MARSHALL Motor Group’s ‘stand-out’ performance in the used car market helped it deliver a strong set of financial results for the first half of 2019, according to the company’s CEO, Daksh Gupta.
Speaking to Car Dealer, Gupta said that the used car market had faced some well-documented challenges during quarter two and added: ‘If you think the market is forecast to decline two per cent this year, we delivered growth of 7.2 per cent which is stunning.
‘One of the things that helps us is that we have got the most prudent stocking policy. We operate 56 days whereas our peers do 90.
‘For me, having a more prudent policy, particularly bearing in mind the residual value drops that we saw in Q2, is very sensible because what it enables you to do is dispose of vehicles faster, recycle them into cash and re-invest into stock at a new revised price.
‘That’s definitely working for us and it’s one of the differentiators in the way that we run used cars. Last year as well, we had a strong performance on used cars and we’re just really pleased that we’re able to keep building on that.’
Gupta explained that Marshall’s strategy around used cars ‘is always around driving the throughput through our existing operations’. He added: ‘There’s no Marshall strategy of having our own used car centres or anything like that. We want to work with our manufacturer partners and drive the operation through our existing franchises.’
Marshall’s performance with new cars seemed to be just as impressive with the company reporting that higher new vehicle margins had offset pressure in used vehicles and aftersales during the first half of this year.
Chief financial officer Richard Blumberger said: ‘We’re really pleased with the increase in new vehicle margins.
‘It’s worth noting that we work closely with our brand partners to negotiate the right targets and critically, we retail to those targets. That minimises the need for us to pre-register and it enables us to maximise our bonus earnings.’
Gupta added: ‘The OEMs are responding to the challenging market conditions. Many of them are removing targets, they’re deferring capital expenditure and they’re throwing more cash at the retailers.
‘One of the protections that we have as a franchised retail business is that we are absolutely an extension and a partner to their businesses. Without a viable network, they don’t have a business themselves so it’s really pleasing to see that many of our brand partners are responding in such a positive manner.’
MORE: Marshall profits down five per cent in a challenging market
MORE: Marshall CEO pays tribute to Sir Michael – a ‘dynamic force for good’
