That is despite enhancing its critical mass by acquiring five Jaguar dealers, three Land Rover dealers and six Volvo sites from the European Motor Holdings purchase just three months ago. The London-based company, which has been under new leadership for a year, is also getting out of its five Vauxhall businesses in the south west and selling single sites for Kia in Burton and Renault in Southampton.
The clean-out in the UK is completed by offering up three Ferrari/Maserati operations in Egham, St Albans and Sevenoaks, which generate a third of all sales for the two marques in the UK.
Interested parties for the dealerships are thought to include Lookers, Marshall Group and Pendragon. Vauxhall says buyers have been found for all sites holding its franchise.
So fresh is the decision to split with the American-owned Ford brands that the document that announces the news still lists PAG as one of just a handful of “core brand partners”.
Inchcape chief executive Andre Lacroix, group chief executive of Inchcape plc, conceded in his presentation that the cull from the 21 brands had to be “ruthless”.
“We are creating a platform from which to deliver growth and improved returns based on fewer, larger-scale and stronger relationships with core partners,” he says.
Conscious that he still runs a large Jaguar retail operation in Australia –Inchcape ceased to be distributor in 2001 – as well as an Australian Volvo business, and an importer for Jaguar and Ford-controlled Mazda in Hong Kong, Lacroix said that he has made it clear to manufacturers that partnership decisions in one country do not necessarily affect another.
A Ford spokesman says: “We were aware of Inchape’s plans to reposition their UK business and have been in regular communication with them. Jaguar and Land Rover are also in partnership with them elsewhere in the world and this will not only continue, but possibly expand. Inchcape’s decision offers us the opportunity to further strengthen dealer representation in the UK.”
The remaining “stronger relationships” in the UK are with VW/Audi, BMW/Mini, Toyota/Lexus, Mercedes/Smart and Honda. In the UK, Inchcape claims to be number one in Audi, BMW, Mini, Smart, Toyota and VW; number two in Lexus and Mercedes and third in Honda.
The sale of 47 dealerships in the UK will go part way to funding an aggressive expansion elsewhere in the world. Inchcape aims to increase the present six international territories to 10 over the next five years.
The six are Australia, Belgium, Greece, Hong Kong, Singapore and the UK. The growth markets already opening are China, Russia, the Balkans and the Baltic states. A Chinese dealership for Toyota has just been completed in 100 days.
Lacroix has spent more than a year developing the new strategy for Inchcape and March 7 was the day of its unveiling. The UK switch was described as a “transformational consolidation”. On top of the decisions on brands and location has come repositioning on business strategy that will apply across the world.
He says that in the emerging markets, carmakers want partners to work quickly at setting up a retail chain. And the partner will be chosen as a result of its performance in other territories. “We want to give an advantage to our partners by being the best distributor or retailer of their brand,” says Lacroix.
A group-wide programme is being introduced called Inchcape Advantage. “The suite of programmes will find ways to share best practice and trial new and innovative ways to deliver the special customer experience.”
Inchcape UK sites being sold
Land Rover Bristol
Land Rover Chester
Land Rover Derby
Land Rover Guildford
Land Rover Ipswich
Land Rover Kings Lynn
Land Rover Norwich
Land Rover Preston
Land Rover Southampton
Land Rover St Helens
Ferrari/Maserati St Albans