am may 2015 preview

AUTOMOTIVE MANAGEMENT

www.am-online.com May 2015 £8.00

T R E N D S / P 3 6

What you need to know about the new used car customer

M A Z D A 2 / P 6 2

Taking on the big boys of the B-segment

N I S S A N / P 21

New showroom CI puts the car buyer at the core

E F F I C I E N C Y / P4 6

15 ways to boost your pre-owned profitability

‘NOBODY TRIES HARDER THAN US… NOBODY’

MD Grant Long explains how Norfolk Motor Group has stamped its authority on the area with a relentless focus on customer satisfaction

F A C T T O F A C E / P 2 8

For more information visit: www.ampeopleconference.co.ukor contact Emma-Louise Kinnaird on 01733 395133 or email [email protected]

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The editorial teamEmail: [email protected] Website: www.am-online.comTwitter: @amchatter LinkedIn: am-online.com/linkedin

Dealers need to be ready for a new breed of used car customer

Jeremy BennettEditor

Tim RoseManaging editor

Danielle Bagnall Senior reporter

welcome

[email protected] am-online.com/ami/am-online.com/linkedinam-online.com @amchatter facebook.com/automotivemanagementUK

inance has transformed new car sales of late, but what impact have fixed monthly payments, shorter replacement cycles, younger stock and the ability to search nationwide had on the traditional used car customer? One thing is for certain: despite strong retained values keeping screen prices high, the

consumers have more buying power than ever and your sales and marketing teams need to understand how to influence their choices and win their custom. Our insights on page 36 and page 40 examine the latest consumer trends

affecting the used car market. One particular is the consumer’s growing appetite for easy-to-understand finance, arranged at the dealership. However, the finance sector says many dealers still fail to properly put finance at the front of their used car proposition and could be missing out on sales as a result. Maybe the used car’s screen price should be replaced by a monthly payment offer the customer knows they can budget for.On page 21, Nissan reveals its new strategy to impress customers and

make them feel welcomed by its retail network. The contrast between how a global brand and a small, regional motor retailer approaches that aim is aptly illustrated by our face-to-face interview with Norfolk Motor Group on page 28.On a separate note, we’ve relaunched AM-online.com and if you’ve not visited

it yet, please do so and let us know what you think.

o u R E x p E R T c o n T R I B u T o R S

F

AM & IMI People ConferenceBook tickets today at:ampeopleconference.co.uk

June 11, 2015

am-online.com May 2015 3

prof Jim SakerAs director of the centre of Automotive

management at lough-borough University’s Business School, Saker is a key figure behind the drive for manage-ment recognition and skills in the motor retail sector.

This month (p33), he looks at the changes technology is bringing to the sector, such as a camera that can tell how a test drive is going.

philip nothardHe 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 Hold-ings, lythgoe motor Group and Arnold clark. In this issue (p26), he suggests a simple formula for dealers to calculate exactly how much their over-age stock costs them daily.

customer satisfaction to build loyalty and stamp its authority on the area.

33 Jim Saker’s view from the business schoolCould Twitter let carmakers see into the future?

34 The key to brilliant customer service

First figure out the service balance you want to provide, says M&S customer service head Jo Moran.

36 Get to know the new used car customer

We examine how finance, shorter replacement cycles and younger stock affect the pre-owned sector.

40 Is 2015 the year used car finance finally explodes?

Used car HP and PCPs are forecast to increase, but dealers still face challenges.

45 Are used car values on course for a crash?

We ask experts in remarketing and valuations where the market is heading in the next 18 months.

PCP

26-28monthsused car

market

Your news

7 News digest This month’s round-up includes

Marshall’s £40m AIM flotation; the FCA is to outlaw automatic opt-ins for add-on products; record results for Perrys Motor Sales; and RAC Cars makes its listings free for all dealers and consumers.

Market intelligence

13 New car registrationsRegistrations hit a 16-year high in plate-change March.

15 Dealer profitabilityThe average UK motor dealer lost £13,500 in February.

17 Used cars The average value of all cars in

March was £5,251, down £316, or 5.7%, on February’s average and 0.2% below March 2014.

4 May 2015 am-online.com

28FACE TO FACENORFOLK MOTOR GROUP MD GRANT LONG

Analysis

21 Nissan’s new CI puts customers at the core

To fight the dramatic fall in showroom visits, Nissan is redesigning its showrooms to give customers a more welcoming, seamless and interactive experience.

23 Making Nissan fit for fleet Nissan is refining its focus on its

corporate customers to top last year’s record fleet registrations.

26 Have you counted the cost of your overage stock?

CAP’s Philip Nothard takes a look at a formula that takes the emotion out of stocking.

Insight

28 How one niche dealer takes on the nationals

Managing director Grant Long on how Norfolk Motor Group has used

In this issue May 2015

WHO IS THE NEW USED CAR

CUSTOMER?

36

WILL USED CAR VALUES

EXPLODE IN 2015?

40

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

21NISSAN

PUTTING CUSTOMERS AT THE CORE


Ageas .....................................................................7Allianz Global Assistance ..............................55Alphera Financial Services ..........................40Aston Barclay ....................................................45Auto Trader ................................................36, 46Automotive Compliance ...............................44Autorola ..............................................................50BCA .......................................................................37Black Horse .......................................................42CAP ................................................................45, 47Car Care Plan ...................................................55CitNow .................................................................47City Auction Group.............................................8Clive Brook ...........................................................7Close Brothers Motor Finance ...................44Co-operative Motor Group ...........................56Experian Automotive ......................................36FCA .........................................................................7GForces ...............................................................48Glass’s ......................................................7, 42, 45IMI ........................................................................18iVendi ....................................................................48Jaguar Land Rover ............................................8Jemca Car Group ............................................46John Clark Motor Group .................................8KPMG ...................................................................37Lookers .................................................................8Manheim ......................................................38, 47Mann Island Finance ......................................42Mapfre Warranty .............................................55Marks & Spencer.............................................34Marshall Motor Group .....................................7MG ...........................................................................9MotoNovo Finance ...........................................42Motorline...............................................................9Motors.co.uk ...............................................37, 47Movex ...................................................................47MyCarCheck Trade .........................................38Nationwide Accident Repair ...........................9Nissan ...........................................7, 8, 14, 21, 23Norfolk Motor Group ......................................28Paragon .................................................................7Perrys ....................................................................8RAC Cars ..............................................................8Retail Automotive Alliance ...........................56Riverside Motor Group.....................................9Romans International .....................................48Savilles ................................................................56Seat .........................................................................8Swansway Garages ........................................18The Warranty Group .......................................56Trident Garages ................................................56Warranty Direct................................................55Wessex Garages ..............................................40WMS Group........................................................55

D E A L E R S A N D S U P P L I E R S I N T H I S I S S U E :

MAZDA2TAKING ON THE B-SEGMENT’S BIG BOYS

46 15 ways to boost your pre-owned profits

We explore how to increase the efficiency of your used car operation.

52 AM PollMost dealers believe their used car sales have suffered because of the new car market.

55 Stretch your profits with extended warranty sales Warranties offer dealers increased revenues and retention from reassured customers.

Showroom

62 Mazda2The stylish and well equipped Mazda2 should do well in the UK’s tough supermini segment.

64 Suzuki S-CrossDealers are looking forward to an update of Suzuki’s crossover car this autumn, which may include the first diesel automatic.

65 Mazda3With a flood of new models, Mazda’s product image, value and pricing have been rated more highly by dealers.

67 Volkswagen Golf A prowl through Volkswagen’s online test-drive booking facility reveals online users’ most in-demand car is the Golf.

Coming soon

70 In June’s issue – published May 22

Swedish-style personal service as Volvo rolls out the franchise’s new corporate identity; how dealers can fight the fast-fits; the best from the AM Aftersales Conference and the Fiat 500X reviewed.

62


F O R D A I LY N E W S , V I S I T: a m - o n l i n e . c o m

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

F O L L O W A M O N T W I T T E R : @ a m c h a t t e r

NEWS DIGEST8 Mg

MG has announced it will open a multi-million pound flagship dealership in London’s Piccadilly.

RAC CarsUsed car classified advertising service removes charge for listings.

10

T H E N E W S Y O U C A N ’ T A F F O R D T O H A V E M I S S E D

M A R S H A L L M O T O R H O L D I N g S

Marshall £40m LSE flotation to fuel further acquisitionsMarshall Motor Holdings has raised more than £40 million in its flotation on the London Stock Exchange.

