AMUC14_FPAD_FPAD 18/07/2014 15:50 Page 1
Tuesday 21 October
Telford International Centre, TF3 4JH Success in used car sales has long been the bedrock of a successful dealership. Today, the sales environment is undergoing a transformation that is redefining the long-established sales model. Vital profit centres in F&I are under scrutiny and consumer trends ensure that understanding and adapting to a digital sales model is imperative. The current sales model must change and adapt.
Headline sponsor:
The AM Used Car Market Conference 2014 sees experts presenting their thoughts and best practices to help dealers adjust to the rapidly changing conditions. Developed with dealers for dealers, the conference is designed to provide pragmatic advice and practical ‘take-aways’ that can help turn the threats surrounding today’s used car operation into tomorrow’s opportunities.
Co-sponsors:
For more details, or to book visit www.usedcarconference.co.uk
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Technology can help win customers’ trust, but not without a team behind it
I
t shouldn’t come as a surprise to encounter workshop technicians clutching cutting-edge gadgets in franchised dealerships. They do it every day as part of their jobs and are trained and measured on their abilities to a degree only fighter pilots are familiar with. However, when the gadget is a camera and the technician is making a motion picture selfie – alongside an offending ‘red work’ part – what is the reaction? Given the industry’s collective ‘light bulb’ moment regarding video over the past 18 months, with dealers keen to show-and-tell customers everything, the reaction is probably a shrug, a ‘C’est la vie’ and a pat on the back for increasing conversion rates. They say it’s not the gun that kills, but the man behind it. Likewise, it’s not the camera that builds trust, but the technician holding it. And while the technician is the star in this movie, everyone that works with them, supports them and manages them plays as fundamental a part in winning trust. The elements that go into ensuring that trust are covered in this month’s AM, focusing on aftersales: from having the best staff (p33), being available when customers expect you to be (p38), maximising working efficiency (p49) and having the right tools available to meet your customers’ demands (p53). And we launch the 2015 AM Awards, including for the first time recognition for the essential part service advisers play in ensuring aftersales success (p22).
OUR EXPERT CONTRIBUTORS 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 (p30), he asks if used car dealers are wiser to focus on maximum margin or swiftest stock turn? Professor 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 (p46), he argues that the motor retail sector has to begin making salespeople available at the times when customers want them.
The AM editorial team Email: am@bauermedia.co.uk Website: www.am-online.com
Jeremy Bennett Editor
Tim Rose Managing editor
Don’t forget to enter the AM Awards! See the categories on page 22 am-online.com September 2014 5
In this issue September 2014
38 FACE TO FACE KNIGHTS GROUP AFTERSALES DIRECTOR IAN DOW
Your news
AM Awards 2015
Insight
9
22
33
Going back to basics on right-first-time repairs
35
AM poll
News digest
This month’s round-up includes fresh acquisitions for Marshall Motor Group and Arnold Clark Automobiles, record results for Lookers, and average dealer profitability rises to £31,000 for June.
Enter now
Details of all the categories, two of them new, in the UK motor retail industry’s most illustrious awards.
Analysis
Market intelligence
14 New car registrations
July’s 6.6% rise in registrations prompts the SMMT to upgrade 2014 forecast to 2.45m units.
16
Used car values Average used car values reached a
19
Finance
6 September 2014 am-online.com
Our readers share what proportion of their customers who buy service plans actually use them.
38 Face to face: Knights Group
Aftersales director Ian Dow explains why he has extended working hours, up to 2am for some departments, and why the motor trade needs to follow the lead of other retail sectors on customer convenience.
27 Tesla goes it alone in UK
The American electric car maker is aiming for dramatic UK sales growth, but franchised dealers and aftersales profits are not part of the plan.
record high in July, according to BCA, up 1.4% on the month before. The FLA responds to the Financial Conduct Authority’s proposed ‘think again’ clause on GAP insurance.
Improving your dealerships’ firsttime fix rates is the first step in winning customers back from independents and getting your ‘value for money’ message right.
30
Margin vs time in stock?
CAP’s Philip Nothard asks whether it is wiser to focus on maximum margin or swiftest stock turn.
46
View from the business school
Dealers need to make the right resource available in the right place and at the right time, writes Prof Jim Saker.
