A new franchise is coming. With the backing of the mighty IM Group, Great Wall will arrive in the summer. Car Dealer has the exclusive inside line on the cars, the dealers and the people behind the launch.
Words: James Batchelor & James Baggott. Pictures: Dean Smith
PAUL Hegarty wants to shake up the UK motor industry. He plans to do this by introducing a Chinese car brand to a country that is steadfast in buying German, French, Japanese, Italian, Swedish and one notable American brand. Hegarty knows that the UK is a difficult marketplace to penetrate, though if done successfully there are strong rewards to reap.
The company that Hegarty will be launching is the Chinese manufacturer Great Wall. Armed with two products – an attractive supermini and a no-nonsense pick-up – Hegarty aims to create a nationwide dealer network that will deliver extraordinary levels of customer service, and will make the buying process for customers a simple and straightforward one.
The company has been established in its home market since 1976 and already sells its products in more than 100 countries. The UK is the next market Great Wall wants to conquer, and will sit under the IM Group umbrella, with Hegarty at the helm.
‘We want to offer the customer more for less,’ says Hegarty, managing director of Great Wall Motor Distributors (UK). ‘The quality of the cars is very impressive with many Germanic associations. We will be launching with specifications that most people would not expect.
‘The Koreans would be the most obvious competition, but it doesn’t matter what you compare Great Wall products to, the spec will be higher. I don’t think we will have a base spec – our “base” spec will be higher than many of our competitors’ top specs.’
It is, however, the dealer which will be the biggest point of difference, says Hegarty.
‘For us, the dealer is very important in the overall proposition,’ he explains.
‘Over the years the dealers’ contribution to how a brand is perceived has become secondary to the brand itself.
‘For us, the dealer is part of the brand because we really want to nail this issue of customer service, and deliver an experience beyond what customers would expect from us and the dealer.’
‘We want to go further and exceed all previous expectations with extraordinary service’
Hegarty and his team have drawn up a Customer Charter – specific ways in which dealers can both deliver outstanding customer service and keep Hegarty and Great Wall happy.
‘We will go to dealers and say this it what the charter looks like as far as we’re concerned in demonstrating your commitment to extraordinary levels of customer service, compared to standards already appreciated in the industry,’ explains Hegarty. ‘Our Customer Charter is not rocket science – if we’re honest, most dealers are probably doing 80 per cent of it already. But we want to go further and exceed all previous expectations with extraordinary service.’
Discussions with some dealers have already taken place, many of whom appreciate Hegarty’s back-to-basics methods of selling and looking after customers.
‘We’ve got a lot of interest from dealers – about 250 so far and rising every day,’ he says.
So, how many dealers is Hegarty going to kick off with? ‘That’s not really for us to say. That’s because it is up to the dealers in whether they feel comfortable in going to market with the offering that we’re going to have,’ he explains.
‘If they’re happy in implementing all of the things in our customer charter, then they’ll opt into the franchise. That means if we start out with 60 dealers, we start out with 60. If it means 40, then it’s 40 – we just don’t know.’
Nevertheless, for those dealers who agree with Great Wall’s proposition, they can be assured there will be benefits in holding the franchise. ‘The financial rewards will be linked to the customer’s opinion on how he was served by the dealer,’ says Hegarty. ‘So each dealer will have to satisfy their own customers’ requirements and if those customers score that dealer highly, the dealer will enjoy rewards, benefits, incentives and bonuses that relate to the customer service they offer.
‘These bonuses won’t be related to registration targets but customer service, because we feel that if customers are enjoying the buying experience one of our dealers is offering, they will be advocates for that dealership and spread the word. By being good, you will get more sales and earn more money. But in addition to that, there will be a bonus structure implemented by us to reward the dealer if they are keeping their customers satisfied.’
Hegarty’s plan for dealers sounds refreshingly different, but surely the Chinese name and associations of the country producing inferior products in the past will be a problem?
‘We really don’t believe the Chinese association is going to be a barrier’
‘That is part of the challenge ahead of us,’ replies Hegarty. ‘But our research shows there are certain profiles of customers where the Chinese thing is nothing less than a positive. These people see buying a Chinese car as a great opportunity to buy something that has outstanding value for money and great specification, but clearly there are other people who will dismiss it.
‘Let me put it like this: Most cars are built these days in places where you would never expect them to be made – it could be BMWs from South Africa, a Honda Jazz from China, or Nissan Micras from Thailand – and I think the idea that a car being built in location X is better than it being built in location Y has eroded over the last few years.