Chief executive Daksh gupta said the move would accelerate the growth path the company has been on for the past six years, enabling more sizeable acquisitions and expansion of its existing operations.

The flotation on the alternative investment market (AIM) by the private, family-owned business saw the placing of 26.9m shares – or 38.4% of the total – at 149p per ordinary share. Shares in the company were trading at 182p at the time of going to press. The

Marshall family now owns about 66% of the business. In addition to the £40m, Marshall also has access to £75m in a revolving credit facility.

The company also has a new board. Alongside Gupta are Peter Johnson, non-executive chairman, chief financial officer Mark Raban (formerly of Inchcape Retail, Borders Group, Selfridges and Safeway); and non-executive direc-tors Alan Ferguson (a non-execu-tive director of Johnson Matthey, Croda International and the Weir Group and formerly of Inchcape); Sarah Dickins (executive people director of Provident Financial Group); Francesca Ecsery (a non-

executive director of Foreign & Colonial Investment Trust, Share and Good Energy Group); and Christopher Sawyer (a former chairman of Lorien Ltd and a non-executive director of Marshall Cambridge Holdings since 2008).

The directors have a share-holding of about 1.3%.

By the end of 2014, Marshall Motors had exited 21 non-core or loss-making franchises, while making 12 acquisitions and building six start-ups.

N I S S A NA Nissan open point at Dumfries has been filled with the appointment of family-run car dealer Crossflags.

The dealership is operating from a temporary facility on the site of a former petrol station off Huntingdon Road in the centre of the town until a permanent one is developed nearby.

C L I V E B R O O kClive Brook has acquired its second site from Harratts group, with the acquisition of the Volvo dealership on Leeds Road, Huddersfield.

Clive Brook said: “I created Clive Brook Ltd, which took over the then struggling Harratts site in Bradford. The team here has transformed the dealership into one of Volvo UK’s best-performing sites after enjoying a record-breaking first seven years, which included winning consecutive Trading Standards award for ‘Excellence in Customer Service’ along the way.

“Our appointment will see a significant drive to engage both existing and long-term Volvo customers in the Huddersfield area, with some very keen introductory offers for car sales, service, accessories and parts.”

Harratts Group is on a path to turnaround after it posted a £3million loss in 2013.

F C AThe practice of requiring consumers to opt out of purchasing add-on products is to be outlawed by the Financial Conduct Authority (FCA).

The FCA is concerned that the practice of defaulting consumers into buying a product, for example by using pre-ticked boxes to sell them add-on insurance, often results in consumers purchasing a product they don’t need.

Christopher Woolard, FCA director of strategy and competi-tion, said: “This is about ensuring consumers can make the right decision on what add-on insurance they do or don’t need. Forgetting to un-tick a box at the end of a purchase is not making an informed choice.”

The guidance encourages compa-nies to introduce the most common add-ons to consumers earlier in the sales process and says dealers should give the annual price of add-ons, rather than relying on monthly figures.

P A R A g O NParagon has renewed its contract with Vauxhall Motors as its sole provider of vehicle refurbishment.

The renewal of the contract will lead to further investment at Paragon’s Corby site.

Paragon has also been appointed to handle logistics for vehicles delivered out of the site to Vauxhall dealers.

The company’s fleet manage-ment system, iSight, will also be deployed on the contract.

A g E A SAgeas UK and Volkswagen Financial Services UK have signed an agreement to provide a new, fully branded motor insurance proposition from Volkswagen, Audi, Škoda, Seat and VW Commercial Vehicle dealerships.

Under the agreement, Ageas will underwrite it alongside a selected panel of insurers which it will also manage.

I N B R I E F

g L A S S ’ SA new data provision deal has been agreed between information services company Experian and Glass’s.

Experian has won the contract to provide the vehicle information, which enables Glass’s to link its data and propositions to a specific vehicle via the vehicle registration mark (VRM).

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

P E O P L E N E W S

T O N Y D R AY Lookers has appointed Tony Dray as fleet and commercial director.

Sitting on the operations board, Dray will report directly to managing director Nigel McMinn. Dray was previously fleet and commercial director at TrustFord.

R I C H A R D H A R R I S O N

Seat UK has appointed Richard Harrison as its new director, following the

departure of Neil Williamson.Harrison returns to Seat UK

from three-and-a-half years at Seat S.A, where he worked as group sales director West Europe, and more recently as dealer network development director, worldwide.

Williamson leaves to take up a senior international assignment within Volkswagen Group.

M A R K W H E E L E RNissan has appointed Mark Wheeler as its new fleet sales director.

Wheeler replaces Michael Auliar, who is moving to a new role as regional director with Nissan Europe.

In his new role, Wheeler will directly oversee Nissan’s corpo-rate sales, public sector, contract hire and leasing and dealer fleet teams .

N ATA L I E Y O U N GCity Auction Group has appointed Natalie Young as national sales manager.

With more than 17 years of experience, she has worked for Manheim Remarketing, Auto Trader Digital and Mercedes-Benz Retail. In her new role, Young will be responsible for developing director level relationships with franchised dealer groups and car supermarkets .

R A C C A R SRAC Cars, the used car classified advertising service, has announced its listings are now free of charge to all dealers and consumers.

It has made the move after four months of planning in an attempt to “revolutionise” the car classified websites market and to boost its use by dealers, who it says could save thousands of pounds annually in the medium term.

Rupert Keane, chairman of RAC Cars, said: “With just a few dominant players in the online used car advertising market, sellers feel like they are being held to ransom and paying top dollar to advertise.

“The RAC wants to offer something different that will benefit dealers and private motorists alike.”

P C P SConsumers choosing a new car on a personal contract purchase (PCP) will expect some equity to remain towards their next car when the motor finance term ends.

Research by Manheim showed that 95% of consumers on a PCP are expected to hand the vehicle back and ‘trade it in’ for a new vehicle on another PCP.

However, that ‘trade-in’ is dependent on there being extra value in the vehicle – 80% of consumers expect to have up to 10% equity remaining in the vehicle to take into the next contract.

However, separately, one used car market analyst told AM there is some concern that consumers reaching the end of the PCP may be disappointed in future after enjoying several years of finance deals that have been very heavily supported with manufacturer contribu-tions.

One dealer group chief recently told AM of a premium brand with a ‘negative equity’ product because its recent volume push had left insufficient equity in some models when PCP customers were due to change.

Manheim’s research showed a third of dealers target 75% of their PCP customers for an early exchange.

P E R R Y SCar dealer group Perrys Motor Sales enjoyed record revenue and profits in 2014, its annual results show.

Revenue increased by 8% to £531 million for the year to December 31 (2013: £491m), while operating profit was at £11m (£7.7m). Profit margin is at 1.9% compared with 1.38% in 2013. Gearing is at 60.21% (79.19%), return on capital employed 12.82% (11%) and EBITDA £13,037 (£9,665).

Gross profit margin was 14.4%, compared with 14.3% the previous year.

New car unit sales grew by 8% and used by 3%. Gross margin on new vehicles improved by 8% and 10% on used compared with 2013. Vehicle sales accounted for 87% of revenue and 60% gross profit.

J A G U A R L A N D R O V E R Jaguar Land Rover UK hopes to increase peace of mind in customers buying a used Jaguar or Land Rover vehicle with its revised approved used-car programme.

The new programme provides vehicles under five years old and less than 100,000 miles with a two-year unlimited mileage warranty, a 165-point inspection and a consequential damage warranty of up to the vehicle purchase price.

Approved used vehicles will get an independent history and mileage check, a 30-day, 1,000-mile vehicle exchange policy, UK and Europe roadside assistance, seven days’ driveaway insurance, and MoT cover.

Specifically for Land Rover approved-used, customers are also treated to a half-day Land Rover experience, allowing owners to experience the all-terrain capability.


J O H N C L A R K M O T O R G R O U PJohn Clark Motor Group has expanded its representation of Nissan to three car dealerships in Scotland.

Having begun Nissan representa-tion with its takeover of the Strat-stone Aberdeen site from Pendragon in 2013, John Clark Motor Group has now opened two new Nissan franchises in Dundee and Perth, creating up to 40 jobs. Both trade under its Specialist Cars brand.

Andrew Simpson, dealer principal of both new dealerships, said: “This is another demonstration of our commitment to growth. We are investing heavily across the region and see the Nissan brand as the ideal partner in keeping our business booming.”

