www.am-online.com May 2015 £8.00
NISSAN / P21
AUTOMOTIVE MANAGEMENT
New showroom CI puts the car buyer at the core
FAC T T O FACE / P 2 8
‘NOBODY TRIES HARDER THAN US… NOBODY’ MD Grant Long explains how Norfolk Motor Group has stamped its authority on the area with a relentless focus on customer satisfaction
MA ZDA 2 / P62
TRENDS / P36
Taking on the big boys of the B-segment
What you need to know about the new used car customer
EFFICIENCY / P4 6
15 ways to boost your pre-owned profitability
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Dealers need to be ready for a new breed of used car customer inance has transformed new car sales of late, but what impact have fixed monthly payments, shorter replacement cycles, younger stock and the ability to search nationwide had on the traditional used car customer? One thing is for certain: despite strong retained values keeping screen prices high, the consumers have more buying power than ever and your sales and marketing teams need to understand how to influence their choices and win their custom. Our insights on page 36 and page 40 examine the latest consumer trends affecting the used car market. One particular is the consumer’s growing appetite for easy-to-understand finance, arranged at the dealership. However, the finance sector says many dealers still fail to properly put finance at the front of their used car proposition and could be missing out on sales as a result. Maybe the used car’s screen price should be replaced by a monthly payment offer the customer knows they can budget for. On page 21, Nissan reveals its new strategy to impress customers and make them feel welcomed by its retail network. The contrast between how a global brand and a small, regional motor retailer approaches that aim is aptly illustrated by our face-to-face interview with Norfolk Motor Group on page 28. On a separate note, we’ve relaunched AM-online.com and if you’ve not visited it yet, please do so and let us know what you think.
F
philip nothard He is retail and consumer valuations editor at cAP, which he joined in 2010 after two decades working in motor retail, culminating in running dealerships for european motor Holdings, lythgoe motor Group and Arnold clark. In this issue (p26), he suggests a simple formula for dealers to calculate exactly how much their over-age stock costs them daily. 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 looks at the changes technology is bringing to the sector, such as a camera that can tell how a test drive is going.
The editorial team Email: am@bauermedia.co.uk Website: www.am-online.com Twitter: @amchatter LinkedIn: am-online.com/linkedin
AM & IM People Con I ference B
ook tic ampeopleckoets today at: nference.co .uk Jeremy Bennett Editor
Tim Rose Managing editor
Danielle Bagnall Senior reporter
June 11, 2 015 am-online.com May 2015 3
In this issue May 2015 WHO IS THE NEW USED CAR CUSTOMER?
36
PCP
used car market
26-28 months
WILL USED CAR VALUES EXPLODE IN 2015?
40
28 FACE TO FACE NORFOLK MOTOR GROUP MD GRANT LONG
Your news
7
News digest This month’s round-up includes Marshall’s £40m AIM flotation; the FCA is to outlaw automatic opt-ins for add-on products; record results for Perrys Motor Sales; and RAC Cars makes its listings free for all dealers and consumers.
Market intelligence
13
New car registrations Registrations hit a 16-year high in plate-change March.
15
Dealer profitability
17
Used cars
The average UK motor dealer lost £13,500 in February.
The average value of all cars in March was £5,251, down £316, or 5.7%, on February’s average and 0.2% below March 2014.
4 May 2015 am-online.com
Analysis
21 23 26
Nissan’s new CI puts customers at the core
To fight the dramatic fall in showroom visits, Nissan is redesigning its showrooms to give customers a more welcoming, seamless and interactive experience.
33
Jim Saker’s view from the business school
34
The key to brilliant customer service
Making Nissan fit for fleet Nissan is refining its focus on its corporate customers to top last year’s record fleet registrations.
Have you counted the cost of your overage stock?
CAP’s Philip Nothard takes a look at a formula that takes the emotion out of stocking.
Insight
28
customer satisfaction to build loyalty and stamp its authority on the area.
How one niche dealer takes on the nationals
Managing director Grant Long on how Norfolk Motor Group has used
36
Could Twitter let carmakers see into the future?
First figure out the service balance you want to provide, says M&S customer service head Jo Moran.
Get to know the new used car customer
We examine how finance, shorter replacement cycles and younger stock affect the pre-owned sector.
40
Is 2015 the year used car finance finally explodes?
45
Are used car values on course for a crash?
Used car HP and PCPs are forecast to increase, but dealers still face challenges.
We ask experts in remarketing and valuations where the market is heading in the next 18 months.
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:
21 NISSAN PUTTING CUSTOMERS AT THE CORE
62
MAZDA2 TAKING ON THE B-SEGMENT’S BIG BOYS
46 52 55
15 ways to boost your pre-owned profits
64
Suzuki S-Cross
AM Poll
65
Mazda3
67
Volkswagen Golf
We explore how to increase the efficiency of your used car operation. Most dealers believe their used car sales have suffered because of the new car market.
Stretch your profits with extended warranty sales
Warranties offer dealers increased revenues and retention from reassured customers.
Dealers are looking forward to an update of Suzuki’s crossover car this autumn, which may include the first diesel automatic.
With a flood of new models, Mazda’s product image, value and pricing have been rated more highly by dealers.
A prowl through Volkswagen’s online test-drive booking facility reveals online users’ most in-demand car is the Golf.
Coming soon Showroom
62
Mazda2
The stylish and well equipped Mazda2 should do well in the UK’s tough supermini segment.
70
In June’s issue – published May 22
Swedish-style personal service as Volvo rolls out the franchise’s new corporate identity; how dealers can fight the fast-fits; the best from the AM Aftersales Conference and the Fiat 500X reviewed.
Ageas .....................................................................7 Allianz Global Assistance..............................55 Alphera Financial Services ..........................40 Aston Barclay....................................................45 Auto Trader................................................36, 46 Automotive Compliance ............................... 44 Autorola ..............................................................50 BCA.......................................................................37 Black Horse.......................................................42 CAP................................................................45, 47 Car Care Plan ...................................................55 CitNow .................................................................47 City Auction Group.............................................8 Clive Brook...........................................................7 Close Brothers Motor Finance................... 44 Co-operative Motor Group ...........................56 Experian Automotive......................................36 FCA .........................................................................7 GForces...............................................................48 Glass’s......................................................7, 42, 45 IMI ........................................................................18 iVendi....................................................................48 Jaguar Land Rover............................................8 Jemca Car Group ............................................46 John Clark Motor Group .................................8 KPMG...................................................................37 Lookers .................................................................8 Manheim......................................................38, 47 Mann Island Finance ......................................42 Mapfre Warranty .............................................55 Marks & Spencer.............................................34 Marshall Motor Group .....................................7 MG...........................................................................9 MotoNovo Finance...........................................42 Motorline...............................................................9 Motors.co.uk...............................................37, 47 Movex...................................................................47 MyCarCheck Trade .........................................38 Nationwide Accident Repair...........................9 Nissan...........................................7, 8, 14, 21, 23 Norfolk Motor Group......................................28 Paragon.................................................................7 Perrys....................................................................8 RAC Cars..............................................................8 Retail Automotive Alliance ...........................56 Riverside Motor Group.....................................9 Romans International.....................................48 Savilles ................................................................56 Seat.........................................................................8 Swansway Garages ........................................18 The Warranty Group.......................................56 Trident Garages................................................56 Warranty Direct................................................55 Wessex Garages..............................................40 WMS Group........................................................55
am-online.com May 2015 5
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
8
F O R D A I L Y N E W S , V I S I T: am-online.com
RAC Cars Used car classified advertising service removes charge for listings.
T O g E T A M ’ S F R E E D A I L Y N E W S L E T T E R , V I S I T: am-online.com/newsletter FOLLOW AM ON TWITTER: @amchatter
Marshall £40m LSE flotation to fuel further acquisitions Chief executive Daksh gupta said the move would accelerate the growth path the company has been on for the past six years, enabling more sizeable acquisitions and expansion of its existing operations. The flotation on the alternative investment market (AIM) by the private, family-owned business saw the placing of 26.9m shares – or 38.4% of the total – at 149p per ordinary share. Shares in the company were trading at 182p at the time of going to press. The
Marshall family now owns about 66% of the business. In addition to the £40m, Marshall also has access to £75m in a revolving credit facility. The company also has a new board. Alongside Gupta are Peter Johnson, non-executive chairman, chief financial officer Mark Raban (formerly of Inchcape Retail, Borders Group, Selfridges and Safeway); and non-executive directors Alan Ferguson (a non-executive director of Johnson Matthey, Croda International and the Weir Group and formerly of Inchcape); Sarah Dickins (executive people director of Provident Financial Group); Francesca Ecsery (a non-
Mg MG has announced it will open a multi-million pound flagship dealership in London’s Piccadilly.
