AM - Automotive Management August 2015 preview

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PROGRESS / P28

AUTOMOTIVE MANAGEMENT

Terence Byrne on getting recruitment ‘right first time’

HOW PERRYS SAVED £170,000 ON ENERGY PLUS

Get more digital marketing for less money.

The pros and cons of outsourcing.

How paying more on a DMS could save you thousands.

KIA / P21

PEOPLE / P77

TOP TIPS / P57

Are there 100,000 sales and a sports car in its future?

Why dealers should ‘fire fast and hire slowly’

31 ways to boost your business

Music Sport Theatre Events

GIFT CAR D Music Sport Theatre Events

DEALER RECOMMENDED

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2016

Nominate the best suppliers in motor retail for your chance to win an iPad Mini, £250 worth of shopping vouchers or a £250 Ticketmaster gift card.

AM wants franchised dealers to recommend their favourite suppliers, which it will promote in the magazine and at am-online.com.

The survey is open to franchised dealers only and should take about five minutes to complete. To thank you for helping AM, leave your business email

address and you will be entered into a draw to win one of three prizes: a £250 Ticketmaster gift card, an iPad mini, or £250 worth of shopping vouchers (for a high street store of your choice).

Watch out for the survey emails on August 24 and September 1 to be in with a chance of winning.

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Counting costs: Is it time to check the efficiency of your dealerships? he UK’s new car market is expected to level off in the coming months and franchised dealer margins have been squeezed. At the same time, many manufacturers’ demands for investment have reached new heights. So isn’t it time to check the efficiency of your business?

Money can easily be wasted if controls and checks are not sufficient. It’s a particular focus of Perrys’ chairman Ken Savage, who explains on p41 how maintaining a keen eye on every line of cost brought dividends to his AM100 top 25 dealer group.

The question of whether to bear fixed costs such as headcount in-house or to outsource to an expert supplier is also one for many dealers to consider. Experts outline the pros and cons of each on p35.

Of course, while headcount can be viewed as a cost, it should also be seen as an investment. Midlands dealer group Progress, the subject of our face-to-face interview on page 28, does just that, and it’s an approach shared by Swansway Garages and Greenhous Group in our report on page 77 of the recent AM & IMI People Conference.

The industry suffers high staff turnover and often the cost and trouble of recruiting new talent can have a real impact on a dealership, yet Spire Automotive reports on page 47 that it has found some ways to mitigate that expense.

Finally, for top tips on some easy wins for your business, turn to page 57.

T

The editorial team Email: am@bauermedia.co.uk Website: www.am-online.com Twitter: @amchatter LinkedIn: am-online.com/linkedin

AM Digita lD Conferenc ealer e

Book ticke amdigitaldtes today at: aler.co.uk Silverstone , Stephen Briers Editor-in-chief

Tim Rose Managing editor

Jeremy Bennett Associate editor

Danielle Bagnall Senior reporter

Sept 15, 2 015

am-online.com August 2015 3

In this issue August 2015 28

PROGRESS INSPIRING EMPLOYEES

Your news

7

News digest Fiat boss issues an ultimatum to its dealers; Auto Trader dismisses threat from rapidly growing RAC Cars; CDK signs a deal to supply DMS to Volkswagen Group network; and MPs call for tougher measures to dissuade diesel car use.

Market intelligence

15 16 17

The kings of Q2 The 10 brands that added most registrations in Q2 accounted for 78.7% of all the growth in the period.

Dealer profitability The average UK motor dealership lost £384 in May, a contrast to the

4 August 2015 am-online.com

21

KIA AIMING HIGH

£5,000 profit made in the same month a year earlier.

19

Used cars

21

Looking into Kia’s future

The Korean manufacturer is pulling out all the stops, but will it be enough to hit its target of 100,000 annual registrations by 2020?

Insight

28

Do you buy in services or grow your own?

41

How to cut costs without cutting profits

47

Put more than money into your employees

52

Jim Saker’s view from the business school

‘I write very few customer letters’

Škoda and Suzuki dealer Progress was named ‘a company to inspire Britain’, and managing director Terence Byrne credits employees recruited for their ‘can-do’ attitude to customer service.

COST

35

Average monthly used car wholesale values rose £98 to £5,498 in June, an increase of 1% on May.

Analysis

New car registrations June registrations push half-year to record high, but NFDA sounds note of caution over pre-reg.

41

EFFICIENCY AND SAVINGS GET THE PROFIT BALANCE RIGHT

Should your dealerships take an in-house or an outsourced approach to essential services?

We ask dealers and suppliers for the pros and cons of each.

Dealers need to be careful to avoid cuts in spending leading to reduced efficiency and profitability.

Hiring the right people is crucial, but getting them to stay, let alone develop, can be a struggle. Dealers and recruitment experts share their experience and advice.

Motor retailers that invest in digital technology at the expense of people skills run the risk of neither working.

For the latest motor retail industry news, visit am-online.com Sign up to get AM news daily by email: am-online.com/newsletter

DEALERS AND SUPPLIERS IN THIS ISSUE:

47 EFFICIENCY

PEOPLE WHY YOU NEED TO PUT MORE THAN MONEY INTO YOUR WORKERS

90

75 77 84

VOLVO XC90 A FLAGSHIP TO CHANGE VOLVOÕS FORTUNES

AM poll

Almost one in five dealers is unsure how to validate customer driving licences since the paper counterpart was abolished, according to our latest poll.

How to get the most from your employees

Expert advice on recruiting, retaining and developing a motivated and skilled workforce from the AM & IMI People Conference.

‘Branding is about everything you do, not just the adverts’

Everyone in your business needs to understand your branding strategy, former Vodafone marketing chief Daryl Fielding told a recent meeting of the AM Executive Breakfast Club.

86

AM Awards winner: Best Manufacturer Digital Initiative

KiaÕs ÔRe-View MirrorÕ campaign mixed web reviews, real customers and YouTube to impressive effect.

Showroom

90

Volvo XC90

93

Škoda Octavia

94

Mazda 3

The most eagerly awaited Volvo in 10 years may take the fight to Audi, BMW, Land Rover and Mercedes-Benz.

The value-for-money, spacious and efficient Octavia Estate takes its place on AM’s long-term test fleet.

MazdaÕs recovery after a rare glitch cements the 3Õs reliable reputation.

Coming soon

98

In September’s issue – published August 28

Brand director Alasdair Stewart explains how Škoda is recovering from being ranked last in the NFDAÕs winter survey; how finance houses should be helping franchised dealers to optimise their PCP renewals; and the Honda HR-V reviewed.

Adroit Automotive............................................37 Agile Future Forum ........................................80 Auto Trader..........................................................8 Autoprotect ..........................................................7 Benfield ...............................................................13 BMW.....................................................................79 Brayleys ................................................................7 CDK Global.........................................................38 ClickMechanic...................................................13 Colin Appleyard................................................10 Cooper BMW.................................................... 44 Day’s Motor Group...........................................38 Eastern Western..............................................13 EDM Group.........................................................13 Essex Auto Group............................................35 Fiat ..........................................................................7 FLA .......................................................................15 Ford ......................................................................80 GForces...............................................................37 Greenhous Group ............................................80 Griffin Mill Garages...........................................8 Honda............................................................10, 13 IMI..........................................................................77 JCB Group..........................................................13 John Clark Motor Group ...............................37 JT Hughes ..........................................................13 Kia ..................................................................21, 86 Lookers .................................................................7 Loughborough University .............................79 Macrae & Dick ..................................................38 Mercedes-Benz..................................................7 Moneypenny ......................................................35 Motorclean.........................................................38 Motorline...............................................................7 Movex...................................................................37 NFDA....................................................................15 Nissan....................................................................8 Paragon Automotive.........................................8 Pendragon............................................................7 Pentagon Group ........................................13, 37 Perrys Motor Group .......................................41 Progress .............................................................28 RAC.......................................................................13 Ridgeway Group.............................................. 44 RMB Automotive..............................................10 Sewells................................................................80 Škoda .....................................................................8 SMC Group.........................................................42 SMMT...................................................................15 Snows Group.................................................... 44 Swansway .....................................................8, 77 Sytner...................................................................79 Toyota...........................................................44, 79 TrustFord............................................................42 Vantage Motor Group.......................................8 Vauxhall...............................................................79 Volkswagen..........................................................8 Volvo .....................................................................90 Wessex Garages..............................................37

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NEWS DIGEST

T H E N E W S YO U C A N ’ T A F F O R D T O H AV E M I S SE D

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Auto Trader

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Auto Trader has dismissed the threat from RAC Cars to surpass it as the number one digital marketplace for used cars.

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Dissatisfied customers More than a third of motorists who have bought a used car would not use the same dealer again under any circumstances.

F I AT

IN bRIEF

Toe the line or lose franchise, Fiat boss tells dealers

MOTORLINE

Domenico gostoli, the recently appointed head of Europe, the Middle East and Africa for Fiat Professional, has warned dealers they will lose the franchise if they don’t represent the brand correctly.

Fiat’s commercial vehicle department is looking at its dealers to see if it will continue to work with them.

