AM Online

Motorhouse to sell new

Car supermarket group Motorhouse 2000 is looking to capitalise on the opportunities offered under block exemption by seeking franchise deals with vehicle manufacturers.

The £120m turnover company, which has outlets in Cannock and Mansfield and plans to open a third this year in southern England, is in talks with a number of carmakers about opening official supply channels to sell new cars.

At present, Motorhouse sources new cars – which form a small percentage of its stock – as imports from Europe or through links with friendly dealers, but exchange rate issues and the decline in price differentials between the UK and the mainland has made this less attractive.

“I’m hopeful of having something finalised in the next few months,” says Motorhouse managing director Ian Allen. “Block exemption has enabled multi-branding, and we’re aware that the size of our showrooms meet the criteria of most volume manufacturers.

We have the facilities here to display a manufacturer’s full range, and we have clearly demonstrated that we can sell brand new cars in volume.

“We’re happy to have their branding in their part of the showroom. What we have with our car supermarkets is economy of scale. We could have six or seven showrooms in one, whereas dealer groups have the problem of finding six or seven sites for an autopark.”

Should his attempts to gain manufacturer franchises fail, something Allen claims is “unlikely”, he will look at acquiring one or two small franchised dealerships “to establish a supply chain”.

And no matter the outcome, he will progress with opening a third volume outlet within the next 12 months.

“We have identified a site in the south of the UK which is a greenfield site and has planning permission for a car supermarket. We’re currently in negotiations with the owners,” he says.

Once established and matching the performance of Motorhouse’s other sites, Allen expects the new site to drive total group turnover near to the £200m mark – in effect a top 40 placing in the AM100.

This month, the business began its first TV marketing campaign, with adverts on ITV’s Central and Yorkshire networks. Allen sees this as a particularly important step, as the majority of Motorhouse customers live within a 45-minute car journey of the two showrooms. “It’s only been running three weeks but it looks like it is working well,” he adds.

The message being promoted is “Look at your leisure – no pressure”, and this is reinforced by the sales practices Allen demands. After the initial meet and greet, customers are left alone to browse, and can request the keys to any cars they are interested in. The sales staff, all in uniform, remain on the sidelines until a customer requests their assistance.

Allen says price, choice and quality are the brand values of Motorhouse. Both sites stock around 1,000 cars ranging from new to three years old, a third of which are under cover.

Used vehicles are sourced through carmaker and fleet remarketing, with Motorhouse’s buyers approved at BCA and Manheim’s manufacturer sales. Stock turnaround is usually within a month.

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