For the latest motor retail industry news, visit am-online.com Sign up to get AM news daily by email: am-online.com/newsletter
22
AM AWARDS 2015 ENTER THE MOTOR RETAIL ‘OSCARS’ NOW
DEALERS AND SUPPLIERS IN THIS ISSUE:
64
CITROËN CACTUS WILL IT BUMP UP ‘MAINSTREAM’ SALES?
53 GIVE YOUR WORKSHOP A PERFORMANCE BOOST THE LATEST IN AFTERSALES TECHNOLOGY
49
Measure the right things to cut waste
Lean thinking can double a service department’s efficiency, delegates at the AM Aftersales Executive Club heard, but it is not for the faint-hearted.
Showroom
64 Citroën Cactus
Quirky design and innovative finance may attract buyers tired of run-ofthe-mill family hatchbacks.
66 Seat Ibiza FR
Fuel-saving active cylinder technology powers a car that is frugal but fast.
69 Mazda6 Tourer
Estate’s effortless 1,200-mile Highlands trip shows why the Mazda6 is such a hit in Scotland.
ways to boost your 53 Eight workshop’s performance 70 Mitsubishi ASX Retail service, maintenance and repair volumes are forecast to fall more than 10% in the next five years. Use these tools to improve your conversion rates and profits.
The crossover has helped to reverse the fortunes of Mitsubishi dealers.
Coming soon
Recommended 60 Reader Roundtable 74 Dealers are asking for extra support with new regulations and methods of working, say 2014’s top suppliers.
In October’s issue of AM
Face to face with John Clark; Do dealers need to change their add-ons to comply with the FCA?; and the BMW 2 Series Active Tourer reviewed.
ADP Dealer Services UK............................54 Arnold Clark Automobiles..........................11 ASE.....................................................................12 Auto Trader.....................................................60 BCA.....................................................................16 BDO....................................................................22 Black Horse..........................................11,14,60 Brayley Cars....................................................11 Bristol Street Motors....................................11 BTC....................................................................53 CAP....................................................................30 Car Care Plan................................................60 Castrol........................................................34,53 CitNow........................................................42,53 Citroën..............................................................64 City Motor Holdings......................................11 Close Motor Finance.......................................9 Deloitte..............................................................14 Duncton Group..............................................20 Emac.................................................................60 Frontline Solutions.......................................20 Gforces.............................................................54 JFE Nissan......................................................33 Knights Group................................................38 Kia......................................................................33 Lean Enterprise Academy..........................49 Lookers...............................................................9 Mapfre Abraxas............................................60 Marshall......................................................11,34 Mazda...........................................................33,69 Mitsubishi........................................................70 Moneybarn......................................................20 Pendragon..........................................................9 Pentana............................................................54 Pinewood.........................................................60 Provident Financial Group.........................20 Razoom............................................................54 RTS....................................................................33 Seat....................................................................66 Stericycle ExpertSolutions........................54 Supagard.........................................................60 The Warranty Group....................................20 Tesla..................................................................27 Trend Tracker...........................................34,53 Trowbridge Ford............................................11 TrustFord..........................................................14 Unipart Automotive.......................................12 Vertu Motors...................................................11 What Car? .......................................................12
am-online.com September 2014 7
MARKET INTELLIGENCE 16
Used car values
The latest data on nearly new, ex-fleet and part-exchange car values from the UK’s main auctions.
