6:53 am, May 27, 2020
It was a straightforward answer to a straightforward question.
Appearing on Car Dealer Live, Eden Motor Group chief executive Graeme Potts had been asked by Car Dealer founder James Baggott if the coronavirus crisis would mean a whole new era for the motor trade.
‘No, putting it bluntly. I’m an unreconstructed clicks and bricks man and I remain so.’
Potts, whose career stretches back some 40 years, reckoned that those buyers who didn’t want to see their car before delivery or collection were in a tiny minority and would continue to be so, even though so much of the buying process, such as research and finance, would be carried out digitally.
‘The combination of clicks and bricks is here to stay,’ he said. ‘The physical dimension has a long, long way to go.’
Potts, who has been CEO at Reg Vardy, group MD of RAC, and MD of Inchcape’s Europe and Latin American businesses, established Eden Motor Group in 2008 when Inchcape decided to dispose of Vauxhall as it was no longer seen as core and the then MD of Vauxhall approached him to take over Inchcape’s five Vauxhall dealerships – which he’d been responsible for up to 18 months before.
The group has grown since then, taking on other manufacturer franchises, including Peugeot, Mazda, Fiat plus Hyundai, and has several used car sites as well.
‘I often get asked about the growth plan for Eden, and it is the truth to say that there never was and never has been a growth plan for Eden,’ he said, pointing out that Eden today is relatively very small compared to divisions and turnover that he’d been responsible for in the past.
‘There was never an aspiration for my own business to get to the level of scale that I’d previously been responsible for.
‘It was much more about wanting to do things my way – and I don’t mean that in the self-obsessed way, I mean using the retail and principles that I’d developed and learnt over the years but in an unadulterated kind of way.
‘Because when you’re in a plc or a big company, even the CEO can’t completely determine the policies and the ethos of that company, and that’s what I wanted to do with Eden, so the growth is quite literally an outcome of the success of those policies and ethos.’
Talking about businesses that Eden had acquired, he said: ‘We have some very clear selection criteria and if they’ve ticked the box and we’ve felt that we can manage them then we’ve taken them on and hey presto – and it almost is like that – we end up today with 25 businesses and around about £330m turnover.’
Was it cars that drive him or the money side of the business, asked Baggott.
He replied: ‘It’s neither. Truthfully, it’s neither. I’m a retailer. I love motor cars – always have done. But passion for motor cars to me is not in any way a guarantor of success in the automotive space.
‘I love people and I love retailing, and consequently my chosen space is the automotive sector. Money, profitability for the business, is an outcome of doing the right things: the right teams, the right products, the right marketing.
‘So the financial return is effectively something that validates doing the right things in the business. I love the variability, the size of the market, etc.’
One of his proteges at Inchcape was Daksh Gupta – now Marshall Motor Holdings group CEO – who Baggott said had told him that he’d learnt a huge amount from Potts. Was Potts proud of what Gupta had achieved?
He said: ‘That’s very kind of him. I’m not sure I’d use the word “proud”, but I do take some satisfaction from the fact that there are a number of outstanding alumni who have gone through the mill of being part of my reporting team!
‘Putting it bluntly, I like to drive a business but I absolutely love coaching in an informal kind of way, and when you get people like Daksh and others like him who are ambitious, have got very, very good commercial antennae and who want to learn, then it’s fantastic to work with that kind of calibre of person.
‘And yes, it is quite pleasing – it’s one of the great non-cash rewards to have helped, perhaps with a little bit of wisdom, a little bit of experience, some people who have gone on to great things in the industry.’
Talking about the challenges he’d faced with manufacturers, he said that every brand had its ups and downs but they’d built relationships.
He said: ‘The greatest pressures have been making sure we retain the ethos and culture of the company as size increases. If we’ve ever drifted, we’ve learnt a lesson and come back.’
Maintaining ethical and cultural purity had been the biggest issues, as economic and market pressures had come and gone.
And it’d been tough sticking to those principles during the crisis as he sought to protect the company and its 830 employees.
He added: ‘Being as tight and as controlled as we have been has all been about making sure that Eden gets through this and can survive and maintain employment, and it is our hope that we can, even after this, be able to employ everybody that we still do, even though the vast majority are furloughed as we speak.’
Potts said that planning for reopening on June 1 had been extremely detailed and demanding – something the group had been engaged in for several weeks as it brought in various safety measures.
All its physical dealerships had been closed of course, but it had experienced very encouraging digital sales during lockdown.
‘What we’ve been able to see on a daily basis is the anticipation of a degree of normality on the part of customers,’ added Potts, with a certain air of optimism.
But although he foresaw ‘reasonable levels of economic activity relatively quickly after the lockdown is gradually released’, the outlook isn’t entirely rosy, he warned.
He predicted a bit of a bounce at first but then the economics of the country would come into play, with the possibility of mass redundancies and an erosion of confidence.
‘That’s the concerning phase – how quickly we have to get the national finances back into some kind of order. I don’t want to be negative but I suspect we could have a multi-year recession on our hands.’
Used car demand will, however, be strong, he felt. Values are very good at the moment, and he felt they would hold if not go up slightly in the medium term.
There could also be a mini-bounce sparked by concerns over public transport, meaning a reversion of independent travel to work or leisure.
‘Those at the slightly lower end of the pricing matrix could do very well indeed,’ he said.
Baggott also wanted to know who or what Potts admired in business, and it was the John Lewis organisation that was singled out first.
He said: ‘Their employment brand is superb. The quality and preparation for customer interface in the Waitrose supermarkets and the stores is excellent.’
Apple was also admired.
‘The way there is this aura around the brand and the knowledge base of their people is phenomenal.’
He added: ‘I love businesses where the colleague base are enthused by the product and service that they deliver but also they’ve got clear processes that mean the interface is frictionless and easy and enjoyable.’
As the interview neared its end, Baggott asked Potts what he’d learnt from the crisis. Once again, the answer was matter-of-fact: ‘We need to make it even easier to work in our sector and be successful and not to have a complete compromised balance of life.’
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