10:56 am, March 7, 2024
Automotive titan Peter Vardy says the influx of cheap EVs from China was a major factor in his dealer empire changing its business model.
Speaking at our Car Dealer Live conference at the British Motor Museum today, Vardy opened up on some of the difficult decisions facing his business over recent times.
Issues with used car supply saw Peter Vardy close several of its used car supermarkets last year, sparking a change of approach from the business in both the new and used markets.
The outfit, which has been subject to countless rumours over recent months, has now switched its focus to premium brands, as apposed to volume cars.
During a candid chat with Car Dealer editor-in-chief James Baggott, Vardy explained the reasoning behind the decision.
He said the high price of EVs was eating into new car margins, meaning it no longer made sense to focus on volume brands.
Vardy, who was our first keynote interviewee of the day, also addressed some of the more colourful rumours that have been swirling around both him and his company.
‘There’s been a rumour that I’ve cloned my house in Scotland and rebuilt it in Australia,’ he joked.
‘It has been an interesting time and we are looking at changing the business. We’re trying to look as a family at what the next 20 years look like for the motor trade and where we can play a role in that.’
He added: ‘I’ve got a little bit of a hang-up with them looking to the future with the volume space for the new car franchises.
‘If you look at what’s happening with electric vehicles, the price of the cars is going up and up and up and consumers can’t afford that with the charging as well.
‘I think there is a serious issue in volume new cars with electric vehicles, because if it becomes a price war, which it has, the only winner there will be the Chinese.
‘I’ve spent a lot of time in China – I lived there for a while – and I’m very fond of the place, but in a political environment it’s quite easy to understand that if we didn’t want Chinese mobile phones in the country, politicians might say they don’t want Chinese cars, too.
‘There is a lot of disruption around that.
‘I think the whole new car world for us on the volume side is too dangerous to get involved in and then you’ve got to change to finance commissions, which whatever happens at the end of the year, we will see fewer commissions for dealers.
‘In volume dealerships it was going to be difficult to do new and used cars, so we decided to move out of volume cars and move into premium cars.
‘Also, going forward, the margins are protected and, let’s be honest, the wealthy are getting wealthier so their ability to afford an electric car is there, isn’t it?
‘That part of the market is clearly safe from a dealer side.’
Later in the interview, Vardy became more emotional as he explained the impact that recent changes had had on his staff.
Several members of his workforce have left the company as a result of the closures and Vardy, a devout Christian and charity campaigner, was candid about the human impact of letting staff go.
He said: ‘Business changes are difficult and I think that if part of your ethos is “giving back” then part of your ethos is also looking after your staff.
‘When you do see people leave the business because you can’t continue to give them a job because your business has changed, that’s a really difficult thing to do.
‘We haven’t made those decisions lightly. When you are valuing people, which what we are trying to do, letting them go is very difficult emotionally.
‘We have let some people go through the changes and seen people go to other companies and that’s been a very difficult thing to do. It is not as easy as just the business decision itself.
‘It’s been dealing with people that’s been difficult, but I’m 100% confident in the decisions we’ve made on the data that I can see.’
You can watch all the sessions from Car Dealer Live, which is headline-partnered by Auto Trader, as they happen by purchasing a streaming ticket now.
Alternatively, you can buy tickets to watch back the full event from tomorrow (Mar 8).