“We’re completely reshaping our dealer network, and this is across the world, not just in the UK,” said Gostoli. “We need the dealer network to be a reflection of us and do things the way we do, not

how they want to. There are plenty of dealers that want to work with us and there will be a ‘zero tolerance’ approach with dealers.”

Fiat Professional UK country manager Sebastiano Fedrigo joined Fiat Professional UK in September 2011. He said: “When I joined back in 2011, we had to sack 52 dealers from our network straight away. We now have 73 sales locations and the overhaul is part of a process to get to 100 quality dealers – 100 dealers that represent us correctly and help to build our brand.”

PENDRAgON

The UK’s Supreme Court has ruled that a KPMg scheme to enable dealer group Pendragon to recover VAT on demonstrator cars sold as used cars was “abusive” of the law.

Its decision overturned a previous Court of Appeal ruling on the scheme, which Pendragon used on two occasions, in 2000 and 2001.

Normally when a dealer group buys new cars for use as demonstrators, it will pay VAT on the full sale price and then recover the input tax.

The scheme, devised by KPMG, exploited three exceptions to the normal incidence of VAT so Pendragon would only have to account for VAT in respect of the difference between the wholesale purchase price and the retail sale price of its demonstrator cars.

HMRC accepted that the scheme technically worked, as the conditions for exemption from VAT and for the margin scheme were satisfied.

However, it argued that the scheme breached the EU legal principle of abuse of law and so the VAT advantages could be denied.

Giving the leading judgment in the Supreme Court, Lord Sumption said the KPMG scheme was abusive as “a system designed to prevent double taxation on the consideration for goods has been exploited so as to prevent any taxation on the consideration at all.”

Motorline Group is investing in new sites in Dartford, Medway, and the M4 corridor.

The Kent-based motor group has yet to confirm which of its franchise partners will be represented at the new sites, which will open in 2016.

The family-owned firm sells new and used cars for 10 makers including Volkswagen, Toyota and Hyundai.

b R AY L E Y S Brayleys is expanding its North London operations with the construction of a Kia dealership in Enfield.

The new showroom represents a seven-figure investment and will sit opposite Brayleys’ Honda franchise on Great Cambridge Road. It is due to open in October.

AUTOPROTECT

MERCEDES-bENz

Mercedes-benz Retail group’s pop-up shop in the bullring Shopping Centre, birmingham, attracted more than 45,000 visitors in the five weeks it was open.

Opened in conjunction with Mercedes-Benz Birmingham Central, Mercedes-Benz Solihull and Mercedes-Benz Tamworth, the pop-up store generated 479 sales leads. The group plans to open more pop-up shops in Manchester and south London this year.

C A R TA x

More new cars will be subject to vehicle excise duty (VED) tax from April 2017 due to falling CO2 emissions, george Osborne announced in the emergency budget.

He said if the current regime remained, by 2017 75% of new cars would pay no road tax in their first year. The tax will still be based on CO2 emissions but only zero-emission cars will be exempt.

Also in the budget, the current requirement for a first MOT test three years after registration may be extended to four years.

AutoProtect has entered the service plan market with its Foresight Service Plan. Early trials have seen dealers’ double conversion rates, according to AutoProtect.

It includes a training and support package that helps sales and service staff to increase conversion rates.

LOOKERS Lookers has opened an Audi used car superstore near Glasgow.

Audi UK director Andre Konsbruck attended the official opening of the £3.5 million, 6.5-acre site in Hamilton.

It has an Audi Approved used car showroom, 10-bay service centre, display spaces for more than 120 used Audis plus storage facilities for a further 450 vehicles.

It will be headed by Derek Lyon, Lookers Audi head of business for Hamilton.

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NEWS DIGEST AuTO TR ADER

T O R E A D A M ’ s D A I L Y N E W s L E T T E R , V I s I T: a m - o n l i n e . c o m / n e w s l e t t e r

Auto Trader has dismissed RAC Cars’ threat to unseat it as the uk’s number one digital marketplace for used cars.

s WA N s WAY

Auto Trader’s chief executive, Trevor Mather, said the RAC was a longstanding, trusted brand, but only as a breakdown company: “You think about them first when you break down on a motorway, but not when I’m about to buy or sell my car.”

In March, RAC Cars announced its listings would be free. At the time, it said its site was attracting about 600,000 visitors a month and that it would not need to match Auto Trader’s 11 million figure, because it does not have fees to justify.

In June, then-chairman Rupert Keane said RAC Cars had passed 200,000 vehicle listing within 55 days of making its service free and would be the market leader by the end of this year.

“Our aim is to have 500,000 vehicles by the end of this year, something that would make us market leader in terms of volumes,” he said.

Mather said: “It’s not hard to get to 200,000-250,000. It’s really hard to reach 400,000 – 450,000.”

He also said RAC’s free listings would attract retailers, but if it couldn’t attract more potential buyers, “all you’ve done is reduce the potential response level on every vehicle”.

According to Hitwise, Auto Trader had a visit share of 63.2% in the car buying market in May. Keane, who left RAC Cars in July, said: “The new free-to-advertise strategy is not only right for the market, but also right for the RAC.”

The family-run group’s 2014 accounts show PBT at £6.2 million and turnover of £436.1m.

Operating profit, at £7.8m, was up 17% on the previous year. New car and van sales volumes increased by 17% on 2013 and used vehicles by 12%.

By brand, Audi and Volkswagen Cars profits improved, while VW Commercial Vehicles profitability fell slightly due to “management issues” at one of the four centres.

Swansway’s single Seat centre delivered a profit “in excess of” £400,000. Land Rover returns were “very satisfactory” and the Peugeot dealership in Chester produced a result on a par with 2013.

Honda, however, was described as struggling in terms of volume and profitability.

“The brand suffers from a lack of variety across the product offering and market share continues to fall,” the group said. “We expect this decline will reverse to some extent in 2015.”

VOL k s WAGEN

swansway has reported a 20% growth in year-on-year profit before tax (pBT) and 18% increase in revenue.

pEOpLE NEWs MIkE ThOMpsON Nissan Motor (GB) has appointed Mike Thompson to head its aftersales operation, replacing Chris Marsh, who becomes the brand’s marketing director.

Thompson joined Nissan in 2012 as the network strategy director.

ANDREW CuLLIs Andrew Cullis has joined Škoda UK as head of marketing, reporting to director Alasdair Stewart. He has moved from Hyundai UK, where he was marketing director for seven years.

pAu L FRANkLINs L AT T E R Y Nissan has appointed Paul Franklin-Slattery as national corporate sales manager.

Franklin-Slattery takes over from Mark Wheeler, who was recently promoted to the role of fleet sales director. He joins Nissan from Seat.

IAN CARLIsLE Mark pardoe, Griffin Mill operations director, left, with managing director Tim Bagnall

CDk Global has signed a deal with Volkswagen Group uk to be its recommended dealer management system (DMs) supplier.

GRIFFIN MILL GARAGEs

CDK said it is the largest dealersupplier agreement for a DMS ever seen in the UK. Pilot sites will run CDK’s CORE Drive system from the end of this year to mid-2016, and following a successful trial, it will be rolled out to the 700+ dealerships operating Volkswagen Group’s franchises.

Volkswagen Group UK will recommend CDK’s CORE Drive to every dealership across its Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, Audi, Seat and Škoda dealer networks.

Griffin Mill, which is owned by VT Holdings, has transformed its former Škoda site on Tonteg Road into a Renault and Dacia showroom to become the 12th new Renault Group partner to join the franchise in the past 12 months.

Managing director of Griffin Mill Tim Bagnall said: “We have been looking at Renault and Dacia for some time and it is clear to see they are growing. It’s a fantastic prospect to add two of the fastest-growing franchises to what we already have. Renault and Dacia are franchises for the future and we are keen to make this a successful partnership.”

Renault Group uk sales director Darren payne said: “Expanding our dealer network is a key part of our GO5+ strategy for sustainable growth.

“This is an exciting time for Renault Group in the UK, with our sales this year again growing significantly ahead of the market growth.”

Griffin Mill Garages has opened a new Renault and Dacia franchise in pontypridd, south Wales.

Paragon Automotive has appointed Ian Carlisle as group chief executive. He began his career with Marks & Spencer, before senior roles with Autoglass and Homeserve.

CAROLINE BOOThROYD Vantage Motor Group has appointed Caroline Boothroyd to the new role of group head of people and development.

Boothroyd will help to develop and deliver a sustainable people and development strategy. Previous employment includes Arcadia Group, Asda and Taylor Wimpey, where she was learning and development manager for the UK.

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NEWS DIGEST UsED cAR sURVEY

More than a third (39%) of motorists who have bought a used car would not use the same dealer again under any circumstances, a survey has found.

The study into the car-buying habits of 1,500 motorists carried out by the RAC also found 40% of people said they had had a problem with a vehicle bought from a used car dealer and almost a third (29%) said the dealer did not do well in correcting the problem.

One in three (30%) car owners said they have actively told people not to use a particular car dealer.

Despite the negative experience of some highlighted in the survey, conducted for the launch of RAC BuySure, 56% of motorists said they would buy a used car rather than a brand new vehicle because new cars depreciate more quickly.

