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Every level of UK motor retail is now driven by data here are so many trends influencing the ways in which the UK’s motor retail industry may evolve. Hyundai’s growth in shopping centre-based digital stores continue to make the news (page 7), but these will be outnumbered by traditional car showrooms for some time yet. The AM100 autumn update (page 20) shows the UK’s largest franchised dealers are as resilient as ever, with the top performers hitting new heights and the AM100 producing almost £1.5 billion of earnings in total. While the autumn update is a great illustration of the data we gather at AM, this issue’s Face To Face dealer interview with Vertu Motors shows the importance of business data for those steering one of the UK’s largest motor retailers. As you’ll read on page 26, its senior management doesn’t have operating controls that work on a daily basis, but by the minute. The trends it can identify within its business can be used to drive tactical responses to immediate challenges in the business, such as sales targets or stock availability, while data, or occasionally the lack of it, can influence strategic programmes being put in place. Every automotive manager must by now understand the importance of monitoring their business. But what about monitoring the consumer? In this issue, we have conducted an exclusive study to see what the UK motorist expects of their franchised dealer. We hope the results and insight, from page 38 through to page 49, truly influence your thinking. n AM is delighted to introduce a new member of the editorial team, Tom Sharpe. After 10 years in local newspaper journalism, covering news and motoring, he has joined AM as our news and features editor and is already getting out to interview dealers and carmakers.
T
am-online.com/ami/
ouR exPeRt contRibutoRS Prof Jim Saker As director of the Centre of Automotive Management at Loughborough University’s Business School, Saker is a key figure behind the drive for management recognition and skills in the motor retail sector. This month (p33), he says dealers need to ensure the things they choose to measure are truly of benefit to their businesses. Rupert Pontin is head of valuations at Glass’s. With more than 29 years’ experience in the motor trade, he has worked for companies such as BCA and Car Shop, as well as running his own successful independent used car business. In this issue (p34), he says the only way for dealers to examine how they source, present and price their stock is by using as much market intelligence as possible.
the editorial team email: am@bauermedia.co.uk Website: www.am-online.com twitter: @amchatter Linkedin: am-online.com/linkedin
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Stephen briers editor-in-chief
tim Rose Managing editor
tom Sharpe news & features editor
Jeremy bennett Associate editor
Thursday, February 1 1
am-online.com December 2015 3
In this issue December 2015 42 SALES BEHAVIOUR TAKE A LOOK INSIDE YOUR CUSTOMERS’ MINDS
26 Your news
7
15
News digest Volkswagen Group’s emissionsbased woes continue as investigation widens to CO2 and petrol engines; Mazda launches a direct sales and test drive service in London; Digital retailer Rockar and Hyundai announce opening of second store; and Marshall Motor Group acquires SG Smith Holdings for £24.4 million.
Market intelligence
13
Dealer throughput
14
New car registrations
The UK has the highest sales per dealership in Europe.
Industry bodies talk of stability returning after year-on-year registrations record a fall for the first time in 43 months.
4 December 2015 am-online.com
18 20
FACE TO FACE VERTU
Dealer profitability
Franchised dealers made an average profit of £73,200 in September, a £1,000 drop.
Used cars
The average wholesale value of used cars rose in October despite a sustained rise in volumes.
AM100 autumn update
How Vertu monitors every aspect of its business Chief executive Robert Forrester and commercial director David Crane explain how a business the size of Vertu Motors creates the solutions that bring their furthest outpost within reach – even if it can’t solve the people problem.
Jim Saker’s view from the business school Satisfaction is the wrong measure. The most successful businesses aim to build relationships with customers to ensure their return.
34
Why there’s no such thing as too much intelligence
35
AM Poll
38
AM survey: What buyers really expect from dealers
Observations of their 2014 accounts show the UK’s largest dealer groups reported ‘resilient’ combined earnings.
Insight
26
33
To succeed, dealers need to examine closely not just what they are buying, but also how they are presenting and pricing their stock, writes Glass’s Rupert Pontin.
The question of whether consumers should see clear market prices leaves dealers divided.
We’ve surveyed hundreds of consumers in partnership with Motoring.co.uk to find out what they expect in the car buying and aftersales journeys.
For the latest motor retail industry news, visit am-online.com Sign up to get AM news daily by email: am-online.com/newsletter
55
AM USED CAR CONFERENCE ADVICE AND ANALYSIS FROM OUR EXPERT SPEAKERS
60 FIRST DRIVE AUDI A4
42
47 52 55
The differences between used and new car buyers Data on consumers’ preference for finance, part-exchanging and even how quickly they choose can help dealers see inside their minds and even influence change.
What do your aftersales customers really want? With independents winning more share of the service and repair market, dealers need to adapt to changing customer needs.
AM Award winner: Jardine Motors Group
Having won the AM Best Fleet Dealer award this year, group fleet director Andy Wade shares how Jardine is structured to exceed its fleet customers’ demands.
AM Used Car Market Conference report The latest expert insights into how dealers can run better used car operations.
Showroom
60
Audi A4
62
Mazda2
63
Honda Civic Tourer
The German brand’s compact executive saloon enters its ninth iteration and takes a page out of its luxurious big brother’s book.
Clever Skyactiv technology has ensured that this supermini can outpace similarly priced rivals.
A nice package in the metal, Honda’s PCP offers are ensuring the Civic doesn’t pack too high a price.
Coming soon
66
In January’s issue – published December 18 Gary Savage, chief executive of Mercedes-Benz UK, reveals why it has become the highest-rated franchise in the UK; and the DS 4 reviewed.
DEALERS AND SUPPLIERS IN THIS ISSUE: Alphera Financial Services...............................43 ASE ............................................................................ 15 Aston Martin........................................................... 15 Audi.......................................7, 8, 10, 52, 53, 60, 61 Auto Trader.............................................................43 Barclays Partner Finance .................................57 Bentley...................................................................... 15 Black Horse............................................................43 BMW......................................................15, 47, 52, 61 CACI...........................................................................42 CAP............................................................................55 Carshop....................................................................56 Citroën......................................................................62 Codeweavers .........................................................43 Dacia...............................................................8, 10, 14 Daihatsu...................................................................62 DS........................................................................62, 66 Endeavour Automotive ..........................................8 Experian Automotive...........................................42 FLA .............................................................................13 Ford ............................................................14, 62, 63 Glass’s.......................................................................56 Google.......................................................................57 Honda....................................................................7, 63 Hyundai .........................................................8, 15, 55 ICDP.....................................................................13, 47 Infiniti...................................................................15, 61 Jaguar................................................................52, 61 Jardine Motors Group.........................................52 JCT600......................................................................10 Jeep............................................................................16 John Clark Motor Group....................................10 Kia .............................................................................. 14 Knights BMW.........................................................47 Land Rover .....................................................15, 52 Lean Enterprise Academy.................................57 Marshall Group ........................................................8 Maserati................................................................... 15 Mazda.............................................................7, 15, 62 Mercedes-Benz......................................7, 8, 61, 66 Mini ............................................................................14 Mitsubishi ...................................................................8 MotoNovo ................................................................43 Motoring.co.uk.......................................................38 Motors.co.uk...........................................................43 NAMA........................................................................56 NFDA......................................................................... 15 Paragon Automotive...............................................8 Perrys Motor Sales..............................................57 Peter Vardy.............................................................10 Peugeot.............................................................10, 62 Picador ........................................................................8 Porsche..............................................................10, 15 Progress Group.....................................................10 Renault ..................................................8, 10, 62, 63 Renault Retail Group..............................................8 Rockar .........................................................................8 Seat..........................................................7, 14, 31, 52 Sikken ..........................................................................7 Škoda .................................................7, 8, 14, 52, 63 SMMT........................................................................ 14 Suzuki .................................................................10, 14 Swansway Group..............................................8, 47 Toyota ...............................................................52, 57 Trusted Dealers ....................................................56 Vantage Motor Group.............................................8 Vauxhall ................................................8, 14, 26, 62 Vertu Motors ..........................................................26 Volkswagen .....................................7, 8, 14, 52, 53 Volvo ......................................................14, 49, 61, 63 Whocanfixmycar.com..........................................48
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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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F O R d A i L Y N E W s , V i s i t: am-online.com
Rockar and hyundai to open second store New store to open in Westfield shopping centre, Stratford, east London.
t O G E t A M ’ s F R E E d A i LY 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 FOLLOW AM ON tWittER: @amchatter
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John Clark Motor Group The Scottish dealer group has added the Renault, Dacia and Peugeot franchises to its network.
