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Morris urges dealers to see 'how things change'

Online sales are already accounting for more than 2% of the UK car market, claims OneSwoop boss Hugh Morris: “We have seen the proportion rise and expect it to reach at least 4-5% by the end of next year.”

Mr Morris is enthused by the challenge of his job though he says he “doesn't know” how many cars have been delivered by OneSwoop. The recent figures quoted by the company are: * 17,000 registered users (potential customers must indicate they are seriously interested, and are then kept informed of cars available and latest prices). * 7,000 requests for a price quote from those who are registered. * Orders (for which a deposit of 15% of the sale price must be paid) “in the high hundreds”.

Mr Morris, a managing partner with Andersen Consulting, is coming to the end of an initial six-month secondment as chief executive officer of OneSwoop. His future, he said, “is subject to board discussion at OneSwoop” but he gives the impression of wanting to continue.

He is about as far removed from the life of a franchised dealer as it is possible to be. OneSwoop operates from offices just off The Strand close to the Thames and Mr Morris, a Cambridge graduate, is a governor of Sadler's Wells Foundation. He is passionate about finding the most efficient way a business or organisation can operate.“I am fortunate enough to be playing a part in the reengineering of an important industry,” he said.

“Life here is frenetic but fantastically exciting. OneSwoop is not saying dealers are dead, but they must rethink their role. We want to play our part in changing the retail process which is so inefficient.

“We will help manufacturers and dealers in that process, and there is money to be made for all of us. We are not here to cock a snook at established companies, because for us to survive we must help those people do business better. “Selling via franchised dealers accounts for 30% of the cost of a car and we estimate we can reduce the sale price of cars by 18%. Dealers will remain part of the process but there are too many of them.

“I question the need to have hundreds of showrooms dotted around the country - dealers only sell cars so they can service them. They should get on and do that. OneSwoop will play a part in the way manufacturers and dealers operate. “It is important dealers see how things are changing, and realise that manufacturers have plans to sell cars direct to retail customers.”

Some of what Mr Morris says is similar to comments by Virgin Cars chief executive officer Ian Lancaster in an interview with Automotive Management. The two companies and other dotcom new entrants want to foster a climate of change.

“I am glad Virgin Cars exists,” said Mr Morris. “The strength of the brand helps to encourage more people to consider buying online - once they do that, they will look at others such as OneSwoop.”

He accepts some of the newcomers will fail but OneSwoop has more than £30m behind it from heavyweight investors including BP Amoco, Credit Suisse First Boston and Schroders/ Salomon Smith Barney. That is enough to last at least two years, and the syndicate is looking long-term.

Mr Morris feels at home with investment banks. Since joining Andersen Consulting 20 years ago, his responsibilities have included the introduction of new trading systems at the London Stock Exchange. His most recent assignment was at Bell South Atlanta, a US telecommunications company.

His knowledge of motor retailing is negligible, but he is convinced the internet is providing an important catalyst for change. Another is the EU Block Exemption review in 2002.

Mr Morris accepted that automotive dotcom companies were having a tough time in the US but believed they would do better in Europe. “The American market has many trading restrictions but in the EU it will be made even more competitive when Block Exemption is changed,” he added.

He did not see US-originated companies such as Autobytel and CarsDirect (due to launch next month) as big threats to OneSwoop. Mr Morris has more respect for Virgin Cars which he expects, with OneSwoop, to be one of three or four new entrants left in the fight for sales by 2005.

Mr Morris also thought Direct Line's, whose cars are provided by Dixon Motors, would do well. He forecast that one major retail chain was likely to become a force in motor retailing, and saw the national launch of Sainsbury's Bank Drive finance package as “significant”.

Respect for Virgin Cars is balanced by scepticism about rivals' quoted sales figures. Three weeks ago, Virgin said that since June it had sold almost 1,500 vehicles and had a sales rate of 30 a day.

Mr Morris, while not revealing the level of OneSwoop's success to date, said: “Our figures will always be net, after cancellations, and not all our competitors do that.” He accepted the “great” Virgin brand was an advantage but questioned the extent to which it could be stretched, and thought association with Virgin Trains was a disadvantage.

OneSwoop is sourcing all cars from franchised dealers in the UK and other EU countries, though he wanted eventually to buy some directly from manufacturers.

Roeland van de Ven, founder and president of OneSwoop, has franchised dealer interests in the Netherlands. The company has gained more automotive experience by recruiting Alan Crane (formerly chief executive of CarSpecs) and Andrew Carroll, previously a senior executive with Ford in Germany.

“That was always part of the plan as we grew,” said Mr Morris. “They are car men with years of experience, and we are ready for that now.”

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