IN TOP GEAR: Justin Divaris among some of the luxury marques sold by the Daytona Group.
JUSTIN Divaris is in a rather enviable position within the local motor industry. Not only does he head up the Daytona luxury pre-owned division, but within the group he has Hyde Park BMW/Mini, Audi Northcliff and both the Aston Martin and Rolls-Royce distributorships in his portfolio .
I sat down with him to see how the downturn is affecting his business operations and what trends the market has in store.
Interestingly the downturn is not playing too big a role when it comes to the overall revenue stream for the group. “For us personally, we are actually doing better than last year,” he said. It seems this is due to two major factors, in that the brands are carrying better products and his investment in pre-owned facilities ensures he covers the new and used market.
Finance is a major concern and he says there are “tons of people who want to buy cars, they are just not getting finance”. This is where the pre-owned operation comes in, where he says “nine times out of 10, we will put someone into a used car”.
That may not be a used car as we generally know it, although obviously both Audi and BMW provide pre- owned vehicle programmes. The Daytona showroom in Sandton is home to everything from a Porsche Cayman to a Koenigsegg.
Everything except the Audi dealership is located on the same site, so you can take a look at a Mini for tackling the urban jungle or an Aston Martin Vantage for de- stressing on a Sunday morning.
While things may look as though they are going well at for Divaris and his team, the operation is still facing similar challenges to the rest of the retail motor industry. “Bread and butter volumes are a problem,” he says when talking about the German marques; however he points out that “not many dealers have the client base that we do”.
He admits that trade-in values are a serious concern, but fortunately both Audi and BMW are providing some trade-in assistance to keep the market alive. He stresses that choosing stock is more important than ever and while the pre-owned market is proving lucrative at the moment, they are selective when it comes to the vehicles they take in.
When it comes to the luxury brands, Divaris says the “top end new market is going well”, acknowledging that even in an overall downtrodden market, those with cash to spend are still doing so. In this market many of the buyers are cash and he says 50-60% of buyers want to buy immediately. For some this has been a problem, but he says they buy in stock every month so that customers do not have to wait, despite many retailers facing stock allocation issues as manufacturers try to reduce their stock levels worldwide.
Even at Aston Martin, Divaris says they are set to sell the same number of units this year, but the margins are likely to be tighter — making trade-in negotiations even more important. He also says there has been a noticeable decline in new customers, so his salespeople are having to learn to sell again after the recent years of order taking.
He says many of the sales are what the industry calls “conquest sales”, where a deal sees a customer changing brands for reasons ranging from better service to better product.
Divaris is also well placed to see the trends when it comes to who is buying what. He says many “Porsche owners are upgrading to Astons” and while pre-owned Ferrari sales are still doing well, Lamborghini sales have slowed. Rolls-Royce sales have been hampered slightly by exchange rates, but next year will probably be the best year for the brand, with many choosing to jump out of the back seat of their Phantom and into the driver’s seat of the new Ghost. In fact, he expects to sell more than 30 Rolls-Royce models next year against the 18 that were sold in SA last year.
New product will be key for all the brands, with not only the Ghost arriving, but also the new Aston Martin Rapide. Even Koenigsegg, for which Daytona holds the local distributorship, will launch a new limited edition model called the Trovica Koenig. There will only be three of the white carbon fibre bodied car worldwide and the first one has already been sold to an existing customer in SA.
So it all looks promising and Divaris is optimistic despite the challenges his company and the industry at large are facing.
Strategic choices have been key to helping the company remain strong in the current climate and many a dealer, irrespective of the brand they carry, should be doing the same.
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