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Suzuki GB boss Dale Wyatt: 'Used cars are not the holy grail'

Suzuki GB managing director Dale Wyatt thinks Suzuki’s 2018 car registrations will come in 1,000 or 2,000 short of last year’s 40,000 record
Graeme Jenkins, head of fleet, Suzuki: 'It was important to get the right balance of fleet to retail, which I think the brand missed out on in the past'
 

Suzuki Ignis

Suzuki’s surprisingly commodious compact SUV, the Ignis offers the option of four-wheel drive and the SHVS mild hybrid drivetrain. Prices start at £9,999 and 3,687 were sold in H1 (down 12.8% on H1 2017).

Suzuki Swift

A total of 8,521 Swifts were registered last year. Despite prices rising from £8,999 to £10,999, the launch of its latest generation last summer boosted  year-on-year registrations 19.54% in H1 (to 5,072).
 

Suzuki S-Cross

Wyatt believes consumer test drives should make the S-Cross favoured over the Vitara. Its 2017 sales figures were less than a third of the Vitara’s (3,507), however, and were down 17.35% in H1.
 

Suzuki Vitara

Suzuki’s biggest seller is its flagship Vitara SUV, with 11,933 registrations in 2017 and 5,854 – up 12.93% year-on-year – in H1 of this year. Prices range from £15,999 to £25,899.
 
Suzuki parted ways as sponsors with Ant and Dec in March

There has always been something of the showman about Dale Wyatt, the director of automobile at Suzuki GB, but the way he leapt from his seat to address journalists at the recent launch of the Swift Sport could not fail to hide his genuine optimism for the brand.

On the back of what Wyatt hailed as “a landmark year” for the Japanese brand’s UK operations – in 2017 it yielded more than 40,000 registrations for the first time in its history – the skip in Wyatt’s step may be down to the silverware the brand has picked up recently.

In February, dealers voting in the AM awards 2018 chose Suzuki as their Franchise Partner of the Year and two months later Autocar named Wyatt as their ‘Outstanding UK Leader’.

However, more important than either may be Suzuki’s fifth-place result, out of 29 surveyed franchises, in the National Franchised Dealers Association’s Winter 2017/18 Dealer Attitude Survey.

Its score, 7.9 out of 10 (average: 5.3), only bettered by Kia, Mercedes-Benz, Lexus and Toyota, was a strong endorsement from Suzuki’s franchise partners.

Just days after the survey was published, Wyatt, who was marketing director before he took the top job three years ago, talked to AM at the Geneva Motor Show about the result.

“Our relationship with our dealer network is the most important thing in the business and to come fifth was a real positive.”

Wyatt said: “As a manufacturer brand I’ve always wanted us to be seen as friendly, transparent and approachable and I think that is what dealers like about us.

“It’s part of the reason that we are so owner-driver-biased in the network. We like to work with people that operate in a similar way to us – that pick up the phone when you call.

“That’s why we don’t have any presence with the PLCs. We have groups like Stoneacre (which now has nine Suzuki dealerships), which are easily contactable.”

SUZUKI GB TOTAL REGISTRATIONS AND MARKET SHARE 2001-2017Wyatt calls at least two of Suzuki GB’s dealers each day, a process he believes is central to forging strong bonds between retailer and manufacturer.

“With a lot of owner-drivers we have a different set of issues,” said Wyatt. “The hard times aren’t always business-related, sometimes they can be quite personal and that is when we, as a brand, have been able to show our support and help an operator through a tough period.

“Those close ties really put us at an advantage as a brand.”

Wyatt is pragmatic about Suzuki’s position as a budget brand –  it demands little from its retailers in terms of investment in locations.

He said he wanted a dealer network like “a good three-star hotel chain where you’d be happy to stay, but perhaps not take your wife for the weekend”.

That budget positioning has not damaged Suzuki’s profitability. Wyatt said his retailers achieved an average return-on-sales figure of 1.8% during 2017, reaching an average of 3% in the first quarter of last year. That did drop to 2.4% in Q1 2018, but that is still more than double the industry average of 1%.

 

Growing Suzuki's UK market share

Suzuki’s approach to dealer investment does not mean it harbours no ambitions of driving growth and profit.

At the end of his presentation during the launch of the Suzuki Swift Sport in Dublin, Wyatt said he wants the brand to reach 2% market share in the UK.

“It’s my life’s ambition. I’m confident that we can do it,” he said.

In the first six months of this year, Suzuki’s market share (1.56%) was flat on the same period last year (1.58%), but the brand has overtaken Fiat in UK market share (down to 1.52% from 2.01% over the same timeframe) and the next comparable brand in Suzuki’s sights will be Citroën, on 2.15% to the end of June. Wyatt is pragmatic about Suzuki’s sales volumes in a shrinking UK market, and said last year’s total of over 40,000 is likely to slip to between 38,000 and 39,000 in 2018.

By the end of Q1, the brand – whose Q1 2017 registrations were bolstered, as were so many others,  by the pre-VED change 12 months ago – was 18.84% down year-on-year, with registrations falling from 13,951 to 11,323.