The Dundee Nissan dealership is set on a prominent site at Specialist Cars’ existing base in Myrekirk Road.

The Perth Nissan dealership, in Strathtay Road, is on a brand new site for Specialist Cars, with significant investment made to turn the building into a top of the range showroom.

NEWS DIGEST R E A D A M I N Y O U R I N B O X : a m - o n l i n e . c o m / n e w s l e t t e r


M GMG has announced it will open a multi-million pound flagship dealership in London’s Piccadilly.

The six-car showroom will be housed in a seven-storey Georgian-fronted building at 47-48 Piccadilly, and will incorporate a state of the art interactive media centre so customers can configure their car.

As part of the investment, totalling almost £30 million, the building has been sympathetically refurbished and upgraded to accommodate the showroom.

MG will run the flagship showroom on the ground floor, with offices in the basement. Above are six floors of executive offices.

D I G I TA L F I N A N C EDealers have been urged to sharpen up the way they display online finance offers, following Lloyds Banking Group becoming the first bank to launch secured digital car finance in the UK.

Some dealers see a bigger threat as banks assess the rising potential of direct loans.

Initially, Halifax Car Plan Extra is restricted to eligible customers buying used cars through dealer-ships, but it will be extended to new car PCP and HP deals by summer. Halifax customers can prearrange secured finance for a used car and have the money transferred to a dealership when a sale is agreed.

N AT I O N W I D ENationwide Accident Repair Services has bought bodyshop group Seward in a £3.8 million deal.

Seward is the 10th-largest independent accident repair chain in the UK and operates eight body-shops plus mobile repair services in the region of Poole, Bournemouth, Southampton, Portsmouth and Brighton.

For the year ended March 31, 2014, Seward generated revenues of £16m and profit before tax and depreciation of £1.1m. Its net assets stood at £1.5m at March 31, 2014.

Nationwide said the addition of Seward’s bodyshops gives it greater coverage in the South and improves economies of scale and flow while extending its presence in its target markets of insurance, fleet and retail.

The acquisition was completed just as a takeover bid for Nationwide Accident Repair Services was announced by The Carlyle Group.

R I V E R S I D E Riverside Motor Group has acquired Peter Stockill Limited, which represents Seat and Chrysler Jeep in Hull, for an undisclosed sum.

The acquisition comes following Pat Stockill’s decision to retire from the industry, taking the group’s franchise portfolio to five.

Riverside director Mark Denton said: “The business fits perfectly for us geographically and we are excited about the prospect of a second Seat dealership in the group. ”

M O T O R L I N EThe Motorline Group has acquired Maserati Cardiff.

The business has been acquired from Arrow Automotive for an undisclosed sum and will be the second Maserati dealership in the Motorline Group.

The South East-based dealer group has in recent years expanded into the Bristol and Cardiff areas, so the acquisition fits well with their existing infrastructure.

Glen Obee, Motorline chairman, said: “This acquisition highlights our commitment to Maserati after opening the deal-ership in Maidstone last year .”

Motorline represents Volk-swagen, Toyota, Lexus, Hyundai, Maserati, Renault, Dacia, Škoda, Nissan and Peugeot as main car dealers.

MG’s Piccadilly showroom

The National Franchised Dealers Association (NFDA) makes a huge contribution to dealers by representing them as a lobbying group to government, government bodies, the EU and the SMMT.

Recent lobbying activity includes interactions with the Financial Conduct Authority over GAP insurance and representing dealers to the Driver and Vehicle Licensing Agency over the changes in number plate administration.

On top of these lobbying benefits, the NFDA provides individual as well as generic legal advice and a variety of support services around human resources and accounting.

The NFDA also promotes franchised dealers through the Trusted Dealers website.

To add to the mix, the NFDA has added a number of commercial packages with advantageous terms to be enjoyed by its members. These include confidential waste disposal, print management, stationery and office supplies, vending machines, water coolers, number plates, online recruitment and service plans.

These commercial partnerships are designed to help NFDA members save money while offering first-class suppliers to the membership.

If you’d like more information on our Trusted Dealers brochure, please email [email protected].

Turning to Trusted Dealers, I’d like to congratulate the team on a record March in generating more than 7,194 50-second calls, up 37% year-on-year, and 1,408 email enquiries, up 48% year-on-year.

Now that we are able to offer postcode matching to our members, we are also able to predict the level of enquiries in sales we would be able to generate for you.

By Neil Addley, MD of Trusted Dealers, the advertising website owned by dealers and the NFDA

TRUSTED DEALS FROM THE NFDA

For more information, call 01423 506 272 or email [email protected]

A M P R O M O T I O N

“The NFDA has added a number of commercial packages with advantageous terms to be enjoyed by its members”

market intelligence t h e n e w s i n d e p t h

14Registrations

Just 10 manufacturer brands accounted for 92% of the growth in first-quarter registrations.

15dealer profitability

the average Uk motor dealer lost £13,500 in February, a more than 20% increase over the loss made in February 2014.

sponsored by

Registrations hit 16-year high in plate-change March month’s 6% year-on-year growth driven by 11.6% increase in fleet sector cars


17Used cars

the average value of all cars in march was £5,251, down £316, or 5.7%, on February’s average and 0.2% below march 2014.

nearly half a million new cars were registered in the UK during the crucial March 2015 plate-change month.

the March new car market was 6% ahead of March 2014, according to data from the society of Motor Manufacturers and traders (sMMt), which said it was the best monthly performance since the twice-yearly number plate changes were introduced in 1999.

the month’s growth was driven by the fleet sector, which grew by 11.6% to 219,153 cars, while the private market rose by 2.7% to 253,043 units. Business registrations fell by 6.6% to 20,578 units.

the sMMt said the 37th month of consecutive growth in the UK’s new car market shows a continuing demand for new products and new fuel-efficient advanced technologies, and growth in fleet reflects the economic confidence currently felt by UK companies. it said the strong UK

U K n e w c a R R e g i s t R at i o n s

point-of-sale consumer car finance volumes grew 5% in February, to more than 133,000, said the Finance & Leasing association (FLa).

new business volumes in the used car finance market rose 9% compared with February 2014.

consumer new car finance volumes fell 3% in February, but were up 9% over 12 months. the percentage of private new car sales financed by FLa members through dealerships was 76% for the year.

geraldine Kilkelly, FLa head of research and chief economist, said: “the FLa’s Q1 2015 retail motor finance confidence survey shows that the majority of respondents expect single-digit growth in new business over the next 12 months.”

new cars bought on finance by retail buyers through dealerships Feb-15 change on 3 months to change on 12 months to change on previous year Feb 2015 previous year Feb 2015 previous yearValue of advances (£m) 626 +3% 2,374 +7% 14,104 +14%number of cars 41,534 – 3% 148,783 +1% 894,347 +9%new cars bought on finance by businesses through dealerships number of cars 24,122 – 3% 95,322 +1% 456,113 +11%

F e B R U a R y M o t o R F i n a n c e M a R K e t: n e w c a R s Source: FLA

F i n a n c e s tat sR e g i s t R at i o n s B y M a R K e t s e g M e n t y e a R -t o - d at e

Business 28,327

Business 30,9092014

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

2015

Source: SMMT

market has helped to bolster the economy and drive it out of recession. this growth, supported by domestic manufacturing, has attracted more than £14 billion of investment since 2011, creating almost 30,000 additional jobs.

mike Hawes, Smmt chief executive, said: “the best month this century for new car registra-tions is a welcome boost for the UK’s thriving automotive sector.

“the challenge for a new government and industry will be to maintain this momentum and to strengthen Britain’s manufacturing capabili-ties through continued investment, innovation and policies that maintain our global competi-tiveness.”

at stockbroker Zeus, analyst mike allen said the data confirmed its thesis that the sector is in a volume-orientated mid-cycle market, with some margin pressure in new and used cars, and anecdotal evidence that manufacturer

targets remain demanding and there is some pre-registration activity.

“that said, we believe forecast risk across the sector is firmly on the upside. the sector valua-tion of the UK dealer groups also continues to look undemanding in our view,” said allen.

chris Sutton, Black Horse managing director, said it was good to see a boost come from busi-nesses taking on fleets and upgrading company cars, demonstrating strong business confidence.