EMissiONs sCANdAL
iN BRiEF
VW Group CO2 ‘irregularities’ may affect 800,000 vehicles
MCLAREN
Figures for CO2 emissions and fuel consumption on some Volkswagen models may have been set too low during the certification process, the manufacturer said following a review connected to the NOx scandal involving its diesel engines. The latest revelation also affects petrol engines and came as the German regulator, Kraftfahrt-Bundesamt (KBA), widened its investigations into the emissions scandal to more than 50 brands. Customers taking delivery of new cars from Volkswagen, Audi, Skoda and Seat are being asked to sign a letter confirming they understand that the CO2 figures and fuel economy figures may change. The brands’ websites have all updated their footers with the line “Our CO2 and consumption values are provisional and are currently under review. Revised values will be published if necessary.” If the figures are found to be incorrect, it will have implications in the fleet market, where company car taxation is set through CO2 levels. Consumers may also make a case for claiming compensation. According to a report in The Financial Times, VW may offer European customers the chance to sell their vehicles back to dealerships at current market value if tests uncover that emissions have been understated by more than 10%. However, a VW spokesman told Automotive News Europe that fuel efficiency deviations were incorrect by a margin of 10%-15%. He said models affected
include VW, Seat and Skoda models that use 1.4-litre, 1.6-litre and 2.0-litre diesels built in 2012 and later. He said models identified that could be affected so far include VW Golf, Polo, Passat, Audi A1 and A3, Seat Ibiza and Skoda Octavia models. VW’s 1.4-litre ACT petrol engine is also affected. In a statement, VW said: “The board of management of Volkswagen AG will immediately start a dialogue with the responsible type approval agencies regarding the consequences of these findings. “This should lead to a reliable assessment of the legal and the subsequent economic consequences of this not yet fully explained issue.” VW estimates the latest issue may cost the company more than £1.4 billion. This is in addition to the £4.7bn the company has set aside to deal with the NOx emissions scandal. While many of VW’s rival manufacturers have already gone on the record to say they have not cheated emissions tests, KBA said it had “verified indications from third parties regarding unusual pollutant emissions”. A KBA spokesman said it had been working since September to determine whether further manipulation of emissions is taking place in the market: “The studies include more than 50 different vehicles from domestic and foreign manufacturers. “Based on raw data, partly increased nitric oxide levels in different driving and environmental conditions have been identified so far,” he added.
McLaren has launched the first model of its new Sports Series, which the manufacturer claims will help double its global volumes to 4,000 cars a year by 2018. McLaren has already taken more than 1,000 orders for the £143,250 570S Coupe, which will be followed by the £126,000 540C Coupé and another bodystyle in 2016.
AstON MARtiN Aston Martin dealers across the UK have been left shaken but not stirred by a visit from James Bond’s new DB10. Aston Martin has been using its marketing tie-up with the film to draw customers to showrooms with appearances of the car designed for Spectre, the latest film in the 007 franchise. The first event saw more than 500 people attend the Aston Martin Works showroom in Newport Pagnell.
hONdA MAzdA
Mazda has launched a direct sales and test drive service in some London boroughs to boost business in areas where it has no dealership presence. The MyWay scheme has been launched in cooperation with seven of Mazda’s franchised dealers in the M25 area. The idea could be introduced in other locations if it proves successful. Customers can order a car online, test drive it at home or at work, get a part-exchange valuation at a location of their choosing
and Mazda will also pick up and drop off vehicles for servicing work. Customers wishing to use the service must create an account at the mazdamyway.co.uk website. Finance can also be arranged online and a live chat service is
available for customers that need help. Mazda has appointed a team of 12 based in Euston to operate Mazda MyWay. It says is has not employed sales people, but “brand champions” focused on customer service. The service currently operates in Barnet, Brent, Camden, City of London, Ealing, Enfield, Greenwich, Hackney, Hammersmith and Fulham, Haringey, Hillingdon, Islington, Kensington and Chelsea, Lambeth, Lewisham, Merton, Newham, Southwark, Tower Hamlets, Waltham Forest, Wandsworth and Westminster.
Honda has named Chiswick Honda the Sikken Bodyshop of the Year in its first Bodyshop of the Year awards. Bodytek Taunton scooped the PPG Bodyshop of the Year prize.
MERCEdEs-BENz Mercedes-Benz Cars UK has taken to the small and silver screens to recruit talent from outside the auto industry to its dealer network. A TV advert was shown during Channel 4’s new series of Fargo and will be shown in cinemas during December before Star Wars: The Force Awakens.
am-online.com December 2015 7
NEWS DIGEST
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
ROCK AR
digital retailer Rockar and hyundai are to open a second store, at Westfield shopping centre in stratford, east London. The new site will begin trading on December 4. As with the original store at Kent’s Bluewater shopping mall, the 250-square-metre store will be staffed by salaried ‘product angels’ and a vehicle purchase can be completed on in-store tablets. tony Whitehorn, hyundai UK chief executive, said it was a business model that had proved popular and successful. “Importantly, it’s capturing a new type of customer,” he told AM. “The industry average age of a new car buyer is around 52, but at Rockar is 39. More than half of them are female, over 90% have never bought a Hyundai before, and over 80% have never bought a new car before.” Ironically, it’s the i10 city runabout – traditionally bought by older customers – that has made up more
than 50% of Rockar sales. “Considering this is a brand new concept with no repeat purchasers, it’s great and we’re now replicating it in Stratford,” said Whitehorn. He said some elements of the Rockar experience had been transferred into the rest of the Hyundai network. For example, with more than 50% of buyers completing their Rockar purchase online and out of hours, it has led to the creation of a complete online service booking facility for all dealerships. “We’re becoming more of a 24/7 industry. It’s not about being open, it’s about being accessible out of hours. People don’t always want live chat, but they do want to have the facility to send an email or make a purchase in their own time, not the dealer’s. That’s where things are going. “We’ve learned that people don’t go there to buy a car, they go to go shopping. We’ve learned that the average spend on a trip to a shopping mall is £250, so you need to have your deposit under £250 and your monthly payments the same. That way, you might get a customer.”
wP E O P L E N E W s BARRY JONEs Renault Retail Group has appointed Barry Jones as managing director of its UK operations, replacing Richard Hemming who takes on a new role outside the group.
JAMiE sCOtt Paragon Automotive has appointed Jamie Scott as its head of new business and strategy for remarketing. Scott joins the business from Manheim, where he held a number of senior roles.
L AUR A WiLLiAMs MARshALL
PiCAdOR
The deal includes a retention of £1.7m subject to performance conditions and the completion of certain property developments and finalisation of accounts. Marshall acquired the entire issued share capital of SG Smith from Robert Smith (the son of the founder and managing director) and investors. Smith will remain with Marshall for a time to assist with the integration process, before retiring. SG Smith has dealerships across Kent, Surrey and London, representing Audi, Skoda and a Mercedes-Benz commercial vehicle aftersales franchise. daksh Gupta, Marshall group chief executive, said: “The business is a good cultural fit for the group and we are delighted to be growing our relationship with Audi, strengthening our Skoda representation and extending our partnership with Mercedes Benz in commercial vehicles.”
Picador is a Vauxhall specialist and the Renault and Dacia franchises are the first non-GM brands the group has added to its business since it opened in 1963. simon hawker, Picador Renault general manager, said: “It’s a monumental step for Picador and we’re certain that in Renault and Dacia we have chosen fantastic brands to grow with, you can see a real increase in the following for their cars and, with models like the new Kadjar crossover, the product line-up is getting stronger all the time.” The new purpose-built, stand-alone showroom on Portsmouth Road shares the site with Picador’s existing, 23-bay Renault service centre.
Marshall Motor holdings has acquired family-owned sG smith holdings for £24.4 million.