IN BRIEF
MARSHALL MOTOR HOLDINgS
Marshall Motor Holdings has raised more than £40 million in its flotation on the London Stock Exchange.
10
executive director of Foreign & Colonial Investment Trust, Share and Good Energy Group); and Christopher Sawyer (a former chairman of Lorien Ltd and a nonexecutive director of Marshall Cambridge Holdings since 2008). The directors have a shareholding of about 1.3%. By the end of 2014, Marshall Motors had exited 21 non-core or loss-making franchises, while making 12 acquisitions and building six start-ups.
NISSAN A Nissan open point at Dumfries has been filled with the appointment of family-run car dealer Crossflags. The dealership is operating from a temporary facility on the site of a former petrol station off Huntingdon Road in the centre of the town until a permanent one is developed nearby.
gL ASS’S A new data provision deal has been agreed between information services company Experian and Glass’s. Experian has won the contract to provide the vehicle information, which enables Glass’s to link its data and propositions to a specific vehicle via the vehicle registration mark (VRM).
PA R Ag ON FCA
The practice of requiring consumers to opt out of purchasing add-on products is to be outlawed by the Financial Conduct Authority (FCA).
CLIVE BROOk
Clive Brook has acquired its second site from Harratts group, with the acquisition of the Volvo dealership on Leeds Road, Huddersfield. Clive Brook said: “I created Clive Brook Ltd, which took over the then struggling Harratts site in Bradford. The team here has transformed the dealership into one of Volvo UK’s best-performing sites after enjoying a record-breaking first seven years, which included winning consecutive Trading Standards award for ‘Excellence in Customer Service’ along the way. “Our appointment will see a significant drive to engage both existing and long-term Volvo customers in the Huddersfield area, with some very keen introductory offers for car sales, service, accessories and parts.” Harratts Group is on a path to turnaround after it posted a £3million loss in 2013.
The FCA is concerned that the practice of defaulting consumers into buying a product, for example by using pre-ticked boxes to sell them add-on insurance, often results in consumers purchasing a product they don’t need. Christopher Woolard, FCA director of strategy and competition, said: “This is about ensuring consumers can make the right decision on what add-on insurance they do or don’t need. Forgetting to un-tick a box at the end of a purchase is not making an informed choice.” The guidance encourages companies to introduce the most common add-ons to consumers earlier in the sales process and says dealers should give the annual price of add-ons, rather than relying on monthly figures.
Paragon has renewed its contract with Vauxhall Motors as its sole provider of vehicle refurbishment. The renewal of the contract will lead to further investment at Paragon’s Corby site. Paragon has also been appointed to handle logistics for vehicles delivered out of the site to Vauxhall dealers. The company’s fleet management system, iSight, will also be deployed on the contract.
AgEAS Ageas UK and Volkswagen Financial Services UK have signed an agreement to provide a new, fully branded motor insurance proposition from Volkswagen, Audi, Škoda, Seat and VW Commercial Vehicle dealerships. Under the agreement, Ageas will underwrite it alongside a selected panel of insurers which it will also manage.
am-online.com May 2015 7
NEWS DIGEST PCPS
Consumers choosing a new car on a personal contract purchase (PCP) will expect some equity to remain towards their next car when the motor finance term ends. Research by Manheim showed that 95% of consumers on a PCP are expected to hand the vehicle back and ‘trade it in’ for a new vehicle on another PCP. However, that ‘trade-in’ is dependent on there being extra value in the vehicle – 80% of consumers expect to have up to 10% equity remaining in the vehicle to take into the next contract. However, separately, one used car market analyst told AM there is some concern that consumers reaching the end of the PCP may be disappointed in future after enjoying several years of finance deals that have been very heavily supported with manufacturer contributions. One dealer group chief recently told AM of a premium brand with a ‘negative equity’ product because its recent volume push had left insufficient equity in some models when PCP customers were due to change. Manheim’s research showed a third of dealers target 75% of their PCP customers for an early exchange.
JOHN CLARK MOTOR GROUP
John Clark Motor Group has expanded its representation of Nissan to three car dealerships in Scotland. Having begun Nissan representation with its takeover of the Stratstone Aberdeen site from Pendragon in 2013, John Clark Motor Group has now opened two new Nissan franchises in Dundee and Perth, creating up to 40 jobs. Both trade under its Specialist Cars brand. Andrew Simpson, dealer principal of both new dealerships, said: “This is another demonstration of our commitment to growth. We are investing heavily across the region and see the Nissan brand as the ideal partner in keeping our business booming.” The Dundee Nissan dealership is set on a prominent site at Specialist Cars’ existing base in Myrekirk Road. The Perth Nissan dealership, in Strathtay Road, is on a brand new site for Specialist Cars, with significant investment made to turn the building into a top of the range showroom.
8 May 2015 am-online.com
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
JAGUAR LAND ROVER
Jaguar Land Rover UK hopes to increase peace of mind in customers buying a used Jaguar or Land Rover vehicle with its revised approved used-car programme. The new programme provides vehicles under five years old and less than 100,000 miles with a two-year unlimited mileage warranty, a 165-point inspection and a consequential damage warranty of up to the vehicle purchase price. Approved used vehicles will get an independent history and mileage check, a 30-day, 1,000-mile vehicle exchange policy, UK and Europe roadside assistance, seven days’ driveaway insurance, and MoT cover. Specifically for Land Rover approved-used, customers are also treated to a half-day Land Rover experience, allowing owners to experience the all-terrain capability.
PERRYS
Car dealer group Perrys Motor Sales enjoyed record revenue and profits in 2014, its annual results show. Revenue increased by 8% to £531 million for the year to December 31 (2013: £491m), while operating profit was at £11m (£7.7m). Profit margin is at 1.9% compared with 1.38% in 2013. Gearing is at 60.21% (79.19%), return on capital employed 12.82% (11%) and EBITDA £13,037 (£9,665). Gross profit margin was 14.4%, compared with 14.3% the previous year. New car unit sales grew by 8% and used by 3%. Gross margin on new vehicles improved by 8% and 10% on used compared with 2013. Vehicle sales accounted for 87% of revenue and 60% gross profit.
RAC CARS
RAC Cars, the used car classified advertising service, has announced its listings are now free of charge to all dealers and consumers. It has made the move after four months of planning in an attempt to “revolutionise” the car classified websites market and to boost its use by dealers, who it says could save thousands of pounds annually in the medium term. Rupert Keane, chairman of RAC Cars, said: “With just a few dominant players in the online used car advertising market, sellers feel like they are being held to ransom and paying top dollar to advertise. “The RAC wants to offer something different that will benefit dealers and private motorists alike.”
PEOPLE NEWS RICHARD HARRISON Seat UK has appointed Richard Harrison as its new director, following the departure of Neil Williamson. Harrison returns to Seat UK from three-and-a-half years at Seat S.A, where he worked as group sales director West Europe, and more recently as dealer network development director, worldwide. Williamson leaves to take up a senior international assignment within Volkswagen Group.
T O N Y D R AY Lookers has appointed Tony Dray as fleet and commercial director. Sitting on the operations board, Dray will report directly to managing director Nigel McMinn. Dray was previously fleet and commercial director at TrustFord.
MARK WHEELER Nissan has appointed Mark Wheeler as its new fleet sales director. Wheeler replaces Michael Auliar, who is moving to a new role as regional director with Nissan Europe. In his new role, Wheeler will directly oversee Nissan’s corporate sales, public sector, contract hire and leasing and dealer fleet teams.
N ATA L I E Y O U N G City Auction Group has appointed Natalie Young as national sales manager. With more than 17 years of experience, she has worked for Manheim Remarketing, Auto Trader Digital and MercedesBenz Retail. In her new role, Young will be responsible for developing director level relationships with franchised dealer groups and car supermarkets.
