Car Sales Execs feel pain in the wallet

Falls in commission have cut average pay for car salespeople in the wake of falling new car sales and dealer profits. But the skills shortage has seen technicians command an average 5.6% pay rise, while apprentice numbers are rising.

BMW dealer principals earned an average £83,174 last year – 44% more than the national all-franchise dealer principal average total pay of £57,771.

The tenth, 2006 edition of the RMIF/Sewells Retail Motor Industry Pay Guide reveals a fall in total pay for car sales executives, almost certainly as a result of deteriorating car sales and dealer profitability. And with a few exceptions, other motor trade staff also experienced a slowdown in growth of total pay last year.

Total pay, including basic and commission, for sales executives and business managers working in the franchised sector fell by 1.1% between 2004 and 2005. This happened despite an increase in basic pay of 4.5%, because of a decline in commission payments. Commission makes up over 60% of sales executives’ total pay, and is usually awarded on the profits retained on each car sold.

Service technician pay increasing at above average rate

On the other hand, service technicians and mechanics in both franchised dealerships and independent garages earned some of the largest increases in both basic and total salary. For example, franchised dealer service technicians achieved an increase in total pay of 5.6% between 2004 and 2005. This continues a run of increases in total salary exceeding 5% since 1999 for these employees.

Propelling the increases for service productives is the well-known skills shortage in this area. And the 369 respondents to the 2006 Pay Guide survey reported a high turnover of service staff – essentially technicians and mechanics – and difficulties filling these positions. This is a very similar picture to that described by respondents to Pay Guides since 1999.

More service apprentices in response to skills shortage

In response to the skills shortage in service workshops, dealers and independents have now taken on more apprentices relative to the number of fully-qualified technicians and mechanics. Two years ago, franchised dealers only employed one apprentice for every 4.7 fully-qualified service productive. The 2006 Pay Guide survey found this had improved to a ratio of 4.0 to 1. A similar improvement was noted for independent garages.

While this improvement is welcome, 2006 Pay Guide respondents clearly understood that even more apprentices are still needed. 60% of franchised dealers and 29% of independents claimed that they intend to take on more apprentices or trainees in the next 12 months - the majority in the service workshop.

BMW dealer employees still out in front

Which franchise pays the most is always a key topic for dealer managers. BMW dealers were out in front again this year, with the proviso that some large volume franchise dealerships do pay more than relatively small prestige marque outlets. As an example, the national average total pay across all marques for a dealer principal was £57,771 in 2005, while the average for BMW dealer principals was 44% higher at £83,174.

Job ‘perks’ continue to fall

The availability of ‘perks’ for all motor trade employees continued a falling trend noted in the Pay Guide since 2002/2003. The most widespread benefit was a company pension to which employers made a contribution. 44% of franchised dealer employees and 15% of independent garage staff received a company pension contribution.