Picador has opened its first Renault and dacia new car franchise with a new site in southampton, following the opening of its authorised repair centre in March this year.
Vantage Motor Group has appointed Laura Williams as group resourcing specialist to help with a recruitment drive. Williams previously worked as a recruitment manager for Asda.
EMMA sOBLE Mitsubishi Motors in the UK has promoted Emma Soble from her position of dealer support manager to general manager, network development, due to the growth the brand has experienced.
JOhN dOORBAR Swansway Group has promoted John Doorbar to head of business at Crewe Audi, from his current role as general sales manager. He replaces John Nimbley, who was made head of business at Swansway’s new Stafford Land Rover showroom.
JOhN FRENCh E N d E AV O U R
Endeavour Automotive has acquired haddocks hyundai in a share capital deal for an undisclosed sum. The Haddocks dealerships in Colchester and Frintonon-Sea in Essex take Endeavour to four sites with the South Korean franchise. The group also has six Volvo businesses, taking its total to 10. John Caney, Endeavour Automotive managing
8 December 2015 am-online.com
director, said: “I am delighted to have strengthened our relationship and geographical spread with Hyundai UK. “The Haddocks business is a fantastic opportunity with a great territory, loyal team of staff and produces a positive set of results. “This is a great fit for the group and expands our reach beyond our existing territory.” Caney launched Endeavour Automotive in 2012, after he had sold his previous AM100 dealer group, Wayside, to Jardine Motors Group in 2011.
John French has returned to Skoda UK, as head of sales operations. French previously worked for Skoda UK’s planning team before spending three years in China as Volkswagen’s regional sales and marketing strategy manager.
market intelligence 14
new cars
new car registrations fell for the first time in 43 months in October, down 1.1% year-on-year..
15
18
profitability
the average dealer made £73,200 profit in September, down £1,000 on the figure achieved a year previously.
the news in depth
Used cars
sponsored by
the average wholesale value of used cars rose 3.4% yearon-year in October, according to nama.
UK dealers sell most cars per outlet in europe average British dealer sells 535 cars a year, more than 200 ahead of nearest rival, France he UK has some of the most successful dealers in europe, with the highest average sales per franchised outlet across the big five european markets, according to the latest data from iCdp. UK dealers sell 535 new cars a year on average. France and italy trail behind at 325 and 322 respectively, while spain and Germany lag even further behind. iCdp has published its 2015 edition of the european Car distribution handbook, which provides network figures for 36 brands across 36 european markets. According to iCdp, the average sales per main dealer figure varies widely, depending on the brand type and relative market position. in general, as the name suggests, european volume brands have the highest average sales per main dealer at an average of 362, and they also have the largest figures for individual brands, with Volkswagen recording an average of nearly 600 sales per main dealer and Renault more than 500. Following on from these brands, are the big three German premium brands of BMw, Audi and Mercedes-Benz, all recording an
t
AV e R A G e s A L e s p e R M A i n d e A L e R B Y B R A n d t Y p e A n d M A R K e t, 2 0 1 5
Source: ICDP, ECDH
800 700 600 500 400 300 200 100 0
France
Germany Premium
average of more than 300 sales per main dealer across europe. despite this, the premium brand category comes in third, behind Asian volume brands, on 302 sales per main dealer, and premium on 244. iCdp said this is due to a very tight spread among Asian volume brands, with toyota the highest at 338 and Kia the lowest at 252, a spread of less than 100. this compares with a spread of nearly 400 for premium brands. however, niche premium brands such as smart, Jaguar, Alfa Romeo and Jeep have an average sales per main dealer figure of less than 100,
Italy european volume
asian volume
a figure more comparable with “Other” and smaller Asian brands. gareth arnould, icDP researcher, said: “At the macro level, network performance in terms of average new car sales per dealer has grown, driven by a combination of network reductions and stronger new car sales in recovering markets. “this growth will undoubtedly help dealer performance at an individual outlet level, and may convince network planners to halt network reductions – a move that we feel would be unwise given changing customer behaviours and threats to aftersales profitability.”
s e p t e M B e R 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 new cars bought on finance by consumers through dealerships sep 2015 Change on 3 months to previous year sep 2015 Value of advances (£m) 2,640 +16% 4,538 number of cars 156,835 +10% 274,550 new cars bought on finance by businesses through dealerships number of cars 48,583 +4% 124,302
Spain asian
Source: FLA
Change on previous year +15% +10%
12 months to sep 2015 15,590 957,063
Change on previous year +14% +9%
-4%
508,911
+8%
United Kingdom Other
F i n A n C e s tAt s point-of-sale consumer new car finance was up 10% by volume and 16% by value in september, compared with the same month last year, according to Finance & Leasing Association (FLA) figures. the percentage of private new car sales financed by FLA members through dealerships was 79.6% in the year to september 2015 – another record high. the point-of-sale consumer used car finance market also reported new business volumes up by 10% in september, while the value of new business increased by 13%. geraldine kilkelly, head of research and chief economist at the Fla, said: “in september, the point-of-sale consumer car finance market has continued to grow in line with our expectations for 2015 as a whole. the range of finance products available to consumers through car dealerships has contributed to more than four years of consecutive monthly growth in new business.”
am-online.com December 2015 13
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n e w c a r r e g i s t r at i o n s
1
1 2 3 4 5 6 7 8 9 10
BRAND Jeep SsangYong Lotus Smart Abarth Infiniti Mitsubishi Porsche MG Jaguar
YTD (%) 185.84 116.32 75.00 69.04 66.71 64.13 51.95 44.03 29.19 26.29
r i ser s & fa l l er s
Jeep remains at the top of the risers’ table and looks secure with only two months to go in 2015. its growth, more than 6,000 extra units, has been fuelled by the renegade small sUV, which is being promoted on 0% aPr PcPs with monthly payments of only £199 after deposit and a £1,500 deposit contribution from the manufacturer. its growth seems to be at the expense of its sister brand fiat. Despite the italian brand telling AM it was seeking 20,000-unit growth in 2015, the volume has not materialised for its dealer network. its registrations are actually more than 2,000 units down on the same point last year. 10 9 8 7 6 5 4 3 2 1
BRAND Fiat Seat Bentley Suzuki Alfa Romeo Chrysler Chevrolet Mia Perodua Proton
