AM - Automotive Management magazine - March 2017 preview

MOTORVOGUE / P28 How the smaller dealer can benefit from scale

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March 2017 £8.00

LEXUS / P36 Why it wants its dealers to deliver a 50% rise in sales TRANSPARENCY / P83 Should it be clearer when you’re giving a great deal?

MICHAEL SMYTH, HALL OF FAME INDUCTEE

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EDITOR’S LETTER

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here’s been much talk in our industry about a need for more transparent pricing. The reasons given are consumers’ dislike of negotiation in the car buying process, and the resultant impact on perceived trust in the dealer and value in the deal.

We examine the subject in this issue (pages 83 to 95). But I’ve begun to wonder whether we’re actually talking about translucency, rather than transparency. I suppose it depends on the interpretation of transparent.

The Oxford English Dictionary definition of ‘easy to perceive or detect’ surely applies to car pricing already – it’s a foolish dealer that doesn’t put a figure on stock – albeit that price may be negotiable.

And the growth in online used car valuation services suggests the consumer is getting better guidance on the trade value for their part-exchange, even if they don’t understand how those values have been calculated. But no one wants absolute transparency.

So really we’re talking about trust. The hotel industry still isn’t transparent, years after it went through its digital disruption. Look on TripAdvisor or Hotels.com and you certainly won’t see what any reviewer actually paid for their stay a fortnight before the school holidays when the rate probably doubled.

The closest a user will get is the consolidated guest review ratings for service, value, facilities etc and a raft of verbatim reports from guests.

Yet our industry still doesn’t encourage reviews. That must improve – accept there’s no one more transparent or trustworthy than an existing customer.

MEET THE TEAM

Tim Rose Editor

am-online.com

Tom Sharpe News and features editor

Stephen Briers Editor-in-chief

Jeremy Bennett Head of digital/ associate editor

MARCH 2017

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MOTORVOGUE / P28 How the smaller dealer can benefit from scale LEXUS / P36 Why it wants its dealers to deliver a 50% rise in sales

NT AUTOMOTIVE MANAGEME March 2017 £8.00 www.am-online.com

I N D U S T R Y

TRANSPARENCY / P83 Should it be clearer when you’re giving a great deal?

AM magazine Your monthly publication, in print and digital form, brings the latest news insights, market intelligence and in-depth interviews with franchised dealers and the heads of manufacturer national sales companies. Every issue also tackles a specific topic of dealer operations and gathers inspiration for readers from sector experts.

MICHAEL SMYTH, HALL OF FAME INDUCTEE

N ATIO SPIR AN IN IL TA RE R TO L IN MO

Independent Dealer magazine

TO AL

Independent Dealer is published every spring and autumn. The spring edition brings you the ID50 rankings and analysis of the largest used car retailers in the UK. The autumn edition shares best practice to help readers understand where the growth opportunities lie.

AM Awards More than 1,000 people gather each year at the ICC in Birmingham to see the UK’s best in motor retail rewarded with a prestigious AM Award.

More than 20 trophies are presented during the gala dinner, in categories for dealers and carmakers. Every winner is celebrated, culminating in the headline awards of Retailer of the Year, Business Leader of the Year, Manufacturer of the Year and Hall of Fame.

AM Executive Breakfast Club This free-to-attend networking and business improvement club is exclusively for directors of franchised dealer groups. Its meetings are quarterly, confidential, and always bring inspiration from a non-automotive guest speaker. Past presenters have included a director of customer service at John Lewis, a head of HR at the BBC, a co-founder of budget airline BMI Baby and a head of event services at the London 2012 Olympics.

AM-online A daily source of UK motor retail news, insight and opinions for franchised and independent dealers.

Register to receive our daily newsletter direct to your email inbox, and on Saturday a digest email brings you the most important news of the week.

AM conferences Inspiring case studies, sector specialists’ advice, peer networking and interactive problem-solving workshops all feature in AM’s conferences designed to support motor retailers in their thirst for knowledge. Our recent conferences have tackled critical areas such as people and skills, digital marketing and technology, customer service and regulation of F&I.

Automotive Management Live The success of our newest event, combining an exhibition hall packed with more than 60 exhibitors with best practice workshops spanning important aspects of dealer operations, has prompted a decision to move it to the National Exhibition Centre at Birmingham in 2017. As ever, it will remain free for all franchised and independent dealers to attend.

AM100 Profitability, growth and acquisitions are regular subjects of conversation at the annual AM100 gala dinner in London. It is here that AM presents the latest AM100 rankings of the UK’s largest franchised dealer groups, and previews its AM100 supplement, complete with analysis of the trends.

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CONTENTS

AM Awards 2017

UP FRONT

INSIGHT

06 12 16 24

28 Face to face: Motorvogue

News insight News digest Market intelligence Opinions

DEALER MASTERCLASS 96 Showroom finance

TALENT 7 Apprenticeship levy 107 108 People on the move 110 Eight questions to...

David Higson, Mercedes-Benz Vans head of technical and service quality am-online.com

Jon Pochin expects to improve customer service and profitability through single sites hosting numerous franchises

35 5 minutes with...

Jair Marrugo Mapfre’s UK boss talks about adapting to Brexit and dealers’ rising opportunities with online insurance sales

36 Brand values: Lexus Its sales are rising but still lag far behind rivals. Now director Ewan Shepherd is prioritising customer care and dealer profits

SPOTLIGHT: TRANSPARENT PRICING 84 Is the price right?

Classified sites believe telling car buyers how good (or not) a price is will boost sales and build trust.

Some dealers fear it will drive down prices

90 Haggling is fast dying out When it comes to knocking a dealer down on price many of today’s buyers would much prefer to avoid the hassle

94 Standing out from the crowd Transparent pricing means dealers will have to find new ways of helping themselves to get the competitive upper hand

SHOWROOM 100 Nissan Micra launch report

102 Long-term reports MARCH 2017

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NEWS INSIGHT

Smart’s online portal has received 12 orders since its December launch

HOW WILL ONLINE INFLUENCE FUTURE ROLE OF DEALERS? Test drives and car delivery remain the province of dealers but there is a perceptible shift among buyers to researching their purchase and arranging the finance via the internet

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hree car manufacturers staked an early claim to online new car sales in 2017 within days of news that UK consumers splashed out more than £130 billion in total via the internet last year.

But as industry analysts sought to highlight the difference between the fashion, technology and travel sectors which contribute most to that total, Capgemini senior manager and head of automotive customer experience Mathias Schatz described traditional dealerships as a “hurdle manufacturers need to overcome” on the route to more significant online sales.

He added: “Online sales are coming, be in no doubt.”

Hyundai, Peugeot and Smart officially launched Click to Buy (Hyundai), Order Online by Peugeot and Smart Cars Online platforms in January following short soft-launch periods.

Citroën and Volvo are due to follow in Q2.

Haggle-free, fixed-price car buying

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which can be completed in as little as half an hour and result in a vehicle being delivered to a customer’s door are among the key selling points, perhaps highlighting areas which a new breed of internet-savvy customers regard as undesirable at their local dealership.

A clear incentive With Mike Britton, managing director of Barclays Partner Finance, telling AM that 77% of the UK adult population made an online purchase during 2016 – and with the value of online sales up nearly 500% since 2008 – it’s clear there is an incentive for manufacturers to shift part of their sales focus online.

The continued drift of sales from the high street to the internet yielded a further 15.9% rise in online sales (to £133 billion) in 2016, according to the IMRG Capgemini eRetail Sales Index – £18 billion more than 2016.

Capgemini’s Cars Online Trend Study surveyed 756 customers from three global markets and found that 74% of new car customers would

consider buying online. It suggested that manufacturers cannot overlook the importance of online car sales. It stated: “In the future, it won’t be enough to only produce vehicles and offer them through the dealer network.

“Car manufacturers will have to transform their business models to become completely customercentric and deliver on online sales expectation.”

In its first three weeks Hyundai

Click to Buy attracted 127,000 visitors and 8,000 vehicle configurations, with a total of 467 registered users and 33 completed applications to buy. The large majority (93%) of buyers have so far opted to collect their cars from a dealership.

Since its December soft launch Smart has received 12 orders and completed four sales.

Few manufacturers seem willing or able to quantify what they expect to make from online new car sales

Hyundai’s Click to Buy site attracted 127,000 visitors in its first three weeks

am-online.com

SEND US YOUR NEWS If you have any news stories you’d like to let us know about email us at newsdesk@am.co.uk

THE CUSTOMER IS IN FULL CONTROL AND CAN DELIBERATE ALL THEY WANT OVER SPEC AND FINANCE DECISIONS DAVID PEEL, PEUGEOT UK or the volumes of cars they might expect to sell via online channels.

