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Hall of Fame: Sir Arnold Clark
The most famous and recognized man living in Scotland?
He has some notable rivals for that title, but there’s no doubt that Sir Arnold Clark is a ubiquitous figurehead, known by millions throughout the country.
Sir Arnold is a true one-off. Aged 78, he regularly works 12-hour shifts and is reputed to take just 10 days holiday a year.
His career path in the automotive industry was set upon joining the Royal Air Force in 1945. He chose to enrol with the motor division, eventually becoming a motor mechanics instructor.
After leaving the RAF, Sir Arnold utilized his experience and leadership qualities to establish his own company. He purchased a Morris Ten Four for £70 and, after many careful hours restoring the car to its original condition, sold it for £150.
From this first venture, Sir Arnold began to buy and sell cars privately, building a fund of money that was used to open the first Arnold Clark showroom in 1954 in Glasgow’s Park Road.
Fifty-two years later and Arnold Clark has developed into one of the UK’s largest privately owned businesses It sells more than 70,000 new cars and 100,000 used cars per year and generates an annual turnover of around £1.8bn from 135 sites. It also trades on, or auctions, 30,000 cars.
All this growth, from the second car he purchased to the latest dealership which opened this year, has been self-funded. Sir Arnold plans further growth as well, particularly in England.
The business has no debts and, aside from the contract hire division, no borrowings. Sir Arnold’s mantra is: if you can’t afford it, don’t do it.
Not only that, he has never taken a dividend from the business; an ethos of reinvestment that means every penny goes back into developing the group.
Knighted in 2004 for services to the motor industry and the Scottish Community, Sir Arnold is a big supporter of training.
His company has its own training centre, delivering qualifications from modern apprenticeships to management development, and is affiliated to GTG, a training organization based in Glasgow and Edinburgh.
Almost everyone who meets Sir Arnold has an anecdote to tell, some of which have taken on myth-like status. Like the time he sold his own car on the spot to a casual enquirer, which meant a long walk home – anything to not miss out on a sale.
Then there’s his habit of walking around showrooms lifting the windscreen wipers on any cars that he thinks are overpriced, a none-to-subtle way of telling the showroom sales staff to lower the sticker price.
The business Sir Arnold founded now has interests in every facet of the automotive industry – new/used car sales, servicing, vans, rental, parts and accessories, contract hire, insurance (for cars, homes and travel) and classic cars – and a few unrelated ones.
It even holds corporate events and takes private bookings on the famous Drum racing yacht purchased from Duran Duran singer Simon Le Bon.
The only thing Sir Arnold Clark doesn’t do is actually make the cars!
“The man with the Midas touch” is how AM described Tom Dunn in 2004.
The Nationwide Autocentres managing director, who this month sold his company for £49m, has an unblemished record of acquiring loss-making repair businesses and turning them into profit spinners in record time.
He did it when buying 41 sites from Lex Autocentres in 2001. He did it again in 2002 when acquiring the remainder of the under-performing Lex service and repair business, and again in 2003 after purchasing the Stop ‘n’ Steer network.
Then, in 2004, Dunn pulled off his most audacious deal yet, acquiring 50 sites from the AA, after the recovery services firm decided to withdraw from service and repair.
As part of that transaction, Dunn secured an agreement for his network to become the AA’s approved service provider, a move that includes displaying AA branding to further raise the profile of the 213-outlet business.
But Dunn is more than simply a turnaround expert. He formed a strong management team to focus on the day-to-day operations and put a significant amount of effort into training (Nationwide won AM’s training award last year).
He’s also a committed advocate of mandatory industry licensing and it was no surprise when he played a fundamental role in helping the Institute of the Motor Industry get its Automotive Technician Accreditation scheme off the ground last year.
Nationwide is the motor industry’s biggest backer of the ATA, putting more than 100 technicians through the voluntary scheme so far and with plans this year to ensure a further 1,000 staff become accredited.
Its in-house training centre is IMI approved, while the company has a record of training more apprentices than it actually needs, a service to the industry that helps other repair businesses to take on skilled staff.
As Dunn says: “When you are repairing a car, someone is going to drive it at 70mph or more – yet in the past, the repairer hasn’t been regulated.
“Anyone can set up a garage; you don’t need qualifications or experience. But now, finally, we do have a recognized qualification for our staff to achieve.”
Nationwide Autocentres is one of the UK’s fastest rising stars: last year it was ranked 57th in the Sunday Times Fast Track 100 – the highest placed automotive company – after revenues swelled 80% from 2001 to 2004 (£57m turnover).
So it came as no surprise when this month a team of managers acquired the business for £49m with funding from Phoenix Equity Partners. Dunn will oversee the switch to the new owners, and is likely to leave the company within the next couple of months.
It took him just five years to build Nationwide and he believes the company has the potential to become a 500-strong network over the next couple of years.
What next for Dunn? It’s all speculation, but expect him to have a plan already laid out. We’ll just have to wait and see what it is.
You may ask how a new and used car supermarket can beat the country’s best franchised dealers into winning the title of AM Retailer of the Year 2006. When the company has such solid, successful business practices as Available Car, our judges feel that it puts many franchised dealers to shame.
This 10-acre outlet at Castle Donington near Derby has scooped the AM Used Car Retailer trophy for the last three consecutive awards. It achieves consistent year-on-year growth in sales and profit, its finance penetration is double the national average, and its proportion of repeat business and customer referrals is testament to the excellent service it provides.
Graham Bell, its founder, is proud to collect the motor retail industry’s ultimate trophy for his business.
He says: “We were really surprised – a few years back, these awards were about manufacturers rather than independents, so it is a real honour for us to win Retailer of the Year.”
Bell credits Available Car’s success to good management and processes – motivated staff all get a months’ extra wages at Christmas if the business is succeeding – and a “sell the company not sell the cars” philosophy.