19
THE NEWS IN DEPTH
Finance
The Finance and Leasing Association responds to FCA proposals for GAP insurance policies to require a ‘time to consider’ clause
N E W C A R R E G I S T R AT I O N S
SMMT upgrades 2014 forecast to 2.45m units July’s 6.6% year-on-year rise marks 29th consecutive month of growth NEED TO KNOW n 172,907 new cars registered in July n Year-to-date growth now at 10.1%
A
By Tim Rose total of 172,907 new cars were registered in July, a rise of 6.6% and the 29th consecutive month of growth. The Society of Motor Manufacturers and Traders (SMMT) said economic confidence and attractive finance had driven the market up 10.1% year-to-date to 1,460,172 units. The SMMT has revised upwards its 2014 market forecast, to 2.45 million registrations, 8.1% higher than 2013. Mike Hawes, SMMT chief executive, said: “The continued positivity has led to an uplift in the SMMT full year forecast to 2.45m passenger car registrations, a rise of 8.1%. However, the more moderate growth of the last
VOLUME SPLIT
July Total Diesel Petrol AFV Private Fleet Business 2014 172,907 91,324 78,291 3,292 76,738 88,256 7,913 2013 162,228 82,290 77,506 2,432 71,539 83,763 6,926 % change 6.6% 11.0% 1.0% 35.4% 7.3% 5.4% 14.3% Mkt share ‘14 52.8% 45.3% 1.9% 44.4% 51.0% 4.6% Mkt share ‘13 50.7% 47.8% 1.5% 44.1% 51.6% 4.3% Year-to-date Total Diesel Petrol AFV Private Fleet Business 2014 1,460,172 734,197 699,346 26,629 700,378 690,369 69,425 2013 1,325,851 653,035 654,957 17,859 628,964 639,306 57,581 % change 10.1% 12.4% 6.8% 49.1% 11.4% 8.0% 20.6% Mkt share ‘14 50.3% 47.9% 1.8% 48.0% 47.3% 4.8% Mkt share ‘13 49.3% 49.4% 1.3% 47.4% 48.2% 4.3% three months shows that overall demand is beginning to stabilise.” TrustFord’s operations director John Leeman said 29 months of continuous growth was “a remarkable achievement” and reflected ongoing consumer confidence, falling
U K N E W C A R R E G I S T R AT I O N S 2 0 0 7-2 013 (F U L L Y E A R S) A ND SM M T 2 014 F O R EC A S T
14 September 2014 am-online.com
inflation rates, wage growth and a national employment increase. “What’s more, we have seen a huge effort from across the industry to provide consumers with quality products, great customer service and competitive financial packages.” Sue Robinson, director of the National Franchised Dealers Association, said: “It is extremely encouraging that new car sales continued to improve in July with year-to-date growth now at 10.1%. “With such strong manufacturer and finance offers currently available, dealers are reporting that it is proving much easier to close a sale. However, competitive pricing and strong incentives remain important if the sales trend is to continue throughout 2014.” David Raistrick, UK Automotive leader at Deloitte, said: “It will be interesting to see whether the major September registration month will continue to show strong growth. I
expect overall growth levels will start to stabilise in the final part of the year; a slowdown that will largely be driven by the increasing numbers of nearlynew vehicles returning to the market.” Chris Sutton, managing director, Black Horse, one of the UK’s leading motor finance providers said: “The UK automotive sector is clearly one of the success stories of the UK economic recovery with yet another month of increased new car sales albeit at a more moderate pace than we have recently witnessed, a likely indication that growth may stabilise over the forthcoming months. “Consumers are clearly being influenced by improved fuel-efficient cars and attractive finance deals. “In a very competitive market, consumers will be eagerly awaiting new models that will be arriving on the market, which we would anticipate will further add to an increase in new car sales in the second half of 2014.”
MARKET INTELLIGENCE New car registrations N E W C A R R E G I S T R AT I O N S
