The changes, which come less than a month after Dixon Motors was acquired from Royal Bank of Scotland by entrepreneur and former Inchcape managing director John Haines, will see turnover drop by £100m. Haines says the move will turn Dixon “into a successful business”.
The group also plans to relocate and downsize its head office and is terminating use of its pre-delivery inspection (PDI) centre in Thorne, near Doncaster. The £11m centre opened just three years ago and was a key reason why RBS acquired the dealer group in 2002. It will now close with the loss of 200 jobs.
One analyst says: “It was a good concept but they didn’t get enough volume through to make it work. There were also issues over quality.”
Dixon Motors, ranked 11th in the AM100 with an estimated turnover of £800m, has this week sold two Fiat/Alfa Romeo dealerships in Leeds and Horsforth, and five Honda sites at Bradford, Doncaster, Harrogate, Horsforth and Leeds.
Pendragon has acquired the Honda outlets, which will be rebranded Stratstone Honda. It’s the group’s first move with the carmaker and makes it a sizeable partner in the UK.
Dixon is now in advanced talks with a major UK dealer as it looks to dispose of four VW sites at Bradford, Grimsby, Lincoln and Skipton. The deal is expected to be concluded within a month.
“We are a volume group and the culture of the franchises we have disposed of is very different to that of our remaining franchises,” says Haines. “We plan to reduce our debt and invest in our franchises. Profits will increase as a consequence of these disposals and we expect margins and productivity to improve.”
The retail part of the business turns over £600m (the £800m AM100 turnover included leasing and vehicle management, which is now standalone). Haines predicts this will fall by £100m next year. But by 2007, he expects it to rise to around £650m.
“We want to be seen as more serious players by the manufacturers we represent. We’re not planning to take on any more franchises, instead we will invest in what we have,” adds Haines. Dixon now plans to carry out PDI within its retail sites.