It’s clear that this works, which is why Bell plans to open a second Available Car outlet this year. In its three years of trading, both the number of cars sold and profits achieved have doubled. The dealership stocks more than 1,500 cars, with a wide mixture of brands, ages and prices. Its strategy is to be a destination for car buyers with any budget.
Judges' comment
Available Car is a true retailer because it is choosing its own stock and it doesn’t have the support of a manufacturer’s brand. There are very few truly professional retailers, but these are as good as it gets. Available Car has had an unusually high level of attention to retailing over a long period of time.
Last year’s winner of the AM carmaker of the year has retained its crown after one of its most important years in the UK new car market. 2005 was one of the busiest for Lexus in terms of new models with the introduction of the GS, IS and RX400h.
With a limited model range, the all new IS and GS saloons were crucial to the manufacturers success, and both models lived up the high expectations. Sharper styling, new engine line-ups and superior quality interiors have combined to produce two models that will rival the offerings from the big German three. And Audi, Mercedes-Benz and BMW will have even more to worry about following the launch of Lexus’s first diesel engine last month.
The carmaker also continued to lead the way in customer service. It topped the JD Power UK customer satisfaction study, claiming the 2005 Gold Award for an amazing fifth successive year, scoring 848 points out of 1000 in the ownership satisfaction report, well above the industry average of 786.
In both the Sewells and RMIF dealer attitude surveys it continued to forge ahead. In the RMIF report, it recorded a 9.7 out of 10 rating, ahead of second- placed premium rival BMW, while in the Sewells survey it also retained top spot, for the third year running, seven points ahead of second-placed Mini.
The company’s success can be traced back to its UK launch in 1990. With only one model at the time, Toyota’s premium brand effectively started with a blank canvas but realized that without brand strength, the only way it could get into buyers’ minds was through word of mouth and that meant focusing on excellent customer service. This continues today.
“The fact that we continue to lead the rankings above all other manufacturers is a reward for the effort we invest in building a successful and profitable centre network. It illustrates another dimension in Lexus’s efforts to achieve the highest possible standards in all aspects of its business,” says Steve Settle, Lexus GB director.
Lexus also leads the way in hybrid technology and was the first manufacturer to fit a hybrid engine into a large vehicle with the RX400h. It now plans to introduce an all-new 3.5-litre V6 335bhp unit into the GS and the future is likely to see similar engines added to each model range.
2006 will be another busy year for Lexus. The IS220d went on sale in January and its success will be crucial as the manufacturer aims to further increase fleet and corporate user-chooser sales.
The summer will see a new 3.5-litre V6 engine added to the RX range, the GS450h will follow and an all new LS, powered by a 4.6-litre engine mated to an eight-speed gearbox, is also planned.
Last year, the carmaker sold 10,548 cars in the UK and held a 0.43% market share. This year, it is aiming for 16,000 units and also plans to add a further six dealers to bring its total to 59. By 2010 it hopes to be seeing annual sales in the region of 20,000, averaging around 400 per dealer.
“We want to be seen as a true premium brand in the UK. Our unique selling proposition is not our heritage, it’s our customer experience,” adds Settle.
Judges' comments
Lexus is highly unusual: it understands the concept of partnership with its retail network. And, because of that, it’s rated highly by dealers and customers alike.
Large retail group: JCT600 LTD
JCT600’s growth curve has been nothing short of unprecedented. Fuelled almost entirely by organic expansion, the privately-owned company has seen turnover soar 186% over the five years to December 2004 from £243m to £453m, while pre-tax profits increased even more rapidly, by 286% (£3.5m to £10.1m).
Last year saw the single biggest increase for a group used to dealing in record results. Pre-tax profits exceeded £16m (not including exceptionals), way ahead of forecasts. In the November AM100, JCT600 was one of the top performers in the return on capital employed table at an impressive 25.9%.
Some more facts and figures: return on sales comfortably above 3%, £16,000 profit per employee, gearing of 22%, 30 franchises operating from 20 sites. In 2004, 19 of the 20 dealerships made a healthy profit (the Rover site was the exception), more than half returning in excess of £300,000 profit.
But it takes more than cold hard facts to become AM’s large retail group of the year. AM Awards auditor Carter & Carter says: “Innovation is present in all areas of the business, resulting in a KPI-driven approach to success with robust reporting and monitoring of performance. The culture of the business is driven from one man’s passion for excellence, which instils a pride in the workforce.”
That man is John Tordoff, who took over as chief executive in 2002, when his father Jack Tordoff stepped back from day-to-day operations.
Since taking control, John Tordoff has driven the group forward through selective expansion of the franchise representation – brands range from Porsche, Ferrari, BMW, Mercedes-Benz and Bentley to VW, Chrysler, Mazda, Seat, Vauxhall and Peugeot – coupled to a disciplined approach to manufacturer and company procedures.
Group policy is to represent no more than four dealerships per franchise, with all locations within a two-hour drive time from the Bradford head office to ensure senior management can operate hands-on control.
JCT600 strives to squeeze profit from every part of the business and has developed rigorous processes. Sales performance is monitored through an online management system, Contact, which tracks the potential customer. It means that while many dealers stop contacting people after a couple of phone calls, JCT600 staff are still converting them into customers after four or more calls.
This is combined with a ‘Steps’ selling process, an 11-point strategy that brings consistency to customer service across the 20 dealerships. All new sales staff attend the two-day course followed by a one-day telephone sales training and one day Contact diary course.
The group also undertakes its own mystery shopping, often employing a finance company to audit the business. The results are fed back into the dealerships for corrective action to be taken, if necessary. The sales process is further audited by a 52-point check list, which is regularly reviewed internally.
JCT600 helped found the West Yorkshire Trading Standards Motors Trade Partnership, which is intended to raise professionalism and image of the automotive business. Not surprisingly, complaints against its dealerships are low.
Judges' comments
This group does the basics right – and without overstaffing the business. It has an excellent selection of franchises and has the right structure and processes in place to make the most of them. A unanimous decision by the judges.