10 -Y E A R M A R K E T T R E N D S AVA I L A B L E : w w w.am-online.com/ami
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June Year-to-date Marque 2014 % market 2013 % market % 2014 % market 2013 % market % share share change share share change Ford 23,647 13.68 25,597 15.78 -7.62 197,201 13.51 188,993 14.25 4.34 Vauxhall 18,756 10.85 18,165 11.20 3.25 160,365 10.98 150,805 11.37 6.34 Volkswagen 14,017 8.11 14,029 8.65 -0.09 124,683 8.54 115,346 8.70 8.09 Audi 12,032 6.96 10,761 6.63 11.81 95,793 6.56 84,528 6.38 13.33 Nissan 10,455 6.05 9,195 5.67 13.70 81,384 5.57 70,856 5.34 14.86 BMW 9,955 5.76 8,390 5.17 18.65 85,077 5.83 73,604 5.55 15.59 Mercedes-Benz 8,404 4.86 7,673 4.73 9.53 72,270 4.95 62,310 4.70 15.98 Škoda 7,588 4.39 4,922 3.03 54.16 46,764 3.20 37,306 2.81 25.35 Peugeot 6,845 3.96 7,375 4.55 -7.19 64,273 4.40 63,628 4.80 1.01 Kia 6,011 3.48 6,027 3.72 -0.27 46,860 3.21 43,205 3.26 8.46 Toyota 5,791 3.35 6,645 4.10 -12.85 56,855 3.89 54,003 4.07 5.28 Hyundai 5,302 3.07 4,997 3.08 6.10 48,034 3.29 44,132 3.33 8.84 Citroën 5,179 3.00 5,732 3.53 -9.65 49,269 3.37 48,516 3.66 1.55 Fiat 4,863 2.81 4,610 2.84 5.49 39,733 2.72 34,033 2.57 16.75 Seat 4,149 2.40 2,929 1.81 41.65 31,491 2.16 25,681 1.94 22.62 Renault 4,088 2.36 2,319 1.43 76.28 36,152 2.48 22,354 1.69 61.72 Land Rover 3,722 2.15 3,459 2.13 7.60 33,741 2.31 33,579 2.53 0.48 Mini 3,571 2.07 3,147 1.94 13.47 24,979 1.71 28,467 2.15 -12.25 Honda 3,030 1.75 3,372 2.08 -10.14 32,949 2.26 33,598 2.53 -1.93 Volvo 3,010 1.74 2,274 1.40 32.37 22,860 1.57 19,054 1.44 19.97 Mazda 2,426 1.40 2,196 1.35 10.47 22,313 1.53 17,838 1.35 25.09 Suzuki 2,254 1.30 1,739 1.07 29.61 21,980 1.51 18,859 1.42 16.55 Dacia 1,404 0.81 1,303 0.80 7.75 14,380 0.98 8,297 0.63 73.32 Jaguar 1,352 0.78 1,155 0.71 17.06 11,178 0.77 9,813 0.74 13.91 Mitsubishi 1,181 0.68 397 0.24 197.48 7,181 0.49 5,431 0.41 32.22 Lexus 731 0.42 692 0.43 5.64 6,362 0.44 4,806 0.36 32.38 Porsche 661 0.38 731 0.45 -9.58 5,301 0.36 4,632 0.35 14.44 Smart 415 0.24 342 0.21 21.35 2,942 0.20 3,263 0.25 -9.84 Alfa Romeo 342 0.20 376 0.23 -9.04 3,299 0.23 3,163 0.24 4.30 Jeep 278 0.16 133 0.08 109.02 1,906 0.13 1,091 0.08 74.70 MG 203 0.12 27 0.02 651.85 1,407 0.10 156 0.01 801.92 Subaru 165 0.10 87 0.05 89.66 1,474 0.10 1,187 0.09 24.18 Maserati 161 0.09 20 0.01 705.00 725 0.05 194 0.01 273.71 Infiniti 131 0.08 28 0.02 367.86 357 0.02 266 0.02 34.21 Chrysler 126 0.07 172 0.11 -26.74 1,210 0.08 1,551 0.12 -21.99 Bentley 120 0.07 131 0.08 -8.40 930 0.06 727 0.05 27.92 Abarth 116 0.07 96 0.06 20.83 905 0.06 807 0.06 12.14 SsangYong 80 0.05 31 0.02 158.06 818 0.06 322 0.02 154.04 Aston Martin 50 0.03 45 0.03 11.11 532 0.04 575 0.04 -7.48 Lotus 34 0.02 25 0.02 36.00 129 0.01 122 0.01 5.74 Perodua 3 0.00 13 0.01 -76.92 25 0.00 165 0.01 -84.85 Chevrolet 2 0.00 701 0.43 -99.71 2,761 0.19 7,465 0.56 -63.01 Mia 0 0.00 0 0.00 0.00 5 0.00 0 0.00 0.00 Proton 0 0.00 0 0.00 0.00 1 0.00 15 0.00 -93.33 Saab 0 0.00 0 0.00 0.00 1 0.00 3 0.00 -66.67 Other British 77 0.04 81 0.05 -4.94 509 0.03 503 0.04 1.19 Other Imports 180 0.10 89 0.05 102.25 808 0.06 602 0.05 34.22 Total 172,907 162,228 6.58 1,460,172 1,325,851 10.13
BIGGEST GROWERS Y E A R T O D AT E
1 2 3 4 5 6 7 8 9 10
BRAND YTD (%) MG 801.92 Maserati 273.71 SsangYong 154.04 Jeep 74.70 Dacia 73.32 Renault 61.72 Infiniti 34.21 Lexus 32.38 Mazda 25.09 Mitsubishi 32.22
Fixed price, five-year care packages, gongs from consumer brands such as Which?, Honest John and What Car? and a strong performance in the new Auto Express Driver Power survey of 50,000 car owners, who put the brand’s dealers only behind Lexus, have so far failed to translate into improved sales for Honda. Market share is at a new low. Outlet numbers are at least stable and the range has been boosted recently by the Civic Tourer, but the 2015 Jazz can’t come soon enough.
