Dealership Specialty Auto Risk Management

MFGunderstands the unique demands and exposures for dealership operations. Our service platform for Dealership and Specialty Auto operations tailors a program designed to fit your unique needs. For your risk transfer resource, contact a MFG risk consultant for more information about developing or enhancing your risk management program. We consult for a broad range of Dealership and Specialty Auto operations: Franchised Auto, Fleet & Leasing Operations, Independent Auto, Motorcycle & ATV Dealers, Truck & Trailer, Industrial Machinery & Equipment, Implement & Ag Equipment, RV & Boat Dealers, Auto Body & Repair.

MFG Insights

    The risks an auto dealership faces are wide, varied and complex. When it comes to managing these risks you can’t wait for something to happen before you develop a response. Enterprise risk management (ERM) is an integrated approach to understanding and managing an organization’s risks. Through ERM you can establish a plan that reduces risk and responds to incidents as they arise.

    There is not one specific way to apply ERM to a business. It exists more as an overriding concept that allows for multiple approaches to the same end. For auto dealerships the approach to ERM can be broken down into five main steps. Begin by developing a list identifying all the risks facing your business. List both internal and external factors, accounting for the financial as well as other risks such as:

    Competition – If a competitor revises their sales system or pricing structures it could force you to lower prices in order to stay competitive. Likewise, new competitors can enter the marketplace taking potential business away from you, causing a decrease in revenue from ether loss of sales or price reductions required to maintain a competitive advantage.

    Inventory – If a customer is looking to buy and you don’t have the make or model that they want, you could lose their business. Conversely, retaining too large of an inventory can exposure your dealership to additional losses in the event of a storm, theft or other disaster.

    Manufacturer Problems – If you deal primarily in only one or two brands of vehicles, your success is directly linked to the manufacturer. Their brand reputation, vehicle offerings and general financial well-being is all out of your control but could directly affect your business operations.

    Regulatory Demands – Whether it will change the way you handle your business operations or deals directly with the features of the vehicles you sell, legislative changes are unavoidable and must be dealt with when they arise.

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