Small retail group: Norton Way Motors
One figure stands out above all others: return on capital employed of 49.2%. That’s the highest ever achieved by an independent group (Porsche Retail once topped 67%) and puts Norton Way Motors a mile in front of its nearest competitors in the AM100.
It’s all the more impressive when you consider that this is a business with individual cultures, profiles and geographic locations. One part, based around Letchworth in Hertfordshire, consists of smaller showrooms housing Honda and Peugeot franchises. The other is a sales behemoth: the massive Chiswick Honda site in west London, which sells cars, motorcycles, marine and power equipment, and the similarly substantial Mazda dealership in Letchworth, both the largest facilities in Europe for their respective franchise partners.
More recently, Norton Way opened a fleet operation in Bedfordshire to serve the UK corporate market. The 60-strong team handled around 8,000 cars last year. It is the sole supplier of Mazda cars to National Car Rental, the carmaker’s largest customers, and is also the primary provider of Mazda and Honda cars to BT Car Fleet.
For a privately-owned group of its size – four dealerships, 320 employees, £150m turnover, AM100 No 61 – such investment could be seen as a bit of a risk. But it’s a calculated one, and the management team headed by managing director David Grainger has proved itself capable of handling such a diverse range of operations.
AM Awards auditor Carter & Carter agrees, describing Norton Way as a “unique business”. The assessor adds: “A positive philosophy is evident, and reaction to opportunities and improvement to both process and levels of service appears to be implemented without delay.”
Across the seven audited areas – including planning and strategy, people management, customer satisfaction, finance performance and innovation – Norton Way scored top marks. The company employs an external assessor to carry out mystery shopping exercises to monitor customer performance, with anyone scoring below 70% subject to a £250 fine. It rarely needs to invoke this penalty.
It’s not all about wielding a big stick; Norton Way dangles the carrot through its recognition and reward scheme, where staff nominate their peers for outstanding customer service.
This is backed up by Norton Way’s internal CSI system, which measures all areas of customer service – even feedback to its coffee shops. Every sales and service customer is contacted, with the team insisting on 100% completion of the Customer Profile Forms (CPFs). All complaints are tracked through to conclusion, with the service team contacting the customer again to ensure total satisfaction with the outcome.
A list of the staff achievements during 2005 suggest the people management policy is succeeding: Honda UK technician of the year, sales person of the year and parts advisor. It’s a similar story across the group.
This level of detail, combined with outstanding profit and ROCE performance in 2005, makes Norton Way the deserved AM Awards 2005 small retail group of the year.
Judges' comments
Norton Way has excellent returns and makes brave decisions as shown by its innovative fleet centre and by taking on the massive Chiswick Honda brand centre. The company takes calculated risks and pulls them off.
Highly commended
Hodgson Newcastle
Volume dealership: Hodgson Newcastle Toyota
Volume: the AM Awards’ definition is a dealership selling at least 1,200 new cars or 1,200 used cars. Hodgson Toyota comfortably surpasses this, retailing more than 2,000 new cars last year. It also sold in excess of 1,000 used.
A family business, Hodgson is described by AM Awards’ audit partner Carter & Carter as “going from strength to strength”. Founded in 1992 with eight staff, Hodgson’s group workforce now totals more than 100. In the past two years, both its turnover and profit has doubled, with the Toyota dealership in Newcastle currently the brand’s top retailer in the UK.
Managing director Steve Hodgson is extremely hands on with the business, and has a real focus on a process of continual improvement and re-investment. It is this policy that drives the company forward even through a period of tough new car retailing conditions.
Hodgson is also committed to retailing cars at a reasonable profit, not simply registering them with the aim of getting a back-end bonus from his manufacturer partners. He says: “Only in this way can you control your business and not be affected by manufacturer dictates and adverse trading environments, and continue to gain organic growth and market share.”
One of the tools to achieving this is its comprehensive company process manual. This contains detailed guidelines for staff on the operational sales process and margins achieved. It also has robust processes for customer follow-up – all sales and service customers receive a postage-paid questionnaire from Steve Hodgson, who monitors all feedback personally – plus new car delivery, workshop loading and quality control.
The manual ensures that staff deal with customers in the right way, and follow a thorough and proven system that maximizes business opportunities. It clearly has helped Hodgson Toyota build its brand: one in three of its customers state either the company’s reputation or its friendly staff as the main factor in making their purchase.
“To sell all models well demands excellence in marketing and an incredibly disciplined approach, particularly when you consider that more than 85% of Hodgson’s sales are retail,” says Hodgson. “With the absolute involvement of a team that has been together for a decade, we are able to address issues head on, and the psyche is one of ‘can-do’.
“We do not see any vehicle we sell as a lost cause. We look at why the vehicle was made, who for and how we can ensure that person is well enough informed to make their buying decision. You can only do this if you are retailing, not registering.”
People management is another of the business’s strengths. Hodgson has achieved Investors In People status, and consistently encourages self-development and career progression among its staff. Internal and external training is provided in extension to the manufacturer training required by the franchise, and the company rewards departments and individuals appropriately. All staff are encouraged to suggest improvements within the business.
Such a well-run, profitable, forward-thinking dealership is a worthy winner of the AM volume dealership award.
Judges' comment
This is a great example of a place that sells cars; that might seem obvious, but there are too few great car retailers out there. This is one of the best – last year it sold more than 3,000 cars.
Small dealership: Halliwell Jones Warrington
The financial performance of the Halliwell Jones Group over the last five years speaks volumes about its success and why it is one of the most consistently successful UK retailers.
Having invested more than £8m in dealership redevelopment and property purchases, the group is ranked 5th in the AM100 top 20 return on sales listing and ranked 9th in the AM100 return on capital employed.
The BMW dealership in Warrington, which opened in 1998, plays a significant role in this performance. Last year the showroom sold around 1,000 new BMW and Minis (close to the 1,200 cut-off point for small dealership) and 650 used to turn over more than £4m. It is in the top 10 within the BMW network in terms of net profit, topping 3% return on sales criteria for the first time.
