AM Online
Sponsored by

MD Jon Taylor on how Now Motor Retailing is bouncing back

4 Jon Taylor Now Motor Retailing

As many dealer groups attempt to rally their troops and find answers to the questions thrown up by June’s Brexit vote, others remain all too aware of the current market forces affecting their business.

After annual financial results that brought nine years of turnover growth to an end and its lowest net profits since 2008, Now Motor Retailing Limited is one business that has fallen foul of market forces outside its control.

In its annual accounts, the eight site London-based solus Vauxhall business attributed its 44% decrease in profit before tax of £502,431 in the year ended December 31, 2015, to the discontinuation of the Vauxhall Zafira Classic.

The MPV was a popular purchase within the M25, having found favour with taxi drivers and large families alike, and had accounted for 26% of Now’s new car sales prior to its loss from the forecourt at the end of 2014. The resulting decrease in sales meant a reduction in the group’s volume bonus earnings of £283,487.

Now Motor Retailing managing director Jon Taylor conceded: “It was a tough year for us, financially. We’re a retail-only business.

“The special edition Zafira was massively popular, so we have a massive hole to fill.”

However, Now’s 2015 turnover of £81.4 million was just 3% below its best-ever result in 2014 (£82.3m) – itself representing a 14% rise on 2013, and Taylor is confident the business is in a good place and will resume its upward trajectory in 2016.

Last year’s turnover for new car sales was £32.3m, with a new car profit of £513,416, giving a return on sales of 1.59%.

Taylor has high hopes that Vauxhall’s stronger forecourt line-up will increase new car sales in 2016 – it is his first full year with the new Astra and Corsa in stock and a new version of the popular Mokka SUV arrives in October.

Other changes are also afoot at the retailer – a move into new pastures outside the M25 is part of its plan to make the business less reliant on the London market.


‘It’s right that we have a bit of a balance’

In January, Now acquired two former Skurrays Vauxhall sites, in Swindon and Marlborough.

The sale of Skurrays’ former Oxford operation to the Eden Group a fortnight later meant the loss of the name behind the UK’s oldest car franchise – it was founded by Ernest Clement Skurray in 1899 – but its significance to the Now group was that it diversified its locations.

Taylor said: “Trading in London had become a little bit more difficult. In the last couple of years, property prices have been going up exponentially, staff costs have been rising exponentially and we just felt that it would be better to have a balance of business outside London.

“I love the London market. There’s an awful lot of chimney pots, a lot of opportunity, but when the cost of everything is rising it does get a bit tougher. It’s right that we have a bit of a balance.”

Taylor formed Now Motor Retailing with fellow shareholder and company finance director David Challis in 2006 and acquired five Lance Owen sites with the backing of Vauxhall Motor Holdings. Taylor, a former Drive Vauxhall operations director, had previously worked within the Arriva Group in an automotive career that started at the age of 18.

He said he did not want his own business at the expense of his family life with his wife and two daughters so stayed near to home in Marlow, Buckinghamshire.

As a result, Now’s market has continued to grow in the West London region.

In 2010, Now self-funded the acquisition of the former West End Vauxhall site at Staples Corner, off London’s North Circular Road, where AM’s interview took place.

Recession-hit Monorep followed in 2012, with Taylor and his team agreeing terms with liquidators after two years of approaches to buy the second-generation, family-run operation.

He said: “It was sad, really. They’d had a fairly tough trading time during the recession and I think the Southall and Hayes businesses were very close together. If we’d have managed to buy from Monorep, we’d have only had one business.

“Being based in this area, we were able to take some central cost out and it became a more effective business.”

JOn Taylor, Now Motor Retailing“It would be wrong to think that there’s not a lot of pre-reg in the market. Not just us, for everybody. It’s a false market and it’s definitely a forced market” Jon Taylor, Now Motor Retailing

Taylor culled a site from Now’s own portfolio in April, closing its sales operation in Addlestone and moving staff into a new facility about a mile away in West Byfleet – previously a standalone service and parts facility.

Following the closure of the Addlestone site and the acquisition of the two former Skurrays sites, Taylor forecast a return to growth for 2016, projecting turnover of almost £102m.

Projected net profit of £689,065 would give the business a return on sales of 0.68%. That would be an increase from 2015’s 0.62% figure, behind 2014’s 1.1% and well below Taylor’s target of 1.5% target, which the business surpassed for the years 2010 to 2013.


Integrating new technology

As Taylor’s group has grown from five sites to eight, it has  embraced technology to make managing the business easier, including using video to present his quarterly business updates to each of his dealerships.

He encourages transparency from his two area managers (in Swindon and Marlborough), who have the autonomy to run their own teams and make their own business decisions.

Taylor said: “We try to let them do their own thing, I think that’s when you get the best out of people.”

Elsewhere, video has been adopted to foster new levels of transparency and develop customer advocacy.

Now aims to deliver every service with its own CitNOW video presentation, but Taylor concedes the reality is about 87%, with about 75,000 hours of labour sold by Now’s workshops each year.

Taylor said: “It’s really transparent – it’s definitely helped with customer satisfaction. We are selling more than we were. It’s 4% or 5% extra upsell, but it’s all upsell and it’s self-funding.”

As well as using video in an aftersales capacity, Now aims to upload videos of all their used cars – along with 20 images – within 48 hours of their arrival on site onto a website that is redesigned by 21st Century Internet every two years.