AM PROMOTION
TRUSTED DEALS FROM THE NFDA By Neil Addley, MD of Trusted Dealers, the advertising website owned by dealers and the NFDA
The National Franchised Dealers Association (NFDA) makes a huge contribution to dealers by representing them as a lobbying group to government, government bodies, the EU and the SMMT. Recent lobbying activity includes interactions with the Financial Conduct Authority over GAP insurance and representing dealers to the Driver and Vehicle Licensing Agency over the changes in number plate administration. On top of these lobbying benefits, the NFDA provides individual as well as generic legal advice and a variety of support services around human resources and accounting. The NFDA also promotes franchised dealers through the Trusted Dealers website.
“The NFDA has added a number of commercial packages with advantageous terms to be enjoyed by its members” To add to the mix, the NFDA has added a number of commercial packages with advantageous terms to be enjoyed by its members. These include confidential waste disposal, print management, stationery and office supplies, vending machines, water coolers, number plates, online recruitment and service plans. These commercial partnerships are designed to help NFDA members save money while offering first-class suppliers to the membership. If you’d like more information on our Trusted Dealers brochure, please email deals@trusteddealers.co.uk. Turning to Trusted Dealers, I’d like to congratulate the team on a record March in generating more than 7,194 50-second calls, up 37% year-on-year, and 1,408 email enquiries, up 48% year-on-year. Now that we are able to offer postcode matching to our members, we are also able to predict the level of enquiries in sales we would be able to generate for you. For more information, call 01423 506 272 or email neil@trusteddealers.co.uk
10 May 2015 am-online.com
NEWS DIGEST RIVERSIDE
Riverside Motor Group has acquired Peter Stockill Limited, which represents Seat and Chrysler Jeep in Hull, for an undisclosed sum. The acquisition comes following Pat Stockill’s decision to retire from the industry, taking the group’s franchise portfolio to five. Riverside director Mark Denton said: “The business fits perfectly for us geographically and we are excited about the prospect of a second Seat dealership in the group.”
MG
MG has announced it will open a multimillion pound flagship dealership in London’s Piccadilly.
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D I G I TA L F I N A N C E
Dealers have been urged to sharpen up the way they display online finance offers, following Lloyds Banking Group becoming the first bank to launch secured digital car finance in the UK. Some dealers see a bigger threat as banks assess the rising potential of direct loans. Initially, Halifax Car Plan Extra is restricted to eligible customers buying used cars through dealerships, but it will be extended to new car PCP and HP deals by summer. Halifax customers can prearrange secured finance for a used car and have the money transferred to a dealership when a sale is agreed.
MG’s Piccadilly showroom
The six-car showroom will be housed in a seven-storey Georgian-fronted building at 47-48 Piccadilly, and will incorporate a state of the art interactive media centre so customers can configure their car. As part of the investment, totalling almost £30million, the building has been sympathetically refurbished and upgraded to accommodate the showroom. MG will run the flagship showroom on the ground floor, with offices in the basement. Above are six floors of executive offices.
N AT I O N W I D E
Nationwide Accident Repair Services has bought bodyshop group Seward in a £3.8 million deal.
MOTORLINE
Seward is the 10th-largest independent accident repair chain in the UK and operates eight bodyshops plus mobile repair services in the region of Poole, Bournemouth, Southampton, Portsmouth and Brighton. For the year ended March 31, 2014, Seward generated revenues of £16m and profit before tax and depreciation of £1.1m. Its net assets stood at £1.5m at March 31, 2014. Nationwide said the addition of Seward’s bodyshops gives it greater coverage in the South and improves economies of scale and flow while extending its presence in its target markets of insurance, fleet and retail. The acquisition was completed just as a takeover bid for Nationwide Accident Repair Services was announced by The Carlyle Group.
The business has been acquired from Arrow Automotive for an undisclosed sum and will be the second Maserati dealership in the Motorline Group. The South East-based dealer group has in recent years expanded into the Bristol and Cardiff areas, so the acquisition fits well with their existing infrastructure. Glen Obee, Motorline chairman, said: “This acquisition highlights our commitment to Maserati after opening the dealership in Maidstone last year.” Motorline represents Volkswagen, Toyota, Lexus, Hyundai, Maserati, Renault, Dacia, Škoda, Nissan and Peugeot as main car dealers.
The Motorline Group has acquired Maserati Cardiff.
market intelligence 14
15
Registrations
Just 10 manufacturer brands accounted for 92% of the growth in first-quarter registrations.
dealer profitability
the average Uk motor dealer lost £13,500 in February, a more than 20% increase over the loss made in February 2014.
the news in depth
17
Used cars
sponsored by
the average value of all cars in march was £5,251, down £316, or 5.7%, on February’s average and 0.2% below march 2014.
Registrations hit 16-year high in plate-change March month’s 6% year-on-year growth driven by 11.6% increase in fleet sector cars U K n e w c a R R e g i s t R at i o n s nearly half a million new cars were registered in the UK during the crucial March 2015 platechange month. the March new car market was 6% ahead of March 2014, according to data from the society of Motor Manufacturers and traders (sMMt), which said it was the best monthly performance since the twice-yearly number plate changes were introduced in 1999. the month’s growth was driven by the fleet sector, which grew by 11.6% to 219,153 cars, while the private market rose by 2.7% to 253,043 units. Business registrations fell by 6.6% to 20,578 units. the sMMt said the 37th month of consecutive growth in the UK’s new car market shows a continuing demand for new products and new fuel-efficient advanced technologies, and growth in fleet reflects the economic confidence currently felt by UK companies. it said the strong UK
R e g i s t R a t i o n s B y M a R K e t s e g M e n t y e a R -t o - d a t e 2015
private 351,571
0
100,000
200,000
300,000
Source: SMMT
Fleet 354,690
private 347,668
2014
targets remain demanding and there is some pre-registration activity. “that said, we believe forecast risk across the sector is firmly on the upside. the sector valuation of the UK dealer groups also continues to look undemanding in our view,” said allen. chris Sutton, Black Horse managing director, said it was good to see a boost come from businesses taking on fleets and upgrading company cars, demonstrating strong business confidence. “the industry has for a while been suggesting that demand will ease for new cars, but based on current data it is hard to predict when this growth will slow down. certainly the continued low interest rate environment coupled with attractive and affordable car finance deals continue to play a strong role in maintaining growth in this part of the UK economy,” said sutton. ■ turn to page 14 for analysis of Q1 performance, and to page 16 for the March registrations’ table.
market has helped to bolster the economy and drive it out of recession. this growth, supported by domestic manufacturing, has attracted more than £14 billion of investment since 2011, creating almost 30,000 additional jobs. mike Hawes, Smmt chief executive, said: “the best month this century for new car registrations is a welcome boost for the UK’s thriving automotive sector. “the challenge for a new government and industry will be to maintain this momentum and to strengthen Britain’s manufacturing capabilities through continued investment, innovation and policies that maintain our global competitiveness.” at stockbroker Zeus, analyst mike allen said the data confirmed its thesis that the sector is in a volume-orientated mid-cycle market, with some margin pressure in new and used cars, and anecdotal evidence that manufacturer
Fleet 309,545
400,000
500,000
600,000
Business 28,327
Business 30,909
700,000
F e B R U a R 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 new cars bought on finance by retail buyers through dealerships Feb-15 change on 3 months to previous year Feb 2015 Value of advances (£m) 626 +3% 2,374 number of cars 41,534 – 3% 148,783 new cars bought on finance by businesses through dealerships number of cars 24,122 – 3% 95,322
800,000
Source: FLA
change on previous year +7% +1%
12 months to Feb 2015 14,104 894,347
change on previous year +14% +9%
+1%
456,113
+11%
F i n a n c e s tat s point-of-sale consumer car finance volumes grew 5% in February, to more than 133,000, said the Finance & Leasing association (FLa). new business volumes in the used car finance market rose 9% compared with February 2014. consumer new car finance volumes fell 3% in February, but were up 9% over 12 months. the percentage of private new car sales financed by FLa members through dealerships was 76% for the year. geraldine Kilkelly, FLa head of research and chief economist, said: “the FLa’s Q1 2015 retail motor finance confidence survey shows that the majority of respondents expect single-digit growth in new business over the next 12 months.”