Wyatt pulls no punches in his assessment of the brand’s handling of the plate-change month: “We screwed up March. We had logistical issues due to the weather that meant we had the cars in the wrong place at the wrong time and our consumer offers were far too elegant when others really did get down and dirty with their less desirable models.”

In the following quarter, Suzuki did claw back some of that loss in volume, however, ending the six months to June 30  down 6.2% year-on-year, in a market down 6.26%.

While bigger market share remains the target, Wyatt is clear that stability is also a big part of Suzuki’s attraction to dealers.

“No part of our growth to date has been boom or bust,” asserts Wyatt.

“We haven’t chased the big numbers. Suzuki’s growth has always been in the form of steady, manageable gains. That has given our network confidence and stability.”

It has also been core to retailers’ profitability.

In 2003, the brand had 153 retailers taking a share of 32,877 registrations. Today, the brand has 158 sites taking a share of sales 22% greater, resulting in a 77% rise in sales per franchised outlet in the period from 2011 to 2017, from 143 to 252.

 

Suzuki aims to sell 50% more fleet cars by 2020

Wyatt is proud of his brand’s strong reputation as a retail brand, satisfying the needs of customers who walk into showrooms and delivering healthy margins for its retailers in the process.

However, Suzuki has made a concerted effort to bring some “balance to the business” since January 2017, when it appointed Graeme Jenkins, formerly a corporate sales manager for Maserati, as the brand’s head of fleet.

Suzuki’s ambition is to sell 50% more fleet cars by 2020.

To the end of June, the brand’s fleet sales were up 14.4% to 7,598 (2017: 6,641). In 2017, Suzuki registered 14,426 fleet sales, giving it a retail:fleet ratio of 64:36.  

Jenkins said: “It was important for us to get the right balance of fleet to retail, which I think the brand had missed out on in the past, and also future-proof the brand in that sense, offering some longevity.

“Now there are the right people in the right places to make that happen. There is a really good back-office team in place and now we have been able to add bodies on the ground to really back that up and drive further progress.”

In May, Suzuki GB announced the appointment of three regional business development managers for the south, north and the Midlands.

Joe Skinner, formerly of Lookers Leasing, heads the southern region; in the Midlands, Louise Kelly joins from her role of corporate sales manager at Maserati North Europe, and in the north, Tim Whitworth joins from a role as regional business manager at Dekra Automotive.

Jenkins said: “We now have three regional fleet managers that have been charged with providing our retailers with the kind of opportunities that wouldn’t have simply walked into their showrooms.”

Retailers have been charged with delivering on a nine-point promise for business customers, which includes: provide alternative transport; provide aftersales progress reports throughout the day; wash and vacuum cars seen as part of pre-booked work; and provide accident aftercare.

Suzuki will continue to handle larger corporate agreements itself, however, and the Swift was recently adopted by AA/BSM driving schools.

A Suzuki spokesman said it hoped to account for a third of the 2,850 vehicles acquired by the driving tuition provider each year.

Jenkins added: “At the heart of our efforts is the support of the retail network and the great thing about the AA/BSM deal is that it should benefit retail sales too. The number of young people having early contact with a Swift, and learning to drive in a Swift, is expected to boost sales in itself.”

Wyatt said Suzuki would also try to ensure that Swift fleet cars will be channelled back into the retail network when they are remarketed.

 

'Electrification is very expensive'

The breadth of vehicle models available to Suzuki retailers appears to be one of the network’s few bugbears.

In the most recent NFDA survey, Suzuki scored a 5.8 out of 10 (average: six) when dealers were asked about their satisfaction with its used car programme.

Wyatt conceded that the brand had a very “soft touch” used car operation, which warranted greater focus now that the market is swinging towards the used sector.

He said: “It really is time to focus the mind on what a Suzuki used car needs to offer and help our dealers to deliver that more effectively.

“I don’t think used cars are the holy grail, though, and many retailers are throwing themselves into it right now. They have to exercise caution and realise that they are probably buying stock at the top of the market.”

Wyatt said Suzuki’s retail network achieves an average new-to-used ratio of 1.1-to-one.

Franchisees are also becoming more aware of the need for a presence in the alternative fuel vehicle (AFV) market, scoring the brand just 3.3 out of 10 on their satisfaction with the brand’s ‘greener’ options.

The fact that just 3% of Suzuki’s sales mix is diesel means it has side-stepped some of the diesel-related issues other brands have faced, but its budget roots have left it wrestling with the idea of what an electrified Suzuki should be.

Robin Luscombe, who spoke to AM in March as part of a dealer profile, hosted Takanori Suzuki , Suzuki’s head of European automobiles, and Nobuo Suyama, Suzuki GB’s managing director, when they visited the UK on an “EV fact-finding mission” in December.

Luscombe said Suzuki plans to invest in EVs to meet strict regulations that will be brought into force in India – its key global market, with 1.25 million annual sales – but feared such developments could drive up prices.

Wyatt echoed those concerns: “There is no doubt that electrification is very expensive.