Tony Whitehorn, president and chief executive of Hyundai UK, said: “In terms of the potential of the market, the number of people that might buy a car online, I really don’t know.

“What I am sure about is that 2.6 million cars were bought in dealerships last year and that will largely be the same in 2017. Ask me if that will be the case in 30 or 40 years’ time and I’d say that I doubt it.

“Ultimately, we have entered into the unknown. We have invested an awful lot of money in this but that is the kind of business we are. We take risks and go places others might not.”

Yet dealers, too, have huge sums invested in their own businesses, often at the insistence of manufacturers. Hyundai’s last showroom design was only in 2014.

Will dealers profit?

All manufacturers were at pains to highlight the ongoing role of dealerships in all new car sales, Whitehorn insisting that it was “fantastic for the dealer”.

Dealers receive a full margin on sales from Hyundai’s new site.

Maria Rogers, head of digital and product manager for Order Online

by Peugeot, said that all sales delivered through the French manufacturer’s offering would be handed to a dealer selected by the online customer.

An online signature service developed by PSA Finance restricts customers to a PCP offer – the option of HP and cash purchases will come later – but means that Peugeot can boast an end-to-end online sales platform, potentially completing a transaction in as little as 30 minutes without any dealer input.

Hyundai and Smart both ensure some contact with the dealer remains as finance agreements must be signed in the dealership in the same way as the 2016 AM Award-winning BMW Retail Online platform does. In addition, Hyundai,

am-online.com

Peugeot and Smart all make use of their dealer network for test drives and vehicle delivery.

Smart would not reveal details of dealer commissions for sales conducted via the new online portal, but Rogers stated that Peugeot dealers would get the “same level of remuneration as they would for an offline deal”, before adding: “There is a small service fee which we apply for the dealers.”

Some believe dealers will be paid agency-style fees by carmakers in future.

Making prices transparent Fears about the erosion of the car retailer’s role in the sale seem to be apparent from the focus placed upon transparent pricing that could signal the death of the haggle (see Spotlight section, pages 90 and 91).

But, while Hyundai includes transparent pricing in its promotional material for its Click to Buy platform, Whitehorn conceded that customers had the right to approach the dealer for offers having started an online purchase.

He said: “There’s nothing stopping them discussing price if they choose to be referred to the dealer. That is their choice. It’s unlikely, but possible, that the dealer might want to give a better deal.”

Rogers said customers have greater input on the Peugeot site, seemingly offering more parity with customers who might walk into a dealership to make a purchase for online customers who choose to end the process with a traditional interaction. She said: “We start with a national price but if a customer chooses a retailer they want to deal with it then goes to a dealer price.

The dealer decides whether to discount.”

David Peel, Peugeot UK managing director, said: “With e-commerce by Peugeot, that pressure to make a decision is removed; the customer is in full control and can deliberate all they want over spec and finance decisions, change their minds and

THIRD PARTY ONLINE SALES FCA Group and Seat have both teamed up with Amazon as they embarked on online sales experiments in recent months.

Seat sold its Mii By Mango limited edition cars through the Amazon marketplace in France, with the order fulfilled by a local Seat dealer and delivered to homes within 72 hours.

Fiat Chrysler Automobiles has struck up a more permanent relationship with the online retail giant, however, and has begun sales of its 500, Panda and 500L in Italy.

Research which revealed that half of the Italians surveyed were happy to buy a car online, 97% still wanted to pick it up at a dealership, which means that customers complete their purchase at a dealership.

Capgemini’s research

retrace their steps as many times as they wish.”

In its research into online sales Peugeot found that the average car buyer spends 11 hours online prior to choosing their car and Schatz said that 98% of car buyers now start their car buying journey online.

Schatz said: “By 2020 we predict that 80% of all automotive sales leads will be generated online.

“The dealer network is one of the main hurdles and manufacturers will need to overcome contractual and legal agreements before moving forward wholeheartedly with their online sales plans.

“Some might seek to establish new product away from their existing line to sell purely online away from their established network. That might be one solution.”

He added: “I think what needs to be established is what the role of the dealer will be in the future. More and more we are likely to see sales become the domain of the OEMs.” Customers will choose Schatz said that, ultimately, it will be up to customers whether they chose to transact online or drive the car and touch it at a dealership, before making a purchase.

Britton said “the rise of the online channel seems set to continue at a truly astonishing rate” but suggested that the slow adoption in automotive was not surprising given the “high

suggests that manufacturers hold the key to online car sales, however, as they command more consumer trust.

Its research said that, although there is a slight interest in purchasing vehicles through third party technology company platforms (11%) like Google or Apple, this is greatly overshadowed by the preference for buying cars from the platforms of the more established manufacturers (57%) and automotive retailers.

The willingness to buy from online-only companies like Amazon in China is higher, attaining almost 40%. FCA’s chief marketing officer, Jakob Nyborg, said: “The biggest take-up of online sales geographically will be in Asia, and especially China.”

value physical product and a complex customer journey which encompasses negotiation and trade-in and other key components”.

‘Omnichannel’ approach Britton expects an ‘omnichannel’ approach to car buying – mirroring that seen in other retail sectors – will ultimately prevail.

He said: “For example, 52% of John Lewis’ online sales last Christmas were ‘click and collect’ where the goods are ordered online but picked up in John Lewis or Waitrose stores.

“So in future we should perhaps expect the car buyer to do their research online, visit the showroom for a test drive, negotiate over the phone, but configure the car and arrange finance online.

“The important thing to remember is to build your journey and process around the customer and their needs, rather than the channel.

“We need to make sure we are able to meet, greet and serve the customer at whatever point of interaction they chose in a frictionless and friendly manner. It’s what customers will expect.”

Whitehorn said “it’s not like buying a washing machine”, adding: “People still want a relationship with their local dealership so they know where they can go for aftersales and who they might turn to should they have any issues.” TOM SHARPE

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NEWS INSIGHT

USED VEHICLES PLAY MAJOR ROLE IN PENDRAGON PLANS

Aim is to double used revenues and focus on aftersales in addition to new car sales

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endragon is on a path to double its used car revenues after its new car turnover declined 1.4% in 2016 – despite a 1.9% overall rise in group revenues to £4.54 billion.

If realised, the ambition would restore the national dealer group to the position of the UK’s largest car retailer, a position it lost recently following Sytner’s acquisition of car supermarket chain CarShop.

Pendragon saw a 5.6% rise in revenues earned from used car sales in the year ended December 31, 2016 (to £1.92bn), selling 159,000 used vehicles through the year, but has now targeted further growth after seeing its new car revenues fall from £2.22bn to £2.19bn in the same period. Nevertheless, it still has faith in the 2017 new car market and expects it to hold flat, despite forecasts by the Society of Motor Manufacturers and Traders (SMMT) for a 5% decline.

Aftersales revenue rose 4.1% to £316.5 million (2015: £303.9m) with gross profit of £193.5m in line with 2015. Yet the group grew gross profit from used cars by 3.6% to £162m (2015: £156.3m). Overall gross profit was up 1.9% to £559.6m (2015: £548.9m).

Group operating profit grew 0.7% to £101.2m (2015: £100.5m) for the year, however, as gross margin held flat at 12.3% and operating margin dropped by 0.1ppts to 2.2% (2015: 2.3%).

Pendragon chief executive, Trevor Finn, described the results as “encouraging” before mapping out the group’s plan for growth in 2017.

He said: “Pendragon is leading the evolution of automotive online retailing.

“Our underlying profit before tax has increased by 7.6% in the year as our growth continues. The group has doubled underlying profit before tax in four years as a result of our clear strategy of offering choice, value,

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MARCH 2017

customer service and convenience.

“Future growth will be driven by our initiatives, our investment in additional physical capacity for used car sales and by our strategic advantages in IT and intellectual property.

“We believe we can achieve at least double digit growth in used revenue in 2017 and our aspiration over the next five years is to double our used vehicle revenue.

“In order to test this, during the final quarter of 2016 we invested in inventory and adjusted our algorithms and marketing initiatives with a view to driving growth in used vehicle activity levels to test the capacity of our current footprint.