Some 44% felt they got better quality and a higher spec of vehicle if they bought from a used car dealer.

The primary reason for deciding to change cars was increasing repair bills (50%), followed by unreliability (41%) However, nearly a third (31%) of respondents said they just felt like a change while 29% said the mileage on their car was getting too high.

POOR sERVIcE

Nearly one in 10 people (8%) described the service and efficiency levels of the car dealer they last dealt with as ‘very poor’ or ‘poor’, according to research from EDM group.

About a third (34%) of people rated the service levels and efficiency of the car dealer they last dealt with as ‘very good’ or ‘excellent’.

For those who were disappointed with service levels, 45% said it was because they were given incorrect data and information. One in five people (20%) said the process was very paperbased and it took too long.

Significantly, some 86% of people who said that they were unhappy with service levels said they would not go back to that marque or dealer again.

Matt collinge, associate director – automotive at EDM group, said: “Having the correct information on a customer, and the speed and efficiency of the sales process, is obviously very closely correlated to how customers rate the service they received.”

T O R E A D A M ’ s D A I L Y N E W s L E T T E R , V I s I T: a m - o n l i n e . c o m / n e w s l e t t e r

EAsTERN WEsTERN

scottish car dealer Eastern Western Motor group is building two Mazda and Nissan showrooms on the outskirts of Edinburgh as the group celebrates record financial results.

The showrooms will be located on a three-acre site at the group’s ‘luxury car village’.

Development work on the land, which was originally designated for supermarket use, is due for completion in April next year.

The privately owned company also represents MercedesBenz, BMW, Mini, Lexus, Toyota, Honda, Volkswagen, Seat, Smart, Alfa Romeo and Suzuki.

The dealer group’s accounts for the year to December 31, 2014, reveal turnover rose by 18% to just more than £463.6 million in 2014, compared with the previous 12 months.

The number of new and used vehicles sold during the year increased by 10% while aftersales revenues were up by 5.5%.

Profit before tax grew by almost £1m to just over £7m.

Group operating profit was £8.7m, up from £7.7m.

hONDA

honda UK is piloting a re-prospecting service at 30 of its dealers to help them to understand why a prospective customer did not buy and to potentially win them back.

Dealers are measured on the enquiries generated and acted upon, and all enquiries are followed up two weeks later to measure the consumers’ experience, whether they bought or not, if not for what reason, and whether they are still looking for their next car. honda UK head of cars Leon Brannan said: “This is very expensive to do nationally, the ROI has to be right, and we have to take the network with us in terms of the benefits because they could easily see this as a bit ‘Big Brother’,” he said. “It’s actually a lead generation programme.”

IN BRIEf P E N TA g O N Pentagon Group is opening a new Vauxhall dealership in Lincoln.

The new site, in Tritton Road, will be redeveloped to the latest Vauxhall showroom standards.

Pentagon plans to stock 40 to 50 used Vauxhall cars on the forecourt.

Trevor Reeve, Pentagon chairman, said: “I think there’s huge potential here in Lincoln.”

JT hUghEs JT Hughes has opened a new Hyundai car dealership in Shrewsbury The development is adjacent to its recently opened Honda dealership on Battlefield Road.

Managing director John hughes said: “We felt it was time to match our new Honda dealership with an equivalent purpose-built site to continue and expand our terrific relationship with Hyundai.”

DIscOUNTs DRY UP Dealer margin pressures are making it harder for consumers to get new car discounts than a year ago, according to a survey.

Average discounts negotiated are down from a typical markdown of 10.14% to 8.9%, said What Car? Research.

This equates to a price increase of £204 across all models.

JcB gROUP

OVERchARgINg

British women are charged an average of £45 more than men for car repairs, according to a survey.

ClickMechanic, an online marketplace for car repairs, examined independent car garages across the UK and found that a standard repair costing a man £571 will typically cost a woman £616, an increase of 8%.

Male and female mystery shoppers requested quotes to replace the clutch of a 2011 Ford Focus from 182 garages across 10 UK cities. The investigation found eight out of the 10 cities charged women a ‘female premium’ and only 6% of surveyed garages gave a consistent quote to both.

JCB Group is to expand its portfolio of Volkswagen Group sites with the takeover of the West Sussex Motors Škoda franchise.

The franchise, based in Worthing, covers Hove and its neighbouring city, Brighton.

The independently owned JCB Group now employs more than 300 staff across Kent and Sussex.

BENfIELD Benfield Motor Group has started a leasing and contract hire business.

RosedaleLeasing.com will provide retail customers and small business owners with “more competitive and low-cost” leasing rental prices. Benfield’s fleet division already supplies more than 12,000 cars to businesses.

am-online.com August 2015 13

market intelligence 16

the kings of Q2

the 10 brands that added most registrations in Q2 accounted for 78.7% of all the growth in the period.

17

dealer profitability

the average Uk motor dealership lost £384 in may, a contrast to the £5,000 profit made in the same month a year earlier.

19

the news in depth

Used cars

sponsored by

Used car wholesale values rose £98 to £5,498 in June, an increase of 1% on may.

Uk new car market

June registrations push half-year to record high nFDa sounds pre-reg caution as registrations grow 7% in first six months of 2015 Uk new car registrations grew by 7% in the first half of 2015 to the highest half-year total on record. a total of 1,376,889 cars were registered between January and June, according to figures released by the society of motor manufacturers and traders (smmt), 324 units higher than the previous record of 1,376,565 in the same period in 2004.

June marked the 40th consecutive month of growth in the market, with a 12.9% increase in the month to 257,817 units.

Fleet registrations continue to drive the growth, up 18.9% year-on-year and now representing 52.8% of the market, compared with 50.1% last year. year-to-date fleet registrations are up 13.1%. private registrations were up 6.6% in June compared with the same month in 2014. yearto-date, they’re up 2.1%.

Sue robinson, director of the national Franchised Dealers association (nFDa), said it was extremely positive to see the new car market had achieved 40 consecutive months of growth but added a note of caution: “although it is encouraging to see that the market is continuing to grow, feedback and information from the industry suggests that manufactures could be pushing the market through use of targets and incentives. “there is speculation that registration figures may not reflect the real number of cars actually being sold to end users.” mike Hawes, Smmt chief executive, said: “it is still a great time to buy a new car in the Uk.” however, the smmt expects manufacturers to ease off the volume push in the months ahead. “we anticipate a flatter second half of the year as the market finds its natural running rate,” said hawes.

there has been a strong surge in demand for alternatively fuelled vehicles in recent months, he added, with volumes rising 70.9% in June. hawes said low interest rates and attractive finance deals, combined with a wealth of new models featuring the latest technologies, have continued to encourage consumers to purchase new cars. richard Jones, managing director, Black Horse, said: “Factors for continued prosperity in the motor car industry include continued strong business confidence as they upgrade their fleets and rising levels of household income coinciding with manufacturers and dealers offering competitively priced cars and finance offers. “continued low interest rates have also played a role on car sales and we would also expect to see increased use of car finance in the second half of 2015 by potential car buyers.”

r e g i s t r at i o n s b y m a r k e t s e g m e n t

F i n a n c e s tat s

the number of new cars bought on finance via dealerships grew 6% in may, compared with may 2014, according to the FLa. the average advance for new car purchases 2014 private 623,749 Fleet 605,685 business 57,831 was up 4% to £16,500. the percentage of private new car sales financed by FLa 0 300,000 600,000 900,000 1,200,000 1,500,000 members through dealerships reached 77.6% in the year to may 2015, a record high.

Source: FLA m a y m o t o r F i n a n c e m a r k e t: n e w c a r s the point-of-sale consumer used car finance market also grew 8% new cars bought on finance by consumers through dealerships by value and 3% by volume in may, may 2015 change on 3 months to change on 12 months to change on compared with a year earlier. previous year may 2015 previous year may 2015 previous year geraldine kilkelly, FLa head of Value of advances (£m) 1,215 +10% 5,197 +14% 14,750 +13% research and chief economist, said: “growth in point-of-sale consumer number of cars 73,659 +6% 317,440 +9% 920,459 +9% car finance in 2015 so far has new cars bought on finance by businesses through dealerships continued in line with number of cars 45,328 +15% 154,314 +19% 504,966 +14% expectations.“ 2015

private 637,051

Fleet 685,184

business 54,654

am-online.com August 2015 15

market intelligence 10-year market trends available: www.am-online.com/ami

n e w c a r r e g i s t r at i o n s

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1 2 3 4 5 6 7 8 9 10

BranD Jeep infiniti mitsubishi lotus SsangYong mini Smart mg maserati abarth

YtD (%) 228.87 169.47 119.83 96.84 83.60 46.23 39.30 38.70 37.94 36.63

r i ser s & fa l l er s

Jeep, infiniti and Mitsubishi appear untouchable at the top of the table, thanks to expanded networks and fashionable products, but the pressure will be on to keep it up. less impressive are the performances of Honda and fiat. Honda has fought back with discounts to boost demand for run-out Jazz and civic models, and fiat has added £1,000 deposit contributions to its 0% aPr PcP on its cheapest 500.

