Gauteng Business News

Send  Share  RSS  Twitter  27 Jan 2009

motoring: Burchmore’s Starts the Year with a Bang!


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While car dealerships are generally faced with the bleak reality of a global economic slump, Burchmore’s – the auctioneering arm of the McCarthy Group – is thriving. Eagerly seeking bargains, private buyers have honed in on the company. The result is a 40% increase in registered auction buyers in the first two weeks of 2009 (versus the same period last year).

This is not the first time that the company has bucked trends within the motor industry. Last year, when new vehicle sales dropped by 2.8% in the month of April (compared to April 2007), Burchmore’s posted triple digit retail sales growth of 127%. This was followed by month after month of record sales, in defiance of slumping new and used car sales.

And now it seems that the same trend could be evident this year. Darryl Jacobson, managing director of Burchmore’s, comments that the company is defying all industry buying patterns. “The attendance by buyers at our auctions is remarkable because it is extremely unusual: while dust collects on showroom floors across the country, Burchmore’s has truly started the year off with a bang!” he notes.

Burchmore’s divides its sales into two categories: auctions and off the floor. The latter are especially buoyant, with a whopping 200 retail sales in the Sandton branch alone in the first two weeks of 2009. Putting this into perspective, some dealers don’t sell 200 used cars in six months.

Jacobson explains that motorists are turning to Burchmore’s because the company sells at wholesale prices. “We all know that South Africans are tightening their belts – and that’s why they are coming here. Public transport in South Africa is limited; so South Africans still need cars. They have not stopped buying; they are just spending their money more carefully,” he explains.

According to André Dalais, newly appointed finance and operations director, Burchmore’s offers a massive choice, with thousands of vehicles on sales floors around the country. “It’s a no brainer. Do you want to trawl through 30 dealerships or come to Burchmore’s and view hundreds of cars under one roof? The answer is obvious,” Dalais comments.

Jacobson describes Burchmore’s as the “South African Wal-Mart” as it offers value for money and massive variety. “The key, of course, is also convenience: we are open seven days a week,” he notes.

According to Dalais, an experienced management team with the ability to convert walk-ins into deals contributes to the company’s success. He adds that there are 24 salespeople working at the Sandton branch alone and 25 employed between the Durban and Cape Town branches.

Dalais says that Burchmore’s will continue to focus on offering affordability and choice. “We know that this is a successful recipe. The most concrete testament of the triumph of this concept was the success of our two sales last year. In Johannesburg, 2 600 people flocked to the sale and over 500 vehicles were sold, many of them snapped up by dealers because of the wholesale prices. In Durban, 2 500 people attended the sale and 460 of the 500 used cars on the floor were sold. This means that we sold 92% of our stock in a single weekend, which is quite astounding. The reason was simple. From the interaction with buyers, it was clear that they were looking for a used car at a good price. Furthermore, they wanted a vehicle that was in good condition – and we were certainly able to deliver in both regards.”

According to Jacobson, this proves that there is no dip in demand for used vehicles. “Yes, rising household bills are beginning to affect consumer confidence, but South African motorists are still buying as many used vehicles as in the past,” he says.

Looking ahead, the Burchmore’s team remains optimistic. The only limiting factor is stock: “Burchmore’s is looking for stock. We are selling everything we have got,” says Jacobson.


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