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“The benefit for us is more than financial”

Eighteen months old on July 24, the Retail Automotive Alliance (RAA) is mature beyond its age, and certainly no toddler. It has grown slightly, has shifted the franchising balance away from its Ford roots, signed agreements with suppliers and is cutting expenditure for its 22 shareholder groups.

There’s more: the RAA has won positive support from Ford and persuaded dealers with strong affiliations to other manufacturers to consider a similar project. And now the Alliance is looking at the possibility of some form of collaboration with automotive ‘buying clubs’ in mainland Europe and North America.

Little has been claimed by the RAA during its first year and half, giving rise to speculation that it might be achieving little. “We decided not to say much before we could outline our progress,” says Philip Maskell, founding chairman of the RAA, in his first major interview since the launch. He is chairman/managing director of Essex Ford Group, based in Basildon.

Maskell says the 22 shareholders are already saving a total of £3m per year and believes this can increase to £10m in another three years.

There is a wide geographical spread, from Dunfermline Autocentre in north-east Scotland to Vospers in Cornwall and Devon, and from Days of South Wales to Busseys in East Anglia. Member companies range from the young (Lifestyle Ford, founded 2001) to a near centenarian (Hendy Ford, 1910).

Paul Knight, a former Ford of Britain finance director, is the RAA’s chief executive. He works with Maskell and other members in deciding the best areas for saving money, and then negotiates with the companies. In some cases, there is a formal tendering process.

The RAA has a list of more than 20 areas where spending can be reduced: they range from lubricants to bottled water, from banking to paper and from paint to telecommunications. Some attractive contracts have been won and others are being negotiated.

One of the big successes so far has been a deal with Manheim Auctions, replacing each member groups’ local vehicle disposal agreement. Manheim is selling 45,000 vehicles a year for the Alliance.

“The benefit for us is more than financial,” says Maskell. “We also invited BCA to tender, but were impressed with Manheim’s IT and support. Now we are selling in the open market, Manheim provides us with market intelligence that gives us all a better understanding of the used vehicle market."

  • This is an excerpt from a two page feature in the June 16 issue of AM.
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