“Putting an extra £10,000 on a car that already costs £30,000 might not seem like a big issue, but it is very different when you are selling new cars priced from £10,000 to £15,000.”

Suzuki currently delivers a nod towards electrification in the form of its SHVS (Smart Hybrid Vehicle by Suzuki) – the mild hybrid system in its Baleno, Swift and Ignis models.

The system incorporates a ‘starter generator’ with a built-in motor capable of delivering assistance to the engine.

Wyatt believes that “stronger hybrid” models and EVs will make their way into the Suzuki range eventually.

So far this year, Suzuki has launched the Swift Sport, a “halo model” expected to account for about 20% of Swift sales, which was showcased to retailers at the Silverstone race circuit. A new Jimny compact off-roader is due to arrive later this year.

Wyatt said: “While we don’t play in every sector, we have three SUVs and have a strong reputation in the market’s fastest-growing segment.”

 

Suzuki's motorcycle business stands alone

Suzuki GB’s affordable and profitable approach to its car franchise is mirrored in the motorcycle side of the business.

However, despite a projected return on sales of about 5% and a 7% market share, it has found that the format of the motorcycle business does not seem to appeal to established franchised car retail operations.

Ian King, Suzuki GB’s business development manager for motorcycles, told AM: “Brands like BMW and Honda align their motorcycles with solus retail sites, which sit well alongside their car showrooms. That’s not the case with us.

“We offer franchisees an affordable model, with lower CI costs, but this usually means our motorcycles are sold alongside other brands – something that franchised car retailers aren’t always used to.”

Keighley-based Robin Appleyard is the only Suzuki car retailer in the UK that also sells the brand’s motorcycles.

King joined Suzuki three years ago at a time when the motorcycle network was aiming to expand from 87 to 125 franchised sites, but he said the push for new outlets has been tempered by the changing nature of the market and the brand has only a handful of open points to occupy beyond its 103 retail locations.

“Of course, we would welcome conversations with franchised operators from the car side to fill those open points in West London, West Kent, the M4 corridor and the West Country,” he said.

 

Giving retailers an easy-to-deal-with brand

Recent activity from within the Suzuki franchise seems to suggest that larger regional groups see the brand’s potential for growth.

Wyatt said Suzuki’s UK franchisee partners were about 60% solus, but that new sites and consolidation has already changed the composition of the network in 2018.

In February, Desira Group doubled its Suzuki representation with the opening of a franchise in Norwich. Hendy Group also doubled its representation with the brand, filling an open point in Crawley.

Ponthir Suzuki and Honda also snapped up Stirling of Hereford’s Suzuki franchise  in February after Phil Harvey, Stirling’s owner and managing director, announced his retirement.

The acquisition added a third Suzuki dealership to the Ponthir Suzuki and Honda operation, with the group already representing the brand in Abergavenny and Caerleon, in Newport.

Gordon Hardie, the managing director of Stirling-based Hardie Motor Group, turned to Suzuki after withdrawing from the Peugeot franchise.

Hardie closed his Peugeot franchise in Larbert and converted his Stirling facility into a Suzuki franchise, citing Peugeot’s continued CI investment demands as “the straw that broke the camel’s back”.

When asked how difficult it was to transform a Peugeot ‘Blue Box’ dealership into a Suzuki site, Hardie said: “Suzuki came in, looked at the building and said ‘it’s blue, that’s our colour; the inside is white, that’s our colour. Brown sofas? They aren’t our colour. If you change those and put up the appropriate signage, we’ll be done’.

“It’s that straightforward and that’s how it should be.

“When did a customer ever walk into a showroom and say ‘I’ve looked at the car and driven it and I love it, but I just cannot buy it off those floor tiles’?”

Hardie’s summation identifies one of the major selling points of the Suzuki franchise and Wyatt is keen to retain that down-to-earth reputation.

“We’re everyone’s favourite brand,” said Wyatt. “That’s basically down to being easy to work with and, perhaps most important of all, profitable. That’s how we want it to remain.”

 

What’s next after Ant and Dec?

ANt and DecSuzuki is on the hunt for a new marketing initiative after cutting its ties with Saturday Night Takeaway hosts Ant McPartlin and Declan Donnelly.     

Bringing an end to a successful partnership that started at the end of 2015, Suzuki confirmed a week after McPartlin’s involvement in a road traffic collision on March 18 that “no further material featuring the duo” would be aired.

McPartlin was later fined £86,000 and banned from driving for 20 months after pleading guilty to drink-driving.

The events were a blow for the brand, which had generated publicity via regular car giveaways on Saturday Night Takeaway, sponsorship slots in prime-time Saturday night advertising breaks and viral YouTube videos.

Wyatt told AM: “We’ve made no secret of just how successful that partnership was for us. In terms of familiarity, awareness and likeability, it really did great things for the brand. We want to find something else.

“With Ant and Dec, for a long time, I don’t think there was a brand in the UK that wasn’t envious of us.”

Wyatt said the brand would not rush into a new marketing/ sponsorship agreement and suggested that an innovative campaign could take any form, not necessarily an alignment with a high-profile television series.

 

 

 

 



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