“The early results of this are very encouraging. Our growth in used vehicle revenue on a like-for-like basis in January 2017 exceeded the increase required to achieve our growth aspirations. We anticipate our performance for 2017 will be in line with expectations.”

GROUP HAS DOUBLED UNDERLYING PROFIT BEFORE TAX IN FOUR YEARS AS A RESULT OF OUR CLEAR STRATEGY TREVOR FINN, PENDRAGON

Evans Halshaw’s website along with that of Stratstone.com will play a key role for Pendragon

Pendragon announced that it would be focusing its efforts on used vehicles, aftersales and new vehicle markets.

Its plan includes the evolution of and investment in the Evanshalshaw. com and Stratstone.com websites, which increased web visitors from 8.5m in 2011 to 22.7m in 2016 and to increase its used car capacity.

The group has doubled market share in six years, and will continue its investment in additional physical capacity for used vehicles sales to achieve at least double digit growth in used revenue in 2017.

Pendragon will open five sites in the first half of 2017 and has five sites “actively being pursued for the second half of 2017”, it said in its annual statement. Online sales channels and the Move Me Closer platform – which sees vehicles brought to customers from sites across the UK following the payment of a refundable deposit

PENDRAGON FIGURES Group revenue (£m) Motor division revenue (£m) Group profit before tax (£m) Group operating profit (£m) Motor division operating profit (£m) Net debt (£m)

2012 3,635.1 3,559.0 34.0 67.9 54.4 216.4

2013 3,848.9 3,768.3 38.9 77.2 61.0 139.6

2014 4,000.4 3,915.0 64.6 97.2 74.5 108.8

2015 4,453.9 4,343.8 79.0 121.7 85.9 79.6

2016 4,537.0 4,426.6 73.0 100.4 84.9 91.7

– is also central to Pendragon’s growth plans.

For the first time customers have been able to self-serve on its websites, and pay a refundable reservation fee via their credit card to take a vehicle off sale and trigger the logistics to move the vehicle so they can view and collect it at the group location of their choice.

Customers will also be able to use its Sell Your Car process, selling direct to Evanshalshaw.com for a guaranteed payment of more than segment leader Webuyanycar.com.

This will help deliver a greater selection of choice and value to customers and turn stock more quickly, it said.

Pendragon now has 85 Sell Your Car locations – from 42 in 2015, and out of a total of 118 Evans Halshaw dealerships – and plans to include the service in all new stores.

Profits in the years ahead will be impacted by higher liabilities to Pendragon’s defined benefit pension scheme. Its statement revealed an increase in obligations since the end of 2015 from £43.4m to £130.2m, largely due to a cut in the discount rate applied to the scheme liabilities.

As a result, in 2017 Pendragon is raising its annual contribution to the pension scheme by £4.1m to £7m and this will increase by 2.25% per annum. TOM SHARPE

am-online.com

NEWS INSIGHT

NEXT ISSUE Read more NADA insights in April’s issue of AM

LESSONS LEARNT AT WORLD’S BIGGEST DEALERSHIP EVENT US dealers share concern new car market has peaked and think UK is ahead on digital retailing

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ranchised dealers in the USA share concerns with UK counterparts about their new car market having peaked and signs of an approaching decline in used car values now stocks have rebalanced.

Key messages at the world’s largest dealer event, the National Automobile Dealers Association Convention in New Orleans last month, highlighted fears of a steady rise in finance defaults, a focus on customer retention and a need for technological developments that could help franchised dealers become more efficient.

However, Malcolm Thorne, executive vice president and chief global strategy officer at CDK Global, told AM he believes the UK is ahead of the USA in aspects of digital retailing.

America’s manufacturers are yet to broadly roll out online sales channels that are appearing in the UK. He said most US consumers also expect instant gratification. They want to take the car home that day, which creates a lot of potential process differences to the UK, where buyers will order and collect the car days or weeks later. In either case, buyers are becoming frustrated by a three or four hour process to complete their car purchase, he warned. Technology companies have to help franchised dealers speed up this process.

A Ford-supported trial is underway at one of its dealerships in Ohio, USA, of a system from financial tech-

10 MARCH 2017

nology firm AutoFi which allows a customer to buy a vehicle directly from the dealership’s website.

It was clear from the exhibition halls at NADA that software will drive the capabilities of franchised dealers forward. As dealer groups continue with centralisation of some functions, such as of HR, accounts and trade-in management, lots of technology is supporting that.

CDK launched MenuVantage Platinum, a predictive menu selling tool.

It predictively presents individual F&I products to customers based on historical transactional behaviour as well as information gathered from them during the sales process.

“Technologysolutionsarebecoming more and more data-driven, and that’s a global trend,” said Thorne. “As an automotive industry we’ve seen others emerge, like Netflix, Apple, Google, that have used significant amounts of data, and we’re starting to see the automotive industry really adopt those technologies now.”

He believes dealers will need help with data, but there has been a shift, as CDK’s customers argue they don’t want more reports, instead they want recommendations.

Thorne said: “Analytics need to be embedded into technology products designed to make recommendations. What the dealer needs is actionable advice, such as these are the five cars you need to sell because you’ve too many of that model, and you need to buy three red cars.”

Cox Automotive’s vAuto division displayed a new service, Stockwave,

DEALERS WILL NOT BECOME OBSOLETE, SAYS FORD In a keynote address, Ford Motor Company president and chief executive Mark Fields assured NADA attendees that the carmaker is not swayed by suggestions that ongoing developments in technology, mobility and ownership habits could render dealers obsolete.

“I say unequivocally that Ford believes in this franchised model,” he added. Fields said the dealer’s role will become even more important as it expands to be a mobility company, not simply a retailer and repairer.

Ford expects that from 2030 electrified vehicles will outsell combustion engine vehicles, and shared a 2050 vision of mass urban implementation of autonomous transportation systems. Fields told dealers this would bring “huge opportunities for our businesses” such as service and maintenance, mass transport, providing parking and charging for EVs, and out-of-

designed to help dealers optimise their used car forecourts.

Based on a dealer’s own buying preferences, stock turn and profit goals, plus reconditioning and transportation costs, and the state of the dealer’s existing inventory, Stockwave can put forward the most suitable stock available for the dealer to

hours storage facilities for shuttles and mass transport.

Showrooms should also become “innovation stores” to allow consumers to experience technology in a better way.

However he hinted the dealer networks will be structured for three different audiences: the urban market, suburban market and the rural market.

“The solutions we’re developing for the future are going to be local solutions, and who knows the local community better than you? Each of you has a pivotal role in developing the communities of tomorrow,” Fields told the gathered dealers.

I SAY UNEQUIVOCALLY THAT FORD BELIEVES IN THIS FRANCHISED MODEL MARK FIELDS, FORD acquire and retail for optimum profit.

Kelley Automotive Group has used the system for almost a year, and its director of pre-owned operations Trent Waybright, said a frustration of sourcing used car stock is the hours spent identifying suitable auction vehicles but then not successfully bidding on all of them. TIM ROSE

am-online.com

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SEARCH BEGINS FOR THE BEST DEALERSHIPS IN THE UK TO WORK FOR

K DEALER

New AM programme will recognise and honour the best employers by measuring the views of their employees

W

e look after our people because they are the key to our success is a phrase often uttered by retail group directors. But which are the best dealerships to work for in the UK? AM plans to find out in a new initiative called Best UK Dealerships To Work For. AM has teamed up with Best Companies Group, which produces similar studies in other industries, to find and recognise the best places to work in the franchised dealer sector. It will be the first survey to look purely at automotive retailers.

The programme is based on the view of employers and the verdicts of employees over a

number of key metrics, including leadership and planning, culture and communications, working environment, relationships with managers, training/development and pay/benefits.

The collected information will be combined to enable Best Companies Group to determine the strength and weaknesses of participating companies. They will then be assessed on this data, with the best being granted AM Best UK Dealerships To Work For status.

In addition to identifying the best individual dealerships, AM will also compile a secondary listing based on the best dealer groups to work for.

Both will be published in a report launched

WHAT ARE THE BENEFITS TO YOU? There are a number of benefits to companies which choose to take part in the AM Best UK Dealerships To Work For programme. They include: 1. Recognition as a top employer, including use of the AM Best UK Dealerships To Work For logo 2. A promotional aid for recruitment and staff retention 3. Pr Promotion to potential customers; raising your profile in your local area 4. The ability to benchmark performance against peers 5. Understanding of employees’ views and areas to improve

TODAY: AM Best UK Dealerships To Work For is launched

PROGRAMME TIMETABLE

JUNE 2: Deadline for participants to register.