YTD (%) -3.68 -6.95 -7.36 -7.89 -10.37 -92.31 -99.68 -100.00 -100.00 -100.00
6
16 December 2015 am-online.com
Marque
October 2015 % market share
2014
% market share
Ford Vauxhall Volkswagen BMW Audi Nissan Mercedes-Benz Peugeot Toyota Hyundai Kia Land Rover Škoda Citroën Renault Fiat Mini Volvo Honda Mazda Seat Jaguar Suzuki Mitsubishi Dacia DS Porsche Lexus Jeep Smart Alfa Romeo Abarth SsangYong Subaru Bentley Infiniti MG Maserati Aston Martin Lotus Chrysler Chevrolet Mia Perodua Proton Saab Other British Other Imports Total
22,081 15,891 13,970 13,938 13,182 10,392 9,924 6,347 6,164 6,049 5,712 5,192 4,924 4,683 4,550 4,408 4,112 3,684 3,368 2,921 2,338 1,929 1,851 1,571 1,401 1,159 1,144 992 847 735 396 310 222 201 169 166 159 120 77 66 1 0 0 0 0 0 73 245 177,664
24,221 19,005 15,495 10,558 12,893 11,934 8,741 5,867 6,233 5,892 5,981 3,695 5,078 5,748 4,754 4,646 5,262 3,946 3,028 2,336 3,450 1,127 1,744 1,784 2,047 0 948 1,096 398 183 356 117 127 216 131 53 188 97 55 8 108 10 0 0 0 2 64 92 179,714
13.48 10.58 8.62 5.87 7.17 6.64 4.86 3.26 3.47 3.28 3.33 2.06 2.83 3.20 2.65 2.59 2.93 2.20 1.68 1.30 1.92 0.63 0.97 0.99 1.14 0.00 0.53 0.61 0.22 0.10 0.20 0.07 0.07 0.12 0.07 0.03 0.10 0.05 0.03 0.00 0.06 0.01 0.00 0.00 0.00 0.00 0.04 0.05
12.43 8.94 7.86 7.85 7.42 5.85 5.59 3.57 3.47 3.40 3.22 2.92 2.77 2.64 2.56 2.48 2.31 2.07 1.90 1.64 1.32 1.09 1.04 0.88 0.79 0.65 0.64 0.56 0.48 0.41 0.22 0.17 0.12 0.11 0.10 0.09 0.09 0.07 0.04 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.04 0.14
Year-to-date % 2015 % market change share -8.84 -16.39 -9.84 32.01 2.24 -12.92 13.53 8.18 -1.11 2.66 -4.50 40.51 -3.03 -18.53 -4.29 -5.12 -21.85 -6.64 11.23 25.04 -32.23 71.16 6.14 -11.94 -31.56 0.00 20.68 -9.49 112.81 301.64 11.24 164.96 74.80 -6.94 29.01 213.21 -15.43 23.71 40.00 725.00 -99.07 -100.00 0.00 0.00 0.00 -100.00 14.06 166.30 -1.14
290,409 227,991 196,411 138,247 146,482 135,359 126,433 90,940 87,768 76,672 69,920 55,073 65,068 71,021 63,771 56,275 51,294 36,075 46,931 40,844 42,858 19,895 30,557 19,671 21,787 5,708 10,703 11,610 9,267 7,098 4,320 2,339 2,903 2,935 1,196 1,057 2,620 1,281 804 329 137 9 0 0 0 0 640 1,842 2,274,550
12.77 10.02 8.64 6.08 6.44 5.95 5.56 4.00 3.86 3.37 3.07 2.42 2.86 3.12 2.80 2.47 2.26 1.59 2.06 1.80 1.88 0.87 1.34 0.86 0.96 0.25 0.47 0.51 0.41 0.31 0.19 0.10 0.13 0.13 0.05 0.05 0.12 0.06 0.04 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.03 0.08
2014
% market share
% change
286,975 229,362 184,157 124,078 139,380 118,824 107,837 91,285 82,288 71,456 68,519 49,178 65,464 72,290 55,486 58,427 41,846 34,730 47,130 33,709 46,061 15,754 33,175 12,946 20,630 0 7,431 9,725 3,242 4,199 4,820 1,403 1,342 2,356 1,291 644 2,028 1,018 750 188 1,781 2,774 5 27 1 3 688 1,207 2,137,910
13.42 10.73 8.61 5.80 6.52 5.56 5.04 4.27 3.85 3.34 3.20 2.30 3.06 3.38 2.60 2.73 1.96 1.62 2.20 1.58 2.15 0.74 1.55 0.61 0.96 0.00 0.35 0.45 0.15 0.20 0.23 0.07 0.06 0.11 0.06 0.03 0.09 0.05 0.04 0.01 0.08 0.13 0.00 0.00 0.00 0.00 0.03 0.06
1.20 -0.60 6.65 11.42 5.10 13.92 17.24 -0.38 6.66 7.30 2.04 11.99 -0.60 -1.76 14.93 -3.68 22.58 3.87 -0.42 21.17 -6.95 26.29 -7.89 51.95 5.61 0.00 44.03 19.38 185.84 69.04 -10.37 66.71 116.32 24.58 -7.36 64.13 29.19 25.83 7.20 75.00 -92.31 -99.68 -100.00 -100.00 -100.00 -100.00 -6.98 52.61 6.39
market iNtelligeNce
Sponsored by
October used car values up 3.4% year-on-year, to £5,441
U S E D C A R VA L U E T R E N D S (£ ) 9,633
9,478
9,673
9,670
7,319
7,318
9,719
9,727
9,662
➡
45,358 £9,533 £9,848 95.27% 95.96%
Inflation
Part-exchange Oct 2014 Oct 2015 88.72
-0.1ppts
89.04
Inflation fell 0.1% in the year to October 2015, the same rate as September, according to the Office of National Statistics’ Consumer Prices Index. Rent and food prices are rising, it said.
70,949 69,361 £4,136 £4,401 94.17% 96.38%
Unemployment
-1.2ppts
Nearly new October 2015 7.67
The Office of National Statistics said UK unemployment for the period from July to September was 5.3%, down 0.1ppt on the last quarter and down 1.2 ppts, from 6.5%, a year earlier.
7,221 £21,776 100.28% Average age (months) Average mileage Average value Sales vs CAP
manheim Fleet £ manheim Part ex £
9,700
Average weekly pay was £492 between July and September, including bonuses, up 3% on the same period last year. Excluding bonuses, the average weekly wage was £463, up 2.5% year-on-year.
47,497
Mortgages
+8.7%
Bca Fleet £ Bca Part ex £
10,000 9,533
+3%
39.56
➡
Retail stock acquisition BCA’s average ex-fleet car value rose £148, or 1.5%, in October to £9,848, setting another record. It was up 3.3%, or £315, year-on-year, with average age static and mileage slightly lower. Simon Henstock, Bca Uk’s operations director, said: “Although October’s values look exceptionally strong, rising average values are not the whole story. Volumes have climbed in recent weeks and while ready-to-retail cars are selling quickly and often for well above guide valuations, there are increasing numbers of poorer quality cars reaching the wholesale markets.” Manheim’s Market Analysis for October showed the average selling price of ex-fleet vehicles dropped £151, or 2%, since September, to £7,371. The average value was £326, or 4.6%, ahead year-on-year.
Pay
Fleet/leasing Oct 2014 Oct 2015 39.82
➡
Trade-in disposal The UK’s largest motor auction group, BCA, reported that average values for dealer part-exchanges climbed in October for the second consecutive month and reached a new record. The rise of £67, or 1.5%, to £4,401 also left the month £265, or 6.4%, ahead year-onyear. Average part-exchange mileage was slightly lower year-on-year, but average age was a month greater. At Manheim’s auction rooms, the average part-exchange value for October was down £67, or 1.8%, month-
on-month to £3,567. Year-on-year, the average value was up 5.2%, or £177, despite a 33% rise in volumes. Daren Wiseman, valuation services manager at manheim, said: “The slight dip in average selling prices in October was entirely expected, and the year-onyear figures were particularly impressive given the significant growth in our auction volumes.”
ECONOMIC I N D I C AT O R S
➡
The average wholesale value of used cars rose in October, according to the National Association of Motor Auctions (NAMA). The average value of all cars was £5,441, a rise of £50, or 0.9%, above September’s average. It was 3.4%, or £178, higher than October 2014. October’s volume of used cars through auctions rose by 2,698 units, or 2.4%, to 114,986 units, a 12% increase yearon-year. At 80%, the first-time conversion rate was flat on a year earlier. NAMA’s data showed vehicles in the ‘late and low’ segment, covering cars up to two-and-a-half years old, dropped in average value by 3.2% year-on-year as volume rose by almost 1,400 units.
YEAR-ONYEAR
9,648
9,700
7,363
7,522
9,848
The Council of Mortgage Lenders said 28,600 first-time buyer loans were issued in October, up 4% month-onmonth and 8.7% year-on-year.
7,371
Credit card borrowing
8,000 7,358 7,045
7,518
7,461 7,204
7,158
6,948
➡
9,126
+6%
6,693
There were 6% more credit card purchases in September than in September 2014. There were 222 million transactions, worth £12.4 billion, up four million and £3 million respectively on August, the British Banking Association said.