am-online.com May 2015 13
MARKET INTELLIGENCE T H E T O P 10 Q1 V O L U M E D R I V E R S Mitsubishi Outlander Mitsubishi’s plug-in hybrid helped to push an extra 5,243 units
The Q1 new car market was 46,466 units higher than the same quarter in 2014. Of these, 42,676 units, or 92% of the growth, were accounted for by just 10 brands. 8,439 6,512 5,243
Mercedes-Benz C-Class Registrations of the C-Class rose by nearly 50% yearon-year
5,194 4,117 3,507 2,937
Nissan Qashqai registered almost 45% more in Q1 2015 than in Q1 2014
2,478 2,243 2,006 Year-on-year increase in Q1 registrations
FINANCE OFFERS Škoda has a three-year PCP on the Citigo that requires monthly payments of £75, one of many competitive Q2 offers. Ford’s focus is on 48-month personal leases, with an agreement on a Ka Zetec 1.2 three-door secured by a deposit of £945. Vauxhall’s opening offer on the Adam Jam is a two-year 2.9% PCP on the 1.2 White, which a user paying £99 a month can buy for £6,000 when the contract closes. Vauxhall also has five-year 0% HP deals on some derivatives in the Zafira, Insignia and Mokka ranges. Monthly payments of £189 are needed on a three-year, 6.9% PCP for a SsangYong Korando SE.
The full list can be found at www.am-online.com/offers
14 May 2015 am-online.com
Top finance offers for retail buyers Model
Finance type
For a searchable list of manufacturers’ finance offers, go to www.am-online.com/offers Deposit
Ford Ka Studio 1.2 3dr Personal lease * £1,190 Ka Zetec 1.2 3dr Personal lease * £945 Fiesta Titanium 1.0 3dr Personal lease ** £3,657 B-Max Titanium 1.0 EcoBoost *** Personal lease *** £4,598 Eco-Sport Titanium 1.0 EcoBoost **** Personal lease *** £4,117 Annual mileage capped at 9,000. Excess charge per mile: * 5.71p ** 5.80p *** 5.89p Škoda Citigo SE 3dr 1.0 PCP £2,750.08 Fabia S 1.0 PCP £2,810.74 * Rapid S 1.2 PCP £3,643.46 Octavia Hatch S 1.2TSi PCP £4,855.35 Superb Hatch S 1.4TSi PCP £5,155.05 Yeti S 1.2TSi HP £9,074.00 Skoda deposit contribution * £500 SsangYong Korando SE PCP £3,575 Korando LE PCP £4,451 Korando ELX4 manual PCP £4,973 Rexton SX PCP £5,059 Rexton EX manual PCP £6,361 Turismo S PCP £4,694 Vauxhall Adam Jam 1.2 white PCP £2,682.36 Adam Grand Slam 1.4 PCP £3,002.55 Corsa Excite 1.2 3dr PCP £2,679.56 Zafira Tourer 1.8 HP £6,435 Insignia Energy 1.8 5dr HP £5,344 Insignia Sports Tourer Energy 1.4 HP £6,169 Mokka Exclusiv 1.4 2wd HP £5,419
Term
Monthly payment
Final payment
APR
Offer ends
48 months 48 months 36 months 36 months 36 months **** 7.14p
£119 £135 £159 £209 £179
n/a n/a n/a n/a n/a
n/a n/a n/a n/a n/a
30/06/15 30/06/15 30/06/15 30/06/15 30/06/15
36 months 36 months 36 months 36 months 36 months 24 months
£75 £129 £129 £165 £215 £349
£4,194.92 £4,103.95 £4,226.54 £6,429.65 £5,763.55 n/a
0% 4.8% 0% 0% 2.8% 0%
30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15
36 months 36 months 36 months 36 months 36 months 36 months
£189 £199 £269 £299 £329 £239
£6,625.00 £7,000.00 £7,925 £9,100 £9,400 £6,985
6.9% 6.9% 6.9% 6.9% 6.9% 6.9%
30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15
24 months 24 months 24 months 60 months 60 months 60 months 60 months
£99 £199 £139 £239 £249 £279 £239
£6,000 £7,100 £6,517 n/a n/a n/a n/a
2.9% 2.9% 4.8% 0% 0% 0% 0%
01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15
Sponsored by
The new car market in the first quarter of 2015 was 46,466 units higher than the same quarter in 2014. Of these, 42,676 units, or 92% of the increased volume, were accounted for by just 10 brands, which featured neither the overall market leader Ford nor second-placed Vauxhall. Volkswagen had been the biggest driver of market growth at the end of 2014, narrowly ahead of Nissan. However, the German brand appears to have eased off the accelerator in Q1 2015. Nissan certainly hasn’t – its 8,439-unit growth in volume is double that of Volkswagen’s and accounts for 18.1% of the total industry volume increase. In fact, Q1 saw Nissan increase its share of the new car market by 0.7 percentage points over its full year 2014 result, while Volkswagen lost 0.4 percentage points. The causes of Nissan’s rise are core new crossover cars, strong customer incentives and increased dealer targets. Nissan has registered almost 45% more Qashqai models in Q1 2015 than in Q1 2014, when the first-generation model was still being run out. The X-Trail, which it launched last June as Nissan’s seven-seat crossover to replace the previous 4x4 and the Qashqai+2, notched up a 250% increase in registrations. By comparison, demand for the lacklustre Micra and Note has declined. At Mercedes-Benz, whose 6,512 increase in volume represented 14% of the total industry volume growth, strong Q1 incentives on the C-Class have worked. Registrations of the C-Class rose by nearly 50% year-on-year, and the A-Class and CLA also climbed in demand dramatically, the former mostly in fleet orders, the latter in the retail market. Mitsubishi, which was 5,243 units ahead year-on-year, continues to make hay with its Outlander PHEV plug-in hybrid and ASX compact SUV. With a fleet programme now in place, the Japanese brand has quadrupled its Q1 fleet registrations, and it has almost doubled its retail registrations. n Read our analysis of Nissan’s new CI and fleet programme on page 21
dEALER KPIs Key ratio
Net profit as % sales Overhead absorption Used: New sales Expenses as % gross Sales per salesman Used vehicle stockturn (days) Return on used car investment Overall labour efficiency Service gross profit % on labour Service expenses as % gross Hours per retail job card Parts gross profit Parts expenses as % growth Parts stockturn
Source: ASE
Rolling 12 months Feb 2015 1.37% 54.5% 0.88:1 62.8% 185 55 78.5% 82.0% 75.6% 58.9% 1.63 22.3% 44.6% 7.6
Rolling 12 months Feb 2014 1.46% 56.6% 0.90:1 62.3% 192 53 81.3% 81.3% 75.8% 56.9% 1.65 22.1% 44.6% 7.4
Benchmark
3.0% 80% 1.5:1 50% 150 45 100% 100% 75% 40% 2.5 22% 40% 8.0
The average UK motor dealer made a loss of £13,500 in February, a more than 20% increase over the loss made in February 2014 (£11,100). This has pushed down the rolling 12-month profit percentage to 1.37%, says dealer profitability specialist ASE. “This is not to say profits are falling in absolute terms on a rolling 12-month basis, with the average dealer increasing profits slightly compared to the prior 12-month period,” said Mike Jones, ASE chairman. “The increase has, however, been dwarfed by the increase in turnover we have seen, principally in new car sales. We will have a more precise idea of 2015 profitability at the end of March once Q1 bonuses are recognised.”