10 9 8 7 6 5 4 3 2 1

BranD Fiat Honda Bentley Suzuki alfa romeo chrysler chevrolet mia Perodua Proton

YtD (%) -6.29 -7.57 -9.63 -10.34 -11.67 -88.10 -99.86 -100.00 -100.00 -100.00

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18 August 2015 am-online.com

Marque

June 2015 share

Ford Vauxhall Volkswagen BMW Nissan Audi Mercedes-Benz Peugeot Toyota Hyundai Skoda Kia Citroën Mini Renault Fiat Seat Land Rover Honda Volvo Mazda Suzuki Dacia Jaguar Mitsubishi Lexus Porsche Jeep Smart DS Alfa Romeo SsangYong Subaru MG Abarth Bentley Maserati Infiniti Aston Martin Lotus Chrysler Chevrolet Mia Perodua Proton Saab Other British Other Imports Total

33,055 30,022 23,670 17,242 15,771 14,024 13,055 10,004 9,801 8,204 8,135 7,707 7,466 7,166 6,654 6,562 5,049 5,044 4,394 4,317 3,486 3,089 2,568 2,200 2,142 1,240 1,004 918 804 768 428 379 245 234 210 148 133 104 93 34 19 1 0 0 0 0 56 172 257,817

% market share

2014 % market change

% share

Year-to-date 2015 % market share

12.82 11.64 9.18 6.69 6.12 5.44 5.06 3.88 3.80 3.18 3.16 2.99 2.90 2.78 2.58 2.55 1.96 1.96 1.70 1.67 1.35 1.20 1.00 0.85 0.83 0.48 0.39 0.36 0.31 0.30 0.17 0.15 0.10 0.09 0.08 0.06 0.05 0.04 0.04 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.02 0.07

29,376 12.87 28,304 12.40 18,654 8.17 15,052 6.59 13,524 5.92 13,503 5.91 11,200 4.91 9,684 4.24 8,850 3.88 7,198 3.15 6,477 2.84 7,260 3.18 7,274 3.19 5,465 2.39 6,277 2.75 6,463 2.83 5,075 2.22 4,027 1.76 4,802 2.10 3,915 1.71 2,700 1.18 3,318 1.45 1,931 0.85 1,792 0.78 1,266 0.55 1,076 0.47 766 0.34 352 0.15 467 0.20 0 0.00 570 0.25 100 0.04 239 0.10 196 0.09 138 0.06 127 0.06 134 0.06 45 0.02 94 0.04 22 0.01 212 0.09 23 0.01 0 0.00 3 0.00 0 0.00 0 0.00 67 0.03 273 0.12 228,291

12.52 6.07 26.89 14.55 16.61 3.86 16.56 3.30 10.75 13.98 25.60 6.16 2.64 31.13 6.01 1.53 -0.51 25.25 -8.50 10.27 29.11 -6.90 32.99 22.77 69.19 15.24 31.07 160.80 72.16 0.00 -24.91 279.00 2.51 19.39 52.17 16.54 -0.75 131.11 -1.06 54.55 -91.04 -95.65 0.00 -100.00 0.00 0.00 -16.42 -37.00 12.93

177,150 142,434 120,064 80,363 83,423 86,009 74,803 57,337 53,945 46,743 39,468 42,248 45,483 31,304 36,840 32,676 27,327 36,164 27,653 21,156 23,548 17,687 14,463 9,882 13,190 6,929 6,192 5,354 3,520 794 2,612 1,355 1,667 1,670 1,078 732 778 609 496 187 129 4 0 0 0 0 379 1,044 1,376,889

12.87 10.34 8.72 5.84 6.06 6.25 5.43 4.16 3.92 3.39 2.87 3.07 3.30 2.27 2.68 2.37 1.98 2.63 2.01 1.54 1.71 1.28 1.05 0.72 0.96 0.50 0.45 0.39 0.26 0.06 0.19 0.10 0.12 0.12 0.08 0.05 0.06 0.04 0.04 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.03 0.08

2014 change

% market

%

173,554 141,609 110,666 75,122 70,929 83,761 63,866 57,428 51,064 42,732 39,176 40,849 44,090 21,408 32,064 34,870 27,342 30,019 29,919 19,850 19,887 19,726 12,976 9,826 6,000 5,631 4,640 1,628 2,527 0 2,957 738 1,309 1,204 789 810 564 226 482 95 1,084 2,759 5 22 1 1 432 628 1,287,265

13.48 11.00 8.60 5.84 5.51 6.51 4.96 4.46 3.97 3.32 3.04 3.17 3.43 1.66 2.49 2.71 2.12 2.33 2.32 1.54 1.54 1.53 1.01 0.76 0.47 0.44 0.36 0.13 0.20 0.00 0.23 0.06 0.10 0.09 0.06 0.06 0.04 0.02 0.04 0.01 0.08 0.21 0.00 0.00 0.00 0.00 0.03 0.05

2.07 0.58 8.49 6.98 17.61 2.68 17.12 -0.16 5.64 9.39 0.75 3.42 3.16 46.23 14.90 -6.29 -0.05 20.47 -7.57 6.58 18.41 -10.34 11.46 0.57 119.83 23.05 33.45 228.87 39.30 0.00 -11.67 83.60 27.35 38.70 36.63 -9.63 37.94 169.47 2.90 96.84 -88.10 -99.86 -100.00 -100.00 -100.00 -100.00 -12.27 66.24 6.96

sponsored by

Year-onYear

econoMic i n D i c at o r s inflation

Fleet/leasing Jun 2014 Jun 2015 39.89

➡

rebound in average values continues with 1% June rise

0.1PPTS

40.06

Used car wholesale values rose monthon-month in June, the second consecutive month of increases after a downward trend in early 2015, according to the national association of Motor auctions (naMa). the average value of all cars was £5,498, an uplift of £98, or 1%, compared with May’s average. the result was an increase of 2.2%, or £117, on June 2014.

June’s volume of used cars through auctions rose by 2,465 units, or 2.1%, to 108,950 units, reversing a decline since March’s peak and up 2.3% year-on-year. the first-time conversion rate remained flat at 73%, which was down on the 77% recorded during June 2014.

was up £88, or 2.6%, month-on-month to £3,396. Year-on-year, the average value was up 8.3%, or £261, with age and mileage down marginally.

trade-in disposal the UK’s largest motor auction group, Bca, reported that after two months of consecutive increases values for dealer part-exchanges stalled in June, dropping by £119, or 2.7%, to £4,278. Year-on-year trade-in values were ahead by £305, or 7.6%. at Manheim’s auction rooms, the average part-exchange value for June

U s e D c a r Va l U e t r e n D s

the cPi annual inflation rate in June was 0%, down from 0.1% in May. the office for national statistics said the main contributors to the change were falls in clothing and food prices and smaller rises in air fares.

45,925 £9,448 £9,727 96.08% 96.99%

Part-exchange Jun 2014 Jun 2015 88.12

House prices

+/-0%

89.45 71,128 70,000

House prices in May were flat since april, according to data from the land registry. the year-on-year increase was 4.6%, which takes the average value of houses in england and wales to £179,696.

£3,973 £4,278 95.66% 96.82% Nearly new Jun 2015 8.46

Borrowing 7,903

➡

retail stock acquisition Bca saw its average ex-fleet car value rise £8 in June, setting a new record of £9,727. the £9,719 average retail stock value for June was up 2.9%, or £279, year-on-year, with average age static and mileage slightly lower.

Bca’s Uk operations director Simon Henstock said: “the most significant factor in the current marketplace is that supply and demand are reasonably well balanced, with conversion rates remaining relatively stable. it is also worth remembering that values remain at exceptionally high levels on average, reflecting that buyers are continuing to compete strongly for good retail-quality stock.”

Manheim’s Market analysis for June showed the average selling price of ex-fleet vehicles rose £303 or 4.2% from May to £7,461. the average value was up £85, or 1.2%, year-on-year.

46,636

+5%

£20,363 99.37% Average age (months) Average mileage Average value Sales vs CAP

manheim Fleet £ manheim Part ex £

Bca Fleet £ Bca Part ex £

10,000 9,448

9,411

9,593

9,445

9,533

9,633

9,478

9,673

9,670

7,319

7,318

9,700

9,719

9,727

Unemployment

7,376

7,273

7,260

7,135

7,358 7,045

7,518

➡

9,126

8,000

+0.1PPTS

7,461 7,158

6,948

the unemployment rate for the three months ending May 2015 was 5.6%, 0.1ppts higher than the prior three months, but down from 6.5% a year earlier, according to the office for national statistics. the number unemployed is now 1.85m.

