The most profitable independent car dealer in the UK pins its success on a combination of driving customers into its physical showrooms and an all-out advertising strategy.
Trade Centre Group was the highest placed non-franchised retailer in the Car Dealer Top 100 list, sponsored by GForces, generating EBITDA profit of £25.1m from revenues of £256m.
The figures for 2019, the latest numbers available, equate to an impressive return on sales of 8.3 per cent – the best margin on our entire list, according to our analysts ASE Global.
The Car Dealer Top 100 was compiled with the help of ASE Global and used EBITDA as the ‘fairest’ measure of car dealers’ performance.
In an exclusive interview with Car Dealer Live, which you can watch above, CEO Andy Coulthurst, said: ‘I’m proud and the team will be proud, but to be honest with you we were a bit disappointed in that year because we were probably around 10 per cent off where we wanted to be.
‘But we’re never happy – we’re always striving to get that little bit more.’
The Trade Centre Group runs six used car supermarkets – three in Wales and three in England – and was set to open another in Rotherham this year, but the pandemic put the opening on hold.
Coulthurst, who up until 2015 worked as boss of Motors.co.uk, also reveals the group’s ‘massive marketing strategy’ completely excludes advertising its cars on traditional classified websites.
He said: ‘We take every single station in our region from a radio perspective. We take as many spots as we can in drivetime as we possibly can book.
‘We’re big on outdoor, you can see some of our digital format screens up and down the motorway. We do paper – traditional – even petrol pumps. Every petrol station in our region has our marketing on the pumps.
‘We are big on digital and we spend a huge amount of money on marketing to drive a steady footfall through the doors that ultimately give us that consistency we can count on every week.’
But that doesn’t include the likes of Auto Trader or his old paymasters Motors.co.uk.
‘We do it purposefully to differentiate ourselves from the market,’ he said.
‘Most dealers are heavily reliant on the classifieds, such as Auto Trader. There’s nothing wrong with Auto Trader, it serves the customers that invest in it very well and they’ll get plenty of leads.
‘But we like to cut our own way and not necessarily always 100 per cent appeal to customers that are just in the market, but bring customers into the market as well.’
Trade Centre Group focusses on getting customers into showrooms and doesn’t believe in online sales.
This presented a challenge during the pandemic, but Coulthurst is confident this approach will continue to be the right path. And with the healthiest profits in the Top 100 list for non-franchised dealers, few could argue with him.
He added: ‘The journey will start online for the majority of our customers but we are still a bricks and mortar business.’
Trade Centre Group was two places above listed used car supermarket rivals Motorpoint who finished in 10th place with EBITDA of £23.9m. So, does Coulthurst have ambitions to join them on the Stock Market?
‘Never say never,’ he said. ‘It’s not something that’s top of the agenda at the moment.
‘We’ve only got geographically a small footprint in the country so I think we’d probably expand a bit further before we gave that serious consideration.’
Looking ahead to next year, Coulthurst is excited about finally opening the group’s Rotherham store and is already stuck in to the recruitment for the site.
And in a final message of thanks to staff, he added: ‘They get told it time and time again, but a big pat on the back, another good year and let’s try and put 2020 behind us and have a fantastic 2021.’
Few will be betting against the used car maestros pushing up the Car Dealer Top 100 table again next year.
Andy Coulthurst admits he’s had one complaint about the used car supermarket’s unique silent TV adverts from a customer who thought their TV was broken.
The dealer advertises its cars on TV heavily in the areas it sells in, but has a silent sound track behind the images which encourages people to look up and stop ignoring the TV during breaks. It clearly works.
Coulthurst said: ‘The thing we’re most famous for and you’ve heard it, well you’ve not heard it, is the silent advert. I’ve only had one complaint from someone who thought the television had broken!’
In our Car Dealer Live interview Coulthurst explains how the group invests heavily in above the line advertising and likes to ‘own’ the marketing space around its dealerships – from bill boards to petrol pumps.
He added: ‘A lot of my time is spent on the marketing side of the business, so not only coming up with creative strategies, but also making sure that that money’s best spent.’