Halliwell Jones expanded the site last year to include a PDI centre, storage facility and bodyshop, which freed up workshop space. Retail hours and profits have risen as a result.
The showroom also accommodates HJ’s restaurant, which offers service customers freshly prepared food from breakfast to dinner. It is also available for business meetings.
In its quest to provide consistently high levels of service throughout the group, Halliwell Jones has developed a clearly defined process for every facet of the business. This is the blueprint to which all staff members adhere to.
Significant emphasis has been placed in recent months on refining and improving the sales enquiry management process. The group has invested a significant amount in a proven enquiry management system, which allows every sales enquiry to be tracked from the initial point of contact through to a conclusion.
“Our objective is to take ownership of all sales enquiries, maximize sales opportunities, monitor work rate and, equally importantly, ensure that customers’ needs and requirements are met in full in every instance,” says David Nutter, dealer principal of Halliwell Jones Warrington.
The group spends around £500,000 on training annually and is committed to ensuring that all employees are provided with the necessary skills and knowledge to perform at the required level.
In-house training is undertaken at the group training centre at the Warrington dealership, which is also used by BMW UK to host regional training courses.
Every year the dealership carries out an employee survey as part of group activities. Year-on-year improvements have been recorded since the scheme started in 2003, with 99% of staff saying they enjoy their work; 94% stating they have sufficient knowledge and skills to do their job well; and 90% believing that customer satisfaction is promoted just as much as profit in their department.
Halliwell Jones has a sponsorship agreement with the Warrington Wolves Rugby League Club, which secured it the naming rights for the newly-built 14,500 capacity Halliwell Jones Stadium.
This has resulted in remarkable spin-offs as the stadium attracts huge media attention, particularly from Sky Sports, and was used for the UEFA European Women’s Championships last summer.
Judges' comment
You’d expect a BMW site to be among the best and this one really is. Quality is the priority and achieved through a team approach involving all staff, who are real professionals. It is easy to see how customer care will be maintained as part of the culture of this company.
Used car retailer: Available Car
Three-time AM Awards used car retailer of the year Available Car has something a bit special. Put to one side, for a moment, the consistent year-on-year growth in car sales and profits, the site expansion that makes the Castle Donington facility one of the largest in the UK, and the annual stock turn of 5.5, achieved in part by a weekly-review policy that means the company sells every car it gets.
Consider instead the ‘no hassle’ approach to sales. Several companies claim to have a similar policy; few go as far as to only appoint staff from a customer service-related background who are then not trained in closing deals. Their focus isn’t on achieving sales targets, but on achieving customer satisfaction targets.
It works: more than half of Available Car’s business comes from customer referrals.
Price haggling is banned; every car is on sale with a fixed price, which removes uncertainty from customers’ minds and creates a more professional atmosphere. After all, where else, other than at the local jumble sale, do people consistently negotiate on a product’s sticker price? Certainly not on the retail high street, and that’s where Available Car’s customer standards ambitions can be found.
Once price haggling is removed, the customer service team can focus on other areas of the business, such as funding. With finance penetrations falling throughout the motor industry, Available Car is bucking the trend. Last year it topped 40% – double the national average for used cars.
This really is a used car retailer with business practices to shame some franchised dealers.
AM Awards auditor Carter & Carter certainly thinks so. “Of all the brands and dealers I have visited over the years, the attention to detail that this business goes to is fantastic,” says its assessor.
Over this period, the number of cars sold has more than doubled from 2,920 to exceed 7,000, while head count has risen each year from 77 in 2002 to 114 now. Progress has been relentless, and with three additional acres added last August, taking the site to 10 acres, Available Car has taken its stock levels to 1,650, up by 550 cars.
Every member of the team shares in end of year profit-related bonuses, which helps to consolidate their long-term commitment to the company. Operating without the stress of a sales focus salary environment, it’s no surprise that staff retention levels are excellent.
Many companies blow hot air at such policies, but the stats prove that Graham Bell lives by his word: “We do not sell cars; we help customers to buy.”
Judges' comments
Used car retailing is all about buying the right cars at the right price – Available Car does this better than anyone else.
Highly commended
Fords of Winsford “Processes that more than match franchised dealers”
Developed in tandem with the Nissan Pathfinder, the Navara has completely revolutionized the pick-up sector in the short time since its launch in August last year. Until then the market was dominated by vehicles that were tough and robust but that failed to achieve a car-like driving experience on the road.
Nissan not only moved the sector’s goalposts, it has set a whole new playing field of its own. The Navara is in a completely different world to the traditional ‘workhorse’ image of pick-ups, which were practical but ultimately unsophisticated machines, powered by old-fashioned diesel engines.
Developed and built side-by-side with the Pathfinder SUV at Nissan’s Barcelona plant, the two vehicles share similar underpinnings, which makes for a very modern and comfortable vehicle that feels much more like a passenger car than a pick-up.
The refined and quiet 2.5-litre dCi engine available in the UK has 174bhp, making it the most powerful in the sector – and it shows. It’s impressive acceleration is only bettered by great in-gear performance and, despite being a large 4x4, it is easy to drive.
It’s offered as a Double Cab or King Cab, which features small ‘suicide’ doors that are hinged at the rear and reveal a pillarless opening to the cab. It also has the longest, widest and deepest bed in the sector, making it a popular choice in the construction, farming and service industries.
These are a few of the reasons why the Navara has been the car that has most excited Nissan dealers in 2005. “That’s because they are selling so many and it’s a rich mix. Around 70% are top of the range models,” says Simon Thomas, Nissan sales director.
Last year Nissan sold more 4x4s than any other year in its history with more than 25,000 sales. Only Land Rover sold more. Despite only being launched in August, the Navara was a big part of this success and its first full month (September) saw 2,086 registered, just two
hundred less than the popular X-Trail.
Since then, sales have consistently been in the high six hundreds and a total of 4,855 have found buyers. In each month, Navara was ahead of perennial market leader Mitsubishi L200.
