trends at the moment are the electrification of the fleet and the reduction in diesel cars as a method of fuel. There may also be a trend towards customers buying cars directly from the manufacturers. You have big things going on at a global scale so that all then filters down into the motor trade. So there's a lot of changes that can happen.