“the industry has for a while been suggesting that demand will ease for new cars, but based on current data it is hard to predict when this growth will slow down. certainly the continued low interest rate environment coupled with attractive and affordable car finance deals continue to play a strong role in maintaining growth in this part of the UK economy,” said sutton.■ turn to page 14 for analysis of Q1 performance, and to page 16 for the March registrations’ table.

Fleet 354,690

Fleet 309,545

private 351,571

private 347,668

MARKET INTELLIGENCE


Škoda has a three-year PCP on the Citigo that requires monthly payments of £75, one of many competitive Q2 offers. Ford’s focus is on 48-month personal leases, with an agreement on a Ka Zetec 1.2 three-door secured by a deposit of £945. Vauxhall’s opening offer on the Adam Jam is a two-year 2.9% PCP on the 1.2 White, which a user paying £99 a month can buy for £6,000 when the contract closes. Vauxhall also has five-year 0% HP deals on some derivatives in the Zafira, Insignia and Mokka ranges. Monthly payments of £189 are needed on a three-year, 6.9% PCP for a SsangYong Korando SE.

The full list can be found at www.am-online.com/offers

Model Finance Deposit Term Monthly Final APR Offer type payment payment ends

FordKa Studio 1.2 3dr Personal lease * £1,190 48 months £119 n/a n/a 30/06/15Ka Zetec 1.2 3dr Personal lease * £945 48 months £135 n/a n/a 30/06/15Fiesta Titanium 1.0 3dr Personal lease ** £3,657 36 months £159 n/a n/a 30/06/15B-Max Titanium 1.0 EcoBoost *** Personal lease *** £4,598 36 months £209 n/a n/a 30/06/15Eco-Sport Titanium 1.0 EcoBoost **** Personal lease *** £4,117 36 months £179 n/a n/a 30/06/15Annual mileage capped at 9,000. Excess charge per mile: * 5.71p ** 5.80p *** 5.89p **** 7.14p ŠkodaCitigo SE 3dr 1.0 PCP £2,750.08 36 months £75 £4,194.92 0% 30/06/15Fabia S 1.0 PCP £2,810.74 * 36 months £129 £4,103.95 4.8% 30/06/15Rapid S 1.2 PCP £3,643.46 36 months £129 £4,226.54 0% 30/06/15Octavia Hatch S 1.2TSi PCP £4,855.35 36 months £165 £6,429.65 0% 30/06/15Superb Hatch S 1.4TSi PCP £5,155.05 36 months £215 £5,763.55 2.8% 30/06/15Yeti S 1.2TSi HP £9,074.00 24 months £349 n/a 0% 30/06/15Skoda deposit contribution * £500SsangYongKorando SE PCP £3,575 36 months £189 £6,625.00 6.9% 30/06/15 Korando LE PCP £4,451 36 months £199 £7,000.00 6.9% 30/06/15Korando ELX4 manual PCP £4,973 36 months £269 £7,925 6.9% 30/06/15Rexton SX PCP £5,059 36 months £299 £9,100 6.9% 30/06/15Rexton EX manual PCP £6,361 36 months £329 £9,400 6.9% 30/06/15Turismo S PCP £4,694 36 months £239 £6,985 6.9% 30/06/15VauxhallAdam Jam 1.2 white PCP £2,682.36 24 months £99 £6,000 2.9% 01/07/15Adam Grand Slam 1.4 PCP £3,002.55 24 months £199 £7,100 2.9% 01/07/15Corsa Excite 1.2 3dr PCP £2,679.56 24 months £139 £6,517 4.8% 01/07/15Zafi ra Tourer 1.8 HP £6,435 60 months £239 n/a 0% 01/07/15Insignia Energy 1.8 5dr HP £5,344 60 months £249 n/a 0% 01/07/15Insignia Sports Tourer Energy 1.4 HP £6,169 60 months £279 n/a 0% 01/07/15Mokka Exclusiv 1.4 2wd HP £5,419 60 months £239 n/a 0% 01/07/15

Top finance offers for retail buyersFIN A NCE OFFER S

THE TOP 10 Q1 VOLUME DRI V ER S

For a searchable list of manufacturers’ finance offers, go to www.am-online.com/offers

The Q1 new car market was 46,466 units higher than the same quarter in 2014. Of these, 42,676 units, or 92% of the growth, were accounted for by just 10 brands.

Year-on-year increase in Q1 registrations

8,439

6,512

5,243

5,194

4,117

3,507

2,937

2,478

2,243

2,006

Mitsubishi OutlanderMitsubishi’s plug-in

hybrid helped to push an extra 5,243 units

Nissan Qashqairegistered almost 45%

more in Q1 2015 than in Q1 2014

Mercedes-Benz C-ClassRegistrations of the C-Class rose by nearly 50% year-on-year


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The new car market in the first quarter of 2015 was 46,466 units higher than the same quarter in 2014. Of these, 42,676 units, or 92% of the increased volume, were accounted for by just 10 brands, which featured neither the overall market leader Ford nor second-placed Vauxhall.

Volkswagen had been the biggest driver of market growth at the end of 2014, narrowly ahead of Nissan. However, the German brand appears to have eased off the accelerator in Q1 2015. Nissan certainly hasn’t – its 8,439-unit growth in volume is double that of Volkswagen’s and accounts for 18.1% of the total industry volume increase. In fact, Q1 saw Nissan increase its share of the new car market by 0.7 percentage points over its full year 2014 result, while Volkswagen lost 0.4 percentage points.

The causes of Nissan’s rise are core new crossover cars, strong customer incentives and increased dealer targets. Nissan has registered almost 45% more Qashqai models in Q1 2015 than in Q1 2014, when the first-generation model was still being run out. The X-Trail, which it launched last June as Nissan’s seven-seat crossover to replace the previous 4x4 and the Qashqai+2, notched up a 250% increase in registrations. By comparison, demand for the lacklustre Micra and Note has declined.

At Mercedes-Benz, whose 6,512 increase in volume represented 14% of the total industry volume growth, strong Q1 incentives on the C-Class have worked. Registrations of the C-Class rose by nearly 50% year-on-year, and the A-Class and CLA also climbed in demand dramatically, the former mostly in fleet orders, the latter in the retail market.

Mitsubishi, which was 5,243 units ahead year-on-year, continues to make hay with its Outlander PHEV plug-in hybrid and ASX compact SUV. With a fleet programme now in place, the Japanese brand has quadrupled its Q1 fleet registrations, and it has almost doubled its retail registrations.n Read our analysis of Nissan’s new CI and fleet programme on page 21

The average UK motor dealer made a loss of £13,500 in February, a more than 20% increase over the loss made in February 2014 (£11,100).

This has pushed down the rolling 12-month profit percentage to 1.37%, says dealer profitability specialist ASE.

“This is not to say profits are falling in absolute terms on a rolling 12-month basis, with the average dealer increasing profits slightly compared to the prior 12-month period,” said Mike Jones, ASE chairman.

“The increase has, however, been dwarfed by the increase in turnover we have seen, principally in new car sales. We will have a more precise idea of 2015 profitability at the end of March once Q1 bonuses are recognised.”

d E A L E R K P I s

Key ratio Rolling Rolling Benchmark 12 months 12 months Feb 2015 Feb 2014Net profit as % sales 1.37% 1.46% 3.0%Overhead absorption 54.5% 56.6% 80%Used: New sales 0.88:1 0.90:1 1.5:1Expenses as % gross 62.8% 62.3% 50%Sales per salesman 185 192 150Used vehicle stockturn (days) 55 53 45Return on used car investment 78.5% 81.3% 100%Overall labour efficiency 82.0% 81.3% 100%Service gross profit % on labour 75.6% 75.8% 75%Service expenses as % gross 58.9% 56.9% 40% Hours per retail job card 1.63 1.65 2.5 Parts gross profit 22.3% 22.1% 22%Parts expenses as % growth 44.6% 44.6% 40% Parts stockturn 7.6 7.4 8.0

A d V E R T I S E M E N T P R O M O T I O N

The recent plate change sparked the best set of March sales figures since moving to a biannual plate change. Supporting those figures were strong fleet sales, improving consumer confidence and the increasing use of car finance.