Retailers can register as a group or by individual dealership. Verification will be sent within 24 hours

at Automotive Management Live on November 9.

The listings will be alphabetical not by ranking, with each dealership honoured exceeding a minimum threshold. Only details of dealerships making the list will be published.

Participation in the AM Best UK Dealerships To Work For programme is free of charge. All companies recognised in the listing will be able to use the AM Best UK Dealerships To Work For logo for promotional work.

If you think your company has what it takes to be honoured in the inaugural AM Best UK Dealerships To Work For list, head to our website – www.BestUKDealerships.com es U ea e s ps co – to o find out more.

ARE YOU ELIGIBLE? To be eligible for consideration, companies must: ■ Have a minimum of 15 employees working in the UK ■ Be a franchised dealership ■ Be a publicly or privately held business ■ Been in business for a minimum of one year A 40% employee response rate is required (80% for dealerships with 15-24 employees). Temporary or seasonal workers, contractors, consultants, interns and volunteers are not counted as employees or included in the survey.

JUNE 9: A web link for the employer questionnaire will be sent to the contact at each registered company

JUNE 23: Completed employer questionnaires are due

n : ter tio ter gis m tra en 7 to re ps.co i gis to 01 Re dline 2, 2 and lersh n a a e de un atio KDe J orm tU inf .Bes ore w r m ww Fo o to g

HOW IT WORKS AM Best UK Dealerships To Work For is a two-part process designed to gather information about each participating dealership.

Part one: the employer completes the employer questionnaire which details company policies, practices, benefits and demographics.

This can be completed at group level for all the participating dealerships where applicable.

Part two: employees of the company complete

JUNE 30: Online employee engagement & satisfaction surveys are emailed to staff

the employee engagement & satisfaction survey, an in-depth set of 76 statements based on a 1-5 scale of ‘disagree strongly’ to ‘agree strongly’.

The survey also includes two open-ended questions and seven demographic questions.

Both surveys are completed online, although a paper option is available if email and internet technology is not available for use by employees.

Best Companies Group will combine the results

JULY 14: Deadline for completion of employee survey

AUGUST 22: Notification letters sent to participating dealerships

of the two surveys to determine which companies make the list of the Best UK Dealerships To Work For. Participating is free, and dealerships will have the opportunity of purchasing an Employee Feedback Report from Best Companies Group which will provide comprehensive details of the surveys, including employee comments and benchmarking against peers.

SEPTEMBER 5: Employee feedback reports sent to companies which ordered them

NOVEMBER 9: AM Best UK Dealerships To Work For report published at Automotive Management Live

MARKET INTEL

USED CAR SALES

Minimal effect on RVs under new VED system Changes represent only a small increase in the overall running costs, say experts

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he new Vehicle Excise Duty (VED) system will create anomalies. It is introduced on April 1, a month into the new Ô67Õ plate, with the same models in the showroom yet in some cases vastly different road tax requirements.

Two or three years on when those cars return to the forecourt, there may be some small impact on the used car market - the cars registered in March may sell faster.

Under the new system, first year VED rates will continue to vary according to CO2 emissions with owners of higher emitting cars paying more, then a simpler three-tiered system comes into play.

VED for zero emission cars is £0 from year two provided they are priced at less than £40,000. Vehicles emitting any CO2 attract a standard VED rate of £140 after year one and owners of vehicles with a list price of more than £40,000 including zero emission vehicles have to pay an additional rate of £310 for the following five years before reverting to its standard rate.

Philip Nothard, retail and consumer editor at Cap HPI, said: ÒMarch 2017 is set to be the biggest on record and vehicles will flow back into the market on different cycles. ÒOn used vehicles, consumers are likely to roll up VED into the total cost of ownership calculation. With high-end cars, the VED is effectively an irrelevance when compared to the price paid for the vehicle. ÒLonger term residual value (RV) forecasts

EXAMPLE Buyers need to know the VED regime is based on list price including options. Despite being discounted, this deal below would move the car from £140 VED to the additional rate £450 VED per year.

Vehicle price (exc VAT) Basic list price Discount -10% Delivery

£32,250.00 (£3,225.00) £550.00

Sub Total Options (exc VAT) Metallic paintt FOC paint discount Leather

£29,575.00

Options Totall p Transaction price (inc VAT)

£833.33 £34,490.00

List Price

£40,960.00

£500.00 (£500.00) £833.33

will remain unaffected because the changes represent a small increase in overall running costs of a vehicle. ÒWhile we may see isolated variances, the changes will have minimal, or even zero influence on a vehicleÕs market value. ÒIf a dealer has two identical cars on a forecourt, one with a lower annual VED cost, it wonÕt necessarily attract a premium, but will support a quicker sale compared to its equivalent counterpart.Ó Rupert Pontin, head of valuations at GlassÕs,

VEHICLE EXCISE DUTY 2017 CO2 emissions (g/km) 0 1-50 51-75 76-90 91-100 101-110 110-130 131-150 151-170 171-190 191-225 226-225 More than 225

VED bands for cars registered on or after April 1,2017 First year rate Standard rate (year two onwards) £0 £10 £25 £100 £120 £140 £160 £200 £500 £800 £1,200 £1,700 £2,000

£0 £140 £140 £140 £140 £140 £140 £140 £140 £140 £140 £140 £140

Standard rate (year two onwards) for cars costing >£40,000 – payable for five years* £310 £450 £450 £450 £450 £450 £450 £450 £450 £450 £450 £450 £450

*Cars costing above £40,000 incur an annual £310 supplement on top of the normal standard rate for the first five years

20

MARCH 2017

said: ÒA short term trend may emerge where vehicles entering the market which are three years old and subject to the former VED rates could realise a greater return. These are likely to quickly wash through wholesale channels and activity will return to normal. ÒIt is highly unlikely the buying public will even remember these changes in three yearsÕ time and in some cases it makes the vehicles cheaper to tax, anyway. It may well affect the decisions of people considering a car that originally cost £40,000 or more and they may factor in the additional costs they will incur over the course of the forthcoming years that the £310 supplement applies. However, if this becomes widespread we are likely to see dealers increasing screen prices to allow for this and to protect margins. ÒThere will be very little impact to the used car market in 2020 as a result of these changes. I would be more worried about what further VED increases are around the corner for cars registered before April 2017, as history shows it is unlikely that they will remain unchanged for very long.Ó

BIGGEST LOSERS Keeresources, which provides automotive lifetime operating cost and value data, also identifies the biggest losers as cars with a list price more than £40K since it attracts the additional fee. Hence buyers of a three-year old car in this price range will pay the £310 premium for another three years.

However the residual impact will be limited director Mark Jowsey commented: ÒThere will be an undoubted advantage for many vehicles up to end-March 2017 registered on the prior VED regime for a considerable time. ÒWe see other factors, notably overall running costs and perhaps the recent decline in diesel sales as likely to be as significant and we are already factoring these into our forecasts. Some market distortion will be caused on higher-emitting vehicles seven years and older where they gain a £140pa VED versus a prior £500+pa cost, which will have some RV effects.Ó

OVERALL RUNNING COSTS AND PERHAPS THE RECENT DECLINE IN DIESEL SALES (ARE) LIKELY TO BE SIGNIFICANT MARK JOWSEY, KEERESOURCES

am-online.com

MARKET INTEL

Sponsored by

FINANCE OFFERS

No shortage ag of p inexpensive deals on offer

S

uzuki, Nissan and Dacia continue to maintain the lowest monthly prices for finance offers in Q1. It’s a position all three brands held in Q4 and they’re continuing the same offers on entry level models in the lead up to March to boost sales.

The Celerio is still available for £79 a month, although Suzuki has increased the deposit by more than £600 this time. Nissan’s Micra has swapped places with Dacia in the top three with an £89 a month offer taking second place. The Japanese manufacturer has followed suit with a deposit increase, up slightly by £55. The Sandero Stepway has seen its monthly price go up £10 to £99, but it’s still one of the most affordable new cars in the UK. Volume players like Ford and Volkswagen get in on the action at the more affordable end of the market with deals on Ka+ and Up Beats at £109 and £115 a month respectively.

Lowest deposit is on the Swift at £0 and Fiat mops up the rest with representative examples with deposits as low as £199 on the 500L Pop 1.4 96PS. Audi’s R8 Spyder is at the other end of the spectrum, but the German brand has reduced the deposit level required by around £150. The monthly payments have been reduced from £1,499 to £1,399.