‘We really don’t believe the Chinese association is going to be a barrier to the majority of customers. The only customers who aren’t going to buy a Chinese car are the ones who just buy because of a brand. The customers who buy a prestige German brand, for instance, buy because of the badge, regardless of where it is built.’
The majority of UK consumers are driven to buy a particular car because of the way it looks, the quality of its construction, the specification and the customer service they will receive when buying it. And Great Wall matches all of these requirements. However, Hegarty can see one drawback.
‘The problem we might have is that Great Wall isn’t known by consumers at the moment,’ he admits. ‘But with our strong proposition and by working with our dealers, this is only a short- term problem.’
Hegarty can say this with some guarantee – he does have a history of bringing in Far Eastern brands to the UK, after all. He joined the IM Group in 1989 as regional manager with Subaru/ Isuzu, then became dealer development manager, then famously progressed on to the role of operations director of Daihatsu, responsible for overseeing the relaunch and development of the Japanese brand in the UK.
‘There is no link at all between our talks with Great Wall and the demise of Daihatsu’
It was a role that only ended recently when it was announced that the importing of Daihatsu models had become too expensive.
‘But there is no link at all between our talks with Great Wall and the demise of Daihatsu in the UK,’ he says firmly. ‘They’re only linked in that we are the group who represents the brands and other franchises.’
Conversations between the IM Group and Great Wall started 10 years ago shortly after the group set up an office in China.
The team was inquisitively looking for a new brand to market, and the IM Group believed Chinese firms were where the opportunity was going to lie in the future.
So, why has it taken so long to bring Great Wall to the UK? ‘That’s because there are 160 manufacturers of cars, trucks, buses and motorcycles in China,’ replies Hegarty. ‘It was always going to take a long time to work through and then work out which one was going to work best within our group, culturally and with the dealer networks we have an association with.
‘Two things really struck us about Great Wall, though. Firstly it was the passion for quality and the nature of the cars and the company,’ explains Hegarty. ‘The company has a motto ‘‘Improving little by little every day’’ – and they do. Great Wall has a benchmark manufacturer which they want to emulate; and that is a top-end, high-quality company. We were impressed by where the cars sat in the market, and when conversations began between them and us, it was the pick- up/SUV market they were sitting in. That was obviously very attractive to us as that is where we traditionally sit if you look at our franchises and our dealers.
‘The second,’ continues Hegarty, ‘was that they were also an export-orientated company and committed in coming to the UK. This is unusual in itself as the Chinese domestic market has a growth that is substantial, but they also realised that for a private company to carry on trading successfully, they needed to look further afield. Great Wall is unusual in China as it is not state-owned, so they are able to be aspirational and look outside of China.’
‘We haven’t ruled anything out… Anything is possible’
And they’re aspirational to say the least. Successful too – they have 500 dealers and 800 aftersales dealers across the world.
The major European market for Great Wall is Italy, which started in 2006 and has been hugely successful with the Italians taking to the Hover SUV and the Steed pick-up. But the market which Hegarty and his team are most interested in is Australia where more than 1,000 Great Wall cars are being sold a month.
You could say that Hegarty is an authority on launching a new brand. ‘There are two fundamental problems when you launch a brand,’ he says.
‘The first is that you make too many assumptions about who’s likely to buy your products, and the second is that you don’t concentrate enough on the things that are really going to make a difference.
‘On the first point, it isn’t up to us to say who is going to buy Great Wall products and direct that market towards our cars.
‘That’s ill-advised. We see little pockets of customers who will be interested in our cars.
‘On the second point,’ continues Hegarty, ‘we are making sure we are concentrating on the important thing – the buying process. We want to make it easy for people to buy these cars, and how do we make it easy? By having good dealers who appreciate that it is the customers who call the shots in the transaction.’
While Hegarty is concentrating on the traditional ways of doing business and dealers looking after customers, he’s not foolish enough not to embrace the buying habits of modern customers. With many consumers wanting to buy cars online, there is a real opportunity for manufacturers to capitalise on new ways of selling cars.
‘We haven’t ruled anything out,’ Hegarty says frankly. ‘This is 2011 – not 1985. So we’ve asked ourselves: What makes it easy for customers to buy one of our cars?
‘Anything is possible. But what we end up doing must be complementary to and not undermine what the dealer can do and is doing. Through the dealer, we would make the process of buying a car straightforward – and whatever way it would be it would always be through the dealer.’