Sytner boss Darren Edwards has given an exclusive video interview to Car Dealer.
In the Car Dealer Live special the boss of the second most profitable dealer group in the UK – according to the Car Dealer Top 100 – reveals his secrets to success.
In a wide ranging interview, recorded at the group’s showcase Jaguar Land Rover site in Sunbury, south west London, Edwards gives his thoughts on a variety of topics.
He talks about:
- Why Sytner bought CarShop and why it will become even more important to the group
- Gives his thoughts on online used car dealers Cazoo, Cinch and Carzam
- Reveals how he’ll soon open the group’s fifth Ferrari dealership
- Says Sytner Auction trade website will soon be opened up to all dealers
- Explains why local lockdowns don’t worry him
- Gives his thoughts on paying back furlough and government rates relief
- And explains how the group plans to grow even further
Sytner is one of the car dealer world’s big hitting groups.
With a portfolio of luxury and premium new car brands, and a high performing used car supermarket group, it’s little wonder it’s one of the UK’s most profitable groups.
Sytner came second in our Car Dealer Top 100 list of most profitable dealers – in 2019 it made £152m EBITDA profit on turnover of nearly £6bn.
Sytner EBITDA profit, 2019
Edwards told Car Dealer he was disappointed with the second place position and hopes to top our list in the future. But how do they do it?
‘Our strategy has always been to focus on premium brands,’ reveals Edwards.
‘We figure you can get better return on investment, you can attract a higher quality of people for the team and we invest a lot to attract them.
‘We have very low staff attrition levels. Our head of business turnover is less than five per cent, the board is zero turnover and has been for many years and our managers are about eight per cent.
‘By having these great brands it gives us the opportunity to make great returns for our shareholders, do a brilliant job for our manufacturers and then you have this circle of investment: Focus on people, focus on customers and delight your manufacturers and shareholders and keep on doing that all the time.
‘By doing that since 1968 when we first started and really the early 2000s when we started to grow, that’s given us the opportunity to continue to grow as we have.’
Sytner has a chocolate box of brands that most dealers would envy.
In the high end luxury world it represents Ferrari, McLaren, Bentley, Bugatti, Aston Martin, Lamborghini, Maserati, Rolls Royce and Porsche.
Sytner is also Audi’s biggest partner in the UK and represents Jaguar Land Rover, BMW, Mercedes, Seat, Skoda and Volkswagen among others.
‘Return at the moment is really, really strong and the partnerships with our brands are incredible,’ said Edwards.
He says the group learned a lot during the pandemic and was quick to offer customers the chance to buy cars on its website.
It introduced an online buying function last year and the combination of sales in store and on its website has helped it continue to record impressive results.
Sales of new cars rose nearly eight per cent in the first quarter of the year, despite showrooms being closed by the third lockdown.
Sytner is owned by American giant Penske Automotive Group which snapped the dealer off the stock market in 2002.
The American ownership has taught Sytner plenty of new tricks and many of the innovations brought over from the States have been rolled out by other dealers too.
‘In Q1 we delivered 42,500 cars, new used and fleet – 10 per cent of those were done purely online,’ said Edwards.
‘We’ve enjoyed massive investment since Roger bought the business in terms of monetary and intellectual.
‘Things like our drive through service lanes have been adopted by the rest of the industry now. That was new back in 2000.
‘Little touches like making sure colleague areas are finished to the same standard as customer areas – the sort of things you’d see in a five star hotel – these are the things that were bought home by Roger.’
Despite the success Sytner has enjoyed during the pandemic, Edwards doesn’t think paying back any government furlough or rates support is necessary.
‘When we think back to that period of time the industry was worried about paying the bills and whether it would stay liquid,’ he explained.
‘That money was vital to us. It allowed us to keep people employed.
‘Since then that support was used for a short period of time. The support was significant as we are a large group. We had 9,500 people on furlough for a couple of months. But now we are focussed on investment.
‘We’ve opened up five or six large dealerships and we’re still investing millions into premises and training.
‘For us now it is about looking forward rather than thinking about paying back. Ultimately every large corporation is going to be paying more tax as the government announced.’
In the video interview, Edwards also explains how the Carshop deal came about.
He said Sytner didn’t want to get into volume franchises for new cars and was ‘happy’ with the mix it had in its portfolio, but was looking at opportunities to grow.
‘The used car business is huge and we wanted a bigger piece of that,’ said Edwards.
‘We looked at different options and CarShop came to our attention. It’s a great business and Jonathan and the team had done a brilliant job and we were very happy when they agreed for us to acquire them.
‘In a normal year without the pandemic, off the 12 sites we now have, we should do 60,000 units and the EBIT contribution is significant.
‘We’ll be looking to grow that over the next few years and it’ll probably be the biggest area of growth for us.’
CarShop also benefits greatly from the Sytner ownership, receiving around 300-400 cars a week from the wider group.
When it comes to the likes of Cazoo and other online used car dealers, Edwards wishes his rivals well – but is quick to point out his group has more used cars in stock than the big three online sites combined.
Edwards said: ‘I think there is a place for everyone and as far as I am concerned, good luck to them.
‘They think they’ve got a unique model, but I think that’s probably changed over the last year.
‘Our view is that we want to appeal to everyone and not just online customers. From our point of view we appeal to 100 per cent of customers who are out there where the online guys appeal to a certain part.’
When it comes to growth, Edwards says he thinks Sytner is now at the ‘upper threshold’ of what manufacturers like its dealer partners to have.
He says there is some opportunity to grow with some, but says Sytner is ‘very picky’ when it comes to taking on more sites.
‘We’ve divested of a number of brands and dealerships in the last 10 years or so to end up with what we have today and it’s more about getting the most out of those businesses.’
That said, Sytner will be opening up with Ferrari in Glasgow and has taken on Bugatti in Manchester.
‘When we have got really good opportunities to grow with brands we will but our main opportunity now is with CarShop – it’s about getting a bigger share of that market with a national footprint,’ added Edwards.
The Sytner boss said he was taken a little by surprise with quite how good business has been since the April 12 reopening, but believes they ‘generated’ some of their ‘own luck’.
‘Overall it has been strong,’ he said.
‘I hope we’re on course for a record year. Based on current predictions it’s looking very good. We delivered 16,000 cars in April and were up 45-50 per cent on order take.’
Sytner has big plans to expand its auction platform too. Launched 15 years ago it sells cars the group doesn’t want to the trade.
Modelled on eBay, it has 10,000 traders registered on the site and sells around 30,000 cars a year. Sytner matches the number of cars it sells on the site with a donation of the same amount to BEN every year too.
‘It’s been very successful and we’re looking at how we can leverage that even further,’ said Edwards.
‘Very shortly we’re going to allow other traders to list cars on that site and that will massively increase the number of cars on there.
‘We’ll manage it and are excited about it. With the world moving towards online auctions we see that as being a potential big platform for us. It’s very profitable for us.’
But what does Edwards think really makes the difference for the group? What makes it one of the most successful?
‘If you look at our leadership, most of these people have all been with the company since they were in sales themselves, they’ve been through the company and now they’re managing the company,’ added Edwards.
‘They understand the culture and can really inject that culture into new people. Fundamentally our success is our people.’