Sales are 75% retail and 25% fleet, with retail including purchases by businesses with less than 25 vehicles, Navara’s biggest area of sales. Nissan is expecting sales of the Navara to hit the 10,000 mark in 2006, which would make it the second most popular pick-up in the UK after the L200 (an all-new L200 will be launched in March).
Residuals are also very strong and after three years and 60,000 miles, EurotaxGlass’s reckons it will be worth 47% of its original cost new, the highest in the class. CAP has similarly strong
values with an estimated 44% for the same period.
The Navara is a worthy winner of the AM New Car of the Year award. It’s introduction has done wonders for the image of pick-up trucks, which is good news for Nissan as it looks to chase even more 4x4 sales. With a plethora of accessories available it is also a great car for retailers, giving them opportunities to upsell extra’s and increase profits.
Judges' comments
Shaking-up the established order has to be applauded. Since launch, the Navara has knocked the L200 from top-spot, and revolutionized the pick-up sector.
Versatility, reliability and desirability: the three factors key to understanding why a used Jazz is popular with dealers and buyers alike.
“The success of the Jazz can be put down to its simple range, excellent reliability, low running costs and class-leading versatility. It is easy for used car customers to see its appeal as a
cheap runabout with a good brand image and the same kind of space featured in the class above. Despite increasing volume coming to the UK, it has still managed to maintain strong residual values,” says Simon Harris, consumer editor, Parker’s.
Just two engines power the Jazz, 1.2- and 1.4-litres, and both are petrol units. “The performance of a petrol engine, the economy of a diesel,” proclaims Honda.
The 1.4 gives 48.7mpg combined, while the smaller unit gives a whopping 51.4 combined figure. Small they may be, but despite the modest output and combined with decent body control, the Jazz gives buyers a spirited drive that is just as suitable for motorway driving as it is for taking the kids to school. This is good news for dealers – the prospective market is huge.
While previously the stereotypical Honda buyer has been quite senior, the Jazz was designed to appeal to young couples and families. It has gone a long way to changing the Japanese manufacturer’s image.
CO2 emissions are in the lowest band, making this a popular choice for those concerned with the environment, and having a cam chain instead of a belt keep maintenance costs bearable.
Honda’s reputation for reliability lives on in the Jazz. “It has the sort of bulletproof reliability record that has kept Honda’s most affordable car on the very top of the JD Power satisfaction survey for the past two years,” says Car magazine’s road test editor Chris Chilton. “But it’s about more than simple pragmatism. The Jazz still looks and feels fresh and that Honda badge lends it some real kudos.”
This is a small car that doesn’t feel like one from inside. Innovative use of space and good equipment levels give it an edge among the competition.
“The interior packaging is genius,” says Chilton. “It’s not just about space, but usable space, and the Jazz delivers like no rival can.”
Having the petrol tank under the front seats allows space for Honda’s ‘magic seats’. These are rear seats that fold flat and low onto the floor, or whose cushions can stack next to the backrests to release a large cargo space.
The Jazz appeals to the private buyer base, which also helps the car keep its value. It has a remarkably high residual value: 46% for three years/30,000 miles.
That’s testament to Honda’s solid Approved used car scheme, which enables dealers to capture the majority of Jazz models returning to the market.
“The Jazz sells well and returns a healthy mark-up, so is an ideal used car for the dealer,” says Mark Norman of CAP, who helped judge the category.
CAP’s Mike Hind adds: “It’s held its value very well compared to many in the sector. It’s great to drive and still look fresh and modern. Very refined for a small car and very popular.”
Judges' comment
The Honda Jazz has no faults. It’s roomy, economical, versatile, has wide appeal,
and is reliable.
The Jazz returns a healthy mark up for dealers, who get to handle most models returning to the market thanks to Honda’s used car programme.
Just over 21 years ago, M&M Vehicle Repairs was formed by its present owner and managing director Mick Whitehead. A fully qualified mechanic, Whitehead concentrated on providing a quality service for local car owners and fleet operators.
Since then, the business has developed into Staffordshire’s largest, dedicated accident repair specialist and continues to grow. The company puts its success down to three factors - quality, control and consistency – and believes its attention to these makes it stand out from the competition.
“We have demonstrated that a policy of consistently high levels of repair quality and customer service, coupled with innovative ideas, can ensure that the business is built upon solid foundations, and is extremely well placed to go forward and develop over the coming years,” says Paul Glover, director and general manager.
In the early years, the business began to diversify into the accident repair sector where it saw an opportunity for a company that was dedicated to providing a quality service and committed to making the necessary investment.
In the early Nineties, M&M moved into its current location in Longton, Stoke-on-Trent, and built a state-of-the-art bodyshop. In 1994, the need for expansions saw it purchase the adjacent building and open of a brand new repair centre in Leek.
Six years down the line and an increase in business saw further land acquired at the Longton site, where a dedicated paintshop was built. This featured five spraybooths, two of which can accommodate the largest light commercial vehicles, along with preparation and valet areas. In the same year, M&M was also chosen as the RAC Bodyshop of the Year.
Following a strategic review of the business in 2004, the decision was taken to close the Leek site. The site could only accommodate one spraybooth and M&M decided that the whole of the business could be accommodated at its main site. Not one member of staff was lost during the transition; since the closure company turnover has increased.
2005 also proved to be a year of further activity with the addition of Art Decal Signs and Graphics, an existing company specializing in vehicle graphics as well as general signage.
“Our position in the market today clearly demonstrates the achievement made over the past decade or so. Today we are different, we are putting into practice what we believed to be achievable and we can now begin to benchmark against ourselves, and go on to improve even further,” says Glover.
The success of M&M shows that quality and customer service can be key drivers over price. This dedication to such important areas has lead to recognition and approval from manufacturers including Lexus, Toyota, Volvo, Peugeot and VW Group, which includes Seat, Škoda and Audi, as well as group vehicles at Bentley Motors in Crewe.
The strength of M&M was highlighted in last year’s AM50 Bodyshop. The company was ranked 36th overall but, more importantly, was the 5th most profitable bodyshop with a profit margin of 8.5%, more than twice the industry average.