6,000
4,000
4,188
4,113
4,075
3,390
3,395
3,383
3,268
Oct 14
Nov 14
Dec 14
Jan 15
4,041
4,184
4,348
4,397
4,278
4,268
4,243
3,536
3,438
3,367
3,308
3,396
3,411
3,469
Feb 15
Mar 15
Apr 15
May 15
Jun 15
Jul 15
Aug 15
4,334
4,401
3,634
3,567
Sep 15
Oct 15
House prices
12 months to Sep 2015 11,682 1,113,325
Change on previous year +13% +8%
38,395
-15%
+5.3%
Source: FLA
Used cars bought on finance by consumers through dealerships Sep 15 Change on 3 months to Change on previous year Sep 2015 previous year Value of advances (£m) 1,082 +13% 3,120 +13% Number of cars 101,018 +10% 294,249 +9% Used cars bought on finance by businesses through dealerships Number of cars 4,013 +13% 8,935 -12%
➡
2,000
4,136
The Land Registry said house prices rose 1% in September on the previous month. The yearon-year rise was 5.3%, taking the price of an average UK home to £186,553.
am-online.com December 2015 18
Events
www.am-online.com/events
Be a part of the sharing community Date
Event
Venue
January 29 2016
AM Executive Breakfast Club
Simpson’s in the Strand, London
February 3 2016
AM Digital Marketing Conference
Ricoh Arena, Coventry
February 11 2016
AM Awards
ICC, Birmingham
April 14 2016
AM Customer Service
Midlands
May 2016
AM Executive Breakfast Club
Simpson’s in the Strand, London
June 16 2016
AM-IMI People Conference
Park Plaza, Riverbank, London
June 16 2016
AM100 Dinner
Park Plaza, Riverbank, London
September 15 2016
AM Digital Dealer Conference
Midlands
AM AWARDS 2015 WINNER’S PROFILE
BEST FLEET OPERATION: JARDINE
‘Fleet needs a greater level of consistency’ Taking a long-term view and investing in the right staff have paid off, explains Jardine’s group fleet director Andy Wade By Jeremy Bennett ower margins, higher service expectations and the need for volume are just some of the reasons dealers find fleet business challenging, but in five years Jardine Motors Group’s fleet operation has increased pre-tax profits by 7%, turnover by 60% and more than doubled units sold. The secret of its success, which saw Jardine win Best Fleet Operation at the 2015 AM Awards, is consistency and management buy-in, according to group fleet director Andy Wade. “The fleet market is core to our business and we’re in it for the long term,” said Wade. “Unlike some companies that dip in and out of the market tactically, we are developing decades-long strategic relationships with customers and suppliers.” Colchester-based Jardine is number seven in the AM100. It supplies more than 54,000 new and used cars, carries out 800,000 service and bodyshop hours per year and represents 23 brands from more than 70 locations. It has retained 98% of its fleet customers for more than three years. Its business supplies to about 54% national fleet (leasing companies and large corporate users), 33% SME (small and mediumsized enterprises) and 13% Motability sales. The group is a preferred supplier to seven of the top 10 leasing companies in the UK, including Lex Autolease, Zenith, Arval, LeasePlan and Leasedrive. Some of the end-user fleets Jardine works with include Prudential, Whitbread, Capita, Pentland and PricewaterhouseCoopers. As well as cars, Jardine supplies Volkswagen and Toyota LCVs.
L
52 December 2015 am-online.com
Success, Wade believes, has been built on longterm management support, beginning more than three years ago when he started with the business. “There was a recognition that fleet provides some consistency,” he said. “Retail is more of a reactive market, there are inherent peaks and troughs. Fleet needs a greater level of consistency. Winning contracts with leasing companies and maintaining the relationships is also built on consistent understanding of the marketplace.” Fleet margins may be lower than retail, but Wade said the market cannot be ignored: “Half the new car market is fleet and if you don’t play in this segment, you’re immediately cutting yourself off from the opportunity. “The brands Jardine represents, particularly premium, are heavily oriented towards fleets: Audi is more than 50% and one to watch is Jaguar, which is saying much of its growth in the next two to three years will be in fleet.” One of the ways Jardine achieves this consistency is by providing the department with sufficient resources. In 2014, it added Wade’s position to represent customers at board level, reporting directly to chief
executive Neil Williamson. Wade is responsible for a co-ordinated approach to fleet from the individual franchise directors. Jardine has also: ■ created a directorship for corporate accounts, sales and aftersales to ensure it understands the needs of its large fleet customers throughout the lifecycle of their vehicles ■ created a business development manager responsible for prospecting new end-user clients across all the franchises it holds ■ recruited more local business development managers (LBDMs) to “get closer to customers”. Following an investment of £350,000, Jardine now has eight LBDMs: three Audi, two BMW, and one each for Volkswagen, Seat and Škoda. It is likely to add to their number in acknowledgment of growing fleet business expected for Jaguar Land Rover models. Wade said: “Local business is seen as a more sustainable part of the fleet market. It’s also more profitable, because the discounts tend to be lower, they are local to our centre typically, so our delivery costs are less and they tend to come to us for servicing.” Vehicle numbers determine who is responsible for what business. Businesses requiring up to five cars are treated as retail business; between five and 300 units is an LBDM opportunity; and anything beyond this is national fleet. Prospecting new business is based on simple tactics: tracking finance renewal dates, identifying
“Half the new car market is fleet. If you don’t play in this segment, you’re immediately cutting yourself off” Andy Wade, group fleet director, Jardine Motor Group
MOTORS GROUP Dave Timmis, MD, ContractHireAndLeasing. com (right), presents the Best Fleet Operation award to Peter Owen, director – corporate accounts, sales and aftersales, Jardine Motors Group
AWA R D S SP ON S OR
CONTRACT HIRE AND LEASING COMMENT David Timmis, managing director, ContractHireAndLeasing.com
fleet customers in the workshop who weren’t supplied by Jardine and ensuring the branddedicated LBDMs pass on leads to each other. “If a client the BMW LBDM is talking to wants an Audi, they have to take it on the chin and pass it on rather than let another dealer group win the business from us,” said Wade. Innovation has also been key to Jardine’s success. In January 2014, it became the first dealer to offer its own fleet proposition to its 3,000 staff through salary sacrifice. All staff who have been with Jardine for more than 12 months qualify for a twoor three-year contract and can choose from any brand in the group portfolio. With Leasedrive as its partner, Jardine effectively became its own fleet customer. While it gave Leasedrive its salary sacrifice business, Jardine gained through picking up normal supply business to corporate end-users. “It got us in the door to work with a leasing company we didn’t have a particularly strong relationship with,” said Wade. He said Jardine can now advise existing clients “with authority” on salary sacrifice “as well as differentiate ourselves from other dealers”. Jardine is trialling an aftersales plan with LeasePlan, which Wade said has enormous potential benefits for the group and its customers. Jardine is working with the leasing company to direct more into its dealerships. The benefit is increased incremental aftersales turnover and profit for Jardine, a share of which is returned to LeasePlan, so lowering its costs. In the six months before the project launched, Jardine’s aftersales turnover with LeasePlan increased by 9% year-on-year. But since the launch of the pilot, aftersales transactions in three months increased 28% and in one month by 60%. Wade also emphasises ways in which Jardine helps end-users through new approaches. For
V W EMISSIONS SCANDAL Wade said the fleet market is dominated by pragmatism: “There will be some negative impact for VW and its fleet business, but generally speaking I don’t see the issue having a massive impact. “We’ve had one customer, who has only Škoda from the VAG Group on its fleet, asking what the charges would be to return the cars,” Wade said. “But I don’t think they will, as it would prove very expensive.” example, Jardine recognised that its client Whitbread was incurring significant costs due to unallocated cars and early terminations. “Instead of paying large termination fees on a car when an employee left the business, we collect and store it until it is reallocated,” Wade said. “Before delivering the car back we do a safety check and cosmetic repairs, then a full handover to the new driver. The approach provides an additional revenue stream for us and saved Whitbread thousands of pounds in termination costs, plus ensured it fulfilled its health and safety commitments.” It is also extending the use of video from the retail side of the business to the fleet side. All of Jardine’s Volkswagen and Audi retail businesses have CitNOW cameraphones and the group has decided to invest across all other brands. “We’ve said to LeasePlan, since we already have the technology, we’re keen to bring more of the retail experience to the fleet driver,” said Wade. Leasing companies, he believes, are in a commoditised business. Each is looking for a differentiator, typically at the driver level. He believes Jardine will continue to succeed in fleet by taking an approach that goes beyond merely supplying and servicing vehicles.
