AM Online

'Branson will lose' - Smyth

Michael Smyth believes he understands the difference between opportunism and taking pride in building a profitable, forward-thinking business which serves a community.

The chairman of Manchester-based RRG Group (Radcliffe Road Garage Co.) is ready to compete against internet-based new entrants and expects to win.

Mr Smyth is content with selling cars only for Toyota/Lexus and Peugeot. “They understand the need to look after their dealers and I don't want every franchise going,” he said. At various times, RRG has held the Ford, Proton and Hyundai franchises.

Mr Smyth is vigorously confident about the future and ready to take on Virgin Cars, CarsDirect.com and all the other new entrants.

{*branson*}

Though describing himself as “a follower” of Sir Richard Branson, he expects Virgin to drop the project once it has a taste of the realities of motor retailing. He admires Sir Richard and has read his autobiography 'Losing my Virginity'.

He said: “Branson's ideas about selling cars make wonderful reading in the press but I wonder whether Virgin has thought through customers' needs.

“Let's see how good Branson is when his customers take delivery of a car which has a problem with the paintwork. “RRG once had a successful presence in contract hire where the problems are usually based on logistics – we used dealers to solve them. And Virgin and P&O Stena, with their cheap import offers, do not have the cars yet – I wonder whether they will get them.”

Mr Smyth accepted the arrival of the internet as one of the great changes in the retail motor industry, but he has faith in the future of RRG.

“We have brought about great change in the group since 1967,” he said. “Of course there will be more change and we are ready for it, whether the challenge is from Richard Branson or anyone else.”

Mr Smyth agreed with the view of automotive professor Garel Rhys (AM227) that dealers could hold on to the bulk of retail car market.

“In the North-west at least, people want to walk into a showroom and go through a negotiation – and then leave feeling they have been well treated,” he said.

Founded as two workshops and a petrol pump in Bolton in 1967, RRG last year doubled its profits, on a £150m turnover, which puts the group comfortably inside the top 50 in the AM100.

RRG gained the Toyota franchise in 1971 and Radcliffe Road, Bolton, where the business began, became a limited company employing 15 people. It now has more than 400 employees. In 1978, RRG opened a Toyota dealership with filling station in Bury at the former Elton Garage site, named after a suburb. The Elton brand has been retained for most of the group's franchised outlets.

Elton Financial Services was formed in 1985 to handle retain finance and insurance, with Dennis Studholme as the director (he is now RRG group managing director).

In 1996, the group sold Elton Vehicle Contracts (its contract hire division) to First National Motor Finance and formed Emac as its warranty division.

Other changes for RRG have included moving out of filling stations, keeping one from a previous network of 10. Prime Auto Sites, holding 500 used vehicles, was opened in June 1997 and closed 15 months later after badly denting group profits.

Mr Smyth aims throughout the group to combine old-fashioned service values demanded by its customers with modern retailing skills.

RRG recently renewed its Autobytel subscription. It's not making much money yet, but he likes the way the internet company relies on franchised dealers to sell the cars.

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