6:53 am, May 25, 2020
Pendragon CEO Bill Berman would never have sold the dealer group’s US businesses if he’d been in charge at the time.
In an exclusive interview with Car Dealer Live, a clip of which you can watch above, Berman says he would never have supported the sale of the US arm of Pendragon.
He said: ‘In 2017, when they announced they were going to close the US operations. I think if I was on the board at that time I would have strongly and aggressively advised against that.
‘Those are great assets, they produce at a very high level. Jaguar Land Rover is an amazing brand in the US, premium luxury brand and the locations we had were unreplicable. You could never buy those brands again.’
Host James Baggott also asked Berman about the properties Pendragon sold in 2006 and then leased back to free up cash.
Those leases are due to expire in the near future and could cost Pendragon dearly – that’s something Berman is already planning to tackle.
When asked whether this could mean closing dealerships or relocating, Berman said ‘it’s going to be all those and more’.
He added: ‘Decisions and things that make sense at the time, for example, that’s one of the ones that if you could go back in a time machine you would have done differently.
‘Those leases have, with the normal increases, outrun their usefulness and put us in a position where it makes it hard to compete. Some of those expire in 2025, some in 2031, and we’re working through those with the landlord.
‘If you can’t get the right deal and it doesn’t make sense, you have to make the best business decision. You make decisions based on the circumstances that you’re in and then have to live with them and adjust accordingly.’
HIGH HOPES
Berman told Car Dealer Live he has high hopes for the business that has been through a sustained period of turmoil and says profit would have been on the cards this year had the pandemic not hit.
He added: ‘The year started off very strong for us. We were ahead of our target and our budget, and the numbers we could see we were outperforming the marketplace as a whole.
‘I wish we had a much stronger balance sheet, but the work we did in the latter half of last year and beginning of this year has put us in a position where we’re going to be able to keep going forward.’
He added that Brexit was still an ongoing concern that would affect the group’s future, but predicted that there would be a positive sales ‘bump’ on the other side of lockdown.
And he also discussed relationships with Pendragon’s biggest manufacturer partners on the show.
While he said Vauxhall is ‘a bit of an enigma at the moment’ he added that: ‘The closures [Ford] talked about pre-pandemic, they really didn’t affect us’.
He added: ‘To me, with the Ford thing, I think it’s going to be very advantageous for us. We’re a large Ford dealer and the stores they’re talking about closing will do nothing but give our existing businesses more throughput. It came as a welcome revelation.’
However, aside from its six Porsche dealerships, the big partner Pendragon is missing is Volkswagen Group and Berman would be keen to add.
He said: ‘I cannot offer a full suite of brands to consumers. VW and Audi, that’s the largest car company in the world and we don’t represent those brands.
‘Yes, I would love to in the right circumstances and right locations work with those brands.’
To watch the full Car Dealer Live interview click the link below and for more interviews like this click here.
Proposed pay plan for Pendragon – which could see CEO earn £2.2m a year – faced investor rebellion
Pendragon records £2.3m loss for first quarter of 2020 – but says things are improving