BRAND 10 Mia 9 Honda 8 Aston Martin 7 Smart 6 Mini 5 Chrysler 4 Chevrolet 3 Saab 2 Perodua 1 Proton
YTD (%) 0.00 -1.93 -7.48 -9.84 -12.25 -21.99 -63.01 -66.67 -84.85 -93.33
BIGGEST FA L L ER S Y E A R T O D AT E
9 am-online.com September 2014 15
AMDD14_FPADv2_FPAD 13/08/2014 09:47 Page 1
DIGITAL DEALER CONFERENCE 2014
4 September 2014 – The Heritage Motor Centre, Gaydon This conference aims to deliver easily digestible ‘chunks’ whilst also throwing a few curved balls to help dealers maintain their momentum and avoid becoming bogged down in the sheer volume of information, innovation and options available in the digital sphere. As well as marketing and social media, the conference looks at the wider aspect of digital including latest technology, data and security.
Our speakers include: I
Ian Plummer, Volkswagen UK
I
Henry Williams, Williams Automobiles
I
Alex Kozloff, Internet Advertising Bureau
I
Marshall Manson, Social@Ogilvy
I
Hugh Dickerson, Google
Headline sponsor: Masterclass sponsors:
For further details, please visit www.amdigitaldealer.co.uk
IN OCTOBER’S ISSUE
C O N TA C T U S
PUBLISHED SEPTEMBER 26
AM, Media House, Lynch Wood, Peterborough PE2 6EA Email: AM@bauermedia.co.uk
FACE TO FACE:
John Clark Motor Group John Clark, managing director, tells AM why the Scottish dealer group has been growing strongly and how it optimises its sales.
John Clark, (right) chairman and managing director, pictured with Chris Clark, business development director
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 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, Tom Seymour AM advertising Commercial director Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Project managers Leanne Patterson 01733 468332 Kerry Unwin 01733 468327 Angela Price Lucy Peacock 01733 468338 Account managers Julie Howard 01733 468141 Sara Donald 01733 366474 Richard Kerr 01733 366473 Kelly Crown 01733 366364 Recruitment enquiries Richard Kerr 01733 366473 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 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.
Do you need to change your basket of add-ons? In light of the FCA’s focus on ‘positive consumer outcomes’, we look at whether dealers’ upselling processes, and the products they offer, may need to change in the near future.
The secrets of success Looking at add-on product segments, we ask dealers how they feature that product in their sales process and why they enjoy such success.
ADVERTISERS’ INDEX Alphera...................................................56 Armchair Answercall.........................55 ASE .........................................................17 Autoclenz...............................................63 Autos On Show.Tv................................52
74 September 2014 am-online.com
BMW 2 Series Active Tourer The first front-wheel-drive car to bear a BMW badge is a major departure from the brand’s heartland.
Barclays Partner Finance...................2 Black Horse...........................................18 British Car Auctions ..........................62 Cars 2......................................................71 Chris Eastwood Automotive............72 Dealer Management Services.........55 DM Keith.................................................71 DSG Financial Services......................67 TrustFord ..............................................71
Heritage Automotive..........................72 iVendi.......................................................61 Lawdata..................................................63 Lloyds Banking Group.......................18 Loughborough University.................51 Manheim Retail Services..............8, 13 Mapfre Abraxas ..................................10 Motoring.co.uk...............................36-37 Northridge Finance.............................26
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Paragon Automotive...........................31 Park’s Motor Group............................72 Pentana Solutions...............................51 Supagard ..............................................62 Symco......................................................35 Trader Publishing......41, 43 45, 47, 48 Trusted Dealers...................................12 Volkswagen Financial Services......73 CitNow.....................................................32