While others in the most expensive category aren’t surprising due to their performance or luxury nature, Jeep’s Cherokee stands out as particularly

TOP FINANCE DEALS FOR RETAIL BUYERS Model Lowest monthly price offers in Q1 Suzuki Celerio 1.0 SZ2 5 door Nissan Micra 1.2 Visia Limited Edition Dacia Sandero Stepway Ambiance TCe 90 Fiat 500 Lounge 1.2 69hp Fiat 500S 1.2 69hp Volkswagen Up Take Up 1.0 60PS 3-door Dacia Sandero Ambiance TCe 90 Dacia Logan MCV Ambiance TCe 90 Ford Ka+ Zetec 1.2 VCT 85PS Volkswagen Up 1.0 60PS 3-door Beats Highest monthly price offers in Q1 Nissan GT-R 3.8L V6 RECARO Audi RS 7 4.0 TFSI quattro 560PS tiptronic 8-speed BMW X6 M BMW X5 M Jeep Cherokee 2.0 Multijet II 140hp Limited 6-speed manual BMW i8 Mercedes-Benz G 350 d Jeep Grand Cherokee 3.0 CRD V6 Limited Plus Audi R8 Coupe V10 5.2 FSI quattro 540PS S tronic Audi R8 Spyder V10 5.2 FSI quattro 540PS S tronic

Finance Deposit type

Term

Monthly Final APR payment payment

Offer ends

PCP PCP PCP PCP PCP PCP PCP PCP PCP PCP

£1,855 £2,611.73 £2,159 £3,998 £3,898 £2,671.23 £697 £1,725 £3,670.05 £3,119.71

48 months 37 months 48 months 24 months 24 months 48 months 48 months 48 months 24 months 48 months

£79 £89 £99 £99 £99 £99 £109 £109 £109 £115

£2,228 £3,195.26 £2,799 £5,525 £5,775 £2,286.90 £2,865 £2,827 £4,754 £3,546

5.90% 7.90% 7.90% 0.00% 0.00% 6.50% 7.90% 7.90% 0.00% 6.50%

31/03/2017 31/03/2017 31/03/2017 31/03/2017 31/03/2017 03/04/2017 31/03/2017 31/03/2017 31/03/2017 03/04/2017

PCP PCP PCP PCP HP PCP PCP HP PCP PCP

£21,255.10 £20,244.24 £15,999 £15,839 £10,288 £6,999 £17,999 £14,121 £31,757.37 £32,824.06

37 months 36 months 48 months 48 months 24 months 48 months 24 months 24 months 36 months 36 months

£799 £829.00 £849 £899 £908 £989 £999 £1,261 £1,299.00 £1,399.00

£37,359.84 £34,241.80 £30,708.15 £30,825.70 N/A £40,418.80 £47,750 N/A £58,900.00 £64,203.85

2.90% 4.90% 2.90% 2.90% 0.00% 2.00% 6% 0.00% 6.30% 6.30%

31/03/2017 02/04/2017 31/03/2017 31/03/2017 31/03/2017 31/03/2017 31/03/2017 31/03/2017 02/04/2017 02/04/2017

pricey, even taking into account it’s a 0% deal. Given it’s on HP it will always have higher monthly payments due to the lack of a balloon payment, but £908 a month puts the offer right next to a BMW i8 and X5 M. The deposit of £10,288 isn’t the highest from the top 10, but the i8 actually has a lower deposit and would only cost an extra £80 a month.

According to AM’s retail offers data there are 56 0%

finance deals across 14 franchises in Q1, an increase on the 40 recorded in Q4 2016. This hints at manufacturers looking to increase financial support to dealers in the run up the March plate-change.

SEARCH FOR FINANCE OFFERS For a searchable list of manufacturers’ finance offers, go to am-online.com/offers

FINANCE PENETRATION

am-online.com

Source: SMMT/FLA

VOLUME OF POS SALES

Private new car registrations Number of new cars on POS finance 1,500,000 1,200,000 900,000

2016

2015

2014

2012

2013

2011

2010

300,000

2009

600,000

2008

Fears that a prevalence of Personal Contract Purchase plans (PCPs) could see the motor industry spark a crash similar to that of the US mortgage crisis have been aired after new business in the point of sale (POS) consumer car finance market grew 12% by value and 8% by volume in 2016.

New business was up 3% by value and down 3% by volume in December, compared with the same month in 2015, figures released by the Finance & Leasing Association (FLA) show.

POS consumer new car finance was up 1% by value and 8% lower by volume in December, 2016, compared with the same month in 2015.

In 2016 as a whole, new business grew 12% by value and 6% by volume.

Nine out of 10 private new car buyers relied on a PCP agreement as the monthly payment option drove record new car sales.

Some industry commentators fear sub-prime lending could catch customers out

in an economic climate where currency fluctuations and the effects of Brexit could prompt a fall in residual values.

Speaking to The Guardian, Andrew Evans, a

fund manager at investment firm Schroders, said “borrowing is a very bad idea when it is done against a depreciating asset”, adding that there was a “serious level of fragility built into the system”.

The FLA’s head of motor finance, Adrian Dally, argued that the market was “stable”, however, adding: “I think people are acutely aware of what happened in 2008. Back then credit and liabilities were held by people who didn’t know who they had loaned to, but that isn’t the world we live in now.”

AM asked Dally why potential barometers of the finance industry’s health, such as default rates, were not published by UK car finance providers.

He said: “They are details that the FLA doesn’t hold. It’s not as though there is no transparency.”

The percentage of private new car sales financed by FLA members through the POS reached 86.6% in 2016, up from 81.4% in 2015.

MARCH 2017

23

OPINIONS

VIEWPOINT TEACH YOUR SALES STAFF TO AVOID ‘TRIPPING POINTS’

GLOBAL DEALERS FACE FIVE CHALLENGES

TIM ROUTLEDGE, chief experience officer, Experience Insight

STEVE YOUNG managing director, International Car Distribution Programme

Any sales process can be derailed by Ôtripping pointsÕ Ð those moments that test a customerÕs commitment to a purchase, and make them reconsider or even quit altogether.

Some tripping points may be obvious, such as rude or unhelpful staff; some less so Ð whether a sales person offers a hot drink or not. But all of them matter.

The brain is hard-wired to seek congruence, so tripping points occur whenever our expectations and reality do not match.

Your potential customers have done research, consulted friends and been exposed to marketing campaigns. When they walk into a showroom, they will have expectations about how the experience is going to go. If they are not met, tripping points will occur.

The shift in attention these trigger activates an unavoidable cascade of physiological and neurological responses that your customer experiences as stress.

The instinctive response to stress is Ôfight or flightÕ. At best, this means an uncomfortable experience for your customer. At worst, they wonÕt buy from you.

Advances of scientific knowledge about how humans make

“CUSTOMERFACING STAFF MUST BE COACHED TO BETTER UNDERSTAND PSYCHOLOGY” 24

MARCH 2017

decisions means we now have the ability to identify tripping points as they happen in real time, see how much stress they generate and determine what may be causing them.

Tripping points can be caused by any aspect of the customer experience Ð the process, the environment or customer-facing staff.

Employee development programmes are the best starting point for optimising customer service as the ÔTripping Point IndexÕ highlights opportunities to enhance sales staff performance.

Analysis of the emotional, motivational and functional intelligence of each customer-facing employee and their levels of resilience to stress should be used to inform the design and delivery of targeted training programmes.

Customer-facing staff must be coached to better understand psychology and human behaviour, and also in developing their own emotional intelligence to help them determine why customers may be feeling or behaving in a certain way and how best to respond.

Some customersÕ reactions may seem odd and what triggers them insignificant, but things are often not as they appear and if sales staff are to appreciate how tripping points work, they need to understand what is causing them.

After providing the background to tripping points by explaining the science behind them, specific tripping points highlighted by the research can be introduced and customer-facing staff coached to recognise and overcome them.

Helping sales staff to empathise better with customers (and colleagues) makes it more likely that tripping points will be avoided.

All dealers face a number of common challenges. Product changes include increased connectivity, autonomy, telematics and remote diagnostics, electrification and hybridisation. In parallel, customersÕ attitudes are being shaped by the internet, and the data and services it provides access to.

Experiences in other sectors are transferring into what customers are looking for from the automotive industry. These include a greater focus on “instant gratification” and convenience, the Ôalways onÕ nature of consumers, and less reliance on physical shopping.

