USED cars and aftersales offer a route to success when times are tough in the new car market, a packed Live Stage audience heard at CDX today.
John O’Hanlon, chief executive of Waylands Automotive, Daksh Gupta, boss of Marshall Motor Group, and John Tordoff, CEO of JCT600, joined Car Dealer founder James Baggott to discuss the state of the automotive industry in what continue to be turbulent times.
Asked which areas of his business was excelling, Tordoff, who as boss of JCT600 heads up 51 centres across Yorkshire, Lincolnshire, Derbyshire, Nottinghamshire and the north-east of England, told the audience at Farnborough International: ‘Three or four years ago, we took a conscious decision to improve our used car and aftersales performance. We’ve always been relatively strong with it but we just put a lot more focus behind it. That certainly drove our performance last year and we can see further growth ahead.
‘The new car market is just so volatile. It’s difficult to make a business case to just focus on used cars these days. If you focus on used cars and aftersales, you give yourself more of a degree of control away from the pressure that the manufacturer puts you under every day.’
Asked if he was getting hold of enough stock to be able to do that, Tordoff added: ‘There’s rarely a shortage of stock availability. We generate a lot of part-exchanges that we then retail.
‘We have good connections within the trade and we have gone from two buyers to having six or seven now and they’re constantly out there sourcing the right cars.’
Indicating that Marshall, which has 106 dealerships nationwide, has also upped the ante on used cars, Gupta said: ‘We took a conscious decision to do this post-Brexit – we knew the new car market was forecast to decline and that has happened. I believe the new car market will be three or four per cent – maybe even five per cent – down this year.
‘For us, we made a strategic decision to focus on used cars and that’s really worked for us. Last year, our used volumes were up 2.3 per cent and our revenue was up 8.1 per cent. We also had a 13.1 per cent improvement in gross profit which equated to £7.5 million. That improvement more than offset the decline for us in new cars and we were able to deliver record results last year.
‘The other thing we have looked at is staff turnover. I saw a report recently that said industry turnover was 36 per cent. We have worked incredibly hard on employee engagement so our management turnover – with about 180 people in that population – is now just 13 per cent.’
O’Hanlon, who as boss of Waylands Automotive represents only Volvo at its dealerships in Oxford, Newbury, Reading and Swindon, said: ‘I think it’s slightly different for me. The joy of Volvo this year has been its absolute strength. We’re up 34 per cent year-on-year after a terrific 2018.
‘Part of my challenge is absolutely maximising every opportunity coming in. Yes, we’re working really hard on used, working really hard on aftersales, and also for Waylands it’s about trying to build our brand. The Waylands brand has only been going for 18 months, so it’s all about getting an online presence. We’re trying to build as much as we can through social and through digital.
‘Those are areas where we can get a big bang for our buck and are areas where we have put a lot of time and focus – letting customers know who we are and letting our local customers know where we are too.
‘Every brand goes up and down. Volvo is in a happy place. It’s got some fantastic product all arriving at the right time.’