Automotive News Canada - March 2020 - v2 - 16

* MARCH 2020

Is the business office selling outdated products?
Staff training is also
critical to growing
revenue, and options
are readily available,
including in-store,
off-site and online
By STEPHANIE WALLCRAFT
TORONTO CORRESPONDENT

THE PERCENTAGE OF DEALER
profits drawn from finance and insurance has remained flat over the past
few years, a trend that means retailers
should employ effective staff training
and ensure their F&I products meet
the current needs and wants of customers, say industry
experts.
Hector Bosotti,
national trainer for
automotive training consultancy firm
Wye Management,
said dealerships
should review their
F&I offerings every
Robert Karwel:
two to three years.
"As vehicles
"A lot of times,
get more
the reason some of
complicated
our business offices
and expensive
are producing poor
to repair, the
dollars is they're
validity of F&I
not using the best
is proven."
products or protecFILE PHOTO
tion plans available to customers today. They're using
old protection plans and products
that were available 20 years ago, and
they're still staying with the same supplier."

According to J.D. Power Canada,
F&I profits at dealerships have held
steady since 2015 as other critical business numbers, such as average transaction prices, have fluctuated.
F&I income averaged $504
to $554 per transaction over
the past five years, according to data from J.D. Power; it
averaged $535 in 2019.
Meanwhile, vehicle gross
profits figures per unit have
risen to $1,680 in 2019 from
$1,320 in 2015, a reflection of the
increase in transaction prices as consumers moved to higher-cost
vehicles such as utility vehicles, said
Robert Karwel, senior manager of J.D.
Power Canada.
"Dealers, I think, are not necessarily as reliant on F&I today as they
might have been six to seven years
ago, [in] light of escalating vehicle
cost and the impact on vehicle gross.
But that doesn't mean it's not important to dealers. They still need to keep
the lights on, and F&I is a reliable profit driver.
"As vehicles get more complicated
and expensive to repair, the validity
of F&I is proven," Karwel said, adding
that service-contract incomes grew to
an average of $1,146 per transaction in
2019 from $1,002 in 2015.

TAILOR-TRAINED EFFECTIVENESS
Keeping staff trained on developments in the industry is key to
growing F&I profits per transaction. Multiple training methods are
available, meaning that ongoing education is not a one-size-fits-all solution.
While the finance managers interviewed by Automotive News

Canada agreed that personal interaction with an instructor is key, it can
come in varying forms.
* Classroom training: Many urban
markets across Canada have providers that offer off-site finance
training in a classroom setting. Training away from
the office reduces distractions,
which enhances learning.
"It's a little bit more hands
on," said Asad Khalid, financial-services manager at
Myers Orléans ChevroletBuick-GMC in Orléans, Ont.,
a suburb of Ottawa. Khalid drives into
the city to attend off-site training.
"You get a chance to unplug away
from your normal setting and go to
somewhere where you can actually
shift focus."
* In-dealership training: For locations where classroom training is not
available, having a
trainer visit a dealership keeps the in-person element in the
equation, which can
be helpful in certain
circumstances.
Sean Greaves,
Dustin
finance manRussell:
ager at Sydney
Online
Mazda in Sydney,
training is
N.S., said when a
an appealing
trainer visits his
option for
office, he benefits
dealerships
from having that
in remote
trainer's full attenlocations.
tion.
FILE PHOTO
"One-on-one seems
to help because I can ask them more
particular questions than in a class-

* Total F&I income is more consistent over the same period: an
average of $554 per transaction in
2015, $504 in 2016, $525 in 2017,
$510 in 2018 and $535 in 2019.
- J.D. Power Canada

room setting or an online setting," he
said.
* Online training:
Dealerships in more remote locations
might find that online training is the
most cost-effective option, and it might
be the only viable method.
"Due to the logistics
of being in Newfoundland - and different factors, costs being one of them
- a lot of our training is done either
here or online," said Dustin Russell,
finance manager at Clarenville Ford
in Clarenville, Nfld., about 200 kilometres northwest of St. John's.
"I prefer online, but I'm open minded either way.
"The last [online training] we did
was an interactive one where we had
an instructor online and we all logged
in. The interaction part of it, where if
you had questions you weren't physically in attendance but the [trainer] was
there to answer any questions, that was
helpful." - ANC

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AUTOMOTIVE NEWS CANADA

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* Vehicle gross profit figures per
unit have been growing over the
past five years, from $1,320 in
2015 to $1,435 in 2016, $1,563
in 2017, $1,601 in 2018 and
$1,680 in 2019.

Feds acknowledge, but ignore, industry
calls to side with U.S. gov't on fuel regs

JOE VERDE

020520

F&I INCOME? FLAT

SC 13120

with California's standards even
if the U.S. administration dials
back limits scheduled for 2021-25
model-year vehicles.

TORONTO - CANADA
won't deviate from aligning
TOYOTA: iZEV MISSES THE POINT
with California on fuel-economy standards despite warnings
Bains also rejected a call
that departing from U.S. federal
to adopt a technology-neuregulations could drive up vehitral approach for reducing
cle costs, says Industry Minister emissions. Ottawa launched
Navdeep Bains.
the $300-million iZEV
The federal governrebate - for zero-emisment is "very mindful"
sion vehicles - that has
of concerns but believes
handed out $134 million
Canada needs to folto eligible buyers since
low California's strinMay.
gent fuel-economy stanLarry Hutchinson,
dards if it is to cut carpresident of Toyota
bon emissions by almost Bains:
Canada, told an indusAligning with try gathering ahead of
one-third by 2030,
California's
Bains said in an interCIAS that the program
standards
view at the Canadian
won't help Canada meet
International AutoShow is the right
its carbon-reduction tarthing to do.
(CIAS) in February.
gets, saying that ZEVs
FILE PHOTO
In a January meetaccount for less than
ing with Prime Minister Justin
three per cent of new-vehicle
Trudeau, industry leaders urged sales. Of the numerous Toyota
the government to continue har- and Lexus hybrids available,
monizing Canada's emissions
only the Prius Prime qualifies
and safety rules with U.S. stanfor the rebate.
dards.
"Our message to govern"Otherwise, all of industry
ment is this: Set the goal posts,
becomes less efficient [and] the
but don't call the play," said
cost of vehicles in Canada goes
Hutchinson. "Because we autoup for the end consumer," said
makers know best how to drive
Magna International chief execdown costs and get competitive
utive Don Walker, who took
[low-emissions] vehicles into the
part in the January meeting.
market."
Then-Environment Minister
Bains said the program's
Catherine McKenna announced
popularity proves it is spurring
in June that Canada will align
EV sales. - ANC

http://www.JoeVerde.com/CAN

Automotive News Canada - March 2020 - v2

Table of Contents for the Digital Edition of Automotive News Canada - March 2020 - v2