When Nas Khan moved from Pakistan to South Shields, aged just 13, he couldn’t speak a word of English.
The 56-year-old said it was “strange and scary” trying to adjust to his new life in the North East of England.
“I was literally frightened to get on a bus. If I got off at the wrong stop, I wouldn’t know how to explain where I needed to be…”
Less than a decade later it would be Khan’s friendly, conversational approach that made him a hit as a trainee car salesman with Jennings Group and his communications skills that paved the way to a directorship and his current role as managing director.
In the early days, Khan knew just one thing – his father, who moved to the UK to work for British Steel, wanted his eldest child to be an accountant, an engineer or a doctor.
However, on a year’s break from his accountancy studies at the age of 22, he uncovered a talent for selling cars as a salesman with Jennings Group.
“I absolutely loved it from day one,” he said. “Interacting with customers and selling cars just came very naturally. It was at a time when Ford had around 22% to 25% market share, subsidised finance was just coming in. It was fantastic.”
Despite the disapproval of his family and some friends, Khan wanted to make it as a salesman rather than return to accounting. After a progression into the less customer-facing role of business manager did not suit him, he became branch manager at Jennings’ then-new Stockton-on-Tees site.
After he assumed responsibility for Jennings Group’s marketing, things accelerated: “We took to the radio and our ads in the newspapers went from a full page filled with images and numbers into something very clean and welcoming, something that stood out.
“It was a huge success. The dealership went from strength to strength.”
So did Khan’s position, following a series of management buy-outs. The first, in 1992, saw former sales director Alan Bentley team up with Khan and fellow directors Nicky Dalkin and Graeme Armstrong to take over the business from the Jennings and Hodgson families.
Further buy-outs – in 2005 and 2012 – saw Khan installed as managing director.
That teenager who four decades ago nervously took his first steps into South Shields today has a contented twinkle that suggests he has cemented himself at the heart of his community and at the helm of a business that employs more than 490 people. Jennings yielded a record turnover of £188,930,358 in 2015 – up 9.25% on the year before (£172,938,000).
The largest independently owned Ford dealer group in the UK, with four main dealers and two specialist Transit sites, Jennings now holds franchises with Mazda, Seat, Kia (two), Mitsubishi and Harley-Davidson.
Furthermore, its flagship Ford Store in Stockton will be demolished this summer to make way for a state-of-the-art, £3.5 million facility – Khan’s biggest investment to date.
Flying the flag for Ford
Jennings Group’s Ford franchises in Stockton, Middlesbrough and Gateshead yielded a net profit of £1,937,773 in 2015, selling a total of 1,778 new cars to retail customers, 1,400 into the fleet market and 688 via Motability.
Combined with a Ford commercial operation that yielded a further 1,567 new sales and a burgeoning aftersales operation at the Stockton site that operates 24/7 with three shifts, Khan is confident his investment in the new facility will be rewarded.
“This will represent my biggest investment in the business since the management buyout; this is going to take everything,” he said.
Khan described the Stockton Ford dealership as the “backbone” of the Jennings Group business over the past 20 years and said the development, which he hoped would get under way in April or May, would have to be carried out without closing the business.
“Our reputation and marketing is one thing, but, without a doubt, sales rely heavily on the quality of the product” Nas Khan, Jennings Motor Group
He said: “We are totally demolishing this site, but we are open 24/7 for servicing and there is a 24/7 body shop there. We could never afford to shut it. The cost of building is one thing, but the cost of interruption at that site could affect us.
“We’re going to build the workshops, shift people over and then demolish the showroom area. Because the site is big enough, hopefully we will be able to build each section of it and move people across as we go, but it’s still going to have huge disruptions.”
Development of a former jam factory – now at the heart of a “Motor City” that includes Jaguar, BMW, Mercedes-Benz, Audi, Toyota, Ford and Kia – is being undertaken with the help of funding from HSBC, which has supported Khan throughout his management buyouts.
Jennings Group’s new facility will feature a showroom divided into areas tailored for the sale of Ford’s performance models, Vignale premium models and more mainstream products.
Halo lighting, tiled floors and tablet-based car configurators – allowing customers to see their ideal car on a large screen – are all part of the Ford Store concept.
New servicing facilities will also complement the glittering front-of-house operation.
Khan said: “I’m in no doubt that the changes are going to be quite gruelling, but I’m really looking forward to seeing the results.
“The new dealership should be up and running for our centenary celebrations in 2017, which is really exciting.”
Product quality makes the difference
Jennings Group has forged a good reputation with its Ford operation and sold 3,866 new cars, almost 6,000 used and more than 2,000 new commercial vehicles in 2015. Ties with former Ford employees Paul Philpott and Lance Bradley, now president and chief executive of Kia Motors UK and managing director of Mitsubishi UK respectively, have led to further success in recent years.
