MFG Group chief executive Declan Gaule (pictured) speaks to AM's Tom Seymour about the company's developments for 2020
What have been the key milestones for the business in the past 12 months?
It is no great surprise to state that the Brexit uncertainty of the past two years and the knock-on effect on consumer confidence made retailing cars in the UK extremely challenging for all concerned.
Therefore, retailers required even more ‘bang for their buck’ so we developed a bigger programme to help with the generation of incremental customer appointments over two days, with an additional 2.5 core selling days.
We have also seen a significant influx of younger, less experienced people enter the industry as sales executives and to that end, we have refined our programmes to dedicate a significant portion of our ‘day two’ to reinforcing and upskilling basic selling skills.
How has the business grown in the past two years?
The past three years have been the most challenging, yet most successful, in MFG’s 13-year history with a 22% and 50% year-on-year growth.
I attribute this down to our people, our products and our reach.
We have invested heavily in our people by ensuring we capture and retain the talent and experience of seasoned UK ex-retailers.
We have re-developed our core two day in-dealer programme and added the 4.5-day version.
We have also expanded internationally and work in more than 40 global territories.
What would be your first piece of advice for a dealership looking to boost sales in a quarter?
Planning is probably the most important thing.
Rather than trying to grapple for sales at the end of the month or quarter, the most successful start early as a ‘fast start’ mechanism.
This enables MFG and the retailer/dealer group to plan all aspects of the sales generation programme including stock selection, personnel rotas, call to action messages and the like.
How have you seen pressure on quarterly targets change over the past 12 months as the UK market has come under increasing pressure on new car sales?
The past two years engendered by Brexit saw a flexing of targets in line with consumer spending and confidence.
However, the factories for all car manufacturers are aligned to their respective long-range plans and to that end, they will – and must – keep producing.
Therefore, the cars will keep coming and any form of ‘slack’ will need to be made up.
I think we will also start to see a third area of new car sales pressure from AFV sales which, at the moment, is the tip of the iceberg.
Couple that with the potential impact of the coronavirus and I think the first six months of 2020 will be supremely tough for retailers.
What is your view on how the new car sales model may change from quarterly bonus to an agency fee?
There are three core factors that would drive a move to a unilateral agency fee model.
The first would be customer-led with respect to the next generation of car ‘buyers’ being comfortable with the concept of the majority of the vehicle purchase/rental being conducted virtually, with only a test drive required to ratify their online research.
The second key point will then drive the manufacturers to reduce the total number of franchised dealers in their networks in favour of strategically located ‘super dealers/hubs’ for the storage and delivery of vehicles as well as being a ‘destination brand experience’.
Lastly, this would, in theory, increase profitability for the remaining dealers and satisfy customers and key stakeholders alike.
On paper, this is a relatively simple concept, however the reality of the legal ramifications of changing a franchised model that has been in place for decades, while ensuring customer satisfaction with fewer dealer touchpoints will be a truly massive, but not insurmountable, hurdle.
Do you expect to see a reduction in the number of sales executives across dealer groups as roles like product geniuses etc increase?
As we work in dealers every day, we have already seen a significant drop in the numbers of sales executives over the past 24 months.
Personally, given the complexity and knowledge uplift required to successfully transition to AFV in the next decade, I would be loathe to see a further reduction in sales executive headcount as selling and buying AFV products will require the highest level of product knowledge and salesmanship that we have ever seen.
My personal view is that a sales executive should be a product genius anyway – that’s their job.
What have been the trends with budgets for training in automotive retail, particularly when the market is under pressure?
Training is often the first budget line to be cut in times of austerity.
However, we are fortunate that although we are technically a training company, our core product is immediate and incremental sales.
What we have seen is a much wider request for our ‘soft skills’ training packages to help bridge the gap left by an increasing number of manufacturers moving from mandatory sales training for all dealers to just launch and product training.
We have launched the MFG Performance Academy to bridge that gap.
What are the big challenges with increasing EV sales at dealerships as more franchises bring out products this year?
Knowledge and confidence.
At the moment, for most sales executives selling an EV is a rarity and not the norm.
While the basic product knowledge for most sales execs and their brand EV products is okay, as soon as the conversation turns to discussions of range anxiety, BEV vs PHEV, residual value depreciation or cost per mile vs ICE, they tend to run a mile and ‘steer’ the customer into a petrol or diesel equivalent.
Until this confidence and knowledge gap is bridged in every dealer for every sales executive for every brand, sales of EV will not be where they need to be.
What are the big developments for MFG Group in 2020?
Our key milestone for 2020 will be launching our EV Sales Pro course that will specifically help retailers of all brands increase their knowledge of the EV sector from a sales executive and consumer point of view, immediately generating EV test drives and significantly increasing unit sales through soft skills training uplift.
We are already in discussions with a number of major manufacturer brands on how we can work in partnership to help drive EV penetration in the UK and abroad.