Judge's comment
In a very tough market, M&M is achieving profit on sales at more than twice the national average. It is a solid business that is very well run, as shown by the decision to close the Leek site in 2004. Turnover has actually risen as a result.
Repairer: Nationwide Autocentres
Just over 21 years ago, M&M Vehicle Repairs was formed by its present owner and managing director Mick Whitehead. A fully qualified mechanic, Whitehead concentrated on providing a quality service for local car owners and fleet operators.
Since then, the business has developed into Staffordshire’s largest, dedicated accident repair specialist and continues to grow. The company puts its success down to three factors - quality, control and consistency – and believes its attention to these makes it stand out from the competition.
“We have demonstrated that a policy of consistently high levels of repair quality and customer service, coupled with innovative ideas, can ensure that the business is built upon solid foundations, and is extremely well placed to go forward and develop over the coming years,” says Paul Glover, director and general manager.
In the early years, the business began to diversify into the accident repair sector where it saw an opportunity for a company that was dedicated to providing a quality service and committed to making the necessary investment.
In the early Nineties, M&M moved into its current location in Longton, Stoke-on-Trent, and built a state-of-the-art bodyshop. In 1994, the need for expansions saw it purchase the adjacent building and open of a brand new repair centre in Leek.
Six years down the line and an increase in business saw further land acquired at the Longton site, where a dedicated paintshop was built. This featured five spraybooths, two of which can accommodate the largest light commercial vehicles, along with preparation and valet areas. In the same year, M&M was also chosen as the RAC Bodyshop of the Year.
Following a strategic review of the business in 2004, the decision was taken to close the Leek site. The site could only accommodate one spraybooth and M&M decided that the whole of the business could be accommodated at its main site. Not one member of staff was lost during the transition; since the closure company turnover has increased.
2005 also proved to be a year of further activity with the addition of Art Decal Signs and Graphics, an existing company specializing in vehicle graphics as well as general signage.
“Our position in the market today clearly demonstrates the achievement made over the past decade or so. Today we are different, we are putting into practice what we believed to be achievable and we can now begin to benchmark against ourselves, and go on to improve even further,” says Glover.
The success of M&M shows that quality and customer service can be key drivers over price. This dedication to such important areas has lead to recognition and approval from manufacturers including Lexus, Toyota, Volvo, Peugeot and VW Group, which includes Seat, Škoda and Audi, as well as group vehicles at Bentley Motors in Crewe.
The strength of M&M was highlighted in last year’s AM50 Bodyshop. The company was ranked 36th overall but, more importantly, was the 5th most profitable bodyshop with a profit margin of 8.5%, more than twice the industry average.
Judges' comments
In a very tough market, M&M is achieving profit on sales at more than twice the national average. It is a solid business that is very well run, as shown by the decision to close the Leek site in 2004. Turnover has actually risen as a result.
Marketing: Sandicliffe Motor Group
Britain’s best motor retailers build a brand for themselves, not for their franchises. Sandicliffe Motor Group in the East Midlands is this year’s winner of the AM Marketing Award in recognition of its success in bringing its business to car buyers’ attention.
Like many dealers, Sandicliffe makes use of all available media. But where it stands out is in the efficiency and breadth of its marketing strategy.
Nigel Falkiner, group marketing director, says: “The great thing about this 600-employee dealer group is that it still thinks it is a small operation. It feels approachable, personable and has its roots firmly fixed to the floor.”
The company successfully combines an emphasis on retaining the customers it already has with understanding the importance of good advertising in attracting new customers, which it describes as “the cream on the cake”.
Its CRM team gathers feedback from customers and showroom visitors, which is used to analyse which adverts are drawing them in. Combining the data with bespoke 0845 phone numbers for different advertising methods lets the business highlight trends, such as which type of marketing is most effective in a particular geographic area, enabling management to target the marketing spend appropriately.
Uniquely, its radio and TV adverts feature Sandi and Cliffe, fictional managing directors of the business, who go through different scenarios and highlight the offers and promotions available in its showrooms. The message put across is one of fun, value and a no pressure customer experience.
Common marketing themes are also used across all press adverts for each of Sandicliffe’s franchises, which include Ford, Kia, Suzuki, Chevrolet and Mazda. This ensures consistency of message, so that customers can visit any Sandicliffe dealership selling that brand, and expect the same offer. In addition, this policy makes it easier to drop the same advert into other sister publications at a lower cost. The company’s website is always included in the adverts.
Other marketing activity includes off-site displays across the East Midlands, at shopping centres in the winter and shows in the summer, and direct mailings to inform customers of sales and aftersales promotions.
A public relations agency is also used. A recent newspaper article about petrol prices prompted Sandicliffe to agree to sell fuel at 2001 prices for two hours. The resultant roadblock as drivers queued for its pumps gained valuable coverage in newspapers and radio.
Sandicliffe’s strength in marketing enabled it to withstand the impact of MG Rover’s collapse last year. Having held back as other dealers were forced to distress sell, it then marketed two offers nationally, which helped it clear two thirds of its stock.
The remaining cars were held back for a planned clearance sale at Nottingham Forest football ground. Its decision to give a replacement three-year warranty to any MG Rover owner who took up its service plan also gained publicity, and added valuable customers to its database.
Judges' comments
A brilliant integration of the whole marketing mix, Sandicliffe is an excellent example of doing the job properly. The company leaves no stone unturned.
Internet retailer: Foray Motor Group
Last year’s AM Awards e-Commerce winner Foray Motor Group continues to exploit the commercial potential of the internet with its National Clearance Centre.
Foray is a long established name in the Ford network. It consists of five main dealer points, five fast-fits, a commercial vehicle workshop and a substantial parts operation.
Following the success of its Cash 4 Trash initiative, Ford awarded the National Clearance Centre the contract to manage all Ford obsolete parts from across Europe. Despite high initial set-up costs for the 36,000sq ft warehouse, the operation was in profit after just two months.