IN 2007, Jennings dispensed with a Subaru franchise it signed up for in the summer of 2004, but a Mitsubishi franchise at its Cargo Fleet Lane site and Kia franchises at Washington and Stockton-on-Tees have proved popular additions.
While the Mitsubishi operation sold 123 new and 416 used cars during the eight months that Jennings held the franchise in 2015 – yielding gross profit of £316,253 – the two Kia sites sold 850 new cars and 1,393 used, resulting in a gross profit of £529,289 for the year.
Khan is pleased with the progress of the two franchises and feels he is reaping the rewards of good timing in terms of the products coming through.
Kia sold 1,521 new Sportages in February despite launching on February 5 and Mitsubishi claims to be the UK’s fastest-growing mainstream automotive brand.
Khan said: “Our timing is right with Mitsubishi and Kia. They both seem to be going places.
“Our reputation and marketing is one thing but, without a doubt, sales rely heavily on the quality of the product and both are producing that – Kia most recently with the Sportage and Mitsubishi with the Outlander PHEV.”
He said Mazda was a good example of how much products influences sales: “We’ve had the franchise 12 years now and had three wonderful years, initially. Then we had six horrible years. Horrible.
“Mazda went through first being bought out by Ford, then going on their own, and then they had the tsunami. They have been through so much pain.
“Now we have had two wonderful years with Mazda again because they have got an excellent product line-up, a complete new range.
“So it is very much down to product, but even Mazda, or Ford or anybody else can’t keep bringing out brand new products every year.”
Khan is eagerly awaiting the arrival of Seat’s New Ateca SUV, which arrives in UK showrooms in September. His Middlesbrough dealership sold 316 new Kias and 419 used in 2015, generating gross profit of £393,385.
Selling beyond the forecourt
As well as having the right products, Khan believes the right people can also make a difference and said an ability to deal with customers remains key to selling cars.
However, Jennings Group is not confined to selling from the forecourt.
An in-house website operation run by a team of 25 has resulted in 300-400 sales completed via the internet. Many cars are delivered to their new owners, with customers from as far afield as Tipperary, in Ireland.
Leading the web development side of the business is Khan’s 32-year-old son, Sohail, who has worked alongside Dale Gillespie to drive the group’s online presence.
For Nas Khan, who made his mark in the trade with a love of the face-to-face approach to sales and customer relations, the new way of working is alien, but he is aware that technology needs to be exploited in the modern sales environment. He said his sales team is “months away” from doing everything on iPads, as the group seeks to tie in its online activity with its DMS.
Exploiting Sohail’s skills has also helped Jennings to remain very much a family business. Khan’s daughter Sarah already worked for the business and she and Sohail have now been joined by their younger sister, 26-year-old Natasha.
Both siblings cut their teeth in businesses that have seen the group diversify from its main car sales operation. Sohail joined the management team of the Leeds Harley-Davidson business in 2013 after Nas Khan took a 50% share. Jennings brought the business within the group with a buy-out completed in January.
The success of the new venture means a newly built Jennings Harley Davidson site is poised to open in Newcastle and Nas Khan is planning further expansion into Manchester.
He said: “As a brand, I love Harley-Davidson. It’s amazing. We had a soft launch for the Leeds site – we’d hardly done any marketing at all – and more than 600 bikers turned up.
“It was a business that was fairly easy to apply our car sales processes to and it’s gone really well. In the first year, our objective was about 140 units. We did in excess of 200. The second year the target was about 180, we did 240 units and it has made a profit from year one.
“On top of that there is profit in accessories, which we don’t have to the same degree with the cars we sell. A Harley-Davidson owner might spend £10,000 on a bike and £3,000 on accessories.”
Khan has also been impressed with a new element to the Jennings business being managed by Natasha.
In February, Jennings Group opened a Subway franchise attached to its Kia site at South Shields. It was only the second Subway franchise to open in a UK car dealership, following Skipton Ford, North Yorkshire, which opened last November.
“The Subway franchise was really left to Natasha and she has been there from 6am to 10pm, working behind the counter, making sure it gets a good start.”
He said both Sohail, a trained physiotherapist, and Natasha, a clinical science graduate, felt “trepidation” about stepping off their chosen path to join 30-year-old Sarah, a trained psychologist, in the business.
Encouraging his children into a volatile industry, where return on sales is 2% or 3% at best, was not an easy decision, he said.
“There is still trepidation from them, but they are all doing fantastically well. I’m so proud of how well they are all doing.
“I keep saying to them ‘listen guys, I am 56 now. I don’t know how much longer I will continue, because I really want to start getting more involved in my charity work. At some point soon, you guys need to take over’.
“I think it’s still a bit scary and daunting for them.”
He added: “I still can’t believe that I’ve arrived at this point. To be the sole owner of the Jennings business and have my whole family involved is a dream.
“Ask me is there anywhere in the world I would rather live, any other business I would be in? I swear I would choose nowhere but where I am.”