AdVERTISEMENT PROMOTION
black horse coMMent By Chris Sutton, managing director, Black Horse The recent plate change sparked the best set of March sales figures since moving to a biannual plate change. Supporting those figures were strong fleet sales, improving consumer confidence and the increasing use of car finance. It is a year since the FCA became the regulator of consumer credit. Its chief executive, Martin Wheatley, reviewed the anniversary by saying: “The broad picture is of a sector that’s beginning to appreciate the importance of placing consumer outcomes at the centre of debates around business strategy. In other words, what we’re seeing here is a positive response to the regulatory agenda.” * We know it has not been easy to embrace the new FCA regime, but at Black Horse, we have recognised the importance of placing the customer at the heart of our business and providing fair customer outcomes. For example, we have enhanced our affordability assessment criteria to consider whether consumers can afford to repay credit across the agreement term and would encourage other finance providers and dealers to do likewise. Remuneration and commission is another key area of FCA focus. We have decoupled the link between remuneration and the interest rate charged to the customer. We believe this will engender trust by providing greater transparency and doing the right thing for consumers. Wheatley concluded his review by saying: “The challenges facing consumer credit are both broad and deep. Certainly, there is no room for complacency.” * This is important. As a sector, we must maintain our consumer focus by improving transparency and value for money, and by providing products with simplified pricing and fee structures. Over the coming 12 months, the FCA will continue to review the Consumer Credit Sourcebook and we can expect them to use their enforcement powers where they consider it necessary. However, regulatory change is not a threat. It is an opportunity to show we are a customer-driven sector. Key to this is considering the spirit of the rules and guidance and FCA Principles for Business when developing business models. Putting the customer at the heart of your business supports the ambition of the motor finance sector and of individual dealers to enhance consumer trust and advocacy. *
www.fca.org.uk/news/consumer-credit-and-the-fca-one-year-on
am-online.com May 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
5
1 2 3 4 5 6 7 8 9 10
BranD Jeep mitsubishi lotus maserati infiniti mg mini SsangYong Subaru Porsche
YtD (%) 280.17 192.26 104.65 100.53 100.00 57.33 53.18 44.99 41.79 27.57
r i ser s & fa l l er s
thanks to rising demand for its cherokee model and an interestfree PcP offer, Jeep’s registrations were five times those achieved in March 2014, and the launch of its new small sUV, renegade, is expected to sustain momentum. suzuki’s registrations have suffered slightly after the launch of its celerio hatchback, which was quickly recalled when a fault was discovered with its brake pedal. 10 9 8 7 6 5 4 3 2 1
BranD Škoda alfa romeo Jaguar Suzuki Bentley chrysler chevrolet mia Perodua Proton
YtD (%) -7.76 -8.76 -9.54 -11.55 -13.77 -83.73 -99.92 -100.00 -100.00 -100.00
10
16 May 2015 am-online.com
Marque
2015
Ford Vauxhall Volkswagen Nissan Audi BMW Mercedes-Benz Peugeot Toyota Citroën Hyundai Renault Land Rover Kia Honda Fiat Škoda Mini Mazda Seat Suzuki Volvo Mitsubishi Dacia Jaguar Lexus Jeep Porsche Alfa Romeo Smart Subaru MG SsangYong Abarth Bentley Aston Martin Maserati Infiniti Lotus Chrysler Chevrolet Mia Perodua Proton Saab Other British Other imports Total
63,466 48,689 38,685 31,026 29,153 26,925 26,616 21,825 20,541 16,770 16,470 15,868 15,508 15,017 11,975 11,924 11,355 10,962 10,084 8,845 7,370 6,662 5,609 5,340 3,903 2,446 2,190 1,928 1,079 1,013 737 661 452 349 250 212 202 153 70 27 1 0 0 0 0 93 323 492,774
December % market 2014 share 12.88 9.88 7.85 6.30 5.92 5.46 5.40 4.43 4.17 3.40 3.34 3.22 3.15 3.05 2.43 2.42 2.30 2.22 2.05 1.79 1.50 1.35 1.14 1.08 0.79 0.50 0.44 0.39 0.22 0.21 0.15 0.13 0.09 0.07 0.05 0.04 0.04 0.03 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.02 0.07
% market % share change
63,149 13.59 50,068 10.77 36,276 7.80 25,529 5.49 28,841 6.20 26,977 5.80 22,369 4.81 21,564 4.64 19,148 4.12 15,601 3.36 14,930 3.21 13,805 2.97 11,987 2.58 14,787 3.18 13,036 2.80 12,749 2.74 12,907 2.78 6,769 1.46 8,576 1.84 9,429 2.03 8,472 1.82 6,827 1.47 1,830 0.39 4,973 1.07 4,150 0.89 2,142 0.46 441 0.09 1,466 0.32 1,134 0.24 823 0.18 505 0.11 361 0.08 295 0.06 305 0.07 250 0.05 199 0.04 103 0.02 34 0.01 26 0.01 409 0.09 1,329 0.29 0 0.00 2 0.00 0 0.00 1 0.00 104 0.02 146 0.03 464,824
0.50 -2.75 6.64 21.53 1.08 -0.19 18.99 1.21 7.27 7.49 10.31 14.94 29.37 1.56 -8.14 -6.47 -12.02 61.94 17.58 -6.19 -13.01 -2.42 206.50 7.38 -5.95 14.19 396.60 31.51 -4.85 23.09 45.94 83.10 53.22 14.43 0.00 6.53 96.12 350.00 169.23 -93.40 -99.92 0.00 -100.00 0.00 -100.00 -10.58 121.23 6.01
2015 94,804 75,176 60,388 46,247 44,919 40,024 40,311 32,913 30,210 25,258 24,866 20,593 20,605 22,265 17,164 18,049 18,731 14,961 14,730 14,158 10,190 10,591 7,970 7,529 4,952 3,686 2,722 2,730 1,438 1,310 950 859 622 528 407 264 375 232 88 96 2 0 0 0 0 166 509 734,588
Year-to-date % market 2014 share
% market share
% change
12.91 10.23 8.22 6.30 6.11 5.45 5.49 4.48 4.11 3.44 3.39 2.80 2.80 3.03 2.34 2.46 2.55 2.04 2.01 1.93 1.39 1.44 1.08 1.02 0.67 0.50 0.37 0.37 0.20 0.18 0.13 0.12 0.08 0.07 0.06 0.04 0.05 0.03 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.02 0.07
13.79 10.80 8.18 5.49 6.36 5.51 4.91 4.71 4.03 3.51 3.36 2.57 2.48 3.14 2.65 2.73 2.95 1.42 1.81 2.04 1.67 1.44 0.40 0.99 0.80 0.44 0.10 0.31 0.23 0.19 0.10 0.08 0.06 0.06 0.07 0.04 0.03 0.02 0.01 0.09 0.37 0.00 0.00 0.00 0.00 0.03 0.03
-0.08 1.19 7.32 22.32 2.63 5.50 19.27 1.48 8.94 4.47 7.63 16.63 20.51 3.04 -6.03 -3.90 -7.76 53.18 17.96 0.96 -11.55 6.88 192.26 10.38 -9.54 21.25 280.17 27.57 -8.76 1.55 41.79 57.33 44.99 25.71 -13.77 2.72 100.53 100.00 104.65 -83.73 -99.92 -100.00 -100.00 -100.00 -100.00 -17.82 143.54 6.75
94,876 74,292 56,271 37,808 43,766 37,937 33,799 32,433 27,732 24,178 23,103 17,656 17,098 21,608 18,265 18,782 20,307 9,767 12,487 14,023 11,520 9,909 2,727 6,821 5,474 3,040 716 2,140 1,576 1,290 670 546 429 420 472 257 187 116 43 590 2,561 5 12 1 1 202 209 688,122
Sponsored by
March’s average used car values fall 0.2% year-on-year Used car wholesale values dropped in March for the second month running, as volumes rose, according to the National Association of Motor Auctions. The average value of all cars was £5,251, down £316, or 5.7%, on February’s average and 0.2% below the same month a year earlier. March’s volume of used cars through auctions rose 11%, or 19,695 units, to 122,543 units.
YEAR-ONYEAR Fleet/leasing Mar 2014 Mar 2015 40.17
Inflation
0 ppts
40.26
manager at Manheim Auctions. He said independents may be planning to match stock to seasonal demands, as 4x4 part-exchange cars fell in value in March, yet prices of executive models rose. “Dealers shouldn’t underestimate the power of seasons on customer buying habits,” he added.
45,575
The CPI annual inflation rate in March was 0%. The Office for National Statistics said the largest contributors were falls in prices for clothing and gas, but these were offset by a rise in petrol and diesel prices and food costs.
46,357 £9,972 £9,670 98.49% 99.00% Part-exchange Mar 2014 Mar 2015 88.52 90.02
Retail stock acquisition BCA saw its average ex-fleet car value fall £3 in March from February’s record £9,673. The £9,670 average retail stock value for March was 1% or £98 up year-on-year. BCA’s UK operations director Simon Henstock said: “Retail demand typically softens post-Easter and with the general election campaigns now in full swing we should expect a little uncertainty in the wholesale markets.” Manheim’s Market Analysis for March showed the average selling price of ex-fleet vehicles fell just £1 from February, to £7,318. The average value was £506, or 6.5%, lower yearon-year.