Consequently, we see five challenges faced by dealers: 1. Facilities Manufacturer demands for new facility investments sometimes seem to ignore the need to make a financial return, or whether the building will still meet the needs of customers in 10 years. In a decade, we will see substantially fewer main dealers, and more secondary points, satellites of metro/urban dealers, in highfootfall locations. There will be a surplus of dealer property with downward pressure on values.

2. The move online Customers are moving online for research, and some for purchase.

In Europe, more than 50% have chosen a single brand before making any dealer visits. The sale has been lost by other brands without them even being aware the customer was in the market.

Manufacturers and dealers need to work together to find ways to engage with customers during the research phase.

“IN A DECADE, WE WILL SEE SUBSTANTIALLY FEWER MAIN DEALERS” 3. Building a balanced business In markets like the US or UK, dealers generate significant contributions to profit from new car sales, used car sales and aftersales.

In continental European markets, many dealers neglect the used car business, and aftersales retention varies widely. Such imbalances leave dealers exposed to downturns in the new car market and aftermarket independents capturing market share.

4. Securing scale advantages There is a trend in most markets towards consolidation. However, scale itself does not give advantage. Continental Europe and China has rapidly developed the dealer group model, with Ôhands offÕ holding company approaches changing towards more corporate models with central functions and greater oversight of detailed dealership KPIs. 5. The importance of people A more active approach is required to target the right sort of people for customer-facing roles, to ensure that their reward systems (fixed salary plus commissions/profit share Ð if any) incentivise the desired behaviours. Induct them effectively and mentor and develop them throughout their employment.

am-online.com

HAVE YOUR SAY Do you agree with these opinions?

Get in touch by email - tim.rose@bauermedia.co.uk

POLL THE CURSE OF THE MIDDLE MANAGER

TWO OUT OF THREE BACK NATIONALLY FIXED PRICING FOR NEW CARS

PROFESSOR JIM SAKER is director of the Centre for Automotive Management at Loughborough University’s Business School and an AM Awards judge. He has been involved in the automotive industry for more than 20 years

COULD/SHOULD NEW CARS EVER BE SOLD AT A NATIONALLY FIXED PRICE, REMOVING CUSTOMER NEGOTIATIONS?

Over the past few years, I have become obsessed by college football – the American sort, not the football we play.

It is a big business, involving unpaid college students playing before crowds of up to 100,000, with millions more watching on TV around the globe. The bestpaid university employee in the world is a college football coach, with a salary of $9 million.

The coaching structure involves a head coach, supported by myriad assistant coordinators who cover every aspect of the game. Some of the best interactions are on the sideline, with the head coach berating an assistant, who, in turn, berates the students, who appear to ignore him.

One of the fascinations is the role middle management plays in the structure. A couple of years ago, Columbia Business School undertook a study that showed more middle managers suffer from depression than any other sector of the work force.

It found that middle managers have higher wages and more autonomy than the workers they manage, but earn less than their superiors and don’t get to make the big decisions.

Middle managers often have to enforce policies from the top (often ones they didn’t develop or agree with) on subordinates who may object to the changes.

Basically, middle managers have the stressful task of absorbing

the discontent of both sides.

In the past, if you were looking for a new dealership sales manager, you appointed the bestperforming salesperson, often without any consideration as to whether the person had any propensity to manage.

My experience in the industry suggests those organisations with strong middle management are the most successful, even if the talent at the top and bottom of the organisation may be lacking.

At Loughborough, we have noticed a marked rise in interest in middle management education within our sector. Historically, the bulk of manufacturer programmes have focused on product and technical training, with management education simply being a ‘nice to have’. Some of the best-performing groups, as well as individual dealerships, are beginning to focus on what is often called ‘talent management’, ensuring that the right people with the right skillset get placed in management positions where they and the company can succeed. This is a move that supports and builds the management structure.

It is ironic that as the dieselgate scandal rumbles on, the only indictments issued have been against six managers – one of whom has been arrested in the US while the other five have been advised by the lawyers not to leave Germany. Being in the middle can be depressing.

“MORE MIDDLE MANAGERS SUFFER FROM DEPRESSION THAN ANY OTHER SECTOR OF THE WORK FORCE” am-online.com

UNSURE 3.3%

YES 60.7%

NO 36%

Almost two thirds of AM-online users believe new cars should be sold at a nationally fixed price.

However, some are also concerned about such a measure being restrictive, and leading to fewer new car sales.

One respondent wrote: “The market can only be competitive if pricing is negotiable. To fix prices goes totally against competition regulations.”

Another said: “It’s not about negotiation, it’s about any business being able to offer a product at a margin they are comfortable with. I can envisage a world without haggling (see our feature on page 89), but putting your best price first and not negotiating is very different to having a single market price for each product, which would be an ultimate disaster for the consumer.”

Yet others cite premium brands such as Apple, that set the prices of their products and its retailers do not discount.

“It would vastly simplify things and customers could use customer satisfaction results to make their choice of dealer,” said one voter. Another agreed: “I would prefer a fixed price, then consumers would choose a dealership of their choice rather than the dealer who discounts the most.”

NEXT MONTH: DO YOU BELIEVE CONSUMERS WANT TO TAKE MORE CONTROL OR CARE OVER THEIR PERSONAL DATA?

VOTE NOW AT AM- ONLINE .COM/POLLS MARCH 2017

25

27th April 2017 Ricoh Arena, Coventry

Connecting the car, the customer and the dealership Cars are already connected and soon vehicles will communicate its servicing and maintenance needs direct to the manufacturer or dealership whilst self-driving cars are a reality

Customers expect a digitalised and joined-up car buying experience with tailored and relevant communications as part of a seamless journey effortlessly joining online, off-line and in-store

Dealerships are increasingly digitised and boutique-style stores are ever more popular whilst the business needs to consistently operate on multiple virtual platforms and in the physical world

Exploring how digital and technology is creating a new era of automotive retailing, AM DigiTech identifies the challenges, opportunities and solutions Headline sponsors:

Co-sponsors:

Topics include

Full masterclass session line-up

• Maximise the digital marketing budget and to gauge the value of different platforms

Tailoring the digital marketing budget for the modern consumer

Technological innovation for the modern dealerships

Martin Dew, head of digital, Autoweb

Richard Buxton, head of unified communications, Node4

• Understanding and preparing for the security risks of a digitally dependent world • Unravelling the complexities of data and legal requirements on the horizon

Exploring digital marketing and advertising channels, how they connect and resonate with customers to result in leads. What you will take-away:-

• Utilising and integrating the increasingly sophisticated use of social media

• Review methods of tracking the returns generated by different marketing channels

• Latest trends in the new and used car purchase journey

• Analysis of the different ways to assign value to website visitor acquisition channels

Speakers include Hedley Aylott chief executive officer and co-founder of Summit, digital retail ‘changemakers’, with clients such as Rockar, Peugeot, Argos and Carpetright

• Understand how these channels interact as part of the customer journey

Online finance, the drive towards digital sales and compliance James Tew, CEO, iVendi Drawing on its wealth of data, iVendi highlights trends and behaviours and explores the role of online finance tools as a facilitator of FCA compliance regulations.

What you will take-away:• How online finance is rapidly developing and evolving consumer expectations

John Leech head of automotive sector for KPMG in the UK, who has acted as a consultant to the government and authored a study on driverless cars

Nick King insight director, Auto Trader, reveals new research exploring processes and steps taken by the most successful dealers

John Miele sales director, carwow, will draw on its wealth of data which helps explain consumers' attraction to using aggregator sites

• Why online finance tools are likely to keep the FCA happy • What we can learn from consumer interactions with online finance tools

Why online reputation matters and how to manage it

Today’s technology advances explained and its role in running an efficient and cost effective businesses and how it enhances customer experiences. What you will take-away:• A greater understanding of the technology available and what’s on the horizon • How technology can make a difference to processes and efficiencies • How technology improves the customer experience and when it turns people off

Social Relationship Marketing (SRM) explained Jeremy Evans, managing director, Marketing Delivery How a mature social media strategy and the wider marketing mix delivers integrated customer communications and how to maximise its reach and engagement. What you will take-away:• Understand the fundamental principles of a mature social media strategy • How quality data ensures your social media presence is maximised • The basics and benefits of Social Relationship Marketing or SRM

Charlie Roberts, sales director, Reputation.com

How retail innovation can impact the dealership model

Keeping tabs on what consumers are saying about your business on third party sites such as Google, Facebook and other major review sites, the pitfalls and best practice. What you will take-away:-

This session explores the innovation in the retail sector and looks at how dealers can capitalise on it to benefit their business.