Cash 4 Trash offers dealers an alternative way to dispose of otherwise unwanted car parts, allowing them to be traded across the UK.
With an estimated £25m of redundant stock in the Ford dealer network alone, the prospect of selling this stock rather than simply writing it off is an attractive one.
The NCC has enhanced Foray’s business across the board. All Ford dealers in Europe have been made aware of the project and new contracts are coming through from both Ford and Foray’s fordspartsuk.com website.
Another benefit of NCC has been the marked increase in incremental sales. Selling a set of alloy wheels, for example, raises an opportunity to sell wheel nuts. Rarely, says Foray, does a cylinderhead get sold without a gasket set accompanying it from stock.
This new initiative has never before been used by a car manufacturer in the format Foray has developed. Profit from the scheme is shared between Foray and Ford.
Foray started the National Clearance Centre by buying stock from dealers all over the UK. It offered free collection and incorporated the cost into the offer.
Now, all Ford dealers in the UK have a credit account with the NCC, providing them with a unique log-in and password. When a dealer purchases a part from the NCC they buy at dealer net, less 20%, giving an added incentive to use the scheme.
“Terms are pre-arranged so everybody knows exactly what they will be paying for a part and what they are selling at,” says Howard Jenkins, group parts manager for Foray. “Quality
control is very tight and every part is scrutinized by a skilled parts technician. We are popular with classic car drivers and owners’ clubs, as these no longer serviced parts keep cherished vehicles alive.”
With the changes in manufacturers’ End of Vehicle Life responsibilities, the National Clearance Centre’s relevance will continue to grow. What it already offers is profit share for the manufacturer, reduction in costs, plus prolonged parts availability and reduced prices for the consumer.
The plan for the future is to promote NCC across Europe with assistance from Ford. Mazda is already on board and other manufacturers are approaching Foray, having seen the success of the model.
Foray describes NCC as “a unique, efficient, environmentally-friendly, profit making opportunity for the entire motor industry”. It’s right.
Judges' comment
Foray continues to develop its internet parts business, which offers a great solution to a real problem in dealerships. We expect other carmakers to soon join Ford and Mazda on board.
Ryland Group’s winning e-commerce strategy has to cover the wide geographic spread of its 26 sites, plus the complexities of the differing manufacturer standards it represents (Bentley, BMW, Chrysler, Honda, Jaguar, Jeep, Mercedes-Benz, Mini, Rolls-Royce, Smart and Volvo).
All stock displayed across its three main website areas – group, third-party lead providers and manufacturer dealer sites – is fully consistent by aggregating the stock data centrally before sending it to its destination. Wherever possible, manufacturer-approved images and descriptions are used.
“Ryland is represented on the internet at different levels. Tying the first three of these strategic approaches together is what we believe to be a first-in-industry approach,” says Henry Whale, development director.
The group website is quick to load and easy to navigate, and combines all franchises and locations. “It is designed to mirror the prestige end of the market, which reflects the franchises we hold,” says Whale. Ryland holds monthly marketing meetings to ensure the site is up-to-date and contains all promotions.
Information is sent automatically on a daily basis to third-party sites, including Auto Trader and Fish 4 Cars. Stock details are displayed in a consistent manner, ensuring the Ryland branding remains strong.
In addition to the above, each franchise also has its own site. Traffic to these will come from the franchise’s own marketing, or from local people performing a web search.
Ryland understands the importance of search engines. Although the websites are advertised heavily through press, radio and car advertising (number plates and bumper stickers), there is a need for the group to appear high up on the leading search engines’ lists.
More than 60% of UK searches are performed through Google, so targeted Ad Word campaigns ensure that Ryland is on the first page. Meta tags, which ‘tag’ key words for searches, are also used.
Not all investment has been for the end user, however. Ryland Group’s online lead management system records all enquiries and enables internet specialists to manage their leads.
Each dealership site has its own unique number that is only available on the site. This enables Ryland to assess how many individuals are choosing their prospective cars online, but then using the phone to make contact. But it doesn’t end there.
“We found that aftersales and dealer transfer calls were made on the same number,” says Henry Whale. “So now each third party site will have a unique number per site per dealer, in order to monitor phone calls individually.”
Every Ryland Group sales person has taken part in an e-commerce course over the last year, and each dealership has its own internet specialist on site.
During the last 12 months, the group has seen the number of sales attributed to the internet rise from 13% to 21%.
Judges' comment
It’s very difficult to integrate a web policy within a group, but Ryland has succeeded. Its system involves no duplication and incorporates the manufacturers’ websites and third party lead providers in a seamless solution.
The world’s first Honda brand centre, Chiswick Honda, operates 362 days of the year and annually sells 3,500 new cars, more than 1,000 used cars, 1,000 new motorcycles, and 1,000 items of lawn and garden, marine and power equipment.
This eclectic approach to the sales mix and an inspired team of staff combine with a fantastic facility to make Chiswick Honda a real success story.
Occupying a three acre site on Norton Way, west London, the facility represents a build investment of £5.3m in addition to £9m land value. But apart from its overall appearance and impressive size, the Chiswick premises has a number of features, which give its unique selling proposition.
The traditional sales, service and parts operations of the car dealership are complemented by sales, service and parts operations for both motorcycles and power equipment.
This generates six additional profit centres, but requires no additional staffing for either the parts or accounting departments, and ensures 100% productivity from additional workshop staff.
A separate purpose-built fleet site has improved workshop and bodyshop profitability and customer CSI, while the used car operation’s use of a ‘mini-showroom’ offers additional benefits.
Holding 120 vehicles, the used car showroom replicates the main showroom and includes customer handover areas on each side to ensure cars are received by customers in the best possible conditions.
With an eye on the environment, Honda Chiswick proactively demonstrates both hybrid technology and motorcycle/scooter solutions. In quarter four of 2005 it became the UK’s first dedicated Honda scooter shop.
