3 months ago
It’s an understatement to say the coronavirus pandemic has been a headache for dealers over the past 12 months, but for big dealer groups it’s been more of a migraine that no amount of strong painkillers can cure. And big dealer groups don’t come much bigger than TrustFord.
The business is the largest Ford-owned group in the world, and as such it has showrooms filling every little corner of the UK – a country that has had to endure differing Covid-19 restrictions for the best part of a year.
It’s this point TrustFord’s chairman and CEO Stuart Foulds finds most frustrating.
Speaking to Car Dealer Live in a special video interview (which you can watch above), Foulds expresses his irritation at the consequences different restrictions across the UK have had on the business.
‘If you look across the UK there have been significant differences between different nations in the handling of the pandemic,’ he tells Car Dealer.
‘For example, in the last lockdown in November, Scottish dealerships were allowed to have forecourts open and were able to do test drives from forecourts.
‘Dealers with showrooms effectively moved their showrooms out onto their forecourts and transacted pretty much as normal.
‘In England, of course, showrooms and forecourts were closed, and then in Northern Ireland where we have big representation, they’ve shut up full stop – they’re not even allowing click-and-collect or home delivery.
‘From a sales perspective in Northern Ireland, we’ve effectively ground to a standstill.
‘I think it’s nonsense to be honest.’
Speaking for the wider motor trade, Foulds lays it on thick that the government ‘hasn’t got it right’ when it comes to showrooms being shut despite other industries being allowed to trade more freely, and MPs simply not understanding the motor business.
‘It’s being handled in different ways in different parts of the country – there’s no cohesion; it’s a bit shambolic.’
Foulds reveals TrustFord has invested around half a million pounds on PPE to keep customers and staff safe.
‘We’ve taken all the measures,’ he says. ‘It’s just a shame the government has decided to take that stance to close us from a sales perspective.’
Returning to the problem of Northern Ireland effectively being a shut-up shop, any hopes for a successful start to 2021 for TrustFord’s Northern Ireland business have effectively been written off.
‘The frustration in Northern Ireland is that they don’t have plate changes like in mainland UK,’ he says.
‘So January is actually the biggest month of the year and that’s effectively been blown completely out of the water this year because we can’t transact.’
TrustFord’s sphere of influence even expands to the Channel Islands which has highlighted a problem not just for the business, but also for the wider global economy.
‘If you wipe out the flights then you wipe out the rental business – remember every major airport has tens of thousands of cars for rental and they’re not doing anything.
‘Guernsey came out of lockdown quite early on but just a few weeks ago they completely locked down again, but Jersey is still open for business,’ Foulds explains.
‘We’re the Hertz franchisee on both islands and operate from both airports – and no tourists means no holiday car rentals at all, which is proving to be quite challenging.’
It’s a global problem for most manufacturers, says Foulds. ‘If you wipe out the flights then you wipe out the rental business – remember every major airport has tens of thousands of cars for rental and they’re not doing anything.’
Despite these very real problems, TrustFord has weathered the coronavirus storm in fine fashion.
‘Business was okay during the first lockdown as we were able to keep workshops open, and then in July it was really, really busy due to pent-up demand and finance agreements that had to be renewed,’ he explains.
‘It was all going swimmingly and then we had the second lockdown – but we had learnt a lot of lessons from the first lockdown. December came and it was going well and then bang – another lockdown! It’s been up and down, but we are well placed.
‘To give some context, anecdotally you could count the number of sales we did last March on one hand, but in January of 2021 we were in the thousands.
‘The new car market was down 40 per cent in January and we were reflective of that, but our used car business was very strong, our TrustFord Now proposition – where we can move cars between dealerships and to customers’ homes – has really come into its own, and our service and bodyshops have never been busier.’
Commercial vehicles have been the real winner for TrustFord, however.
Foulds says: ‘Last year and so far this year, commercial vehicle sales have been absolutely on fire, and that has a lot to do with delivery companies taking up our supply. Commercial vehicles have pretty much balanced the books when it comes to the decline in new car sales.
‘In general, business is pretty good right now – touch wood! The biggest thing for the motor industry in 2020 and today is liquidity – it’s a big black cloud that’s hanging over a lot of businesses.
‘TrustFord is in a very strong position from a financial aspect, but there will be a lot of dealers struggling to make ends meet. A 40 per cent decline in the new car market can be pretty painful when you have bills and mortgages to pay – cash is king. ‘
March worries
Foulds is a little concerned about March though and ‘hoping it will happen’ but even if the plate-change month doesn’t take off, he expects April to become the new March this year. But he’s taking comfort in knowing TrustFord already has a strong March order bank.
‘A lot of finance agreements come to an end in March,’ he says. ‘The finance companies have been pretty good in giving customers some flex, so if we miss March in the true sense of the word, it’ll happen in April so I’m optimistic.’
Foulds is optimistic about the Northern Ireland market picking up too, even if he has to force 12 months’ of business into nine.
He’s confident because of the need to get customers onto new PCPs, and also because Northern Ireland has a strong Motability market and customers are waiting for new cars.
Commercial vehicles sales have been ‘on fire’ for TrustFord in 2020 and 2021
While the business is in fine fettle, TrustFord is naturally part of Ford’s wider plan to consolidate and reduce the size of its UK network, and it’s already begun under Foulds’s watch.
‘Out of choice we have closed some of the smaller businesses and focused on the “motherships”‘, he says.
‘If you think back to a few years ago, the Ford franchise model was to have a mothership and some satellite dealerships in a ‘CMA’ – customer market area – so you would have the principle big dealership in the town, and then have smaller dealerships in the provinces.
‘That model has gone full circle, and now Ford is saying it wants to look at through-put per site. If you look at our German counterpart manufacturers, Ford has many more dealerships so the through-put per dealership is much lower.
‘From our point of view, we have take the opportunity to consolidate and closed and sold some of the smaller sites. For me, it’s a benefit to us – we can push more revenue through one site than perhaps spread it thin through three or four.
‘It has started but there is a long way to go for the whole Ford dealer network – the plan is to get it down to around 200 from something like 380.’
- TrustFord wins Used Car Group of the Year in 2020 Used Car Awards
Redevelopment plans are well underway across the TrustFord network. The most recent of which is in Guernsey where the company has received planning permission to redevelop its Longue Hougue site.
Currently Longue Hougue is TrustFord’s bodyshop on the island, but it will be closing down its sales and aftersales site at La Grange and moving them to Longue Hougue.
‘One consolidated site will save us some money but also give us a strong foundation to invest,’ Foulds says.
This year TrustFord will also be hoping to revive its Smart Hub pop-up dealership operation.
Ford opened this Smart Lab in Quebec City. TrustFord opened a similar hub last year but it had to quickly close
It opened but quickly hit the buffers as lockdown restrictions took hold.
‘You could hardly have written it,’ he explains. ‘We had the plan and we were ready to go; we had visited a site in Italy [running a pop-up dealership] to understand how it all worked, we secured Castleford and we were ready to open in late August, early September. We then got wind of the November lockdown and put the project on hold. We eventually opened our Smart Hub on December 1 and closed it on the 31st!’
The operation is still close to Foulds’s heart, however and he’s hoping to reopen the Castleford Smart Hub as soon as possible.
‘Even in that short space of time, it proved to be hugely successful with customers who were interested to see products showcased not in a showroom environment and not be pounced on by salespeople.’
He adds: ‘We’re desperate to get it open again once the current lockdown lifts. It is my intention to widen the plan across the UK.’
Watch the full interview by clicking on the video at the top of this page.
