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TMS grows with internet but stays loyal to its roots

Peter O'Connor believes TMS Motor Group's website (www.tmsgroup.co.uk) is an integral part of a rapidly evolving middle-ranking dealer group. The internet will account for between 10-20% of TMS business this year including finance and parts sales.

Used cars are easiest to sell, particularly nationally and worldwide, because each is unique. Parts and accessories do well because the group's franchises – Land Rover, TVR and Volvo – have a 'lifestyle' element.

“We sell a lot of clothing and other accessories – it has become a significant part of our business,” he said. Mr O'Connor, who is deputy chairman, is convinced the group's fundamental approach to customers remains the same.

“TMS sold its Ferguson agricultural business to Massey in 1989, but its influence continues to underline the ethos of our business,” he said. “Selling to farmers creates a long term relationship. They wouldn't buy a tractor every year, so we had to provide an ongoing service to retain their loyalty.

“Being a Land Rover dealer in a rural marketplace means we have retained a large number of customers with links to agriculture.

“We have to develop longer and more substantial relationships with our core customers. The internet may have diluted this slightly, but we have not lost sight of our original customer base.”

TMS has its headquarters at Melton Mowbray in rural Leicestershire. Mr O'Connor has been with the family business since the mid-Eighties – founder and now chairman Cyril Hack is his father-in-law.

He helped develop TMS from a single site business to a medium sized dealer group, with seven outlets: four Volvo, two Land Rover and one TVR.

TMS, which turned over £37m last year, is expected to raise turnover to nearer £55m this year, on the back of acquisitions, putting it on the fringes of the AM100.

“We want to expand further with Ford Premier Automotive Group, but it all depends on what opportunities arise,” said Mr O'Connor.

He believes the group benefits from operating a restricted number of brands. “It means we can get under the skin of the brand and live and breathe it,” he said. “We understand what makes Volvo and Land Rover tick, which benefits us and our customers.

“I am pleased Ford acquired Land Rover because it has a track record with Jaguar of nurturing brands,” he said. “I believe Ford will do great things with Land Rover and I expect some surprises.”

The potential for Ford to multi-franchise sites with its PAG brands made sense in larger cities where investment was costly and land is limited, said Mr O'Connor. But he did not believe it would work as effectively in rural areas.

“Brands will become even more important as quality continues to improve,” he said. “There is less difference between products – the main one is the brand and its perceived image. Dealers can't develop the brand if they have huge overheads from investment in cities.”

The achievement of TMS winning the Automotive Management website of the year award pleased staff. “They feed off the recognition that winning awards provides,” he said. “They realise they are working for an innovative business – retaining people is not all about how much you pay for them.

“The industry has gone through 10 years of changes in the past 12 months. In order to survive you need a strategy for a real and virtual business – this is the rub for the purely virtual dotcom companies.

“They believed dealers were complacent, greedy and offered a poor service, and some did. There was a lot of inefficiency, but dotcoms have underestimated the motor industry.

“It's one thing offering a price-led service, another to fulfil the promise. Taking the order is easy, the difficulty comes afterwards – delivering the car, part-exchanges, the aftersales service.”

He sees a place for the real and virtual businesses as dotcoms seek partnerships with dealers, though it was hard to predict which would provide the majority of the business.

“It is important to make internet investment from the start and TMS invested around £100,000 – the site can now easily be developed. We are keeping pace with the internet though we are not necessarily innovators.”

TMS operates Ecomcars, an incremental site offering other makes of new car, as part of the website. Launched last summer, it is designed to target ex-company car drivers and has already broken even.

It trades on the back of the TMS corporate sales business, which has contacts with all main franchises and an infrastructure to distribute cars nationwide. “It means we have UK suppliers for all brands,” he said.

The site is predicted to sell 500-600 cars this year and Mr O'Connor expects sales to rise from next April when the company car tax changes take effect. “More people will opt-out when they see the effect on their monthly salary,” he said.

The website allows potential buyers to obtain quotes, but the transaction still takes place via phone. “We have found that most people want to speak to someone before buying the car – if this changes then we will adapt the website,” he said. “We are as interactive as people want us to be.

“People initially saw the internet as a great way to shop around for the best price. They now appreciate that service is also important and they want to do business with someone who will be around in the future.”

The TVR parts and accessories section, where customers use 'shopping trolleys' to buy online, is creating worldwide interest. “We spotted an opportunity in the market,” he said.

“TVR is low volume so it is hard for people to source parts. We can deliver within 24 hours: distribution and the internet have shrunk the world. The business is turning over a few thousand pounds a month.”

Each internet site is managed by a 'champion' who pulls staff along. “That's why the site stays fresh – all our staff offers feedback and suggestions on how to improve the business,” said Mr O'Connor.

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