6,693

6,000

4,000

4,065

4,032

4,059

3,125

3,130

3,162

3,162

Jun 14

Jul 14

aug 14

sep 14

4,136

4,188

4,113

3,390

3,395

3,383

oct 14

nov 14

Dec 14

4,075

4,041

3,536 3,268

Jan 15

feb 15

3,438

Mar 15

4,348

4,397

3,367

3,308

apr 15 May 15

4,278

3,396

Pay

+3.2%

Jun 15

12 months to May 2015 11,199 1,083,499

change on previous year +15% +10%

40,274

-17%

Source: FLA

Used cars bought on finance through dealerships May 2015 change on 3 months to change on previous year May 2015 previous year Value of advances (£m) 972 +8% 3,138 +14% number of cars 92,431 +3% 299,915 +10% Used cars bought on finance by businesses through dealerships number of cars 3,300 -4% 10,963 -1%

4,184

➡

2,000

3,973

Unsecured borrowing through loans and credit cards stands at a record annual growth rate (since autumn 2010) of 5%, said the British Banking association. it said 59 million credit cards are in issue in the UK, and 67% of them are being used.

the average weekly wage, including bonuses, between March and May, was £492, a rise of 3.2% over the same period a year earlier. excluding bonuses, wages were up by 2.8%.

am-online.com August 2015 19

DIGITAL DEALER Conference Schedule In a world where the digital and physical is colliding and where seamless integration of the two now defines the most successful retailers, digital permeates practically every layer of your business and your customers’ experience.

You don’t need a conference to tell you digital rules, but you do need the insight, new thinking and latest innovations to keep you in play and finely tune your winning strategy.

Driving customers from your site to your site Increasingly a customer’s journey to your dealership is digital whilst strengthening your relationship to retain their loyalty is also firmly rooted in the virtual domain.

Meanwhile, your business’ reputation is likely to be at the behest of online customer reviews and social media comments and your own social media activity needs to engage and entertain.

Headline sponsors:

CONFERENCE 2015

08.30

Registration

11.50

09.30

Welcome from the conference moderator

12.00

Interactive Workshops

09.35

Video through the customer life cycle

12.45

Lunch

13.45

Interactive Workshops

14.45

Refreshments and networking

15.10

Psychological targeting in action

Alistair Horsburgh, chief executive officer, CitNOW Our headline sponsor opens the conference by asking how do you turn browsers into enquiries and customers into loyal customers who can't stop coming back? Find out how video can enhance every part of the customer's journey.

10.00

A fascinating insight into online consumer behaviour and the influence of personality type on purchase decisions showing how marketing analytics and data can be taken to the next stage.

Lee Manning, digital marketing manager, Perrys Motor Sales

10.25

Q&A

10.35

Refreshments and networking

11.00

Creating content to achieve business objectives Justin Kirby, VP/strategic content marketing, Tenthwave Digital LLC

Defining branded content, how it is being put into practice and how it will develop as the discipline matures and evolves.

11.25

Vesselin Popov, development strategist, The Psychometrics Centre at the University of Cambridge

A dealer’s digital journey Triple AM digital Award 2015 winners, Perrys offers insights into the challenges the group faced as it adapted its digital approach to keep up with today’s demanding consumer and also looks at its future digital direction.

The challenge of big data Daniel Smulevich, digital analytics manager, Jellyfish

How to apply the vast swathes of information available to successfully refine marketing strategy, overcome big data challenges and identify good practice.

Q&A

15.45

How an enhanced digital and dealer experience is driving Kia UK’s record sales Kim Wiggins, digital marketing manager and David Hart, dealer marketing specialist, Kia Motors UK

Kia Motors UK is enjoying a sales boom with a combination of strong products, a joined-up online search campaign, exceptional online experience and high standards of customer service.

16.10

Q&A

16.20

Chairman’s closing remarks & conference close

Tickets from £175 Pre-book masterclasses Masterclass sponsors:

Why attend?

This year’s conference addresses the latest in digital innovation by focusing on three distinct areas: Content; Analytics and Data; and Customer Experience online and in-store.

Content Strategy

Analytics & Data

The Customer Experience – Online and In-store

Tuesday 15 September

Silverstone Wing, Silverstone, NN12 8TN

Masterclasses

12.00 & 13.45

Once again, we are hosting eight masterclasses delivered by our range of expert suppliers with the highest levels of specialist knowledge and experience in their respective fields. Delegates are able to attend two of the eight workshops which can be booked in advance.

Staying in touch with customers Jeremy Evans, Marketing Delivery

The “customer journey” has evolved into an ever more complex adventure through the minds and actions of the customer. This repeated workshop featuring insight from dealer group marketing and CRM heads, looks at the ways to keep in touch with customers, and how to act upon the information gathered during the process.

Tracking website visits and calls to understand key showroom traffic drivers

How to rise to the IT infrastructure challenge Richard Buxton, Node4

A flexible approach to IT means smaller business can punch above their weight and larger organisations can harness efficiencies.

This workshop explores the latest developments in technology and how it can improve customer relations and boost profits.

The customer experience when searching online and engaging in digital interaction and how it is then reflected when the car-buyer visits the showroom itself, is both the starting and ending point of our conference. In between, we look at those essential digital components of analytics and big data as well as the content which is more likely to net the desired outcome.

Keynote stage sessions will be punctuated with hands-on and highly informative masterclasses whilst the AM Digital Fair, made up of limited but carefully selected trade stands, enables dealers to meet some of the foremost suppliers in automotive retail in one day.

Who should attend?

Here’s how Digital Dealer can benefit employees at every level in the business:Digital marketing directors, managers and executives – an essential day to understand everything digital

How to stand out online

Divisional directors – gain an overview of the role digital plays at every level of the business

Retailers need a customer review strategy which builds a credible reputation to boost the bottom line as customer reviews are significantly influential in the car buying process. Handling negativity and tracking across several platforms is vital.

Dealer principals & general managers – learn more of the impact of digital on retention, customer satisfaction and profits

Anthony Gaskell, Reputation.com Inc

How online finance information can drive sales

Ali White, Calltracks

James Tew, iVendi

This session seeks to provide clarity and deeper understanding of tracking leads through to sales and how different communication methods can be analysed to provide an overall picture as well as understanding and acting upon information available.

Funding new and used car vehicles is an essential element of the car-buying process and much of this research is undertaken online. This session illustrates how finance is forming an increasingly important online role for the consumer and ways in which dealers can capitalise on this trend.

Great expectations of today’s digital car-buyer

How to make your data work harder for your business

Nick King, Auto Trader

Philip Nothard, CAP Automotive

The expectations of today’s consumers are huge, but some retailers are failing to win over today’s car-buyer. Retailers need a digital strategy which grabs the attention of the consumer and a showroom process which meets their expectations.

The intelligent application of data means dealers can make it work much harder so it delivers improved results for the business; this session covers the entire spectrum of valuation data.

Sales managers – enhance your sales model and processes for the digital age Aftersales managers & service managers – utilise the full range of digital applications and technology to improve customer loyalty and improve efficiencies Sales executives – learn how customers expect digital to enhance their buying experience CRM advisors – understand the importance of integrating all communication channels seamlessly Marketing managers and marketing executives – how to implement and measure digital campaigns across the breadth of communication channels Fleet and corporate sales managers – utilise digital to better connect with businesses, build strong relationships and boost sales IT managers – understand how the worlds of technology and marketing integrate Manufacturer personnel – understand the challenges of today’s digital dealer

Tickets are only available to dealers and vehicle manufacturers.

To book, visit www.amdigitaldealer.co.uk or contact Emma-Louise Kinnaird on 01733 395133, email emma-louise.kinnaird@bauermedia.co.uk

INSIGHt AM & IMI People conference

co-sponsors

Get the most from your employees Expert advice on recruiting, retaining and developing a motivated, skilled workforce FINd waYS to thaNk aNd reward StaFF

recruIt the rIGht PeoPle FIrSt tIMe

Need to kNow

Need to kNow

n dealers should find ways to thank their staff, materially and otherwise n ‘‘You can train people to do their jobs, but you can’t train them to smile and genuinely care’

n Getting the right people first time ‘saves costs in the long run’ n employers must recognise individuals’ talents and nurture them n Sector ‘must work together’

Peter Smyth, director, Swansway Group Find a reason to reward your staff, Smyth told delegates.

“Where we are a little bit different is if someone has been seen to make a massive effort to reach their target, but doesn’t, we still reward them with something, because we are in touch with our people.”

He said Swansway asked Andrew McMillan, formerly customer service manager at John Lewis, to help come up with a company ethos.

“He came back with ‘a family driven by passion where people love to work and customers are delighted to return; our values unite us: caring, honest and proud,’ which dovetailed where we as a family wanted to be.”

Smyth quoted Jack Welch, the former chairman of GE, who said great leaders possess “the generosity gene”.

“We have a yearly day out for everyone within the organisation.

“Anyone who has worked for the organisation for 12 months gets their birthday off on the company.

“Staff that have worked for us for

Steve Nash, chief executive officer, IMI ‘Fire fast and hire slowly’ were the words from the Institute of the Motor Industry’s (IMI) chief executive Steve Nash.

“If you hire people just because they can do a job, they will work for your money, but if you hire people who believe what you believe then they will work for you with blood, sweat and tears,” Nash said.

Nash explained that it was easy for him to stand there talking about talent and the need for it, but the difficulty was in finding it.

Getting the right people first time saves costs in the long run and improves the culture of that workplace.

Culture is the reason why some dealerships are successful in recruit-

five years and over are invited to an annual Swansway dinner where we present people who have reached five years of service a ‘caring, honest, and proud’ solid silver pin. those that have served 10 years get a solid gold pin – “one year we celebrated 140 people reaching 10 years, at a cost of £30,000” Smyth said.

