The strengths of the regional hero motor retailers

Regional dealers with strong local identities typically enjoy close ties with their communities and have generations of employees and loyal customers. We spoke with three to discover the secrets of their success.

■ Mitchell Group: Founded in 1990 by managing director Mark Mitchell, who was AM’s Business Leader of the Year in 2020, the group, serves Chester and North Wales representing Lexus, Škoda and Mazda at its five-acre Cheshire Oaks facility.
■ John Clark Motor Group: Operating 37 dealerships across Scotland and representing brands such as Audi, Volkswagen, Land Rover and Jaguar, the company was founded by chairman John Clark in 1974.
■ Clelands of the Borders: Is celebrating its 30th anniversary with the Volvo brand and the fifth consecutive year as Scottish Retailer of the Year.

PROFITABILITY

With return of sale at 5.5% (2020), Mitchell has overseen growth from 4.3% in 2018. Profitability is maintained by a sharp focus on daily operating controls, taking a meticulous approach to sales channels and understanding any under-performances while utility costs and procurement are carefully managed.

Ensuring the group reconciles all receipts of manufacturer sales and parts bonuses in a timely fashion is vital to profitability, Mitchell says: “Sometimes they are a little late and sometimes they are overlooked entirely!”

As lockdowns became a way of life, John Clark Motor Group created sales ‘hubs’ to handle all email and website enquiries. John Clark adds: “We wanted to ensure we were staying in touch with all our customers and we didn’t lose people who were due to change their vehicles.”

Clelands has the largest area in the Volvo network but, with a population of just 120,000, every opportunity is maximised. Customers are offered a range of add-on products and understanding their needs ensures relevant accessories are suggested.

To meet targets, Clelands sells vehicles all over the country with used cars the biggest single contributor to profitability. Experience in distant and contactless sales, including being upfront with its £1 a mile delivery charge, meant the business adapted easily to lockdown selling.

STAFF & CUSTOMER RETENTION

Employing generations of families, Mitchell Group’s staff collectively boast more than 1,200 years’ automotive experience with an average 11 years of service contributing to a impressive 96% staff retention rate. Benefits include free access to its five-star holiday lodge in North Wales, no Sunday working, additional halfday holidays for school sports days and nativity plays and some of the best salary rates in the region – around 15% above the norm.

The secret, according to Mitchell, is the recruitment process: “New recruits go through a very thorough selection including a first interview at departmental head level followed by a mystery shop in their current role. Around three-quarters of our employees have been recruited through friends and family and we offer £500 for a successful appointment.”

Mitchell writes a personal ‘thank-you’ to each car buyer, amounting to around 2,500 handwritten letters each year. A free car wash for customers, with complimentary refreshments every Saturday (pre-COVID restrictions) entices people back and reinforces positive perceptions of the business.

Likewise, John Clark enjoys exceptional staff loyalty employing generations of families while Clark’s son Chris is now managing director. One Land Rover general manager is about to retire with almost 50 years’ service having joined aged just 17 as a parts apprentice.

Heads of business are given a great degree of autonomy. John Clark says: “We don’t have a typical PLC view that says this is the way things have to be done.”

Customers receive regular communications, not just about product, but information such as driving electric vehicles, servicing and the MOT extension. Clark puts both customer and staff loyalty simply down to trust.

Clelands’ 24-strong team includes some with more than 25 years’ service while its master technician has been with the company from the early days. Pay is typically above the industry average and staff events promote teamwork while employees have autonomy ‘to do what they think is right’.

Retailer principal John Cleland adds: “We have a massive amount of repeat business and some customers have been with us for 30 years. Each customer is really important to me, I can’t afford to upset any one of them.”

BRAND BUILDING

Mitchell Group’s people-centric philosophy is all part of its brand which extends into the local community with events such as its annual Christmas Carol concert at Chester Cathedral now raising £6-£7,000 for charitable causes – Mitchell ensures 10% of the group’s profits are donated to charities, with foodbanks and debt counselling particularly close to his heart.

Having his name above the door is crucial: “It’s becoming more unusual to see a business trading under a ‘living’ surname. You could even say it’s brave as you are putting yourself into the line of fire if anything goes wrong. On the flip side, people think they are being cared for personally.”

The John Clark brand has evolved over time. Partnering with premium manufacturer brands has helped build its reputation along with having a real person’s name above the door.

Involvement with an array of charities is important as is the relationship with local communities. During the pandemic, the group made a particular effort to keep emergency services personnel on the road while its Volkswagen dealer in Kirkcaldy stepped in when the hospital car park flooded, putting 20 staff cars out of action, by providing a vehicle for each person affected.

Clelands has become synonymous with its young driver initiative Drivewise launched 10 years ago to provide under-25s with advanced driving skills after a youngster was killed on the winding Galashiels roads taking his father’s car for a spin.

Drivewise has a three-pronged approach – working with local high schools introducing youngsters aged 14-17 to driving with support of advanced driving instructors and the emergency services; 17-25s have their £149 advanced driving course fee reimbursed on successful completion; and over-65s receive one-to-one tuition on the complex technology in today’s cars.

Cleland has sold participants a Volvo as a result, but the motivation is safety: “Road deaths have reduced in the area over the past 10 years and I have no doubt we have had some impact.”

LEADERSHIP

Pastoral support is evident across Mitchell Group and in the wider community with Mitchell undertaking an array of duties as Deputy Lieutenant of Cheshire and having held the position of High Sheriff of Cheshire.

He says: “I am a strong personality and I have very high expectations. But I am also a committed Christian and my faith gives me an amazing framework to lead.” 

Clark’s leadership and entrepreneurial spirit was recognised in 2016 by an OBE for services to business while his motorsport career also raised his profile locally. He says: “You can’t have a strong business without strong leadership.”

Cleland is another who has enjoyed a top motorsport career. The former British Touring Car champion says strong leadership and a good team is key, adding: “When I raced cars, I raced to win and I have the same mentality in the business. Everything we do has to be the best.”

USED CAR MARKET

Mitchell credits his three heads of business for the group’s used car performance, which contributes at least 2ppts on the return-on-sales figure. He says: “Our budgets are to deliver 1,500 used cars each year at £1,500 profit per unit. They meet that every year without exception.”

John Clark Motor Group focuses on acquiring the right stock and employing the right people to advise customers on the car that best suits their needs. Clark says: “It’s all about being honest and qualifying the used car customer to understand their lifestyle so we can be confident we’re selling them the right car.”

At Clelands, vehicles are retailed up to around seven years old under the Volvo Selekt warranty and used car programme. Cleland says: “We prepare vehicles to an extremely high standard, possibly one that’s higher than most dealers.”