Trade-in disposal BCA reported its average March value for dealer part-exchanges rebounded after three months of falls, to £4,184 – a £143, or 3.5%, uplift. Year-on-year values were ahead by £278, or 7.1%. Manheim’s average part-exchange value for March dropped £98, or 2.8%, month-on-month to £3,438, after the previous month’s 12-month high. Year-on-year, the average value was up 4.7%, or £153, despite an increase in average age by two months. More good-quality part-exchanges following the March plate change is good news for independent dealers seeking stock, said Daren Wiseman, valuations services
ECONOMIC I N D I C AT O R S
House prices
70,915
0.5%
70,006 £3,906 £4,184
House prices in February were 0.5% up since January, according to data from the Land Registry. The year-on-year increase was 6.5%, which takes the average value of houses in England and Wales to £180,252.
96.74% 97.77% Nearly new Mar 2015 8.71 9,391 £20,218
Mortgages
99.78%
1%
Average age (months) Average mileage Average value Sales vs CAP
Home-owner house purchase lending declined in February, both compared with January and year-on-year, said the Council of Mortgage Lenders. Some 40,600 loans were advanced, down 1% on January and 16% year-on-year. These totalled £6.8bn, down 3% on January and 13% year-on-year.
U S E D C A R VA L U E T R E N D S 10,000 9572
9624
9537
9448
9411
7376
7273
9593
9445
9533
9633
9673
9670
7358
7319
7318
4075
4041
9478 9126
8000 7791
6964
7260
7135
7045
6948
6000
4000
3906
3285
Unemployment
7791
3982
4048
3973
3016
3077
3125
4065
4032
4059
3130
3162
3162
1.3 ppts
6693
4136
4188
4113
3390
3395
3383
3536 3268
The unemployment rate for the three months to the end of February was 5.6%, down from 6.9% a year earlier, according to the Office for National Statistics.
4184
3438
2000 Manheim Fleet £ Manheim Part Ex £
0
Mar 14
Apr 14
May 14
Jun 14
Jul 14
Aug 14
Sep 14
Oct 14
Nov 14
Jan 15
Feb 15
Pay
1.7%
Mar 15
12 months to Feb 2015 10,816 1,056,787
Change on previous year +18% +12%
38,835
–21%
Source: FLA
Used cars bought on finance through dealerships Feb 15 Change on 3 months to Change on previous year Feb 2015 previous year Value of advances (£m) 940 +13% 2,628 +11% Number of cars 91,680 +9% 254,182 +7% Used cars bought on finance by businesses through dealerships Number of cars 2,726 09% 9,248 –16%
Dec 14
BCA Fleet £ BCA Part Ex £
The average weekly wage, including bonuses, between December and February, was £485, a rise of 1.7% over the same period a year earlier. Excluding bonuses, wages were up by 1.8%.
am-online.com May 2015 17
AM & IMI PeoPle conference
‘Staff are treated like they are part of an extended family’ Swansway’s Peter Smyth will tell the conference how listening to and rewarding his employees gets the best from them M100 dealer group Swansway Garages has marked its fifth year in The Sunday Times Best Companies to Work For list and prides itself on treating employees like family. However, this only works because there is genuine commitment from senior personnel, according to Peter Smyth, who, along with his brothers John and David, is a director of the familyowned North-West of England motor retailer headed by his father, Michael Smyth, chairman. Peter Smyth said: “We’ve created a culture where staff are treated like they are part of an extended family. But just like family relationships, it doesn’t just happen, you have to put in huge amounts of time and effort to make it work. You need buy-in from the top and not just at the highest level, but at each strata of management. “Not surprisingly, exceptional communication is crucial, but that also means being a good listener and acting on any issues raised as well as genuinely appreciating the people who work for the business and recognising their contribution to the group’s success.” One of the ways Swansway recognises that contribution is its annual long service awards, but it also organises a family fun day and, once a quarter, one of the Smyth family hosts an awards lunch to recognise the group’s ‘unsung heroes’. Another initiative, known as ‘dinner with David’, allows any employee to put themselves forward for a group business lunch with David Smyth at nearby Crewe Hall to discuss any issues and opportunities for the company. Swansway uses a range of tools to engage and inform its workforce, including an intranet, flatscreen displays on the walls at every dealership that show business performance and staff achievements. It also posts a bi-monthly newsletter, Your Way, to every employee’s home, full of news about company
A
“You have to put in huge amounts of time and effort to make it work” 18 May 2015 am-online.com
Peter Smyth: ‘exceptional communication is crucial’ projects, events and praise for unsung heroes and team members who have excelled at their job. With 17 sites representing 11 brands, including Audi, Volkswagen, Seat, Volkswagen Commercial Vehicles, Honda, Peugeot, Citroën, Fiat, Jeep, Abarth and Land Rover, Swansway has annual sales of about £370 million and ranks among the 30 largest franchised dealer groups in the UK. Smyth said it operates an open door policy, an approach he believes has helped establish an environment where employee engagement is not just encouraged, but flourishes. In addition, the group runs a ‘buddy’ scheme, which allows employees to vent their frustration off-the-record. Swansway Group employs 678 people, whose comments in The Sunday Times Best Companies to Work for survey recognised their bosses’ willingness to tackle any task and their passion for the business as being one of their own key motivators. Employees said senior managers embody the company’s values and gave them a top-30 score of 77% positive while their chairman Michael Smyth also received a sound vote of confidence. “The survey responses reflect our belief that you will only create a truly engaged workforce who are motivated and committed to over-delivering in terms of customer care and performance, if you are prepared to live and work by those values yourself, which in turn leads to high levels of employee engagement,” said Smyth.
Don’t forget to be human In a world governed by processes, regulations and measurements, forgetting the human part of ‘human resources’ can be one of the biggest failings of business. If you want humans to work hard for you and buy from you, you have to be human yourself. This can be a business’s key differentiator in a crowded marketplace. At the AM & IMI People Conference, now in its second year, the focus is on how to attract, how to keep and how to motivate the industry’s greatest asset – its people. Taking place on June 11 at The Park Plaza Riverbank in London, before the AM100 Dinner, the conference will explore a range of topics, including attracting high-calibre apprentices, developing individuals and nurturing ‘home-grown’ talent, as well as highlighting the IMI’s measures to create a more professional sector. IMI chief executive Steve Nash will launch its management guide for dealers at the conference, a quick reference to benchmark practices in a group or dealership. Its ‘10 Principles of People Management’ is the latest initiative sitting alongside its Professional Register, which lists the industry professionals who have gained accreditation, and its extensive suite of automotive qualifications, collectively known as ‘IMI Awards’ incorporating the IMI Sales Accreditation, Customer Service Accreditation, Automotive Technician Accreditation (ATA) and Automotive Management Accreditation (AMA). Those who achieve IMI Accreditation are automatically included on the IMI Professional Register, which has more than 40,000 members. Understanding key motivators in the workplace is crucial for success and Dr William Holden, chairman of business growth consultancy Sewells will provide delegates with insights and tangible advice on how to best engage employees in order to succeed in a highly competitive environment. Drawing on Professor Jim Saker
SPE A K ER S
Thursday, June 11, 2015, The Park Plaza Riverbank London Hotel experience from a variety of industries, Dr Holden will look at the vital people drivers of recognition, responsibility and respect, which rank far higher than remuneration. For Greenhous Group, home-grown talent is the way forward, as well as being ingrained in its heritage. HR manager Nahara Hanson will talk about the dealer’s shop-floor-to-boardroom philosophy, illustrated by Derek Passant’s career journey from YTS trainee to chief executive. The group has an exceptionally strong training and development culture and employs several apprentices outside the workshop, including accounts and customer service. Swansway director Peter Smyth will provide a window into the soul of the family-owned business when he takes to the stage to talk about its approach to employee engagement. This has proved so successful that Swansway is celebrating its fifth consecutive year in The Sunday Times Best Companies to Work For list, rising to its current position of 34th from 75th when it was first listed. Professor Jim Saker, director of the Centre for Automotive Management at Loughborough University, will urge the sector to create a more clearly defined career path for those in aftersales in order to help attract high-calibre school leaver apprentice applicants. Prof Saker believes a commitment to training beyond the general three-year apprenticeship to a level 3 qualification and to degree equivalents at level 6 incorporating managerial qualifications will
Peter Smyth Director, Swansway Group Smyth, along with his brothers John and David, is a director of the family-owned AM100 dealer group headed by his father, Michael Smyth. Peter shares a taste of some of the best practice advice he will give on building employee engagement at this year’s conference.