But perhaps a more impressive example of its commitment to promote sustainable transport is the park and ride facility it offers visitors.
On-site showers are available, enabling those working in central London to park at the dealership, get ready for work, then catch the tube from the nearby underground station.
This facility is particularly popular with bikers; however, car users are increasingly taking advantage of the benefits of not entering the congestion charge zone.
An integral part of the Chiswick Honda build was the integration of full on-site meeting and conference facilities. These have been used by membership groups and the local community as well as industry seminars. Video-conferencing is also available.
The physical wellbeing of employees is taken care of thanks to an on-site gym, complete with weekly visits by a personal trainer.
When they’re not working out, both staff and customers alike can enjoy the Costa Coffee facility, complete with laptop internet connection points and plasma TVs. It’s a resource that’s proved popular with the local community, too. How does this translate in financial terms? Honda Chiswick sells more than £1,000-worth of coffee a day.
Two on-site apartments have also been built for busy senior managers who wish to stay over. This facility was utilized every week in 2005.
Judges' comment
Chiswick Honda is an excellent use of space and offers added value for
customers. Excellent facilities encourage more people to wait on site, increasing the amount they spend.
Recruitment: Fords of Winsford
An intensive interview technique at Fords of Winsford ensures that the right people are selected for each vacancy.
The HR manager, who makes the initial selection, reviews every application. Each candidate then goes through a series of interviews. First, they take a test that tackles aptitude and competency – a Discus personality profile.
Discus defines four behavioural characteristics: Dominant (outgoing, task-orientated individuals), Inspiring (outgoing, people-orientated), Supportive (reserved, people-orientated) and Cautious (reserved, task-orientated). It is designed to help managers recruit the people who will best fit into their existing teams.
Following the aptitude test, the Fords of Winsford departmental manager interviews suitable applicants, before the candidate finally meets the senior management team for a chat.
But finding the right people is far from the end of it. Each successful candidate goes on to take a two-week long training and induction programme. If the position is managerial, part of the programme is residential, and held through HBOS.
All new staff have monthly reviews on performance and development throughout their probationary period. Thereafter, reviews for the sale team occur every two months, while all other personnel have six-monthly assessments.
These reviews are two-way meetings, where the employee is assessed on minimum standards of performance in accordance with their job description and is also encouraged to discuss and plan any further training requirements that they have. Life coaching is also available to all personnel.
Fords of Winsford’s performance review system is based on attitude, knowledge and skills (AKS). Its policy is that training will improve knowledge and skills, whereas coaching can change attitudes. The coaching facility takes staff down a non-judgemental, non-directional and impartial review.
Although staff work together as a team, each new sales consultant has an individual training programme, which is constantly monitored by senior management. There is a three-month probation programme before any sales consultant goes solo with customers.
Due to its recruitment policy, and a remuneration package that includes pension, health care and the use of company cars, Fords of Winsford has staff retention of more than 90% after six months. Having such a stable team helps employees work better together, and also strengthens customers’ perception, as they can form a relationship with their original sales consultant.
The company also holds cross-departmental meetings to prevent any anomalies or changes from impacting further down the line.
Fords of Winsford has also won other awards for its stance on recruiting, from Cheshire County Council for equal opportunities, and from SABRE for supporting reservists. In addition, it has a long-term link with Barrowmore, a charity that helps find training and employment for people with disabilities, and also provides regular work experience placements for students.
Judges' comments
That Fords of Winsford retains 90% of its new recruits after six months says it all. This is a used car business that could teach some franchised dealers a thing or two about recruitment. It does everything to ensure it employs the right person.
One of the biggest issues facing franchised and independent repair and service centres is finding and keeping good quality staff. One-third of franchised dealers and a staggering 68% of independent garages report recruitment difficulties in the service and repair areas, while technician turnover averages around 19% for the industry.
Into this environment came the long-overdue Automotive Technician Accreditation scheme, administered, moderated and governed by the Institute of the Motor Industry.
This Government-recognized programme, launched June 2005, is designed to raise the professional status and credibility of skilled individuals, provide a benchmark for technician recruitment and career development, and improve consumer confidence in the retail motor sector. Quite an ambition, but one that was driven forward by the IMI and its chief executive Sarah Sillars, AM’s 2004 personality of the year.
The IMI’s initial target was to get 750 technicians on board by the end of 2005. It ended the year with more than 1,500. And with more carmakers and independent repairers committing to the programme, the IMI is confident of doubling that figure this year.
The accreditation model could also be extended to other industries, with motorcycles and sales under consideration.
The process is straightforward. Having first signed a code of conduct, a technician must pass a series of timed practical tasks, adjudicated by an ATA-registered assessor and an online knowledge test, to achieve accreditation.
This can be carried out either at an ATA-approved assessment centre, such as a training division of a national service and repair organization, an independent automotive training provider or college of further education, or via an ATA-approved vehicle manufacturer assessment programme.
There are three levels of accreditation, reflecting an individual’s job role, experience and qualifications (master technician being the highest):
Successful individuals are issued with a photo identity card, valid for five years and are listed on a public online register. This can be accessed through the ATA website, enabling the public
to find their nearest ATA-registered technician. Technicians must be reassessed after five years to maintain their credentials.
ATA was developed over two years and trialled with a number of founding partners, including: BMW; DaimlerChrysler; Durham Constabulary; Ford; Hertz; Nationwide Autocentres; Toyota and Unipart.
Other vehicle manufacturers and industry stakeholders have since become involved, including Pendragon and the RAC. It also has the support of the Government, Trading Standards and Which? magazine.
The automotive industry suffers from a poor public image and tales of bad practice reported in the national press.
The ATA programme is addressing the problem; for that it is a deserved winner of the 2006 AM Awards training category.
Judges' comments
Long overdue. The ATA does everything that is needed for the industry – it’s the right answer to a long standing problem.
Highly commended
BMW (UK): BMW is doing retailers and the industry a service with its apprenticeship scheme.
Inchcape Ford Wokingham “100% staff retention, impressive growth”
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