What you will take-away:-

• Understand why consumers value reviews and information from third party websites

• How to adapt and embrace the latest retail innovation

• How to keep tabs on who’s saying what about your business and how to respond

• How to align your business with the consumer journey and expectations

• Learn how your business can benefit from third party website reviews

• How to meet the different demands of individual customers online, off-line and in-store

Cox Automotive

For further details, please visit www.amdigitech.co.uk or contact Paige Phillips on 01733 395133 or paige.phillips@bauermedia.co.uk

SHOWROOM LAUNCH REPORT

NISSAN MICRA: EUROPE-ONLY MK5 AIMS

The Mk5 Micra is destined for Europe alone

A

t the launch of the new Nissan Micra, executives were quizzed about the B-segment contender’s “below-par” predecessor.

Laurent Marion, Nissan’s product general manager, defended the Indian-built Mk4 Micra, asserting that the “global car” had delivered 1.4 million sales, but added: “Was that car the right car for Europe? I think we have your answer, because the new car is the car that really defines that.”

Designed in Europe and built at Renault’s factory in Flins, France, the fifth-generation Micra is destined for Europe alone.

At 78mm wider, 55mm lower and 174mm longer (3,999mm) than the outgoing model, it brings the first dose of drama and high levels of personalisation to the Micra range.

Three choices of interior, 10 paint options, four exterior trim options and an array of decals yield a possible 120 variants. A sound system, designed in partnership with Bose,

100 MARCH 2017

features a pair of speakers in the driver’s headrest.

Guillaume Cartier, Nissan Europe’s senior vice-president of sales and marketing, believes the average age of buyers of the new car will be under 50, five to eight years younger than the average B-segment buyer.

He added: “The Micra is currently 15th among the segment’s best sellers in Europe, but we fully expect that the new car will put us back into the top 10.”

Prices start at £11,995 for the entry-level 73PS 1.0-litre Visia.

The range also includes 90PS 1.5-litre dCi turbodiesel and 90PS 0.9-litre turbocharged petrol engines and Visia+, Acenta, N-Connecta trim grades, topping out with the £18,645 dCi-engined Tekna.

The only gearbox available from launch is a five-speed manual.

Nissan launches the Micra with a £169-amonth PCP for the N-Connecta, including a free Bose upgrade (normally £500).

WE FULLY EXPECT THAT THE NEW CAR WILL PUT US BACK INTO THE TOP 10 GUILLAUME CARTIER, NISSAN EUROPE

Performance figures for the 73PS engine have yet to be published, but the 90PS petrol unit claims fuel efficiency of 64.2mpg and 99g/km CO2 emissions. Cars without stop/ start record 58.9mpg and 107g/km.

The 0.9-litre unit should reach 62mph in 12.1 seconds and a top speed of 109mph.

The 1.5 dCi unit claims 88.3mpg and 85g/ km, but loses 12mpg and gains 12g/km without start/stop. It accelerates from 0-62mph in 11.9 seconds, to a top speed of 111mph, making it the fastest option.

In a move towards autonomous driving, the Micra comes with lane-keeping technology and automatic braking as standard, along with stability systems that manage brake and power delivery.

A £500 Vision+ Pack adds a 360-degree monitor, moving-object detection, rear parking sensors and blind-spot warning to the N-Connect and Tekna trims.

Hill start assist, LED running daylights and a gear shift indicator are also standard

am-online.com

FOR B-SEGMENT TOP 10 Q&A £11,995 £18,645

0.9-LITRE 90PS AND 1-LITRE 75PS PETROL; 90PS 1.5-LITRE DCI DIESEL

The new Micra comes with three choices of interior

55.4-88.3MPG

Your predecessor told AM that a rise in registrations from 66,336 in 2008 to 152,525 in 2016 had put NissanÕs retail network under pressure. Does that remain a concern?

I have come to a brand in really good shape. As a business, we have seen a dramatic recovery since the financial crisis, but one of the things that struck me coming into the job was a chart of Nissan sales, which showed just how meteoric the growth has been.

The scale of the business is no longer what it was five or six years ago. The important thing for me is that the infrastructure in the network is right for those new volumes and aspirations and that the quality of service is maintained for our customers.

I donÕt see that as the networkÕs responsibility. I think we can streamline processes to make things leaner and more straightforward, so the network can do its job with fewer headaches.

85-115G/KM CO2

Will the changing demands mean the consolidation of a portion of the network into larger group ownership?

WhatÕs critically important is that we

0-62MPH 11.9-12.1 SECONDS; TOP SPEED 109-111MPH

Rear headroom is insufficient for anyone over 5ft 10in

5SP MANUAL

on all Micras, with the Visia+ trim adding air conditioning.

Acenta adds body-coloured trim, a seveninch touchscreen infotainment system, cruise control and two-tone upholstery.

N-Connecta cars come with 16-inch alloys, tinted windows, automatic air-conditioning and a NissanConnect seven-inch touchscreen sat-nav infotainment system featuring Apple CarPlay, while Tekna grade adds 17-inch alloys, keyless entry and engine starting and the Bose audio system.

A freak snow storm at NissanÕs Dubrovnik launch location meant AM only drove the N-Connecta 1.5 dCi (£17,345).

A high shoulder line and broad D-pillars compromise rear visibility, the falling roofline also meaning that rear headroom is insufficient for anyone over 5ft 10in, but the driving position will comfortably accommodate a larger driver and the MicraÕs 300-litre boot is class-leading, along with the overall interior quality and refinement. TOM SHARPE

am-online.com

ALEX SMITH NISSAN MOTOR (GB) MANAGING DIRECTOR

continue to ensure that customers receive the best possible service. It isnÕt possible to change your ownership model to make that happen. We have well motivated, well trained staff in our dealerships and that is what matters most.

As long as quality customer service remains top of the agenda, we donÕt mind what size of operation is running our sites. Many of our retailers are solus operators and they are often the ones with the best relationships with their local community.

What are the major challenges for Nissan in 2017?

In 2017, there are headwinds that the industry will face in terms of cost base.

It is important that we keep an open dialogue in terms of cost of franchise.

Is the market too volatile for us to set targets and forecast what we will do? No, but I think we have to be prepared for an interesting year.

Another challenge is how busy we expect to be. Micra and Note are being replaced by a car that shares little more than a nameplate with its predecessor and we have significant updates to Qashqai and X-Trail.

The intelligent technologies that the new Micra features are segment firsts, the perceived quality of the interior is superb and the range of engines is excellent. We have completely reset our expectations in the B-segment.

KEY RIVALS

Ford Fiesta

Vauxhall Corsa

Citroën C3

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MARCH 2017

101

RESOURCES

APPRENTICESHIP LEV Y

TALENT PEOPLE DEVELOPMENT

am-online.com

IMI ‘CONFIDENT’ DEALERS CAN USE ALL APPRENTICESHIP LEVY FUNDS Dealers must ‘get on’ with developing new standards, says IMI and NFDA

T

he Institute of the Motor Industry (IMI) believes dealer groups will be able to use all of their apprenticeship levy funds to avoid handing back unused money to the Government.

From April 6, businesses with annual payroll costs of £3 million or more will pay 0.5% of their annual payroll bill, minus an allowance of £15,000, into an account towards the apprenticeship levy.

Dealers had expressed concern that they would not be able to use all of the funds in the original 18-month timeframe and the Government extended this to 24 months in October. Businesses can start drawing down the funds from May 2017.

Steve Nash, IMI chief executive, said: “Dealers will have two years before they will lose the funding from their levy pot.

I’m confident the other standards that are in development will be ready in time before that 24-month deadline.”

Apprenticeships are moving from the previous ‘frameworks’ system. Employeeled working groups or ‘trailblazers’ now have to develop a ‘standard’, which has to be approved by a body, such as the IMI, before levy funds can be used against it.

Stephen Latham, National Franchised Dealer Association (NFDA) senior operations manager, urged dealers to get behind development of the new standards and take on apprentices across a variety of job roles to avoid a surplus of levy funds.

The IMI has been working with dealer groups to help them figure out how much of the levy will be taken up by manufacturer-mandated training for technician apprenticeships and how much will be left in the pot after that.

