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The way we work: a fresh approach

Radical new thinking about urgent action dealer groups need to take to ensure future profitability will be presented at 'Putting profit before turnover', an AM automotive forum to be staged next month.

Teams from Grant Thornton Motor Retail and the International Car Distribution Programme have been working together for a year to try to develop a fresh approach to the way the retail motor industry operates.

The ideas will be given exclusively to delegates at the forum, to be held at the Heritage Motor Centre, Gaydon, Warwickshire on Thursday, November 28.

Senior executives of dealer groups which have worked with the teams will give their views on the ideas and take part in discussions during the day.

Piers Trenear-Thomas, client services director at Grant Thornton Motor Retail, said: “It is interesting that while motor retailing in this country is considered to be more advanced than in other parts of Europe, it is no more profitable. There is also a common presumption that economies of scale are outweighed by diseconomies of scale. Our research indicates that the latter may be true, but the former is more about measuring the wrong things and acting on those measures.

“This industry should and could be more profitable. There is no silver bullet solution, but there is a different way of looking at the problem.”

Grant Thornton Motor Retail is AM's partner in producing the AM100, published each spring and the UK's most authoritative review of the fortunes of the UK retail motor industry.

Three years ago, AM published the first ROCE (return on capital employed) top 20 to identify the groups - both large and small - working most effectively in their use of capital.

Bates Motor Group, which headed the first ROCE top 20, was sold to Inchcape 18 months ago for £23m. Mr Trenear-Thomas said: “The world has already moved on since ROCE, but Edward Belcher's sale of his company indicates how the right approach can produce a big payday for people running a dealer group properly.”

n Ticket price for the AM automotive forum is £195 until Friday, November 8 (and then £249). To reserve a place, or for more information, contact Sue White on 01733 468272 or via e-mail at sue.white@emap.com.

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