It is a year since the FCA became the regulator of consumer credit. Its chief executive, Martin Wheatley, reviewed the anniversary by saying: “The broad picture is of a sector that’s beginning to appreciate the importance of placing consumer outcomes at the centre of debates around business strategy. In other words, what we’re seeing here is a positive response to the regulatory agenda.” *

We know it has not been easy to embrace the new FCA regime, but at Black Horse, we have recognised the impor-tance of placing the customer at the heart of our business and providing fair customer outcomes. For example, we have enhanced our affordability assessment criteria to consider whether consumers can afford to repay credit across the agreement term and would encourage other finance providers and dealers to do likewise.

Remuneration and commission is another key area of FCA focus. We have decoupled the link between remu-neration and the interest rate charged to the customer. We believe this will engender trust by providing greater transparency and doing the right thing for consumers.

Wheatley concluded his review by saying: “The challenges facing consumer credit are both broad and deep. Certainly, there is no room for complacency.” *

This is important. As a sector, we must maintain our consumer focus by improving transparency and value for money, and by providing products with simplified pricing and fee structures.

Over the coming 12 months, the FCA will continue to review the Consumer Credit Sourcebook and we can expect them to use their enforcement powers where they consider it necessary.

However, regulatory change is not a threat. It is an oppor-tunity to show we are a customer-driven sector. Key to this is considering the spirit of the rules and guidance and FCA Principles for Business when developing business models. Putting the customer at the heart of your business supports the ambition of the motor finance sector and of individual dealers to enhance consumer trust and advocacy.

* www.fca.org.uk/news/consumer-credit-and-the-fca-one-year-on

By Chris Sutton, managing director, Black Horse

black horsecoMMent

Source: ASE


market intelligence

10-year market trends available: www.am-online.com/amin e w c a r r e g i s t r at i o n s

r i s e r s & f a l l e r sthanks to rising demand for its cherokee model and an interest-free PcP offer, Jeep’s registrations were five times those achieved in March 2014, and the launch of its new small sUV, renegade, is expected to sustain momentum.

suzuki’s registrations have suffered slightly after the launch of its celerio hatchback, which was quickly recalled when a fault was discovered with its brake pedal.

BranD YtD (%)1 Jeep 280.172 mitsubishi 192.263 lotus 104.654 maserati 100.535 infiniti 100.006 mg 57.337 mini 53.188 SsangYong 44.999 Subaru 41.7910 Porsche 27.57

BranD YtD (%)10 Škoda -7.769 alfa romeo -8.768 Jaguar -9.547 Suzuki -11.556 Bentley -13.775 chrysler -83.734 chevrolet -99.923 mia -100.002 Perodua -100.001 Proton -100.00

December Year-to-dateMarque 2015 % market 2014 % market % 2015 % market 2014 % market % share share change share share change

Ford 63,466 12.88 63,149 13.59 0.50 94,804 12.91 94,876 13.79 -0.08Vauxhall 48,689 9.88 50,068 10.77 -2.75 75,176 10.23 74,292 10.80 1.19Volkswagen 38,685 7.85 36,276 7.80 6.64 60,388 8.22 56,271 8.18 7.32Nissan 31,026 6.30 25,529 5.49 21.53 46,247 6.30 37,808 5.49 22.32Audi 29,153 5.92 28,841 6.20 1.08 44,919 6.11 43,766 6.36 2.63BMW 26,925 5.46 26,977 5.80 -0.19 40,024 5.45 37,937 5.51 5.50Mercedes-Benz 26,616 5.40 22,369 4.81 18.99 40,311 5.49 33,799 4.91 19.27Peugeot 21,825 4.43 21,564 4.64 1.21 32,913 4.48 32,433 4.71 1.48Toyota 20,541 4.17 19,148 4.12 7.27 30,210 4.11 27,732 4.03 8.94Citroën 16,770 3.40 15,601 3.36 7.49 25,258 3.44 24,178 3.51 4.47Hyundai 16,470 3.34 14,930 3.21 10.31 24,866 3.39 23,103 3.36 7.63Renault 15,868 3.22 13,805 2.97 14.94 20,593 2.80 17,656 2.57 16.63Land Rover 15,508 3.15 11,987 2.58 29.37 20,605 2.80 17,098 2.48 20.51Kia 15,017 3.05 14,787 3.18 1.56 22,265 3.03 21,608 3.14 3.04Honda 11,975 2.43 13,036 2.80 -8.14 17,164 2.34 18,265 2.65 -6.03Fiat 11,924 2.42 12,749 2.74 -6.47 18,049 2.46 18,782 2.73 -3.90Škoda 11,355 2.30 12,907 2.78 -12.02 18,731 2.55 20,307 2.95 -7.76Mini 10,962 2.22 6,769 1.46 61.94 14,961 2.04 9,767 1.42 53.18Mazda 10,084 2.05 8,576 1.84 17.58 14,730 2.01 12,487 1.81 17.96Seat 8,845 1.79 9,429 2.03 -6.19 14,158 1.93 14,023 2.04 0.96Suzuki 7,370 1.50 8,472 1.82 -13.01 10,190 1.39 11,520 1.67 -11.55Volvo 6,662 1.35 6,827 1.47 -2.42 10,591 1.44 9,909 1.44 6.88Mitsubishi 5,609 1.14 1,830 0.39 206.50 7,970 1.08 2,727 0.40 192.26Dacia 5,340 1.08 4,973 1.07 7.38 7,529 1.02 6,821 0.99 10.38Jaguar 3,903 0.79 4,150 0.89 -5.95 4,952 0.67 5,474 0.80 -9.54Lexus 2,446 0.50 2,142 0.46 14.19 3,686 0.50 3,040 0.44 21.25Jeep 2,190 0.44 441 0.09 396.60 2,722 0.37 716 0.10 280.17Porsche 1,928 0.39 1,466 0.32 31.51 2,730 0.37 2,140 0.31 27.57Alfa Romeo 1,079 0.22 1,134 0.24 -4.85 1,438 0.20 1,576 0.23 -8.76Smart 1,013 0.21 823 0.18 23.09 1,310 0.18 1,290 0.19 1.55Subaru 737 0.15 505 0.11 45.94 950 0.13 670 0.10 41.79MG 661 0.13 361 0.08 83.10 859 0.12 546 0.08 57.33SsangYong 452 0.09 295 0.06 53.22 622 0.08 429 0.06 44.99Abarth 349 0.07 305 0.07 14.43 528 0.07 420 0.06 25.71Bentley 250 0.05 250 0.05 0.00 407 0.06 472 0.07 -13.77Aston Martin 212 0.04 199 0.04 6.53 264 0.04 257 0.04 2.72Maserati 202 0.04 103 0.02 96.12 375 0.05 187 0.03 100.53Infiniti 153 0.03 34 0.01 350.00 232 0.03 116 0.02 100.00Lotus 70 0.01 26 0.01 169.23 88 0.01 43 0.01 104.65Chrysler 27 0.01 409 0.09 -93.40 96 0.01 590 0.09 -83.73Chevrolet 1 0.00 1,329 0.29 -99.92 2 0.00 2,561 0.37 -99.92Mia 0 0.00 0 0.00 0.00 0 0.00 5 0.00 -100.00Perodua 0 0.00 2 0.00 -100.00 0 0.00 12 0.00 -100.00Proton 0 0.00 0 0.00 0.00 0 0.00 1 0.00 -100.00Saab 0 0.00 1 0.00 -100.00 0 0.00 1 0.00 -100.00Other British 93 0.02 104 0.02 -10.58 166 0.02 202 0.03 -17.82Other imports 323 0.07 146 0.03 121.23 509 0.07 209 0.03 143.54Total 492,774 464,824 6.01 734,588 688,122 6.75

5

10

U S E D C A R VA L U E T R E N D S

Used cars bought on finance through dealerships Feb 15 Change on 3 months to Change on 12 months to Change on previous year Feb 2015 previous year Feb 2015 previous yearValue of advances (£m) 940 +13% 2,628 +11% 10,816 +18%Number of cars 91,680 +9% 254,182 +7% 1,056,787 +12%Used cars bought on finance by businesses through dealerships Number of cars 2,726 09% 9,248 –16% 38,835 –21%

Source: FLA

3285 3016 3077 3125 3130 3162 31623390 3395 3383

32683536 3438

3906 3982 4048 39734065 4032 4059 4136 4188 4113 4075 4041 4184

7791 7791

69647376 7273 7260 7135 7045 6948

6693

7358 7319 7318

9572 9624 9537 9448 9411 9593 9445 9533 9633

91269478

9673 9670

0Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15

2000

4000

6000

8000

10,000

BCA Fleet £ BCA Part Ex £

Manheim Fleet £ Manheim Part Ex £

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E C O N O M I C I N D I C AT O R S

Inflation

House prices

Mortgages

Unemployment

Pay

0 ppts

0.5%

1%

1.3 ppts

1.7%

The CPI annual inflation rate in March was 0%. The Office for National Statistics said the largest contributors were falls in prices for clothing and gas, but these were offset by a rise in petrol and diesel prices and food costs.