The first standard to be developed in the automotive industry was the level three vehicle technician standard, which took two years. Nash is confident others will be

CHECK APPROVED S TA N D A R D S The Government keeps an up-todate list of the apprenticeship standards that are approved, in development and suggested. Check out what is available at: am-online.com/ ApprenticeshipStandards

DEALERS WILL HAVE TWO YEARS BEFORE THEY WILL LOSE THE FUNDING… I’M CONFIDENT THE OTHER STANDARDS THAT ARE IN DEVELOPMENT WILL BE READY IN TIME STEVE NASH, IMI

a lot faster, perhaps less than a year.

He said: “There has been a lot more activity in the last couple of months. I think it got to the point where people have to accept that it’s happening and get on with making it work for them.

“A lot of the speed around development will come down to the trailblazer groups that have to drive this forward.”

Upskilling p g the industryy According to Nash, the existing level two light vehicle technician framework represents 85% of all apprentices in the automotive retail sector. There is not a level two standard to replace it in development and Nash said dealers and trailblazer groups would need to convince the Government of a need for it.

Nash said: “I would expect most manufacturer academies to migrate to the new level 3 light vehicle technician standard.

“Currently, only a few of the premium brands like BMW and Mercedes train to level three. The Government would regard the upward shift to level three across the sector to be a positive outcome.”

Latham said dealers have been getting behind the development of other standards after the Government rejected calls to delay the apprenticeship levy until there

HOW MUCH WILL THE APPRENTICESHIP LE V Y COST YOU? Use this tool to estimate if your business will pay the levy, how much you will have available to spend on apprenticeships and how much the Government will contribute: am-online.com/ApprenticeshipLevy

was greater clarity around Brexit.

He said: “I think after dealers knew there wasn’t going to be a delay they stopped seeing it as an unwanted tax burden and they know they need to make the most of it in order to use the funds available to them.

“Dealers should also look at other standards outside the automotive industry that have already been approved or are in development to see if they might be relevant to their business.”

Latham said the approval process for standards had been “bureaucratic and slow” but the Government realised it needed to speed up the process three months ago and since then the speed of the approval process has improved.

He said: “I don’t think the Government anticipated how many apprenticeships would be developed. This isn’t just the automotive industry. Every company across the UK is now looking at developing standards for apprenticeships.”

Motor finance apprenticeships pp p Adrian Dally, head of motor finance at the Finance and Leasing Association (FLA), is part of the trailblazer group developing the standard for the motor finance specialist apprenticeship.

“The apprenticeship is aimed at anyone that will be sitting down with a customer to talk about finance,” he said.

“In our experience the process has been refreshing. The Government has been very helpful through development.

“We had 12 raised hands overnight to join the trailblazer group and that has been growing. We developed the initial outline for the standard from our first meeting.”

Dally is confident it will get the green light before the end of March.

TOM SEYMOUR

CIT Y & GUILDS WEBINAR Bryony Kingsland, UK funding manager, City & Guilds, gives an hour-long webinar on the new apprenticeship funding for employers, plus a brief update on the wider apprenticeship reforms. am-online.com/CityAndGuilds

MARCH 2017

107

TALENT INTERVIEW AM, Media House, Lynch Wood, Peterborough PE2 6EA Email: AM@bauermedia.co.uk

EIGHT QUESTIONS TO...

A MANUFACTURER AFTERSALES CHIEF David Higson, head of technical and service quality, Mercedes-Benz Vans, is excited about how technology and connectivity can help him deliver the best service possible to customers What are the main responsibilities of your role?

HIGSON: N: I’m very lucky, as I get to head a great team responsible for such an important part of our business.

We serve our customers via our 116 sites across the UK to ensure their businesses are kept moving.

As part of that, we are focused on customer service delivery and everything that entails, including connectivity and digitalisation programmes that are being developed to continuously improve our offering.

My daily focus is to ensure our technical support and customer services, including 24-hour roadside assistance, are maintained to the highest levels, including management of the UK-specific service levels delivered by our pan-European customer assistance centre.

Another important element of my role is the constant dialogue with our customers and dealers. This helps to shape the direction of the business.

What are the most significant challenges ahead in your field of work?

HIGSON: N: The challenge is always to keep customers’ businesses moving and exceed the expectations of their diverse requirements. Ultimately, a van is a mechanical item and will need to be maintained, so it is our unrelenting focus to do this with as little disruption as possible.

We offer round-the-clock servicing across the vast majority of our nationwide dealer network, 24-hour free roadside assistance and operate using highly trained technicians, but my specific challenge also comes with the ‘what next’ bit.

For example, the use of technology and connecting our customers’ vans to our network has become one of the more exciting elements of my role.

How could these challenges be overcome?

HIGSON: Challenges will always be faced in a business, but I believe they can be turned into opportunities. For example, we work collaboratively across all departments within Mercedes-Benz Vans in the UK. It’s no longer ‘sales’ and ‘aftersales’ – we always have the broader business view in mind.

We know our service offering delivers value for money to customers and presents retention opportunities to our dealer partners, which helps drive sustainability and promotes reinvestment with the brand.

However, the biggest area of opportunity is the

am-online.com

digitalisation of this offering and all that entails, so when we start to link our service solutions with vehicle connectivity via Mercedes PRO, we become a true partner to our customers – not just a manufacturer.

What attracted you to this area of expertise?

HIGSON: My background is engineering, sales and marketing, and training. I completed an engineering apprenticeship, which led me into a technical sales role within the commercial vehicle industry.

From here, I moved into a sales and marketing role for Mercedes-Benz Vans, heading the marketing function a number of years ago. The brand is good at developing people, so I moved to a training role to cement my passion for all things technical, as well as promoting the best customer experience through learning.

This ultimately led me to my position as head of technical and service quality, bringing together all of my experience into the one role.

What’s the most important thing you’ve learned in your career, and how have you made use of it?

HIGSON: You can’t go too far wrong if you work with the customer in mind first and foremost. I have also learned that it helps to work collaboratively and be adaptable to change. Having a good sense of humour is essential, too.

As customer needs have changed, the company has evolved. My adaptability to change has enabled me to continue to progress within the organisation and ensures all the knowledge and expertise I have stays with Mercedes-Benz Vans. MATT DE PREZ

QUICK-FIRE QUESTIONS What drives you?

I genuinely love the brand of Mercedes-Benz Vans and what it stands for.

What’s your favourite app?

We use Slack at work to communicate our key achievements and news stories.

How do you relax?

I own a classic Mercedes-Benz and enjoy mountain biking and other sports with my young son.

THIS MONTH’S QUESTION TO THE AM TEAM: What is the best (or worst) award you have won?

EDITORIAL Editor-in-chief Stephen Briers 01733 468024 stephen.briers@bauermedia.co.uk A football skills trophy in 1980. I didn’t even realise it was a competition Editor Tim Rose 01733 468266 tim.rose@bauermedia.co.uk The European languages prize at high school News and features editor Tom Sharpe 01733 468343 tom.sharpe@bauermedia.co.uk Yorkshire Journalist of the Year 2007 Head of digital/associate editor Jeremy Bennett 01733 468261 jeremy.bennett@bauermedia.co.uk A bed-making competition at junior school PRODUCTION Head of publishing Luke Neal 01733 468262 My 10 metre swimming certificate, although I was trying to swim 20 metres Production editor Finbarr O’Reilly 01733 468267 A Mr Man mug to celebrate my ‘Grumpiest Member of Staff’ award. Naturally, I treasure it Designer Erika Small 01733 468312 The B2B quiche bake-off CONTRIBUTORS Matt De Prez, Debbie Kirlew, Chris Phillips, Tim Routledge, Prof Jim Saker, Tom Seymour, Alex Wright, Steve Young ADVERTISING Commercial director Carlotta Hudgell 01733 366466 (maternity cover) Group advertisement manager Sheryl Graham 01733 366467 Head of project management Leanne Patterson 01733 468332 Project managers Kerry Unwin 01733 468578 Lucy Peacock 01733 468327 Katie Lightfoot 01733 468338 Account managers Sara Donald 01733 366474 Kelly Crown 01733 366364 Ryan Pummell 01733 366473 EVENTS Event director Chris Lester Event manager Luke Clements 01733 468325 Event planner Nicola Baxter 01733 468289 PUBLISHING Managing director Tim Lucas Office manager Jane Hill 01733 468319 Group managing director Rob Munro-Hall Chief executive officer Paul Keenan Subscriptions 01635 588494. Annual UK subscription £99, two years £168, three years £238. Overseas one year/12 issues £149, two years £253, three years £358.

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