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Used cars case study: Ford still a big seller in its Essex heartland

If one of the fundamentals of a great used car programme is having stock in the right place, available to the right type of customer, at the right time then Essex Auto Group certainly has that in place.

Dagenham may no longer be a powerhouse of car making, but there are still significant operations for the Blue Oval in the area, and a lot of residual affection for their products.

Chairman and managing director of Essex Auto Group is Phillip Maskell. He oversees a £110 million business, including Ford operations at Billericay, Basildon, Rayleigh, Southend and Lakeside, as well as Mazda, Kia and Fiat dealers and parts division supplying Premier Automotive Group – such as it is now – brands.

But does being in Ford heartland create problems, with too much of a good thing? After all choice is important to used buyers, and hundreds of Focus and Fiesta cars lining the lots could be a hindrance.

“Focus is a very popular new car,” says Maskell. “And there’s a lot of interest as it’s the market leader. But that also means it’s market leader in used cars, and we are in a heavily Ford dominated region, so demand for used cars like the Focus is high.

“But we make sure we spread them across all five sites, and sometimes with the stock, it is necessary to trim the pastry, so to speak, to ensure the right mix. In that case we will use auctions.

“We stick to the rule of thumb of only stocking what you display.”

One of its Essex channels for buying in used stock is Ford Direct, especially if it needs to buy in higher specifications of vehicle than the volume stock it tends to get through the showroom.

However, the vast majority of its used cars are part exchanges for vehicles previously bought from the group, due to the very loyal nature of its Essex customers.

“At any one time we have around 650 vehicles on display across the group with around 90% part exchange,” says Maskell.

“The majority of our stock is one to three years old, and comes from private buyers who bought the car off us in the first place.”

Flexibility is important to the success of the used car operation, which sells 4,000 used car a year and another 2,000 -2,500 back to the trade.

“Essex Auto Group is our approved used cars arm for primarily Ford products, although there are some other brands in there if we think they suit. They have all gone through a multipoint pre-inspection check and are approved by us.

“But we now have two Ford Direct Superstores, with that branding rather than Essex Ford Group, and of course that’s a primary used Ford site,” says Maskell.

“Our third channel is the Essex Auto Mart, which is seriously multi-branded with all sorts of manufacturers represented. As well as providing main dealer back-up, it is competing against the superstores and retail disposal centres.”

The fourth channel is auction, which it uses to underpin the operation, moving on cars that aren’t selling.

Maskell says: “Like most dealer groups, we have stock up to 75 days, although preferably we would have none over 60. After 75 days it goes to auction so we can keep the stock clean and fresh.

“We have an auction-only policy, and use Manheim for all our auction work. As a group, we put around 2,000 vehicles through Manheim every year. Old vehicles also get a better price at auction, and we get really good data back from them.

“We are finding that used vehicles prices and sales are holding up for us this year. The real test will be in the second quarter, after the effect of the plate change, to see if the market is cooling. We’re quietly encouraged.

“There’s now bigger pressure on manufacturers to maximise new vehicle sales, and the fallout is a glut of pre-registered, delivery mileage vehicles being pushed into secondhand market.

“Of course, that then has an effect on the other used vehicle values. It’s an industry-wide problem.”

New product, new opportunities

“We’re all delighted with the quality of product coming from Ford now. Every model becomes class leading, and this year will see the new Kuga, Fiesta and Ka,” says Maskell.

But with successful new products such as S-Max and Kuga, Ford dealers are having to readjust some elements of their used car programmes.

Roelant De Waard, Ford of Britain chairman and managing director, reckons that the Kuga will continue Ford’s success in attracting buyers of more expensive cars, a trend started with the S-Max and continued with the Mondeo and Galaxy.

He said: “We are seeing that we are selling a richer mix of vehicles, and are comfortable selling cars priced above £20,000, thanks to excellent product.

It’s something that started with the S-Max and shows the positive development of our range.

“It also means that dealers are having to get used to dealing with part exchanges from premium brands such as Audi and BMW.”

Maskell reckons retail sites such as the group’s Essex Auto Mart are key in the flexibility needed to market and sell products from premium brand they would not have previously dealt with.

“We can put them on that site and it attracts the right kinds of buyers,” he said.

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