Surviving in tough times

In 2009, an unprecedented 715 New Zealand car dealerships closed their doors. BEN HEATHER takes a look at two-time Champion Canterbury Retail Medium/Large Award winner Holland's Suzuki Cars and how it survived, even flourished, in a tough year for selling cars.

Holland's Suzuki owner Gordon Holland reckons if you're not willing to change your business constantly you might as well give up. That has never been truer for New Zealanders trying to sell cars during the recession in 2009.

"We are in a big change, the whole market is changed."

The 68-year-old has spent most of his life selling cars or motorcycles but is still brimming with enthusiasm, rapidly firing out pithy one-liners about what makes the business work.

Holland's has reinvented itself repeatedly since its inception in the 1950s under Gordon's parents Mick and Alison, starting out as bicycle business before moving onto motorbikes and finally cars in 1986.

Despite a drop in sales in 2009, Holland's still sold more Suzuki cars than any other dealer in the country last year.

"The market has shrunk about 28 per cent," he says. "What we've done is held, but in a way we've done better than that."

Sales, excluding second-hand cars, peaked in 2008 at 849, before dropping back to 702 last year but Holland says profits were steady with last year helped by a slowdown in "100-mile-an-hour" expansion.

Adding value and focusing on the younger market buying cheaper cars also helped, he says.

The dealerships that survived the past year have been willing to take a punt on something new while those that clung to time-tested methods of selling tended to sink, Holland says.

"You can see top performers go arse over kite by not adapting to the new market . . . You're only worth what you're doing next not what you've done."

Taking a punt has usually worked for Holland's, most recently with building and selling dual-fuel Grand Vitaras, which run on LPG and petrol. "We are making the only dual- fuel Grand Vitara in the world that we are aware of."

Holland's has sold 80 duel-fuel cars since 2006 and is now trying to develop a dual-fuel hydrogen Grand Vitara.

Despite the talk of constant change, the biggest key to the success of Holland's was introduced 24 years ago, offering years of free servicing to every person who buys a cars.

Holland says the policy has cost millions over the years for no tangible returns but has kept people coming through the door.

"It's not quantifiable, which scares the hell out of accountants but because we've been running it for 24 years they put up with it."

Holland says he does not build the service costs into the price of cars and the continuing cost of servicing means profits can fluctuate dramatically. But it also means more sales and stronger customer loyalty.

"We work on small margins and big turnovers."

Since the free servicing was introduced Holland's has given away more than 41,000 tyres, 120,000 oil filters, 14,000 batteries, 31,000 spark plugs, 22,000 light bulbs, 37,000 wiper blades and 500,000 litres of oil.

Holland said while providing free servicing has meant he has never creamed massive profits it has kept the business going through tough times. "There are [car dealership] businesses in the past that have done miraculous things but they not usually here anymore."

Holland's employs 46 staff, including 10 in its Timaru yard which opened in 2001, most of whom are in their 20s or 30s. Having younger "Y-generation" staff is an important part of keeping fresh ideas and enthusiasm pumping into the company, he says.

"When a firm grows old you don't want the ideas to grow old. Everyone is thinking entirely different today that they did 10 years ago, even one year ago."

Despite the company's focus on the future, Holland says one thing is unlikely to change. "People don't want to talk to an answer machine, they want to talk to real person, hear the warmth in their voice."

- © Fairfax NZ News