House prices in February were 0.5% up since January, according to data from the Land Registry. The year-on-year increase was 6.5%, which takes the average value of houses in England and Wales to £180,252.

Home-owner house purchase lending declined in February, both compared with January and year-on-year, said the Council of Mortgage Lenders. Some 40,600 loans were advanced, down 1% on January and 16% year-on-year. These totalled £6.8bn, down 3% on January and 13% year-on-year.

The unemployment rate for the three months to the end of February was 5.6%, down from 6.9% a year earlier, according to the Office for National Statistics.

The average weekly wage, including bonuses, between December and February, was £485, a rise of 1.7% over the same period a year earlier. Excluding bonuses, wages were up by 1.8%.

Used car wholesale values dropped in March for the second month running, as volumes rose, according to the National Association of Motor Auctions.

The average value of all cars was £5,251, down £316, or 5.7%, on Febru-ary’s average and 0.2% below the same month a year earlier.

March’s volume of used cars through auctions rose 11%, or 19,695 units, to 122,543 units.

Trade-in disposalBCA reported its average March value for dealer part-exchanges rebounded after three months of falls, to £4,184 – a £143, or 3.5%, uplift. Year-on-year values were ahead by £278, or 7.1%.

Manheim’s average part-exchange value for March dropped £98, or 2.8%, month-on-month to £3,438, after the previous month’s 12-month high.

Year-on-year, the average value was up 4.7%, or £153, despite an increase in average age by two months. More good-quality part-exchanges following the March plate change is good news for independent dealers seeking stock, said Daren Wiseman, valuations services

99.00%

98.49%

Mar 2014Mar 2015

£9,670

£9,972

Fleet/leasing

45,57546,357

40.1740.26

97.77%

96.74%

£4,184£3,906

70,915

70,006

88.5290.02

Part-exchangeMar 2014

Mar 2015

Nearly new

Mar 2015

99.78%£20,218

9,391

8.71

Average age (months)Average mileageAverage valueSales vs CAP

manager at Manheim Auctions. He said independents may be planning to match stock to seasonal demands, as 4x4 part-exchange cars fell in value in March, yet prices of executive models rose.

“Dealers shouldn’t underestimate the power of seasons on customer buying habits,” he added.

Retail stock acquisitionBCA saw its average ex-fleet car value fall £3 in March from Febru-ary’s record £9,673. The £9,670 average retail stock value for March was 1% or £98 up year-on-year.

BCA’s UK operations director Simon Henstock said: “Retail demand typi-cally softens post-Easter and with the general election campaigns now in full swing we should expect a little uncertainty in the wholesale markets.”

Manheim’s Market Analysis for March showed the average selling price of ex-fleet vehicles fell just £1 from February, to £7,318. The average value was £506, or 6.5%, lower year-on-year.

March’s average used car values fall 0.2% year-on-year

YEAR-ON-YEAR

‘Staff are treated like they are part of an extended family’

AM & IMI PeoPle conference

M100 dealer group Swansway Garages has marked its fifth year in The Sunday Times Best Companies to Work For list and prides itself on treating employees like family.

However, this only works because there is genuine commitment from senior personnel, according to Peter Smyth, who, along with his brothers John and David, is a director of the family-owned North-West of England motor retailer headed by his father, Michael Smyth, chairman.

Peter Smyth said: “We’ve created a culture where staff are treated like they are part of an extended family. But just like family relationships, it doesn’t just happen, you have to put in huge amounts of time and effort to make it work. You need buy-in from the top and not just at the highest level, but at each strata of management.

“Not surprisingly, exceptional communication is crucial, but that also means being a good listener and acting on any issues raised as well as genu-inely appreciating the people who work for the business and recognising their contribution to the group’s success.”

One of the ways Swansway recognises that contribution is its annual long service awards, but it also organises a family fun day and, once a quarter, one of the Smyth family hosts an awards lunch to recognise the group’s ‘unsung heroes’. Another initiative, known as ‘dinner with David’, allows any employee to put themselves forward for a group business lunch with David Smyth at nearby Crewe Hall to discuss any issues and opportunities for the company.

Swansway uses a range of tools to engage and inform its workforce, including an intranet, flatscreen displays on the walls at every dealership that show business performance and staff achievements. It also posts a bi-monthly newsletter, Your Way, to every employee’s home, full of news about company

A


“You have to put in huge amounts of time and effort to make it work”

Swansway’s Peter Smyth will tell the conference how listening to and rewarding his employees gets the best from them

projects, events and praise for unsung heroes and team members who have excelled at their job.

With 17 sites representing 11 brands, including Audi, Volkswagen, Seat, Volkswagen Commercial Vehicles, Honda, Peugeot, Citroën, Fiat, Jeep, Abarth and Land Rover, Swansway has annual sales of about £370 million and ranks among the 30 largest franchised dealer groups in the UK.

Smyth said it operates an open door policy, an approach he believes has helped establish an envi-ronment where employee engagement is not just encouraged, but flourishes. In addition, the group runs a ‘buddy’ scheme, which allows employees to vent their frustration off-the-record.

Swansway Group employs 678 people, whose comments in The Sunday Times Best Companies to Work for survey recognised their bosses’ willing-ness to tackle any task and their passion for the business as being one of their own key motivators. Employees said senior managers embody the company’s values and gave them a top-30 score of 77% positive while their chairman Michael Smyth also received a sound vote of confidence.

“The survey responses reflect our belief that you will only create a truly engaged workforce who are motivated and committed to over-delivering in terms of customer care and performance, if you are prepared to live and work by those values your-self, which in turn leads to high levels of employee engagement,” said Smyth.

Don’t forget to be humanIn a world governed by processes, regulations and measurements, forgetting the human part of ‘human resources’ can be one of the biggest failings of business.

If you want humans to work hard for you and buy from you, you have to be human yourself. This can be a business’s key differentiator in a crowded marketplace.

At the AM & IMI People Conference, now in its second year, the focus is on how to attract, how to keep and how to motivate the indus-try’s greatest asset – its people.

Taking place on June 11 at The Park Plaza Riverbank in London, before the AM100 Dinner, the conference will explore a range of topics, including attracting high-calibre apprentices, developing individuals and nurturing ‘home-grown’ talent, as well as highlighting the IMI’s measures to create a more professional sector.

IMI chief executive Steve Nash will launch its management guide for dealers at the conference, a quick reference to benchmark practices in a group or dealership. Its ‘10 Prin-ciples of People Management’ is the latest initiative sitting alongside its Professional Register, which lists the industry professionals who have gained accreditation, and its exten-sive suite of automotive qualifications, collec-tively known as ‘IMI Awards’ incorporating the IMI Sales Accreditation, Customer Service Accreditation, Automotive Technician Accredi-tation (ATA) and Automotive Management Accreditation (AMA). Those who achieve IMI Accreditation are automatically included on the IMI Professional Register, which has more than 40,000 members.

Understanding key motivators in the work-place is crucial for success and Dr William Holden, chairman of business growth consul-tancy Sewells will provide delegates with insights and tangible advice on how to best engage employees in order to succeed in a highly competitive environment. Drawing on

Peter Smyth: ‘exceptional

communication is crucial’

Professor Jim Saker

Steve NashChief executive, IMINash has worked in the motor industry, on both the retail and manufacturer sides, since graduating in 1977. He joined BMW in 1986 and has been a director of the company since 1997, including a period as group aftersales director, also looking after the Rover and Land Rover brands.

Nash has been with the IMI since 2004, serving as non-executive chairman and president before he was appointed chief executive in 2012.

He will launch the IMI’s at-a-glance best practice guide, ‘The 10 Principles of People Management’, at the conference.

Peter SmythDirector, Swansway GroupSmyth, along with his brothers John and David, is a director of the family-owned AM100 dealer group headed by his father, Michael Smyth. Peter shares a taste of some of the best practice advice he will give on building employee engagement at this year’s conference.