IMI chief executive Steve Nash boost the sector’s reputation as an alternative to university. Finally, the Agile Future Forum (AFF), made up of several high-profile companies such as Tesco, KPMG, John Lewis, ITV, B&Q, Ford, Lloyds Banking Group and BT, aims to increase the awareness, acceptance and adoption of agile working in the UK, which it believes is crucial to Britain’s future economic success. The AFF will illustrate how the industry can adopt even more agile working practices to benefit the business and individual employees.
Tickets are available to dealers and manufacturers, with a limited number of supplier tickets on sale. To book, please contact Emma-Louise Kinnaird on 01733 395133, email emma-louise.kinnaird@bauermedia.co.uk or visit www.ampeopleconference.co.uk
Sponsored by
Steve Nash Chief executive, IMI Nash has worked in the motor industry, on both the retail and manufacturer sides, since graduating in 1977. He joined BMW in 1986 and has been a director of the company since 1997, including a period as group aftersales director, also looking after the Rover and Land Rover brands. Nash has been with the IMI since 2004, serving as non-executive chairman and president before he was appointed chief executive in 2012. He will launch the IMI’s at-a-glance best practice guide, ‘The 10 Principles of People Management’, at the conference.
Nahara Hanson HR manager, Greenhous Group Hanson joined Greenhous in July 2008 and looks after HR for the franchised side of the business. With more than 25 years’ experience in fields including the hospitality and legal professions, Hanson is also an affiliate member of the Chartered Institute of Personnel and Development. She will talk about Greenhous’s extensive apprenticeship programmes. Professor Jim Saker Director of the Centre of Automotive Management, Loughborough University Business School Saker is a key figure behind the drive for management and skills in the motor retail sector. He is also an AM columnist and a judge in the AM Awards. Saker will outline how education and the automotive sector can come together to develop clearer career paths, particularly in aftersales. Dr William Holden Chairman, Sewells As chairman and owner of Sewells, Holden has developed the company’s outstanding reputation for providing inspirational and transformational personal development and business change programmes for more than 25 years. What drives improved behaviour and results? How do you adopt the right attitude to business? How do beliefs affect performance? Holden, the author of the bestselling The Guide, will look at the ingredients for success.
am-online.com May 2015 19
INSIGHT AM Executive Breakfast Club
Sponsored by
‘Celebrate what you’re good at and hire the right people’ Identify the service balance you want to provide, says M&S customer service head Jo Moran NeeD To kNow
“People remember people and this is the bit you’re in full control of and what drives consumer loyalty”
n Customer service can be broken down into product, environment and service n Manufacturers can dictate first two, but car dealers control which people are hired to deliver service By Danielle Bagnall e clear about what we are and be proud of that, without trying to become what everyone else wants us to be.” That was the clear message from Marks and Spencers’ head of customer service Jo Moran at AM’s first executive breakfast of 2015. “It’s really important to be clear about what you are and what you aren’t – we wouldn’t chase the Topshop customer, for example. Celebrate what you’re good at.” Moran said: “When I talk about customer service, there are three key areas; product, environment and service. If you think of each area as a circle in a Venn diagram, the section in the middle is a percentage mix of each element. You have to plan what you want your business to represent and at what balance you want your three circles to be at. “Customers want different things out of those three circles on any one particular day. If you go to M&S to get a sandwich you aren’t hugely bothered about the [shop] environment, as long as it’s clean and tidy. All you really require is ‘that’ll be £5 please’ and you’re on your way. “But, you might come in later on to buy a suit, which means those circles then change. Any organisation offering customer service must be clear on how they equip employees with the ability to recognise what the most important circle for a particular customer at a particular time is,” said Moran.
‘B
The growing importance of the service ‘circle’ Moran used Ryanair as an example: “They knew what they wanted to be. They never talked about service or quality, they just delivered on providing a cheap service.” However, the circle of service is becoming more important to customers, which has changed the way Ryanair’s chief executive Michael O’Leary thinks and the brand is slowly implementing a better service. “There is a real fine balance when investing in your environment – you don’t get brownie points for having a good environment or over-investing, but you do lose points on a bad environment. Fixtures and fittings are incredibly expensive and to be honest I don’t think the customer even notices what colour the floor is.” In the past, Moran said, M&S invested a lot in infrastructure and not enough in people on the ground. This gives customers a nice environment, but when they can’t get served, or receive bad service, that is what they remember. “We have spent £1.5 billion over the last three years on store
34 May 2015 am-online.com
Jo Moran, M&S head of customer service
The next AM executive Breakfast Club will take place on Friday, May 15, at Simpson’s in the Strand, London. The guest speaker will be Daryl Fielding, Vodafone’s director of brand marketing. For more details, or to attend, visit: am-online. com/breakfast-club/
renovation, which meant reducing the store staffing budget by 25%,” said Moran. She said she couldn’t emphasise enough the importance of getting the right people. As franchisees, car dealers often don’t have full control of the environment and aesthetics of the showroom, but “people remember people and this is the bit you’re in full control of and what drives consumer loyalty. However, it’s also the difficult bit because people sometimes bring their baggage to work.” Moran explained that M&S once recruited based on skills or particular competencies, but now it looks for evidence of a good customer service attitude. “Staff don’t need to know everything; it’s their attitude that’s important, so rather than saying ‘I don’t know’ to a question they say: ‘why don’t we check that together’.” To get these great people, she said benefit packages must be relevant to them. “We thank our staff often, with little postcards and instant rewards (not M&S products) if they’ve shown great customer service – recognition is really important. “Some of the best ideas will come from the guys on your shop floor and getting those ideas through to you can be tough. We use a social media platform called Yammer. People can send messages or feedback to each other and I will get that instantly, without a lengthy chain of command. “We have invested in our front-line managers in recent years and the results have been phenomenal,” said Moran. These line managers are hugely influential to retail staff, so training was implemented which would then be fed down the chain. Aligning online, offline and mobile retail experiences Brand integrity is important, said Moran, so prices that are on your website should match those on your forecourts. “We are currently trying to integrate our channels – store, web, mobile – so people that buy online buy in store and vice versa. If a customer shops in one channel we gain revenue, if we can get them to shop in an additional channel that revenue is multiplied.”
D I N N E R 11th June 2015, Park Plaza Riverbank, London Jeremy Vine will be the guest speaker at the AM100 dinner this year which will be held on June 11 at the Park Plaza Riverbank in London. Vine established his reputation as a smooth-talking but tough presenter on Newsnight. He now presents the lunchtime show on Radio 2, hosts Eggheads and pops up with a range of graphic wizardry whenever there’s an election. Jeremy joined the BBC as a news trainee. His first reporting assignments were on Radio 4's Today programme, covering issues as diverse as punishment beatings in Northern Ireland and sheep-racing in Dorset. He then took up the reins as a political correspondent, under John Sergeant.
One of Jeremy’s early reports was an award-winning exposé of South African police brutality, which led to twenty four officers being suspended. In a lighter vein, he was famously challenged by Jeffrey Archer to a race on Brighton beach, after remarking that the Tories had become elderly. Archer pulled out, complaining of ‘tiredness’. The AM100 publication is the annual industry guide to the 100 largest dealer groups in the country, according to their company turnover. In addition, the AM100 provides a detailed analysis of the state of the industry and looks at the key issues facing dealers and their customers.
igious gala dinner on the calendar The most Prest Headline sponsors:Headline sponsors:
Associate sponsors:Associate sponsors:
Book your table now at www.am100dinner.co.uk
or call Emma-Louise Kinnaird on 01733 395133 or email: emma-louise.kinnaird@bauermedia.co.uk
SHOWROOM 64
suzuki s-cross
Dealers are looking forward to an update of Suzuki’s crossover car this autumn, which may include the first diesel automatic.
the cars driVing your business
65
67
Mazda3
With a flood of new models, Mazda’s product image, value and pricing have been rated more highly by NFDA members.