The latest version went live in November and allows greater customer tracking, easier updates and places monthly payment options front and centre.

The new site also promotes market value pricing, using Auto Trader’s i-Control tool and other market data to ensure the prices of its 350 used cars are consistent group-wide.

The latest website is the first to be developed primarily with smartphones and tablets in mind, as 64% of its customer enquiries come from such devices, according to Taylor.

It operates in conjunction with a pair of call centres, which regularly deal with a combined 1,100 calls each day.

Taylor said the sales facility in Hayes and aftersales in Swindon accounted for a “big slug of cost” – about £450,000 a year – but added: “Could we do without it? No we couldn’t. Do we handle our enquiries a lot more quickly and effectively than we used to? Yes we do.”

Now’s call handlers book customers in for services and take sales enquiries, which are passed on to the sales team, but do not carry out customer satisfaction follow-up calls.

Instead, Now uses JudgeService and Vauxhall’s own customer feedback. However, he rates Google reviews as the most accurate barometer of his teams’ success.

“Go online and people will see that Google score straight away. That’s what counts. We aim for four stars. All but one achieves that score, that’s Swindon, and we have a plan to make improvements there.”

Now’s online and on-screen activity does not end there. As well as a presence on Facebook and Twitter, the group uses Sky’s Adsmart TV, allowing targeted TV advertising as part of its marketing strategy.

It buys little press advertising inside the M25, but does use strategic billboards and posters on buses.

A new working model for new recruits

As well as utilising new technology, Taylor is clearly keen to experiment with new ways of reaching customers and selling cars.

On January 1, Now began to change the way it recruited sales staff and the way it sold cars at its Richmond business.

In the pilot scheme, the business targeted employees from a retail background by placing job adverts in the same places as those used by John Lewis and Apple stores. It also offered a less commission-led remuneration package, designed to attract a new kind of employee.

A five-day week and a salary of £24,000 a year, plus the potential to earn an additional £6,000 team bonus, is intended to lure a younger, more customer-focused workforce.

Taylor said his team of four new sales staff – the three existing staff were moved to other sales sites still on the old six-day week rota – are a “step ahead” of the rest of the business in terms of customer experience and product knowledge.

The new remuneration packages and rotas were introduced at the same time, to minimise complications with sales staff on different contracts. Managers remain on a six-day week.

Taylor said he was not seeing a performance increase yet, but believes that he will and that recruitment and retention are already both easier.

“What we are starting to find is the younger generation want a better work-life balance. It doesn’t matter that they might have to work weekends, but they want their time off.

“They’re not quite so hungry for money, but they want a better standard of basic living, so I think we have been able to attract a better calibre of candidate.

“From the customers, we’ve had some really positive feedback because they like what we’re doing.”

Now has its own in-house staff trainer and holds monthly recruitment workshops for potential new recruits.

The best candidates from each event are then interviewed at sites where staff are needed before undergoing a month-long “crash course”.


Making the leap from solus

Just as the group has moved outside the M25, it seems it may be time to broaden its portfolio after a year where the loss of one vehicle from the Vauxhall range affected it so profoundly. While Taylor believes there is “plenty more to come” from Vauxhall, he said he will consider expansion into other franchises.

As a solus dealer, Now is more tied than most groups to the fortunes of its manufacturer partner. Vauxhall’s total registrations were flat year-on-year in 2015 (up 0.22%), but that figure hides the fact that its retail registrations fell 3.3% in 2015.

There was some sign of the manufacturer’s fortunes picking up in July 2016, when Vauxhall registered a total of 19,733 cars, 16.8% ahead of the July 2015 figure. The only other month this year in which Vauxhall posted a year-on-year volume increase was March, but the brand is still 4.2% behind year-to-date.

Taylor’s workshops are under pressure to deal with their share of an estimated 36,000 Zafira B recalls within the M25 following the vehicles’ series of well publicised fires.

He said the Zafira B warranty work had compromised the retail capacity of his workshops, which sustained 75,000 hours of sold labour in 2015 and delivered £5m in revenues to support a flourishing parts business that turned over £11m.

“London taxi drivers have recently been told ‘if you haven’t got your recall done you’ll have your licence revoked’, which brought us another wave,” he added.

Market forces are of equal concern for Taylor, who is concerned about the sustainability of the volume of new car sales and the as-yet-unforeseen effects of the EU referendum vote.

“The market’s not sustainable. It’s reached a peak point and I definitely think it will soften a little with Brexit,” he said.

“It would be wrong to think that there’s not a lot of pre-reg in the market. Not just us, for everybody. It’s a false market and it’s definitely a forced market.

“You have to balance things, don’t you? Your manufacturer gives you a target slightly ahead of where your natural runway will be and it then becomes a financial decision whether it’s worth filling that gap with pre-registered vehicles.”

For Taylor, the uncertainty of Brexit is a bigger headache, especially at a time when he is keen to continue the growth of the group: “My vote was to stay in, 100%. We had a fairly volatile economy anyway, why would you want to rock the status quo?”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


  • Malcolm - 31/01/2019 10:49

    All the Now group is now gone, thank goodness, 24k basics rubbish, he is now the owner of Ken Brown Motors (Kia in Harlow and Stevenage) ** edited for legal reasons**. Ex employee.