However, he said it was also important to give things money can’t buy.

“Last year, we were incredibly successful and we needed to reward an awful lot of people, so we wrote to them saying we have experienced incredible success so please accept two extra days holiday, on us.”

Swansway has a training academy, however Smyth believes you can train people to do their jobs, “but you can’t train them to smile and genuinely care”.

“Our human resources department has a very tough brief because their brief is to employ people who genuinely care. We’re not looking to create jobs; we are trying to create careers.

“Say thank you and say it a lot. Don’t just send an email, pick up the phone.

We really do appreciate it as a family, and it costs nothing.”

ment and some aren’t, said Nash. You can have a lovely modern showroom with a Costa coffee in the corner, but if there’s not a welcoming atmosphere it won’t work.

No employee wants to be in the situation where they dread going into work in a morning, they want to feel inspired, he said.

Nash said people work best when they’re kept informed – they not only understand what they’re doing, but they know why they’re doing it. “the Harvard Business Review annual survey from 2014 showed 36% of global employers said they were experiencing a shortage in talent. this year, the same survey revealed that 73% of companies felt there was a shortage.

“Key factors in achieving a good environment for your workplace is recognition and reward. Employers must recognise individuals’ talents and nurture them.”

Nash and the IMI are currently working on increasing awareness of the industry by developing ways of bringing new talent to the industry, such as university fairs, etc. “We need to work together as a sector,” he said.

He finished by saying great companies don’t hire skilled people and motivate them, they hire already motivated people and inspire them.

“If you hire people who believe what you believe, then they will work for you with blood, sweat and tears” am-online.com August 2015 77

INSIGHt AM & IMI People conference

co-sponsors

PaNel dIScuSSIoN: what ‘PeoPle exPertS’ SaY the INduStrY NeedS Steve Nash, IMI chief executive and conference moderator, chaired a discussion of four ‘people specialists’: Q: what are the people issues exercising you at the moment? chris roberts, retail network development director, Vauxhall Motors uk and opel Ireland: “It’s finding the level and quantity of talent we need for the industry, particularly technicians, who are a transient group of people. We’re struggling to pay them enough to keep them. Some independents are paying more than franchises.”

Paul craven, general manager of the toyota and lexus academy: “Our network tells us it is finding the people to apply for jobs and because of the skills gap there is poaching between dealers in the brands and outside. We can add value in the power of our brands to attract more people to the industry and then provide screening and tools to assess those people and recruit the right ones. Simultaneously, we have to encourage our dealers to be more professional in the way they recruit.” helen westby, general manager of the BMw Group uk academy: “Ensuring we have the training aligned to what was needed in the network, that reflects the real world.

For example, we need to look at how we train our managers and we’re putting managers and dealer principals through a rigorous leadership programme that moves away from being transactional to transformational.”

Q: how does Sytner maintain and improve its position in the Sunday times 100 Best companies to work For [it’s currently number two]?

Melvin rogers, hr director, Sytner Group: “We’re not complacent. We continue to get feedback from our employees. And the Sunday Times competition allows us to get the views of everyone that works for the company.

“Once we get the feedback, we take it really seriously and make sure the findings are fed back to the employees. More importantly, they can see actions for improvement are taking place.

“You’d be surprised how many people mention the top 100 in job applications. We’re now looking at driving the employee brand side of things because Sytner is not as wellknown as we’d like it to be.

“We want a greater presence in social media.”

Q: how do you source the right people? andy Savva, owner of Brunswick Garage, a multi-brand, independent service specialist in North london: “I don’t have a rigid salary structure when employing someone. I will pay what I believe they are worth and before I mention salary in an interview I want to know do they understand my culture, vision, mission statement and what I want out of them.

“If I hear someone say they can’t find staff, it means you’re not paying enough, your overall package is not enough – end of.”

chris roberts Paul craven

Melvin rogers andy Savva

“If I hear someone say they can’t find staff, it means you’re not paying enough” andy Savva, Brunswick Garage

Q: does the franchised dealership model need to change? If so, where? craven: “It needs to change. In the last five to 10 years, we have seen significant improvements in the way some dealers go to market. they are becoming much more people-orientated now, recognising the cost of not retaining people: the business is no longer purely about hitting the numbers. Strong leadership is critical to this.” rogers: “We’re on a journey to improve our management competence and this year we’re creating a regional coaching structure with

helen westby

people tasked with spending 80% of their time in dealerships working and equipping managers to coach. We know this is where the help is needed from our research, not in training centres. there’s a direct correlation between the quality of the people in a business and its success and changing practices at the dealership level will make the difference.” roberts: “Owning a car will become more like owning a mobile phone and with the cost of land and buildings being so prohibitive the industry can’t continue to run on a 1% return on sales. the change will be driven by digital technology and as it happens it could be an opportunity to bring in different people to the sector.”

Q: do we still need dealerships when so much customer research is online? rogers: “A number of years ago we said the advent of the internet would lead us to question the need for large centres. But we’re outgrowing them, making them profitable and facilities are getting larger with a good level of footfall. More importantly when they’re there they want to speak to an informed staff member.”

how educatorS caN IMProVe at SellING autoMotIVe retaIl aS a career

Need to kNow n dealers must improve their image to compete with manufacturers in attracting young people n Sector must create ‘champions’ in schools and universities Prof Jim Saker, director of the centre of automotive Management, loughborough university’s Business School Prof Jim Saker reminded delegates of when Loughborough University launched the world’s first bachelor’s degree in automotive management, with support of Ford of Britain, in the

early 1990s. It wasn’t widely lauded, he said – the Independent newspaper ran the headline “Arthur Daley goes to college”.

However, 100% of the first cohort of its students said they found it useful in their careers. One, Darren Guiver, then a Ford sales executive, now runs the AM100 group Spire Automotive.

Yet in 2015 there will be no BSc cohort in automotive management at

Loughborough for the first time in years because, Saker said, the industry is not investing enough in young people. Nevertheless, some manufacturers are investing in training their networks, and dealership managers are investing in the MSc course.

“We have to take this seriously if we are to have any credibility in attracting young people into our sector. there

has to be seen to be career development, whether as an apprentice or right through into higher education.”

Saker said there are barriers to attracting young people that must be overcome. Young people are drawn to the manufacturers, but the image of car sales is still quite poor.

Dealer groups can do things to help. the industry has fantastic technical apprenticeship programmes, and motor retail can show young people it is a credible alternative to higher education, by employing and developing young recruits.

“We have to create some champions in the education field, and have people in the schools, the further education colleges and the universities who want this to happen. If we don’t create those champions, this sector will just be marginalised.”

am-online.com August 2015 79

INSIGHt AM & IMI People conference

co-sponsors

chaNGe the culture oF Your BuSINeSS to Succeed

Need to kNow n dealers need to look at the big picture as well as the detail n to affect a business’s culture, managers must understand the feelings and emotions that drive it dr william holden, chairman, Sewells Business success is built on culture and culture is your people. Despite the pressure on dealers to hit targets, the focus of managers should not be on ‘the numbers’.

Dr William Holden, chairman of business growth consultancy Sewells, showed delegates a video (http://r.thought.co.uk/z24Yqk) of two

teams passing a basketball to each other and asked them to count how many times the ball was passed between members of one team. [try it before reading on.]

Responses ranged from 14 to 18 passes. “In terms of culture and team working, how can we all be looking at the same thing and we all see something different?”

How many people saw the gorilla walking across the screen?

“It’s on screen for about seven seconds and beats its chest, but the majority miss it,” Holden said.

“In terms of culture this is an important principle called Lolo (lock on, lock out). We can lock on to the detail of something and lock out everything else, concentrating on the minutia, but missing the big picture – and what our contribution is to making it happen.”

Culture should be seeing things from 50,000 feet and at five feet, and engaging everyone in a business to do so, Holden said.

“It is the biggest differentiator to transforming performance. An organisation will fail even if you have the best products, services and systems going into a poisonous or sterile culture.”

Without insights into the hidden influencers of behaviour, the culture cannot be influenced, he said. “Feelings and emotions” drive behaviour, he said. He emphasised he wasn’t advocating getting involved in personal crises, but “can we sometimes increase our awareness of how feelings and emotions affect behaviour, performance and results?

“Most managers never get to know how important these two are, so their

approach to managing people is to issue instructions: be more enthusiastic, be more creative etc. But they wash over people with no impact,” Holden said. the real cultural challenge is how to create an environment where people feel so good about who they are, what they’re doing, the impact it has on them, the business, their family and their community, that they become unstoppable.

Inspired leaders, he said, will describe negative behaviour as out of order that has to stop, but then will ask what’s causing it.

