Arnold Clark boss Eddie Hawthorne might be in charge of the most profitable dealer group in the UK – but he isn’t giving up his secrets any time soon.
The CEO, who has been with the business since 1990 and in charge for more than 20 of those years, presides over the most successful dealer group in the UK by some margin.
Arnold Clark topped the inaugural Car Dealer Top 100, sponsored by GForces, registering an incredible £194.3m EBITDA profit from a turnover of £4.46bn.
Managing to eke out a return on sales of 2.6 per cent – twice that of second placed Sytner Group – the art of squeezing every penny out of a deal is something Hawthorne and his team have finely tuned.
In an exclusive Car Dealer Live interview, which you can watch above, he said he was very proud of the numbers for 2019 and pinned the standout performance on the hard work of his staff.
‘We got the result that we hopefully deserve,’ he said.
Joking that if he revealed his secret to success he ‘wouldn’t win anything’ he said ‘looking after the pennies every day’ was critical.
Hawthorne added: ‘We have a very strong used car business throughout our organisation, and we have just over 30 motor stores which concentrate on used cars.
‘One of the things we have done is spend a lot of money on digital – focussing on the digital journey with our customers and trying to make ourselves easy to do business with.
‘So one of the things we’ve fully embraced is that digital journey and believe it or not but giving the customer the power to decide what they want has maintained our margins, if not increased them.’
The Car Dealer Top 100, compiled with the help of ASE Global and sponsored by GForces, has shown just how far ahead Arnold Clark is.
Its £194.3m profit figure was 2.5 times greater than third placed Pendragon, and £42m ahead of second placed Sytner.
Hawthorne admitted 2020 had been tough and said the constant closures and re-openings of dealerships had been painful.
He said: ‘I have to say this has been the year of the Hokey Cokey.
‘I’m in, I’m out, I’m open, I’m shut.
‘It’s been a trying time to keep up with the regulations, but we’re all just trying to keep going.
‘I’m pleased to say we came off of the furlough scheme towards the end of October and we have no intention of going back onto it and we will show a reasonable profit for 2020.’
Looking ahead to the new year, Hawthorne said it ‘couldn’t get worse than 2020’ and said the group was planning to sell more cars than 2019.
‘Our managers are embracing that challenge and we all believe we can do it,’ he said.
‘As long as the government can provide us with a relatively stable period of trading, I think that’s something we can achieve.’
Hawthorne thinks the new car market will be around 1.8-2.0m next year but had high hopes for the used car market – an area the group excels in.
He added: ‘I think used car values will be strong for 2021, and I think the demand for used cars is still there and I think it’ll be there for most of 2021.’
And his parting advice for dealers looking to emulate Arnold Clark’s huge success?
‘Stay positive, watch your course and keep control of your business on a day to day basis,’ he said.
Stability has helped group stay on top
Successful car dealer groups excel when they have a stable management team – and Arnold Clark has just that. Eddie Hawthorne has been leading the business since 1998 and it’s his steady hand on the tiller that has helped guide the group to its incredible performance.
Hawthorne said: ‘One of the strengths of Arnold Clark is the communication, and whether that’s communicating with an apprentice, an admin or an accountant.
‘Everybody is encouraged to talk to the directors and I, and we’re very approachable. That allows for ideas to spread throughout the business and also means that the staff have an interest in making the business successful.
‘I think the secret was always working with an entrepreneur like Sir Arnold. He had a different perspective on business which he’s been able to share with me and the senior managers and I recognise it’s his train set and I’m merely driving it.’