Nahara HansonHR manager, Greenhous GroupHanson joined Greenhous in July 2008 and looks after HR for the franchised side of the business. With more than 25 years’ experience in fields including the hospitality and legal professions, Hanson is also an affiliate member of the Chartered Institute of Personnel and Development. She will talk about Greenhous’s extensive apprenticeship programmes.

Professor Jim SakerDirector of the Centre of Automotive Management, Loughborough University Business SchoolSaker is a key figure behind the drive for management and skills in the motor retail sector. He is also an AM columnist and a judge in the AM Awards. Saker will outline how education and the automotive sector can come together to develop clearer career paths, particularly in aftersales.

Dr William HoldenChairman, SewellsAs chairman and owner of Sewells, Holden has developed the company’s outstanding reputation for providing inspirational and transformational personal development and business change programmes for more than 25 years.

What drives improved behaviour and results? How do you adopt the right attitude to business? How do beliefs affect performance? Holden, the author of the bestselling The Guide, will look at the ingredients for success.

experience from a variety of industries, Dr Holden will look at the vital people drivers of recognition, responsibility and respect, which rank far higher than remuneration.

For Greenhous Group, home-grown talent is the way forward, as well as being ingrained in its heritage. HR manager Nahara Hanson will talk about the dealer’s shop-floor-to-boardroom philosophy, illustrated by Derek Passant’s career journey from YTS trainee to chief executive. The group has an exceptionally strong training and development culture and employs several apprentices outside the workshop, including accounts and customer service.

Swansway director Peter Smyth will provide a window into the soul of the family-owned busi-ness when he takes to the stage to talk about its approach to employee engagement. This has proved so successful that Swansway is cele-brating its fifth consecutive year in The Sunday Times Best Companies to Work For list, rising to its current position of 34th from 75th when it was first listed.

Professor Jim Saker, director of the Centre for Automotive Management at Loughborough University, will urge the sector to create a more clearly defined career path for those in aftersales in order to help attract high-calibre school leaver apprentice applicants.

Prof Saker believes a commitment to training beyond the general three-year apprenticeship to a level 3 qualification and to degree equivalents at level 6 incorporating managerial qualifications will

Tickets are available to dealers and manufacturers, with a limited number of supplier tickets on sale. To book, please contact Emma-Louise Kinnaird on 01733 395133, email [email protected] or visit www.ampeopleconference.co.uk

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boost the sector’s reputation as an alternative to university.

Finally, the Agile Future Forum (AFF), made up of several high-profile companies such as Tesco, KPMG, John Lewis, ITV, B&Q, Ford, Lloyds Banking Group and BT, aims to increase the awareness, acceptance and adoption of agile working in the UK, which it believes is crucial to Britain’s future economic success. The AFF will illustrate how the industry can adopt even more agile working practices to benefit the business and individual employees.


Thursday, June 11, 2015, The Park Plaza Riverbank London Hotel

IMI chief executive

Steve Nash

SPE AKERS

By Danielle Bagnalle clear about what we are and be proud of that, without trying to become what everyone else wants us to be.” That was the clear message from Marks and Spencers’ head of customer service Jo Moran at AM’s first executive breakfast of 2015.

“It’s really important to be clear about what you are and what you aren’t – we wouldn’t chase the Topshop customer, for example. Celebrate what you’re good at.”

Moran said: “When I talk about customer service, there are three key areas; product, environment and service. If you think of each area as a circle in a Venn diagram, the section in the middle is a percentage mix of each element. You have to plan what you want your business to represent and at what balance you want your three circles to be at.

“Customers want different things out of those three circles on any one particular day. If you go to M&S to get a sandwich you aren’t hugely bothered about the [shop] environment, as long as it’s clean and tidy. All you really require is ‘that’ll be £5 please’ and you’re on your way.

“But, you might come in later on to buy a suit, which means those circles then change. Any organisation offering customer service must be clear on how they equip employees with the ability to recognise what the most important circle for a particular customer at a particular time is,” said Moran.

The growing importance of the service ‘circle’Moran used Ryanair as an example: “They knew what they wanted to be. They never talked about service or quality, they just delivered on providing a cheap service.”

However, the circle of service is becoming more important to customers, which has changed the way Ryanair’s chief executive Michael O’Leary thinks and the brand is slowly implementing a better service.

“There is a real fine balance when investing in your environ-ment – you don’t get brownie points for having a good environ-ment or over-investing, but you do lose points on a bad environ-ment. Fixtures and fittings are incredibly expensive and to be honest I don’t think the customer even notices what colour the floor is.”

In the past, Moran said, M&S invested a lot in infrastructure and not enough in people on the ground. This gives customers a nice environment, but when they can’t get served, or receive bad service, that is what they remember.

“We have spent £1.5 billion over the last three years on store

renovation, which meant reducing the store staffing budget by 25%,” said Moran.

She said she couldn’t emphasise enough the importance of getting the right people. As franchisees, car dealers often don’t have full control of the environment and aesthetics of the showroom, but “people remember people and this is the bit you’re in full control of and what drives consumer loyalty. However, it’s also the difficult bit because people sometimes bring their baggage to work.”

Moran explained that M&S once recruited based on skills or particular competencies, but now it looks for evidence of a good customer service attitude.

“Staff don’t need to know everything; it’s their attitude that’s important, so rather than saying ‘I don’t know’ to a question they say: ‘why don’t we check that together’.”

To get these great people, she said benefit packages must be relevant to them.

“We thank our staff often, with little postcards and instant rewards (not M&S products) if they’ve shown great customer service – recognition is really important.

“Some of the best ideas will come from the guys on your shop floor and getting those ideas through to you can be tough. We use a social media platform called Yammer. People can send messages or feedback to each other and I will get that instantly, without a lengthy chain of command.

“We have invested in our front-line managers in recent years and the results have been phenomenal,” said Moran. These line managers are hugely influential to retail staff, so training was implemented which would then be fed down the chain.

Aligning online, offline and mobile retail experiencesBrand integrity is important, said Moran, so prices that are on your website should match those on your forecourts.

“We are currently trying to integrate our channels – store, web, mobile – so people that buy online buy in store and vice versa. If a customer shops in one channel we gain revenue, if we can get them to shop in an additional channel that revenue is multiplied.”

INSIGHT AM Executive Breakfast Club

‘B

Identify the service balance you want to provide, says M&S customer service head Jo Moran

NeeD To kNow n Customer service can be broken down into product, environment and servicen Manufacturers can dictate first two, but car dealers control which people are hired to deliver service

‘Celebrate what you’re good at and hire the right people’

“People remember people and this is the bit you’re in full control of and what drives consumer loyalty”

Jo Moran, M&S head of customer service

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The next AM executive Breakfast Club will take place on Friday, May 15, at Simpson’s in the Strand, London.

The guest speaker will be Daryl Fielding, Vodafone’s director of brand marketing.

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D I N N E R

Vine established his reputationas a smooth-talking but toughpresenter on Newsnight. Henow presents the lunchtimeshow on Radio 2, hostsEggheads and pops up with arange of graphic wizardrywhenever there’s an election.

Jeremy joined the BBC as anews trainee. His first reportingassignments were on Radio 4'sToday programme, coveringissues as diverse as punishmentbeatings in Northern Irelandand sheep-racing in Dorset. Hethen took up the reins as apolitical correspondent, underJohn Sergeant.

Book your table now at www.am100dinner.co.ukor call Emma-Louise Kinnaird on 01733 395133 or email: [email protected]

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Jeremy Vine will be the guest speaker at theAM100 dinner this year which will be held onJune 11 at the Park Plaza Riverbank in London.

One of Jeremy’s early reports was anaward-winning exposé of SouthAfrican police brutality, which led totwenty four officers being suspended.In a lighter vein, he was famouslychallenged by Jeffrey Archer to a raceon Brighton beach, after remarkingthat the Tories had become elderly.Archer pulled out, complaining of‘tiredness’.

The AM100 publication is the annualindustry guide to the 100 largestdealer groups in the country,according to their company turnover.In addition, the AM100 provides adetailed analysis of the state of theindustry and looks at the key issuesfacing dealers and their customers.

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Taking on the big boys of the B-segment

“This new supermini is well positioned to rival the segment-leading Ford Fiesta, Vauxhall Corsa and Volkswagen Polo even if it can never match them on sales volume”

The stylish and well equipped Mazda2 should do well in the UK’s tough supermini segment

so they could see the car in the style they actually wanted,” said Mazda Motors uK managing director Jeremy thomson. The tour was seen as such a success that the company is considering purchasing its own Oculus Rift system for future use, such as ahead of the forthcoming launch of the MX-5 roadster or for fleet events.