“People will tell you what their frustrations are and once they’re on the table, you can put a plan together to move people from feeling bad to good and you can turn average performers to superstars in a couple of weeks.”

caSe StudY: GreeNhouS GrouP

deVeloPING aN aGIle workForce

Need to kNow

Need to kNow

n Motor trade is ‘not just about mechanics’ n Potential recruits should be made aware of career paths in sales, It, admin and accounts

n demand is growing for more flexible workforces n technology now allows more people to work from anywhere n Benefits include reduced costs and a better-aligned workforce

Nahara hanson, hr manager, Greenhous Group Declining unemployment is making it ever more competitive to recruit, said Hanson, which is why Greenhous Group presents at local colleges on careers days and builds relationships through sponsorships, charitable work and work experience placements for schoolchildren.

It also promotes apprenticeships internally to target family and friends of employees.

“Make them aware of the range of roles in our industry, show them it’s not just about mechanics,” she said. “there are career paths in sales, It, admin and accounts as well.”

Greenhous offers some young people training on 12-month contracts.

If they work well, and a job comes up, they may be taken on permanently.

Mentors for these are usually experienced employees who relish the new challenge of training a junior and were once apprentices themselves.

She said 45% of the group’s workforce is aged 45 or older so a longterm HR plan is important.

“Apprenticeships are important for filling future skills gaps. Our work-

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force is ageing and we have to think ahead.”

Hanson said she has detected a decline in applicants’ CVs, with some using ‘text speak’ or putting inappropriate email addresses.

Finding the raw talent can be a challenge, as some young people lack the basic competencies and social skills and have unrealistic expectations. Greenhous selects them carefully as state funding is focused on smaller companies, so apprenticeships are a cost to the business.

Recruitment need not be entirely down to school grades – willingness and attitude should be considered. the industry can prove it offers career paths, said Hanson, pointing out that a third of Greenhous’ directors started as apprentices, including joint chief executive Derek Passant. the group is taking on 25 apprentices this year. the group likes having the ability to instil the company’s ethics, ethos and its commitment to customer service. It also aids retention - the company has a career plan for each apprentice.

Nicky elford, chief operating officer, agile Future Forum Advances in technology, changing demographics and increased globalisation mean the traditional office-based model of work can be out-dated and even counterproductive for some businesses, Elford told delegates. the Agile Future Forum is an organisation set up with government support to examine the value for businesses in having a flexible workforce. Member companies include Lloyds, tesco and Ford.

Ford of Britain’s diversity and inclusion manager lara Nicoll said the company is on a journey to adopt agile working. An example is the way it uses what it calls ‘digital workers’ for certain roles. these are equipped with VPN technology that allows them to access Ford’s servers and

networks wherever they are and use a Webex system to make and receive calls via their office number no matter where they are.

Nicoll said more businesses can now allow people to work anytime and anywhere, and employees have a growing demand to work flexibly and for more autonomy on how they work. Ford has experienced improved productivity from staff in digital worker roles. Such flexibility has a place at the dealer too, as it gives them and Ford the ability to connect anytime and anywhere, so supporting dealers and customers better.

Elford said the business world is changing. Employees want and expect different things, customers want to do business with you on different terms.

Elford said: “It’s important that we adapt to a different model of work than we have now.” tangible benefits from agile working include reducing costs and aligning the workforce to business needs.

It may mean considering multiskilling permanent staff, crowdsourced services, multi-site working, shifts, seasonal workers and staged retirement. Companies must understand their own short-term and longterm goals and understand what employees want and work out something that suits both.

“It’s important that we adapt to a different model of work than we have now”

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AM AwArds 2015 winner’s profile

Best MAnufActurer digitAl init

Taking a risk with online ‘reality TV’ paid off for Kia The ‘Re-View Mirror’ campaign mixed web reviews, real-life customers and YouTube to impressive effect

By Jeremy Bennett ia Motors has had a channel on YouTube for five years – half the lifespan of the online video portal – but for the launch of its third-generation seven-seater, the Carens, it decided to take a risk with its marketing strategy.

The car’s launch content had largely consisted of television adverts, product introductions and feature spotlights, or nods to its sponsorship deals, such as last year’s FIFA World Cup. But in 2014, it decided to exploit the success it had seen partnering with consumer review site Reevoo with the evergreen reality TV series concept.

Kia judged it to be a highly efficient and effective message delivery method. And AM judged it to be class-leading, with Kia winning the Best Manufacturer Digital Initiative Award in February.

Charlotte Wells, Kia’s marketing services manager, said: “Our overall brand proposition of ‘cars that speak for themselves, customers that speak for us’ is well known through TV advertising.

At the same time, with 15,000 reviews and counting on our Reevoo site, we knew the power and influence customer opinion has.

“We knew from our walk-around videos that there was an audience of people interested in a car’s features who were seeking out our videos, looking for an alternative to trawling through a brochure. For the first time, we chose YouTube as the broadcast medium, mixing real customers’ opinions in a reality television-style format.”

K

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The segment featuring the Carens proved to be an early motivator.

Kim Wiggins, Kia’s digital marketing manager, said: “Being a seven-seat MPV, the Carens is in a segment of bulky, quite ordinary looking cars: they are little more than people carriers. We wanted to position our new Carens within the Kia family of well designed, versatile and practical. Good for carrying people, obviously, but also has the luggage space for a smaller family.

“We didn’t want it to be a distress – or stressed – purchase.”

The Carens isn’t a high unit seller and it wasn’t a halo car for the brand. Asked if a traditional ‘above the line’ television campaign wasn’t appropriate and whether that was why risks were allowed, Wiggins said “absolutely, definitely”.

So, two families were chosen from Kia’s Reevoo contributors. The first were existing customers, the Ryans, who’d had their second-generation Carens for six months. The second were the Mallias, prospective buyers of the Mk3 Carens.

“Our selection process was very robust and we

were lucky to find two engaging families. We came up with the scenarios in part, but a lot of what happens wasn’t staged,” Wells said. “The families became part of the production unit and were doing what they would normally do on a Saturday.”

The campaign also saw Kia acknowledge the role of women, more specifically ‘mums’, in making carbuying decisions.

“We know that mums now spend 35% more time online than the rest of the UK population, with 68% saying the internet is the most important research tool when choosing a car,” she said. And 72% of consumers trust online reviews, with 67% reading between two and 10 reviews before making a buying decision.

So the mothers in the Ryan and Mallia families were given centre stage in the ‘Re-view mirror’ campaign. In each of the videos, lasting about a minute, they have the final word.

The campaign went live on September 15, 2014, and lasted until October 5. It was hosted on Kia Motors UK’s YouTube channel (see links, right), on the Kia website’s Carens page, on custom-built

“we knew there was an audience of people who were seeking out our videos, looking for an alternative to trawling through a brochure”

itiAtive: KiA cArens ‘re-view Mirror’ Paul Gordon, managing director, Autotorq, presents the award to Charlotte Wells, marketing services manager, Kia Motors (UK)

AWA r d s sP on s or

Autotorq coMMent

By Paul Gordon, managing director, Autotorq

landing pages and promoted through Facebook, Twitter and CRM. The campaign gained 1.3 million impressions, driving more than 11,000 clicks to the Kia website.

It helped to generate more than 600 requests for Caren brochures and about 140 model sales during its four-week run.

Although there wasn’t an obvious link between manufacturer and dealer in this campaign, the above figures meant dealers would have seen the benefit of the consumer responses. And many of Kia’s network of 182 dealers play the videos in their showrooms and, Wells said, ‘Re-view mirror’ “has been commented on by many as something customers have really related to and mentioned when in the showroom”.

The total cost of development, delivery and media support was under £70,000.

The initially risky approach has now further influenced Kia’s marketing choices.

The reality TV format has been used in the Soul EV campaign (The Electric Takeover: ‘Fill up for £2.80’), the ‘You make us make better cars’ television video from January and the forthcoming Sorento campaign.

The campaign for the new Sorento is at the “embryonic stage”, said Wiggins, but it again uses consumers, with the strapline ‘made for perfectionists’.

As to the video’s impact on Kia’s ‘marketing mix’, Wells said: “People want a balanced approach to how they’re marketed to. If you’re buying any

product, you won’t make a choice based only on what the brand owner says. You will look for views – what do people like me think?

“One of the main reasons we started with Reevoo three years ago was we wanted to be transparent about what consumers thought of our cars. This has been a consistent part of our marketing approach.”

And Wiggins said: “The creation of video content is an intrinsic part of any campaign. We’ve got so many channels we can seed and communicate to our customer with outside of the traditional marketing channels.”

KiA Video linKs View the Kia ‘re-view mirror’ videos at www.youtube.com/user/ KiaMotorsUK The Kia soul eV The electric Takeover: www.youtube.com/ watch?v=qayjUsksu6w

Autotorq is proud to sponsor the Best Manufacturer Digital Initiative 2015 AM Award. As a business that is dedicated to developing effective digital programmes for automotive clients, we always look at best practice in the sector and breakthrough innovation. The Kia Carens concept is both of those.

It’s a great insight supported by an impactful idea.

The automotive industry is going through unprecedented change. We are seeing new retail formats, car connectivity that will transform cars in the same way the iPhone transformed phones and, of course, the emergence of online selling.

Digital innovation is the catalyst for these changes. Digital is not just a website or online content. It’s the way business is defined in 2015.

The brands we all admire are digitally led and multi-channel.

Those that have been consigned to history are the ones that couldn’t make the transition.