As the UK’s number one leasing website, ContractHireAndLeasing.com was proud to sponsor such a strong and pertinent category at the 2015 AM Awards. I must admit when I saw who was up for the Best Fleet Operation award, I thought the judges had a tough decision, with four top names in the hat, but it made perfect sense that Jardine Motor Group won out in the end. Since their small, family-run business beginnings four decades ago, Jardine has expanded into one of the most respected names in the industry and now represents 23 manufacturers at more than 70 UK locations. Lex Autolease deemed them the UK’s best dealer in 2014, but the numbers speak for themselves. Jardine’s fleet division turned over £137 million last year and won contracts from major fleet companies, such as LeasePlan and Arval. Fleet deliveries reached 10,000 units, following 8% growth, but what was more impressive was that a third of those went to SMEs, making it their fastest-growing sector. After bolstering their fleet staff workforce with some new faces and introducing some inspired touches to their customer service, it’s easy to expect 2015 will be even bigger for Jardine Motor Group.
am-online.com December 2015 53
Exclusive networking opportunity – one night to meet the automotive retailing industry under one roof Book early and secure a premium table position for the AM Awards 2016
11 February 2016
www.am-awards.co.uk
For tickets and tables contact Emma-Louise Kinnaird on 01733 395133 or email emma-louise.kinnaird@bauermedia.co.uk
INSIgHT AM Used Car Conference
Headline sponsor
Make more of your used car operation Advice and analysis from our expert speakers on the used car market Do we NeeD A New CUStoMer ServICe MoDeL?
USeD CAr MArket: PASt, PreSeNt & fUtUre
NeeD to kNow
NeeD to kNow
n Customer satisfaction scores ‘are a poor indicator of customer loyalty’ n Pressure to hit a certain CSI score can lead to customers being pestered rather than engaged Professor Jim Saker, director of the Centre for Automotive Management at Loughborough University The industry’s focus on customer satisfaction measurement is a fallacy, according to Saker. Businesses manage what they can measure, and value what they measure, but unfortunately for motor retail it is relationships that bring buyers back, not satisfaction. Saker asked what does the industry actually value: “For years we’ve been driven by customer satisfaction scores and I believe this has led to a culture which is both dysfunctional and actually doesn’t tell us anything about what we should manage.” Underpinning this is the belief that if a customer is completely satisfied, they are loyal, he said, but that is fundamentally incorrect. Yet dealer bonuses are linked to scoring top grades of satisfaction. Saker said satisfaction is a weak emotion, so why bother measuring it? He also criticised industry processes for measuring it, which pester the customer to give a high score through
“If you can build a relationship in an effective way, then those customers do come back” text messages, emails and phone calls. He talked of a dealer group in Asia that conducts its satisfaction surveys with iPads during the customer’s visit. A poor score illuminates a light in the group managing director’s office. “The problem with all this is it generates certain behaviours,” said Saker. “It forces people to try to hit a score. The challenge is to build a relationship with customers with an engagement that supersedes satisfaction measures. “Why is it that somebody comes back to you? It’s to do with trust, integrity, being taken care of etc, and it’s something that attracts them back. If you can build a relationship in an effective way, then those customers do come back and will give you other opportunities.” Different approaches to motor retailing, such as Rockar Hyundai, are underpinned by a digital approach to purchasing a vehicle and don’t involve a salesperson driven by a need to achieve a satisfaction score. While many have dismissed this idea, it’s actually looking at building the relationship in a different way, he said.
n CAP falling used car values to continue for the rest of 2015 n However, it says fluctuations in the used car market are normal Derren Martin, senior car editor, CAP A combination of continuous growth in the new car market in the 43 months to October, pre-registration activity and the dominance of PCPs, will lead to instability in the used car market, but nothing dealers should be overly concerned about. The last few years of booming sales have brought an unusual stability to the market, but this is not the norm, said Martin. Values are already coming down and CAP expects this to continue for the rest of 2015. “That’s not to say that demand isn’t fairly steady, but there’s more cars that have come back into the market from September. There is demand for the supply now. “But demand will tail off as we head towards the end of the year and the supply remains available.” Martin said the key pressure points on the market are: n New car finance, and PCPs in particular, will continue to be a cornerstone of the market with the ongoing phenomenon of used car buyers being enticed to buy new. “But we do need used car buyers.”
n Pre-registration activity, particularly at month end, will put pressure on late-plate models and this will wash down to older vehicles as well. n Current used car prices are perceived as high in the market, as the CAP monthly dealer survey showed in September. n Negative media coverage around emissions and diesel. “There has not yet been much impact on the valuations of diesel cars. But there might begin to be if it carries on,” Martin said. “Perhaps there is a case for a scrappage scheme for older diesel vehicles. “Scrappage was introduced originally to generate more registrations, but it could be used as a way to get some of the dirtiest cars off the road and boost the standing of the industry.“ n As the European economy continues to improve and the euro gets stronger, pumping vehicles into the UK will not be as attractive. CAP forecasts the 2016 new car market to be 2.6 million units. However, this does not mean a slackening of the pressure on the used car market as there is still plenty of volume set to come into it. “Overall there will be slightly more pressure on used car prices next year. The pressure has started already and will continue for the remainder of 2015. And dealers have told us [prices] are too high,” Martin said. “But this is not to be taken wholly as a negative. The recent stability, positivity has been unusual. 2016 will see a return to the normality we experienced prior to the recession – the normality of fluctuation.”
am-online.com December 2015 55
INSIgHT AM Used Car Conference PrePArING UNwANteD StoCk for AUCtIoN
NeeD to kNow n Not selling a car first time can cost dealers £40 per unit n Dealers’ price expectations for poor-quality trade-ins are too high Paul Hill, chairman, National Association of Motor Auctions Putting trade-ins in poor condition through auction with unrealistic value expectations can cost dealers £40 for each unit that doesn’t sell first time. NAMA data shows the proportion of part-exchange vehicles coming through auctions in slightly poorer condition is higher than it has been for some time. Volumes are up 5% – 1.2 million cars are predicted to go through auctions in 2015 – and the growth is being driven by manufacturer and dealer cars because fleet stock has remained fairly flat. Hill talked about the NAMA grading process of vehicle condition and the
link to values. Between grade 1 and grade 5 cars sold at auction there is a 19% difference in the percentage of CAP Clean value achieved. Of grade 1 vehicles, 89% are sold first time, while only 60% of grade 5 vehicles are sold first time because vendors’ price expectations are too high. With the delay to re-entry, the cost of not selling the car first time is £40 per unit, said Hill. “There are too many dealers that still want to chase the value they’ve put in the deal, and that first-time conversion rate will go, that attractiveness to the buyer will go and all they’ll do is increase their stocking value and the actual value for the vehicle will fall.” Hill said NAMA has identified trends showing independent car supermarkets are now buying more grade 1 and grade 2 cars. However, most dealer part-exchanges put through auction are in grade 3 and grade 4 condition. He urged dealers to invest in vehicle preparation. With low-value cars, a polish will suffice, he said, but for stock valued above £5,000 there is a strong return-on-investment case for SMART repairs.
“There are too many dealers that still want to chase the value they’ve put in the deal” web AS A PILLAr of tHe USeD CAr StrAteGy
NeeD to kNow n Mobile-responsive website more efficient than separate sites n Images vital to encourage customers’ purchase decisions Leo Nelson, marketing director, Carshop “Rather than having one or two people 100% focused on digital, it’s about aiming for 100% of the people being at least 10% digital,” said Nelson. Used car supermarket chain Carshop had operated separate desktop and mobile websites, which meant everything had to be planned and delivered twice, said Nelson. Its new website was planned and developed in-house following customer research and live testing. Nelson said the transformation had two objectives – to improve customer experience, and to increase lead
56 December 2015 am-online.com
volume by driving conversion through the website. “Consumers are no longer finding cars through dealers, instead they’re finding dealers through cars. So the first interaction is online through your own website or a third-party website such as Auto Trader, so it’s crucial that first experience be a good one.” About 23% of Carshop’s business comes through reserve and collect. Nelson said this is a clear indication of growing consumer confidence towards an online purchase. Stock pages need to highlight the top features of a vehicle and give a clear call to action, he said. Carshop found 60% of users head directly to one of its showrooms, rather than call or email in advance. The importance of great images cannot be underestimated, Nelson said, as these encourage the customer to make a purchase decision while on the website. Video content also helps the business to communicate messages to the customer in a better way than giving them pages and pages of text.