Volkswagen golf
A prowl through Volkswagen’s online test-drive booking facility reveals online users’ most in-demand car is the Golf.
first driVe Mazda2 – on saLe noW
Taking on the big boys of the B-segment
Mazda received 747 orders for the Mazda2 before launch
The stylish and well equipped Mazda2 should do well in the UK’s tough supermini segment By Tim Rose
M
azda pushed the boat out ahead of the March launch on its new supermini, the Mazda2. It organised a preview tour of its UK dealerships, equipped with an Oculus Rift virtual reality headset and two pre-production cars. A total of 120 Mazda dealerships opted to take part, hosting half-day VIP previews for customers over a six-week period. As a result, each took an average of six pre-launch orders. Colliers Mazda in Birmingham took 18 orders in one night. The Mazda dealers that opted not to host the tour took one pre-order on average. “The headset allowed the dealers to show people all the different colours and trims offered on the car in the showroom,
62 May 2015 am-online.com
24%
Mazda’s overall growth target for 2015/16
so they could see the car in the style they actually wanted,” said Mazda Motors uK managing director Jeremy thomson. The tour was seen as such a success that the company is considering purchasing its own Oculus Rift system for future use, such as ahead of the forthcoming launch of the MX-5 roadster or for fleet events. Thomson said the Oculus Rift tour was vital, as the brand wanted to sell 1,000 new Mazda2s before its financial year closed at the end of March. However, the car wasn’t going on sale until March 21. “We had 747 orders ahead of launch, with the cars still sitting on the boat,” he said.
“This new supermini is well positioned to rival the segment-leading Ford Fiesta, Vauxhall Corsa and Volkswagen Polo even if it can never match them on sales volume”
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 £11,995-£16,995 Engine 1.5-litre petrol: 74/89/113bhp; 1.5-litre diesel: 104bhp Performance 0-62mph 8.7-12.1secs, top speed 106-124mph Transmission 5sp man, 6sp man, 6sp auto Efficiency 56.5-83.1mpg, 89-117g/km CO2 RV 3yr/30k 36% Rivals Ford Fiesta, Renault Clio, Seat Ibiza, Vauxhall Corsa, Volkswagen Polo
What your custoMers WiLL read about the Mazda2
the 2 conforms to Mazda’s latest Kodo design ethos
Mazda prefers to equip cars well as standard to avoid long waiting times
The full-year registrations target for the new Mazda2 is 12,000 units, which will represent an increase of 3,000-4,000 units over the typical annual sales of the old model. The growth strategy – overall, Mazda Motors UK wants 24% growth in sales in its 2015/16 financial year – will mean Mazda needs to “eat a bit of everybody’s lunch”, Thomson said. Conforming to the carmaker’s latest Kodo design ethos and Skyactiv efficiency measures, this new supermini is well positioned to rival the segment-leading Ford Fiesta, Vauxhall Corsa and Volkswagen Polo even if it can never match them on sales volume. Priced from a competitive £11,995, the core Mazda2 range consists of SE, SE-L and Sport trims. A Sports Launch Edition car is pulling initial customers in by offering higher equipment levels for £14,995. SE-L models are expected to be most in demand as these offer the equipment most buyers will desire, such as alloy wheels, front foglamps, electric folding heated mirrors, leather steering wheel with audio controls, cruise control, DAB radio, colour touchscreen with multimedia controller and Bluetooth. The entry-grade SE misses out on all of
these. Sport-specification models add rear privacy glass, auto wipers and lights, rear parking sensors, keyless entry and climate control. In addition, the SE-L and Sport can be specified as Nav derivatives, which adds sat-nav, and the most powerful Mazda2 Sport Nav gets additional LED headlights and daytime running lights. Given that UK cars have to be shipped from the Far East, Mazda Motors UK prefers to equip the cars well as standard to avoid long waiting times for bespoke cars. Only buyers of the Sport Nav can choose leather seats, a heads-up display, blind spot monitoring or a high beam control system. On the subject of power, an 89bhp 1.5 Skyactiv-G petrol engine is forecast to be the best seller. It’s a refined unit and its CO2 emissions of 105g/km and combined fuel economy of 62.8mpg make it the most affordable to run in the range, except for the only turbodiesel on offer, a 1.5-litre Skyactiv-D with 104bhp. The diesel has plenty of torque and made light work of Devon’s hills during the media drive. However, its 89g/ km CO2 emissions and 83.1mpg economy come at a price. A £2,000 premium over the petrol alternative means it suits only buyers who will cover above-average annual mileage. The range is completed by two further 1.5-litre petrol engines: a 74bhp offered in SE and SE-L specifications only and a 113bhp unit exclusive to the range-topping Sport Nav. The supermini segment is the most hotly contested part of the UK’s new car market, but with the stylish and well equipped Mazda2, the dealer network should be well placed to compete.
Motoring research Like the firm’s other new-era skyactiv designs, it’s a car that feels like it’s been thoughtfully engineered by specialists rather than just created by a committee set on meeting generic targets. it’s this that gives it a bit of the MX-5 spirit; sure, it’s not quite the driverfocused sportscar the Mazda two-seater is, but there’s still plenty there to please enthusiasts without scaring off the core buyers. for this, and the way it looks, and the cutabove interior, it’s certainly worth spending the little extra it costs over those generic supermini alternatives. honest John Mazda is on a roll these days, with an impressive range of cars that are good to drive, stylish and practical. those ingredients have now been distilled into the smallest model in the range – the Mazda2. the result is a success, giving big players like the Vauxhall corsa and ford fiesta something to worry about.
am-online.com May 2015 63
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IN JUNE’S ISSUE
C O N TA C T U S
PUBLISHED MAY 22
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 Jeremy Bennett 01733 468261 Managing editor Tim Rose 01733 468266 Senior reporter Danielle Bagnall 01733 468343 Industry editor Tony Willard 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, Philip Nothard, Chris Phillips, Prof Jim Saker, Richard Yarrow
The Volvo Retail Experience Swedish-style personal service forms a part of the future strategy as Volvo Cars UK rolls out the franchise’s new corporate identity.
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
Fight the fast-fits The market for franchised dealer aftersales has dropped by 20% since 2010, while independents and fast-fits have grown their share. The next issue of AM examines the threat to the franchised sector and gathers expert views on how dealers can fight back.
AM Aftersales Conference
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First drive: Fiat 500X
The Italian brand keeps expanding its 500 family, with the addition of a compact crossover SUV set to give a real boost to its dealer network.
Insight into improvements in profitability and retention from the expert speakers at AM’s recent event.
ADVERTISERS’ INDEX Autoclenz .....................................................61 Autoglym Polish ..........................................9 BCC Cars.......................................................69 British Car Auctions ..................................60 Call It Automotive.......................................31 Car Care Plan..............................................57
Edynamix......................................................53 GForces .........................................................20
Moneypenny.................................................27 Motors.co.uk ...............................................39
HPI .................................................................32
Steele-Dixon & Associates ....................68
Infomedia......................................................72
Supagard .....................................................61
iVendi......................................................25 , 44
Symco Training ...........................................52
Lawdata.........................................................60
Tracker Network Systems......................53
Chris Eastwood Automotive...................68
Lloyds Banking Group .............................12
Trader Publishing ......................................49
Manheim Retail Services................2, 6, 35
Trusted Dealers..........................................10
Contact At Once ..........................................27
Mapfre Abraxas UK...........................11 , 54
UHY Hacker Young Manchester.....58-59
Dealer Management Services ...............24
Mon Motors..................................................68
Vertu Motors................................................68
70 May 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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Events
www.am-online.com/events
Date
Event
Venue
June 11 2015
AM-IMI People Conference
The Park Plaza Riverbank, London
June 11 2015
AM100 Dinner
The Park Plaza Riverbank, London
July 17 2015
AM Executive Breakfast Club
Simpson’s in the Strand, London
September 15 2015
AM Digital Dealer Conference
Silverstone Wing, Silverstone Circuit
October 2015
AM Used Car Conference
Midlands
November 6 2015
AM Executive Breakfast Club
Simpson’s in the Strand, London
November 2015
AM F&I Compliance Conference
Midlands