For a motor retailer of its size – between £825 million and
£1.1 billion, depending on the state of the economy – Jardine Motors Group has become used to keeping a low profile. That is about to change.
Alun Jones, a Jardine Matheson employee for 25 years and now chief executive at Jardine Motors, senses that this is the moment to say more about the company.
“We are ready to move on to the next stage of our development,” he said.
“We are keen to grow with the right businesses and brands in the right place, and at the right price. We will be quite selective.”
There is good reason for this policy: Jardine Motors Group – at number nine in the new AM100 table – is in a strong financial position and has a global parent of considerable substance.
His business has kept out of the limelight mainly because of its Asian heritage and ownership, and one reason he wants to move it forward now is because of its franchise mix (see below).
Jones believes this is the strongest and best balanced among major UK dealer groups.
“We have a stable core business and a healthy balance sheet and do not need to ask for more funds for purchases,” he said.
“I regard Jardine Motor Group as a billion-pound turnover business, though we slipped below that during the recession.
“I don’t just want to have a bigger turnover for the sake of it – we have the basic structures in place that can deal with a bigger business.
"I want to increase the return for our shareholders.
“It is also healthy for a business to grow. It’s good for morale and it gives employees fresh opportunities to move within the group.
"Our policy is to try to appoint internally, though that is not always possible.”
Jones has 2,000 people on his payroll.
The pre-recession total was around 2,350, which means the headcount has been cut by 15% (about the average for a large UK dealer group, he said).
The intention is to grow with the franchises held now, but Jones does not rule out new brands.
Acquisitions could be single dealerships: its most recent pur-chase was a Land Rover outlet at Welwyn Garden City in Hertfordshire from the Pilling Motor Group.
That business now trades as Lancaster Land Rover.
Jardine’s retail branding policy is to use the names of acquired groups such as Scotthall, Appleyard, Minories, Abridge and Clover Leaf Cars.
Jardine might get bigger by adding a regional group with growth potential.
Jones is less enthused by the idea of anything like Pendragon’s purchase of Reg Vardy because integration can produce big problems.
“We intend to make purchases with some of the profits we have made and will not have to seek funds from our shareholder,” said Jones.
He refers to Jardine Matheson in this way because that is the group culture.
“Headquarters does not see itself as running a motor group in the UK,” said Jones. “It provides funds for a strong local management with experience and expertise to do it.
“That outlook works throughout the business.”
Expansion has nothing to do with grandiose ambitions.
Jardine Motors Group’s head office is a modest building in Colchester, Essex, the base for Jones and other senior directors and central functions such as accounts.
“Jardine Matheson leaves us alone for most of the time but has strict financial systems,” said Jones.
“The group has a corporate office in London, where members of the family work and this provides a useful link with the global HQ in Hong Kong.”
During the recession the size of Jardine Matheson provided an advantage enjoyed by few other dealer groups.
“They are able to take a long-term view,” said Jones.
“The view held by the main board was that global recessions had happened before and they would manage their way through it.”
In the 2009 calendar year Jardine Motors Group’s turnover fell to £815m, mainly because of the fall in the number of new vehicles sold.
“Because of our franchises we did less well through the scrappage scheme than some other groups,”
“We will do better with sales of new vehicles this year.”
But Jardine Matheson globally did well enough to make a record $1.6bn (£1.11bn now) group profit.
Its turnover was $23bn (around £16bn now) and, at somewhere above $1bn (£700m), the UK’s Jardine
Motors provides a significant share.
Jones also has the experience needed to navigate a company through difficult times after working in the motor industry all his life.
First it was for a number of small independent dealerships and he then spent eight years with Lex (a group acquired by Jardine Motors).
He also once ran a main Mercedes-Benz dealership in Hertford.
“I learned about motor retailing first and then Lex taught me what I needed to know about management,” he said.
“Lex is rather like Ford – you still see people moving into senior positions who have worked for them.”
Jones moved into a senior role when he was chosen to head a joint venture called Polar Motors between Ford and Jardine Motors Group.
That ended when the UK market leader decided to run a group itself called Ford Retail. Because of that Ford is one of the franchises that Jardine Motors Group is unlikely to acquire.
Jardine Motors’ roots go back to 1832
It was beyond the imagination of William Jardine and James Matheson that the company they founded would in 2010 be running one of the UK’s biggest car dealer groups.
That is because the two Scottish entrepreneurs from the same family went into business in 1832, long before cars arrived.
Jardine and Matheson set up in China to ship tea and other things (including opium) to Britain.
Around 150 years later, Jardine Matheson saw potential in the UK.
They liked the look of family-owned motor retailer the Lancaster Group, founded in 1969 by Ronald Lancaster with his son Nick.
It was running Mercedes-Benz, Porsche, Ferrari and Volvo dealerships in East Anglia.
Nick Lancaster has recently resigned as chief executive of HR Owen, the group he later founded.
“Ronnie sold them a dream,” said a Jardine insider.
And the dream came true because Lancaster held four franchises that are still part of today’s Jardine Motors Group UK.
In 1981 Jardine Matheson acquired 76% of the company and took total ownership in 1992.
Jardine Matheson has developed into a widely diversified group that combines cash-generating businesses and long-term property assets.
It owns a considerable amount of land in Hong Kong, operates a global luxury hotel chain and has interests in engineering and construction, transport services, insurance broking, property investment and development, restaurants, financial services, heavy equipment, mining and agribusiness.
The group has a minority investment in merchant banker Rothschilds Continuation.
Five VW Group brands at core of business
Volkswagen is the senior vehicle manufacturing group in the eyes of Jardine Motors, which holds five of its franchises – a quarter of the total at 20.
At the core is VW (mainly cars, but with one VW LCV outlet) plus Audi, Bentley and Lamborghini. Skoda and Seat might be added if dealerships were acquired alongside VW outlets.
The emphasis is on luxury/prestige/premium brands because that is how Jardine Motors runs its profitable global business.
Other Jardine marques include Aston Martin, BMW, Ferrari, Jaguar, Land Rover, Lexus, Maserati, Mercedes-Benz, Mini and Porsche.
Some franchises held are outside the prime focus, but are there for a reason.
Jardine has no big ambitions in the van and pick-up market but retained a single profitable VW LCV franchise that was close to a targeted and acquired VW car dealership in Essex.
Three Smart outlets operate alongside combined Mercedes-Benz sales/service centres, at Chelmsford, Ipswich and
Lakeside (West Thurrock).
Jardine also has Mercedes at Colchester and Southend-on-Sea.
Two Japanese volume brands – Toyota and Honda – are there because they are successful in their localities. Volvo Reading is retained for the same reason.
So does the 20th brand – the combined Chrysler, Jeep and Dodge which does well enough at Southend.
It is on the same site as, but in different premises to, a Mercedes-Benz outlet.
Jardine Motors is watching with interest how the Chrysler, Jeep and Dodge brands fare now they are being managed by Fiat Auto.