AN INteGrAteD bUSINeSS APProACH
NeeD to kNow n Shift in diesel residual values unlikely n New car market growth will push down used car prices Steve Jackson, chief car editor, Glass’s Jackson presented insight on a number of topics: Diesel cars The demonisation of diesel in the press in the past two or three years, with a concentration of criticism in the past six months – and added to by the Volkswagen group emission issue – has arrested the 10-year trend of movement from petrol to diesel cars purchases. Petrol and alternative fuels are now seeing a resurgence. Jackson emphasised that arguments about diesel’s reliability and efficiency would remain paramount, particularly as the proportion of diesel cars on UK roads is small compared with its dominance in the commercial vehicle sectors, especially light commercial vehicles and trucks. “Unless there’s a shift in the commercial vehicles’ use of diesel,
we won’t see a shift in the residual values.” Annual new car registrations glass’s predictions for annual new car registrations: 2015: 2.6 million units (+5%/123,000 units year-on-year) 2016: 2.652m (+2%/52,000) 2017: 2.678m (+1%/26,000) The growth will be fuelled by the appeal of PCP offers, fleet sales, and, Jackson said, population growth. “We’ve not seen a significant shift in the number of cars coming to the market due to PCP contracts coming to an end and the resultant downward pressure on prices,” Jackson said. “But it will happen. There’s a lot of budget cars and older stock around. As manufacturers appeal to buyers with continued sales campaigns, the price of budget stock will be impacted first and it will work its way throughout the market.” Pre-registration activity From September 2014 until March 2015, there has been a 71% increase in first-time adverts of new registration plate stock, suggesting a significant change in pre-reg activity. From March to September this year, the figure rose a further 8.3%. This equates to a year-on-year increase in dealer pre-registrations of 85%.
LINkING CUStoMer ServICe AND ProfIt
NeeD to kNow n ‘there is a huge opportunity to sell more to existing customers’ n only 16% of used car enquiries result in a viewing appointment Neil Addley, managing director, trusted Dealers “Customer satisfaction in used cars is the key to driving loyalty and ultimately profit in our businesses,”
said Addley. “But customer satisfaction will be pointless if it doesn’t lead to action. If you’re measuring it and act on it, you will sell more cars.” He cited research by Capgemini on customer loyalty, which found that the more satisfied a customer is, the more loyal they become to a brand. From studying the customers of about 1,000 dealers on Trusted Dealers, 27% of people had bought from the dealer at some point before.
However, only half of that 27% had bought their previous car from the same dealer. It means there is a huge opportunity to sell more to existing used car customers. Consumers searching online want information and need to gain trust in the dealership. A crucial opportunity for dealers lies in making appointments when online consumers make contact. Currently, only 16% of used car enquiries result in an appointment being booked to view the car. It is simply not offered in half of cases, Addley said. One group Trusted Dealers worked with has raised this conversion rate to 28%. Lost prospects are another opportunity. One in two consumers who did not buy after contacting a dealer told Trusted Dealers they’d not had enough information from the dealer, and one in four were still awaiting a call back from the dealer. “There’s a lot of stock around, but you don’t need to spend any more money, if you focus, to turn more of those enquiries into sales.”
Headline sponsor
tHe fINANCe CUStoMer’S JoUrNey
DIGItAL INNovAtIoN to SUPPort USeD CAr SALeS
NeeD to kNow
NeeD to kNow
n Dealers have to reach customers at the right time with the right offers n finance tools can pre-qualify and pre-approve customers Andrew brameld, sales director, barclays Partner finance The point in the used car buying process at which consumers are exposed to pointof-sale finance is likely to come forward in the near future, said Brameld, because the consumer loves the convenience of online research. The industry has to reach the customer at the right time with the right offers, then they’ll come to the dealership ready to buy and seeking to “fine tune” the deal they want. Data will fuel the dealers’ ability to do this. Knowing customers inside out so the communication is right will be crucial, because there is no ‘one size fits all’ solution. The finance company must act as an enabler, he said.
“We have to make everything we do convenient to the customer. People are time-poor these days” Tools such as parity calculators are allowing finance companies to inform their dealer clients when a customer with motor finance is able to come back into the market to change their car. Barclays Partner Finance has also developed a tool to pre-qualify and pre-approve its customers even before they’ve set foot on its dealer partners’ forecourts. It allows the customer to learn any discounts available through their mobile phone once they arrive on the forecourt, and can transfer their information to the dealers’ sales system to ease the paperwork before signing digitally. “We have to make everything we do convenient to the customer,” he said. “People are time-poor these days.”
n Dealers need to concentrate on building engagement online rather than just pushing sales n All staff have a digital role Lee Manning, digital marketing manager, Perrys Motor Sales Technology is hard to master, but dealers have to master it to better serve the consumer, said Manning. Prior to 2012, Perrys’ website was all about sales promotions, but since then it has improved its digital channels to serve its customers better and improve their experience. The changes were driven by consumer feedback, led by an understanding that digital retailers need to start with the
customer and then work back to the technology. Now that customers are taking more of their car-buying journey online, dealers need to grasp this and cater for it. This includes thinking about all the touchpoints in that journey, influencing change, and building engagement rather than simply screaming ‘buy this, buy that’. Examples of Perrys’ work includes videos explaining what happens in an MOT test or test drive. He said dealers need to humanise their online content for the customer and also must help their staff, from the receptionist upwards, to understand what digital change means. “I’m sure you all can tell me your targets for next quarter, the changes in the industry’s used car prices etc, but how well do you know your customer journey. Because the benefit we’ve found is the deeper we get into what our consumers want, the better things have been for us,” Manning said.
tHe MobILe webSIte exPerIeNCe
NeeD to kNow n Customers’ digital experiences must be seamless across platforms n 27% of customers ‘will switch websites if you’re not good enough’ Hugh Dickerson, senior industry head of automotive, Google “Our consumer has completely changed and we need to change with it, and in this fast-moving world multidevice is king,” said Dickerson. Dealers need to provide a seamless connection between the experiences on all technology platforms. People look at their mobile 150 times a day and google has identified ‘multiple micro-moments’ in their
used car buying journey where they take a couple of seconds to look at one thing online and a few more later to do something else. “Your job is to connect those dots,” said Dickerson. “You’ve got to identify what are those micro-moments for yourselves, deliver on the needs of those, and measure how well you’re performing for each one.” Mobile searches for used cars are up 40% year-on-year, and are growing so quickly it is likely to surpass desktop and tablet search combined. It means dealers’ websites must work quickly and well on mobile, must provide ‘snackable’ useful information, utilities such as ‘click to call’ buttons and a map to the dealership, opening times and finance availability. “The consumer is brutal. 27% will switch websites immediately if you’re not good enough,” he said. Dickerson advised dealers to search ‘page speed insights’ on google to score their website, and also said they should be measuring their websites’ clicks onto test drive requests and directions to the dealership. “Don’t obsess about leads, obsess about activity and engagement that’s driving customers to your showroom.”
A LeAN APProACH
NeeD to kNow n Lean means creating customer value while eliminating waste n there is no ‘one size fits all’ approach for dealers John kiff, lean coach, Lean enterprise Academy Franchised dealers can improve their performance by adopting ‘lean’ principles, which identify and eliminate tiny elements of waste in the process, said Kiff. Toyota invented lean in its Toyota Management System. It means doing something considerably differently over a period of time, he said. “It’s a focus on creating more customer value while at the same time systematically and continually eliminating waste, through struc-
tured problem-solving at every level. It’s getting more and more of the basics right.” He said waste is the flipside of value, anything a customer wouldn’t want to pay for. It means observing the systems and processes in all parts of the business, including websites that waste the customer’s time demanding they fill in a form. Everything we do is a process, and every process has waste, he said. In used cars, waste can be identified in all areas, from buying stock that doesn’t suit the market to internal battles over preparation and over-ageing. “I don’t think this industry is as good at the detail as it needs to be, certainly not to eliminate the waste and create outstanding results.” Dealerships adopt lean with a diagnostic approach and learn it by doing it. There is no one common solution, Kiff said, and key is that the dealership develops its own solutions to its own problems.
