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Automotive Dealership Owners and Sales Managers

The Job

To give the public easy access to view and purchase their vehicles, automotive manufacturers maintain franchised dealerships throughout the United States. Automotive dealership owners manage the performance of their showroom and sales force, other departments, and act as a liaison between the manufacturer and consumers.

Dealerships are exclusive to a particular automaker, though they may offer cars from different lines. For example, a Ford dealership will have Ford models in its showroom, but may also have a separate department and sales force to promote Lincoln or Land Rover models—other automakers operating under the Ford umbrella. Many existing dealerships are family-owned franchises; some have multiple partnerships; others have consolidated dealerships into a chain representing multiple manufacturers.

The dealership owner's primary focus is to keep the showroom and all other departments operating smoothly and profitably. They establish business policies including those relating to inventory, sales and commissions, and financing. Dealership owners determine the operating budget, which will dictate the size and variety of showroom inventory, sales force and support staff, and the setup of the physical building. They also develop seasonal promotions and advertising campaigns, often working with guidelines set by the manufacturer. Several times a year they must represent the dealership at franchise meetings, where dealers receive training updates and other business support from the manufacturer. They also promote their dealership at automobile conventions and trade shows.

Sales managers help the dealership owner manage the overall performance of the main showroom and staff. The most important responsibility of sales managers is the hiring and training of the showroom's sales force and support staff. Sales managers assign duties and hours to employees, monitor their progress, evaluate their monthly sales performance, implement incentives and sales drives, and promote and increase base salaries or commissions when appropriate. When an employee's performance is lacking, it is the sales manager's duty to identify the problem and suggest needed changes. At times, the sales manager may have the unpleasant task of firing employees.

Many times, a customer will try to negotiate a lower price for a vehicle from a salesperson. The salesperson may try to counter with added price breaks or extra options at no charge. The salesperson usually has to confer with the sales manager regarding extra discounts off the invoice price. The sales manager has final say over financial transactions with a customer, and may also have influence on what financing options to extend to customers. While the best-case sales scenario is to sell a vehicle at its sticker price, salespeople do not mind negotiating price. Sales commissions, monthly quotas, and "kickbacks"—commission paid to the dealership from the manufacturer—are incentives to negotiate price to close a sale.

Automotive dealerships also have other departments that are often as profitable as their primary business of selling cars. The service department offers repair and maintenance work for vehicles. Services include periodic tune-ups and systems checkups and repair, oil changes, brake repair, wheel alignment, and bodywork. A service department manager may supervise the work and performance of all service workers and technicians. Their duties include hiring and training of service staff, making work schedules, and establishing vehicle service policies and pricing.

The finance and insurance department often generates large profits for a dealership. A finance or insurance manager establishes relationships with financing and insurance companies, and in turn sells these products—auto loans, service contracts, extended warranties, and various credit insurance—to the consumer. This department often works closely with the sales department in offering these products when closing a car sale. The finance and insurance manager oversees the selling of service contracts and insurance policies to new vehicle buyers and arranges financing options for their purchase.

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