"Dealers must be cuter in dealing with customers and quoting against direct lenders."
Phil Stones used to slip into overdrive to galvanise staff into action. Twenty or so years later, he and business life have changed.
“I see the need to involve people in a different way,” said the boss of Lloyds UDT Chartered Trust motor finance. “You get more from them when they have a chance to participate.”
Mr Stones, 54, was reflecting on 25 years progressing in motor finance: the pursuit of promotion cost him his first marriage. Now happily remarried, he does not intend to make the same mistake again.
Occasionally, though, he still takes work home. “There are times when I need complete solitude to reflect on a decision to be made,” he said.
A second home in Spain is a welcome refuge from corporate life and some of the time is spent playing golf.
“I have a golfing friend in his forties who sold a company and has invested in businesses over there run by his son and daughter,” said Mr Stones. The envy is only lightly disguised.
Mr Stones has devoted much of his working life to Lloyds UDT Chartered Trust, or at least the two separate components of it. He moved from Lloyds UDT to Chartered Trust and, last May, took the return trip. That was followed by the “quite fortuitous opportunity to bring Chartered Trust into the fold”.
Last year, the two companies sold around £3bn of new finance business and Mr Stones expects the figure to be slightly higher in 2001.
With Lloyds' strength in large dealer groups, and Chartered's expertise in used car finance, the two complemented each other. “They were easy to put together,” he said.
The enlarged group covers point-of-sale cash for one in 10 cars sold in the UK, plus caravan and motorcycle loans. The deal was completed in September and Mr Stones moved swiftly to merge the two motor sales operations.
“I believed the staff needed to know where we were going and to remain motivated,” he said.
“Also, motor dealers deserved to know where they stood. We pledged to keep the two brands separate at first, and the staff operate dual brands though we have brought in common standards.”
Integration should be completed by June or July.
“We are moving to a single brand for motor finance but have yet to choose a name,” said Mr Stones. “The acquisition agreement included a clause allowing us to use the Chartered Trust name only for a limited time.
“Now we are to have the chance to promote a name, at sales points and in ads, which will be amplifying everything we stand for.
“We have hung our hats on point of sale motor finance. And we still believe in it, despite the arrival of the dotcoms and high street lenders.”
Mr Stones said point-of-sale motor finance had dropped between 2% and 3% over the past 12 months as competition from direct lenders became more intense.
“We have to learn to be more flexible,” he said. “We have developed the best technology in the sector to enable us to achieve it.”
A personal loan was recently introduced with the intention of helping people with limited equity in part-exchange deals. It was also something new for dealers relying on finance as a profit source at a time when margins in the finance industry were probably thinner than ever, he said.
In the merger, 29 out of a total of 512 sales jobs disappeared and Mr Stones believed the finance industry had learned a lesson when seeking savings. “I am convinced we must keep sufficient sales staff to service dealers,” he said. “It pleased me there were not big cuts – drastically cutting jobs can prove to be a short-term idea.”
People new to a company are vulnerable to cuts after a merger, and Mr Stones said he remembered the early challenges. “I used to have to find a call box that worked to phone and ask for advice when I was on the road,” he said.
“You have high days and low days. It's why, still, I would never ask anyone to do anything I had not done myself, or was not prepared to.”
During his career, the pace of finance business has quickened – it used to take three days to process an application, now it was three hours.
Mr Stones said dealers had the opportunity to take more finance business than many of them believed. “They must be cuter in dealing with customers and quoting against direct lenders,” he said. “And accept it will be at a reduced commission.”