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Camden sets out vision for future of car retail

Camden Motors’ vision for the future of automotive retail involves massive new car superstores in greenfield area complemented by high street advice centres, wrapped up in an online proposition.

The Car Shop business, Camden’s three used car supersites, are likely to have a key role to play as the network expands further: they could become the hubs for new and used cars that act as part distribution centre, part showroom.

“The number of dealer points will fall and we see more big car operations at the centre of a market area. There will be advice shops on the high street rather than gin palaces and it will link into an online proposition,” says Paul Dunkley, Camden Motors chief executive.

The European Commission’s scrapping of location clause next year will spark this development, although Dunkley adds: “Legislation doesn’t change the industry, innovation does. Companies who say nothing’s changed under block exemption are reactionaries – they are waiting for something to change before they do anything.”

Camden Motors is enjoying new freedom after the management buyout team who acquired the company in 1996 bought out the venture capitalist that funded the original deal. It has split the business into four operations, each of which are limited companies with their own boards that have responsibility for corporate governance and own a stake in the business.

They are: Car Shop, headed by ex-McDonalds executive Tim Taylor, who joined two months ago (it accounts for 30% net contribution to Camden profits); Allen Ford, the three Ford CMAs headed by ex--Pendragon Kevin Quigg (30% net contribution); Camden Renault-Nissan, headed by Tim Pickering (25%); and Camden Corporate Fleet, headed by Steve Mennell (15%).

The company will create a fifth division, a vehicle auction business in Northampton, in October through which it intends to sell around 16,000 part-exchange cars each year. These will be models that do not meet Camden’s retail profile of sub-four-year-old, full service history, sub-70,000-mile cars. “We currently sell these older cars all over the place, but the auction centre will give us back control,” says Dunkley.

“Our unique ownership structure means we have a specific focused business with specific focused teams that can develop the strategies – this is where our growth comes from.”

Dunkley sits on each board to oversee proceedings and facilitate sharing of best practice. For him, the regular meetings have two purposes: to check that the investment is being properly managed, and to listen to the strategy.

Three issues will dominate over the next year or so: meeting targets on profit, people development, customer satisfaction and CRM programmes; identify new management teams that can take Camden forward; and reacting to circumstances – how carmakers see their distribution channels in future.

The internet has a vital role to play in Camden’s vision of a new-look distribution structure. It’s a key route to market, not just to direct footfall to the showroom, but for online transactions. “Are cars commodities?” asks Dunkley. “At the lower end of the market where people want a mode of transport and buy on PCPs, the answer’s yes – and these cars will be sold online. But for bespoke and premium brands, people will still want to visit the showroom.

“We will commoditise some cars and services and sell them either online or offline through the Car Shops. The organisation and planning for this is taking place now.”

Camden’s turnover is expected to rise from £1.1bn in the current AM100 to £1.2-1.3bn next year with growth coming from each operating division. Dunkley does not rule out adding more franchises to the four – Ford, Renault, Nissan, Vauxhall – currently managed (he’s considered Toyota and Peugeot in the past), but only on his own terms. That means being able to buy in to the carmaker’s strategy and acquiring a retail business where Camden can add value to the existing management set up.

And he’s happy to invest in showroom premises, as long as it’s the right strategy. “If you are in a partnership relationship, you do what you have to do,” Dunkley says. “The partnership with the manufacturer might not be equal, but does it have to be?”

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