Thomson said the Oculus Rift tour was vital, as the brand wanted to sell 1,000 new Mazda2s before its financial year closed at the end of March. However, the car wasn’t going on sale until March 21. “We had 747 orders ahead of launch, with the cars still sitting on the boat,” he said.

Mazda received 747 orders for the Mazda2 before launch

By Tim Roseazda pushed the boat out ahead of the March launch on its new supermini, the Mazda2. It organised a preview tour of its UK dealerships, equipped with an Oculus Rift virtual reality headset and two pre-production cars.

A total of 120 Mazda dealerships opted to take part, hosting half-day VIP previews for customers over a six-week period. As a result, each took an average of six pre-launch orders. Colliers Mazda in Birmingham took 18 orders in one night. The Mazda dealers that opted not to host the tour took one pre-order on average.

“The headset allowed the dealers to show people all the different colours and trims offered on the car in the showroom,

M

24%Mazda’s overall growth target for 2015/16

SHOWROOM t h e c a r s d r i V i n g y o u r b u s i n e s s

67Volkswagen golf

A prowl through Volkswagen’s online test-drive booking facility reveals online users’ most in-demand car is the Golf.

65Mazda3

With a flood of new models, Mazda’s product image, value and pricing have been rated more highly by NFDA members.

64suzuki s-cross

Dealers are looking forward to an update of Suzuki’s crossover car this autumn, which may include the first diesel automatic.

f i r s t d r i V e M a z d a 2 – o n s a L e n o W


specificationPrice £11,995-£16,995Engine 1.5-litre petrol: 74/89/113bhp; 1.5-litre diesel: 104bhpPerformance 0-62mph 8.7-12.1secs, top speed 106-124mphTransmission 5sp man, 6sp man, 6sp autoEfficiency 56.5-83.1mpg, 89-117g/km CO2

RV 3yr/30k 36%Rivals Ford Fiesta, Renault Clio, Seat Ibiza, Vauxhall Corsa, Volkswagen Polo

Motoring researchLike the firm’s other new-era skyactiv designs, it’s a car that feels like it’s been thoughtfully engi-neered by specialists rather than just created by a committee set on meeting generic targets. it’s this that gives it a bit of the MX-5 spirit; sure, it’s not quite the driver-focused sportscar the Mazda two-seater is, but there’s still plenty there to please enthu-siasts without scaring off the core buyers. for this, and the way it looks, and the cut-above interior, it’s certainly worth spending the little extra it costs over those generic super-mini alternatives.

honest JohnMazda is on a roll these days, with an impres-sive range of cars that are good to drive, stylish and practical. those ingredients have now been distilled into the smallest model in the range – the Mazda2. the result is a success, giving big players like the Vauxhall corsa and ford fiesta something to worry about.

The full-year registrations target for the new Mazda2 is 12,000 units, which will represent an increase of 3,000-4,000 units over the typical annual sales of the old model. The growth strategy – overall, Mazda Motors UK wants 24% growth in sales in its 2015/16 financial year – will mean Mazda needs to “eat a bit of everybody’s lunch”, Thomson said.

Conforming to the carmaker’s latest Kodo design ethos and Skyactiv efficiency measures, this new supermini is well positioned to rival the segment-leading Ford Fiesta, Vauxhall Corsa and Volkswagen Polo even if it can never match them on sales volume. Priced from a competitive £11,995, the core Mazda2 range consists of SE, SE-L and Sport trims. A Sports Launch Edition car is pulling initial customers in by offering higher equipment levels for £14,995.

SE-L models are expected to be most in demand as these offer the equipment most buyers will desire, such as alloy wheels, front foglamps, electric folding heated mirrors, leather steering wheel with audio controls, cruise control, DAB radio, colour touchscreen with multimedia controller and Bluetooth. The entry-grade SE misses out on all of

the 2 conforms to Mazda’s latest Kodo design ethos

Mazda prefers to equip cars well as standard to avoid long waiting times

What your custoMers WiLL read

about the Mazda2

these. Sport-specification models add rear privacy glass, auto wipers and lights, rear parking sensors, keyless entry and climate control. In addition, the SE-L and Sport can be specified as Nav derivatives, which adds sat-nav, and the most powerful Mazda2 Sport Nav gets additional LED headlights and daytime running lights.

Given that UK cars have to be shipped from the Far East, Mazda Motors UK prefers to equip the cars well as standard to avoid long waiting times for bespoke cars. Only buyers of the Sport Nav can choose leather seats, a heads-up display, blind spot monitoring or a high beam control system.

On the subject of power, an 89bhp 1.5 Skyactiv-G petrol engine is forecast to be the best seller. It’s a refined unit and its CO2 emissions of 105g/km and combined fuel economy of 62.8mpg make it the most affordable to run in the range, except for the only turbodiesel on offer, a 1.5-litre Skyactiv-D with 104bhp. The diesel has plenty of torque and made light work of Devon’s hills during the media drive. However, its 89g/km CO2 emissions and 83.1mpg economy come at a price. A £2,000 premium over the petrol alternative means it suits only buyers who will cover above-average annual mileage.

The range is completed by two further 1.5-litre petrol engines: a 74bhp offered in SE and SE-L specifications only and a 113bhp unit exclusive to the range-topping Sport Nav.

The supermini segment is the most hotly contested part of the UK’s new car market, but with the stylish and well equipped Mazda2, the dealer network should be well placed to compete.

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

AM’s intelligence service, AMi, is now free to use for all franchised dealers. AMi is a website launched by AM in 2011in which its primary focus is to measure overall market health and provides insights into market segmentation, relativedealer health and manufacturer brand health.

All users with a login can utilise this online service to collate and analyse data specific to the individual user’s needs.

Email now: [email protected] request your free login username and password.

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Paid for subscriptions are availablefor all non-dealers.


IN JUNE’S ISSUE PUBLISHED MAY 22 AM, Media House, Lynch Wood,

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C O N TA C T U S

A D V E R T I S E R S ’ I N D E XAutoclenz .....................................................61

Autoglym Polish ..........................................9

BCC Cars .......................................................69

British Car Auctions ..................................60

Call It Automotive.......................................31

Car Care Plan ..............................................57

Chris Eastwood Automotive ...................68

Contact At Once ..........................................27

Dealer Management Services ...............24

Edynamix ......................................................53GForces .........................................................20

HPI .................................................................32

Infomedia ......................................................72

iVendi ......................................................25 , 44

Lawdata .........................................................60

Lloyds Banking Group .............................12

Manheim Retail Services ................2, 6, 35

Mapfre Abraxas UK ...........................11 , 54

Mon Motors ..................................................68

Moneypenny.................................................27Motors.co.uk ...............................................39

Steele-Dixon & Associates ....................68

Supagard .....................................................61

Symco Training ...........................................52

Tracker Network Systems ......................53

Trader Publishing ......................................49

Trusted Dealers ..........................................10

UHY Hacker Young Manchester .....58-59

Vertu Motors ................................................68

The Italian brand keeps expanding its 500 family, with the addition of a compact crossover SUV set to give a real boost to its dealer network.

The market for franchised dealer aftersales has dropped by 20% since 2010, while independents and fast-fits have grown their share. The next issue of AM examines the threat to the franchised sector and gathers expert views on how dealers can fight back.

Insight into improvements in profitability and retention from the expert speakers at AM’s recent event.

Fight the fast-fits

The Volvo Retail Experience

AM Aftersales Conference First drive: Fiat 500X

Swedish-style personal service forms a part of the future strategy as Volvo Cars UK rolls out

the franchise’s new corporate identity.

Events www.am-online.com/events

Date Event Venue

June 11 2015 AM-IMI People Conference The Park Plaza Riverbank, London

June 11 2015 AM100 Dinner The Park Plaza Riverbank, London

July 17 2015 AM Executive Breakfast Club Simpson’s in the Strand, London

September 15 2015 AM Digital Dealer Conference Silverstone Wing, Silverstone Circuit

October 2015 AM Used Car Conference Midlands

November 6 2015 AM Executive Breakfast Club Simpson’s in the Strand, London

November 2015 AM F&I Compliance Conference Midlands

am may 2015 preview

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