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SHOWROOM 62
Mazda2
Japanese supermini stands up well against the Ford Fiesta, Vauxhall Corsa and VW Polo.
THE CARS DRIVING YOUR BUSINESS
63
Honda Civic Tourer
Compelling PCP deals make the estate a contender in its class.
FIRST DRIVE: AUDI A4 - ON SALE NOW
Lighter, leaner and a lot more luxurious
Now in its ninth iteration, the A4 is up to 110kg lighter and 21% more efficient than its predecessor By Tim Rose udi promises that its A4 compact executive saloon provides an ownership experience in line with its flagship luxury limousine, the A8. The German manufacturer largely delivers on that promise and the A4 looks destined to remain Audi’s secondmost in-demand model (after the A3). With a model range starting at £25,900, the A4 isn’t quite as crammed with technology and luxury as its far more expensive biggest brother, but it is eerily quiet and refined on the road and an extremely fine place to spend a few hours. The company car drivers who’ll account for 60% of its sales and who typically spend the equivalent of 42 days a year behind the wheel certainly will be pleased with their choice of car. This A4 – tagged the B9 generation internally at Audi – is
A
60 December 2015 am-online.com
“The A4 is probably the only genuine premium car in this segment” Ben Fish, head of product, Audi UK
25mm longer than the old model, and has a wheelbase 12mm longer. It doesn’t sound much, but it is noticeably more spacious for rear passengers and the extra length helps it to stand out from the A3 saloon. It also has 480 litres of boot space. Audi UK head of product Ben Fish said: “The A4 is probably the only genuine premium car in this segment, with focus on quality of materials and getting the specification right for the customer. It should not be a compromise for the fleet driver, who expects good value running costs and great materials.” All the A4 saloons fitted with four-cylinder engines have a BIK taxation range of 17-23% for company car users and CO2 emissions of less than 140g/km. Audi claims the A4 has the most advanced on-board technology of any car its size. Entry-grade SE cars come with xenon headlamps with LED daytime running lights, three-zone climate control, rear parking sensors, keyless start, 17in alloys and cruise control. It also comes with an Audi smartphone interface that allows the driver to display smartphone data, such as navigation, on the car’s seven-inch screen. “People look to have their own personality in their car and as they live and die by their smartphone, they do expect connectivity,” said Fish.
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
a longer wheelbase gives more room for rear passengers
Price £25,900-£38,950 Engines 1.4TFSI petrol: 148bhp; 2.0 TFSI petrol: 187bhp/248bhp; 2.0TDI turbodiesel: 148bhp/187bhp; 3.0TDI turbodiesel: 215bhp/269bhp Performance 0-62mph 5.3-8.9secs, top speed 130-155mph Transmission 6sp man, 7sp auto, 8sp auto, FWD, AWD Efficiency 47.9-74.3mpg, 99-141g/km RV 3yr/30k 47% Rivals BMW 3 Series, MercedesBenz C-Class, Jaguar XE, Infiniti Q50, Volvo S60
What your custoMers Will reaD aBout the auDi a4 autocar audi’s new a4 is impressive in all respects, but most notably for the hushed, slick and refined way it drives, as well as its overall ambience of sophistication.
company car drivers will account for 60% of a4 sales Avant estate versions also get a powered tailgate and electrically retracting luggage cover over their 505-litre boot. Half of all orders are expected to be for Sport trim, a £950 walk-up from SE. It gains integral MMI navigation with a three-month subscription to the online services and internet browsing provided by Audi connect. Other features include cloth sports seats, a sports steering wheel, an upgraded audio system and sporty exterior styling tweaks. For a further £1,500, the customer can choose the topspec S Line grade. Expected to appeal to 30% of buyers, it comes with 18in alloys, part-leather upholstered sports seats, LED headlamps and rear lights with dynamic indicators that illuminate in a progressive sweeping action. It also has sports suspension, although customers can choose the A4’s standard suspension at no cost, and distinctive bodystyling. The crucial powertrain in the line-up is the 2.0-litre TDI, available in 148bhp ‘ultra’ guise and a 187bhp version. The 2.0 TDI ultra with six-speed manual specifically targets the business motorist, with official combined cycle fuel efficiency of 74.3mpg and CO2 of 99g/km. That’s an improvement of almost 10% over the equivalent
the a4 has the most advanced on-board technology of any car its size, according to audi prior A4 and it puts it in the 17% band for BIK. It’ll cost nothing to tax annually either, but its list price of £29,150 in SE trim is £3,250 higher than the cheapest petrol-engined A4, which hosts a 1.4TSI turbo unit that also produces 148bhp. It is just as quick and manages 53.3mpg. Although only offered in SE and Sport trim, this 1.4TSI could be the one to offer SMEs and company car drivers who have concerns about Audi’s recent emissions scandal and who won’t cover huge mileage. The other powertrains on offer are an 187bhp 2.0-litre turbo petrol and a 248bhp version capable of reaching 62mph from standstill in under six seconds, so might appeal to the petrolhead family guy. It’s only offered with quattro all-wheel drive, but manages to keep CO2 emissions down to 136g/km so isn’t ruinous for VED taxation. There are also two V6 diesels producing 215bhp or, in range-topping form, 269bhp. The performance diesel, like the sportiest petrol, is also only available with an eight-speed auto gearbox and quattro all-wheel-drive and is exclusively sold in S Line trim. At £38,950, this derivative is deep into the larger A6’s price bracket, but provides for those few customers who’ll want the ultimate A4.
Daily telegraph for its passengers, the a4 does feel a little more spacious than most of its rivals. in the back, there’s more headroom than all except the BMW 3 series, while up front, the a4 beats the 3 series and matches the c-class. go for an a4 ultra, which is the super-frugal version with low-rolling-resistance tyres, and the fuel consumption figures are impressive, bettering those of every rival. there’s no downside to choosing one of these models, either, so they’re the ones to have. evo the best a4 yet. the 3 series is still a sharper drive, but the a4 leads the class for refinement and technology.
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IN JANUARY’S ISSUE
C O N TA C T U S
PUBLISHED DECEMBER 18
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 News and features editor Tom Sharpe 01733 468343 Head of digital/associate editor Jeremy Bennett 01733 468261 AM production Head of publishing Luke Neal 01733 468262 Production editor Finbarr O’Reilly 01733 468267 Designer Erika Small 01733 468312 Contributors Chris Lowndes, Rupert Pontin, Debbie Kirlew, Prof Jim Saker, Tom Seymour, Piers Trenear-Thomas 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
Mercedes-Benz UK chief executive Gary Savage talks to AM about how stable partnerships and sustainable sales growth have put the franchise top for popularity in the UK motor retail industry.
AM F&I Compliance Conference Report
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
Experts share their advice for dealers to keep within the spirit of the FCA’s consumer credit and insurance regulations.
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First drive: DS4
Easi Drive Accident Management.........50
Marketing Delivery....................................45
Emac...............................................................44
Mercedes-Benz UK ...................................65
GForces ...........................................................6
MDF 360 ........................................................44
Hitachi Capital Vehicle Solutions....36-37
Nextgear Capital UK .................................19
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Premia Solutions........................................46
Printing: Headley Brothers Ltd, Kent
Standing apart from Citroën, the DS brand expects its new premium hatchback to impress more than 4,000 buyers a year.
ADVERTISERS’ INDEX Autoclenz ......................................................59 Black Horse .....................................12,15, 45 British Car Auctions ............................45,58 Call It Automotive.......................................31
Infomedia......................................................68 Institute Of The Motor Industry.............11 Ivendi...........................................................9,63 Karcher (UK) ...............................................58 Lawdata.........................................................59
Steele-Dixon & Associates ....................65 Supagard.......................................................44 Symco Training ...........................................35
Car Care Plan..............................................44
Lloyds Banking Group..............................12
Tracker Network Systems......................31
Chris Eastwood Automotive...................65
Manheim Retail Services...........................2
Trader Publishing ...............................40, 64
Dealer Management Services ...............29
Mapfre Abraxas UK.............................17, 45
Trusted Dealers..........................................10
66 December 2015 am-online.com
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