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Sutton: 'Dealers must have scale'

Clive Sutton has severed links with three manufacturers - most recently Jaguar - which raises the question of whether he flits among franchises, or is a shrewd operator in a hostile environment. The evidence suggests the latter.

The Clive Sutton Group has represented Chrysler Jeep in London since its return to the UK in 1992. At various times in the past three years the group has held the MG Rover and Cadillac/Chevrolet franchises, as well as Jaguar.

The group's chairman and chief executive is decisive - daring to drop franchises which do not work for him - but is not a door slammer, and believes he might again do business with Jaguar, MG Rover, or Cadillac/Chevrolet.. For now, he is once again concentrating all his efforts on Chrysler Jeep. His £35m turnover business has dealerships in St John's Wood (round the corner from the Lord's cricket ground) and Colindale in north London, and at Balham south of the Thames.

"None of us - neither dealers nor manufacturers - know for certain how things will develop in the next few years," he said. "If a relationship does not work now, it might at another time."

Three years ago, he tried and failed to persuade the then Rover management he could make a success of MG in London. He did not see a future in selling Rovers but the company insisted he took both. So he said farewell.

"In the late Nineties, Rover management in the Midlands was sticking pins in a map, deciding where it would be convenient to have dealerships," Mr Sutton (pictured below) said.

##Clive Sutton--left## "They were having an identity crisis over the Rover brand, and planned for the future without using dealers' local knowledge."

When Cadillac/Chevrolet arose, it seemed like a perfect partnership - another American brand for Clive Sutton with the niche appeal which goes down well in big cities.

That franchise also went. "I dropped it when I saw General Motors was not serious about establishing the brands in the UK - GM saw them as sub brands to Vauxhall," he said. "Cadillac/Chevrolet has hardly been a great success here, so I believe the decision was correct."

Mr Sutton contrasts that experience and his "hugely strong" relationship with Chrysler Jeep. "We have about 7% of the UK market, more with some of the higher premium derivatives, and the PT Cruiser has been a great success," he said.

"We have scale with Chrysler Jeep. If you are a dealer in a city or town, you need that, otherwise you will be going nowhere.

"In a small town, or a village, you might run a successful business as 'the local garage', almost regardless of franchise."

Mr Sutton believes he understands motor retailing in the capital, and that many other dealers have a feel for their territories, all over the UK.

He sees an inability of many manufacturers and importers to trust the judgement of people running outlets in their networks.

Mr Sutton regrets he is not still developing a Jaguar network in north London but is content with the undislcosed though "sensible price" paid by the Sytner Group.

"Gaining Jaguar in north London was a long and painful business," he said. "In Highgate, we created Jaguar's first boutique outlet in the UK.

"We bought the land and gained planning permission to build a Jaguar centre at Five Ways corner in Mill Hill, where the A1 meets the A41. I believe it was the best motor dealership site north of the Thames and we have sold it part-developed to Sytner."

Mr Sutton's private backers supported his Jaguar venture, but he faced the need to spend £2m at Mill Hill in addition to the cost of the land.

"I had to be sure we would have the Jaguar franchise long enough to justify sinking that amount of private money into the ground," he said. "We didn't have enough confidence we would keep Jaguar."

Like others running medium size motor retail businesses, Mr Sutton is acutely aware of the competition from large groups.

Pendragon boosted its Jaguar network to 16 in last year's deal with Lex Service and is believed to account for at least half the manufacturer's sales in the London area. The group took over the west London territory from HR Owen, opening a Stratstone outlet on Western Avenue.

"There are similarities between the way Jaguar is going in London - mainly with big groups - and Fiat's decision to award the M25 area to Pendragon," said Mr Sutton.

He left unsaid the failure of that arrangement which last year led to Fiat's reallocation of the territories to smaller groups.

Somewhere, in his pragmatic mind, is the long-term thought that maybe he will again build "a shrine to Jaguar", as he planned at Mill Hill.

"I remain optimistic and open minded about the future," said Mr Sutton. "I hope manufacturers feel the same way."

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