We expect to see more digital initiatives over the next 12 months from across the car industry as manufacturers unveil more breakthrough concepts designed to give a better brand and customer experience. Congratulations to Kia and we look forward to seeing what comes next.

The Kia ‘You make us make better cars’ ad: www.youtube.com/ watch?v=tlPK6JVG0zc

am-online.com August 2015 87

ShowRoom 93

Škoda octavia

AM adds the value-formoney, spacious and efficient octavia Estate to its longterm test fleet.

94

the Cars driVing yoUr bUsiness

Mazda3

mazda lives up to its reputation for reliability with its response to a rare glitch on the 3.

F i r s t d r i V e : V o lV o XC 9 0 – o n s a l e n o w

Volvo’s premium SUV comes out swinging

UK Volvo dealers took more than £150 million worth of orders for the new XC90 before they had even received demonstrators

The XC90 is starting to transform Volvo’s fortunes and could start a scrap with Audi, BMW, Land Rover and Mercedes-Benz

By Tim Rose t may be the Swedish brand’s most eagerly awaited car in a decade – before UK Volvo dealers even received demonstrators for launch events, they took more than £150 million worth of orders for the new XC90 seven-seat SUV. Volvo Car UK said at the launch that it has received 3,500 orders for the XC90, from its first year production allocation of 4,500 units. Its target after that is for 5,500 annual sales.

The XC90 is the first car on Volvo’s new Scalable Product Architecture (SPA) platform, developed in-house since its acquisition from Ford by Chinese group Geely. The SPA platform will also underpin a new S90 large saloon and V90 estate in 2016 and a next-generation XC60 SUV and V60 hatch-

I

90 August 2015 am-online.com

“The Swedish brand has an advantage in that its flagship arrived in showrooms three months ahead of the new Audi Q7”

back later. There will be eight new models by the end of the decade, including a new V40 compact hatchback and an XC40 compact crossover SUV built on a new small car platform.

Customers will be able to choose between petrol, diesel and hybrid powertrains.

“In four years’ time, the new XC90 will be the oldest model in our line-up,” said a Volvo spokesman.

The range renewal and expansion is part of Volvo’s strategy to increase its UK new car sales to 80,000 units by the end of the decade.

To attract conquest sales, Volvo will offer compelling finance offers, including PCP and personal contract hire, together with Swedish brand values and innovative technology such as in-car connectivity and safety systems that protect occupants if the car runs off the road or that prevent the driver from pulling out of junctions in front of approaching traffic.

Given the demand for the new XC90 from launch, Volvo Car UK is not openly incentivising buyers other than to offer a 5.9% APR PCP offer for retail customers and a 36-month/30,000mile contract hire plan from £569 per month for business users.

The Swedish brand has an advantage in that its flagship arrived in showrooms three months ahead of the new Audi Q7

F o r M o r e r e V i e w s V i s i t: w w w . a m - o n l i n e . c o m / r o a d t e s t s

s p eC i F i C at i o n Price £45,740-£53,745 Engine 2.0-litre diesel: 221bhp 2.0-litre petrol: 315bhp Performance 0-62mph 6.5-7.8secs, top speed 137-143mph Transmission 8sp auto Efficiency 36.7-49.6mpg, 149-179g/km RV 3yr/30k 47% Rivals Audi Q7, BMW X5, Land Rover Discovery, Mercedes-Benz GL-Class

the interior shows off Volvo’s new design direction, focused on simplicity, style and functionality

weight-saving technology makes the XC90 efficient

and well in advance of Land Rover’s Discovery 5, expected in 2016.

Now, I’ll make a disclosure – my family car is a last generation XC90. Although only a year old, it has design elements, driving dynamics and performance that all date back to 2002, while the rest of the SUV sector moved on. I knew the new XC90 was clearly going to be a big leap forward, but it is even more than that.

It is the first Volvo to show the brand’s new design direction, focused on simplicity, style and functionality to reflect its Scandinavian heritage. Inside the cabin, there are just eight buttons, allowing a nine-inch touchscreen to control all multimedia, comfort and connectivity functions, which even works when wearing gloves, unlike many others.

It is an efficient 4x4, launched with DriveE new generation four-cylinder, two-litre T6 petrol and D5 turbodiesel engines (a plug-in hybrid badged T8 will follow) that can offer official combined fuel economy nearing 50mpg and Co2 emissions as low as 149g/km. Today’s XC90 handles like a mainstream saloon and no longer like an agricultural vehicle, despite weighing two tonnes and being almost five metres in length, thanks to a weight-saving suspension. Four-corner air

suspension is an option, which offers selectable driving models and suspension heights, named comfort, dynamic, individual and off-road. It can also lower the car 40mm for easy entry and loading.

Even its third row of seats are suitable for people up to 5ft 7in tall, and large windows and an optional full size panoramic roof ensure there’s a great sensation of space and light. Both the second and third row seats are in theatrestyle, set slightly inwards to give passengers a better forward view, and all can be folded individually to create a maximum load space of 1,951 litres.

Little details include a Swedish flag stitched on the side of the driver’s seat, and seat belt buckles stamped with ‘since 1959’ to mark the year Volvo first included its patented threepoint safety belt on its cars as standard.

The 224bhp D5 twin-turbodiesel will be the best seller in the UK, representing three in four sales. Its 149g/km Co2 emissions mean it will appeal to company car user-choosers as well as private buyers. The petrol model is forecast for 15% of volume, and the T8 hybrid for the remaining 10%.

A lower-powered D4 turbodiesel with front-wheel drive is being sold in other markets, but Volvo Car UK said it does not plan to introduce it here.

Trim levels are badged momentum – the entry specification – and Inscription and R-Design as two high-spec derivatives, the latter appealing to those seeking sportier styling and the former focused on comfort and luxury.

A variety of options offer more earning potential, including a 360-degree surround view parking camera for £700 and a £1,500 ‘intellisafe pro pack’ providing adaptive cruise control with queue assist, a lane-keeping aid and blind spot information system.

what yoUr CUstoMers will read aboUt the VolVo XC90 Car bUyer the new Volvo XC90 is one of the best large sUVs you can buy. it offers quality, space, efficiency, safety and comfort. whichever trim or engine you decide to go for, you are guaranteed to get a spacious car with an upmarket interior, inventive design touches and state-of-the-art technology. the new car maintains and enhances Volvo’s reputation for excellent safety, with clever driving aids and impressive crash protection. top gear prices are no longer for the squeezed middle, as the XC90 has moved up a level. but it has worked hard to justify the increase. it’s far from a budget offering, but the XC90 feels worth its premium price-tag. gQ innovative, intelligent and endearingly leftfield, you should also know that the Volvo XC90 is the sUV it’s oK to love.

am-online.com August 2015 91

IN SEPTEMBER’S ISSUE

C O N TA C T U S

PUBLISHED AUGUST 28

AM, Media House, Lynch Wood, Peterborough PE2 6EA Email: AM@bauermedia.co.uk If you or someone you know are aged 16-24 and are interested in work experience opportunities at Bauer Media, go to www.gothinkbig.co.uk Editor-in-chief Stephen Briers 01733 468024 Managing editor Tim Rose 01733 468266 Associate editor Jeremy Bennett 01733 468261 Senior reporter Danielle Bagnall 01733 468343 AM production Head of publishing Luke Neal 01733 468262 Production editor Finbarr O’Reilly 01733 468267 Designer Erika Small 01733 468312 Contributors Debbie Kirlew, Chris Lowndes, Prof Jim Saker, Richard Yarrow

Getting Škoda back on track Brand director Alasdair Stewart says Škoda is recovering from the ‘disappointment’’ of being ranked worst for franchise value in the NFDA Winter 2015 dealer attitude survey and claims complicated offers and high targets were to blame.

PCP renewals

AM publishing Managing director Tim Lucas 01733 468340 Office manager Vicky Meadows 01733 468319 Group managing director Rob Munro-Hall Chief executive officer Paul Keenan

We look at the ways finance houses should be helping franchised dealers to optimise their PCP renewals.

FCA compliance – the key questions With some dealers requiring up to 26 signatures before they will deliver a new car to a customer, we ask finance and insurance suppliers what they see as the crucial questions dealers need to ask their customers to remain compliant.

ADVERTISERS’ INDEX Alphera Financial Services.....................54 Assa Abloy....................................................82 Autoclenz ............................................36 / 89 Barclaycard Loans.......................................8 British Car Auctions .........................89 / 96 Call It Automotive.......................................45 Cap Network................................................40 Car Benefit Solutions................................97 CDK Global (UK) .......................12 / 20 / 85

98 August 2015 am-online.com

AM advertising Commercial director Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Head of project management Leanne Patterson 01733 468332 Project managers Kerry Unwin 01733 468327 Angela Price 01733 468338 Lucy Peacock 01733 468338 Account managers Sara Donald 01733 366474 Richard Kerr 01733 366473 Kelly Crown 01733 366364 Recruitment enquiries Richard Kerr 01733 366473

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The compact crossover is the most important launch of the year for Honda’s UK dealers and brings long-awaited breadth to the Japanese brand’s range and much-needed volume.

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