Ford cars displayed at a Ford car dealership in London, Tuesday, Aug. 22, 2017. A Ford emblem is seen on a car at a store in London, Tuesday, Aug. 22, 2017. Car manufacturer Ford is offering car buyers in Britain a 2,000-pound (US dlrs 2,570) incentive to trade in older vehicles for new, less polluting models.(AP Photo/Frank Augstein)

JOHANNESBURG - The Financial Intelligence Centre Act (Fica) requirements could create massively onerous requirements for vehicle dealerships in terms of their customer engagements, which could be inconvenient from a customer perspective.

This was the view of National Automobile Dealers’ Association chairperson Bruce Allen, who said automotive dealers had been told that they would become accountable institutions.

This meant they would be placed on roughly the same level as banks in terms of their need to know their customers more intrusively.

“We are currently reporting dealers in terms of suspicious and potentially terrorism transactions,” he told the CAR Digital Dealer Conference at the Festival of Motoring on Friday.

Allen said automotive dealer management systems currently did not allow dealers to know who their clients were and there would be a challenge if they started introducing the Fica requirements.

“If you go from one brand, one dealer to another dealer within the same brand, the dealer management systems do not talk to each other. Then you start all again from scratch to capture your client's information.

“There is a massive amount of work that needs to be done on dealer management systems and OEM (original equipment manufacturer) systems. They will be forced to do it through by Fica requirements,” he said.

Allen was critical about how customer satisfaction and loyalty were currently measured in the industry.

He said logic dictated that service delivery drove satisfaction, satisfaction could drive loyalty, and loyalty drove repeat business and referrals, which in turn drove the revenue that made dealer businesses successful.

Allen said there was an obsession in the industry with customer satisfaction and OEMs, and dealers benchmarked themselves against each other.

Intentions

Allen said his personal belief was that most of these programmes were great in theory but unfortunately sometimes failed in application.

“The intentions are 100 percent correct but our desperate need to compete leads to possibly incorrect behaviour.

“There are a plethora of follow-up calls, surveys, emails and SMSes that go out to our customers. And it's not only our industry that's bombarding these customers with this constant need for feedback. “Is this customer-friendly behaviour? I don't believe so.”

Allen added that many OEMs ran incentive or margin hold-back programmes, which related to customer satisfaction, and in turn rewarded the dealer for providing a certain result that was a score or percentage or a number.

He said this could impact on dealer profitability but could result in “wrong behaviour” because dealers prompted and coached their customers to get good results. Allen said dealers looking for ways to drive improvements and improve results were doing expensive “warm and fuzzy” things that often papered over the cracks rather than sorting out the issues and problems in the business.

Allen questioned whether dealerships need fancy TVs, sofas, children's play areas and complementary wi-fi.

- BUSINESS REPORT