The story was very different back then when the group had a confused brand strategy, irregular geographic spread and a mix of franchises that made it impossible to have real focus.
It also faced massive legacy issues on property which had peaked after the group acquired Appleyard in 1997.
Eamon Bradley, then chief executive, undertook a radical overhaul, much of it away from the public glare.
With minimum fuss, he more than halved the group’s size in five years, taking it from 128 franchised outlets to 52 in 2006, disposing of mainly volume and LCV franchises.
It focused the company squarely on premium brands in key geographical areas – clustered mainly in the north-west, north-east, south-east and eastern England – bringing the group more in line with the market position of its Asian parent company Jardine Matheson Holdings (JMH), whose operations include the chain of luxury Mandarin hotels.
According to long-time Jardine stalwart Alun Jones, who replaced the retiring Bradley in January, the consolidation is now complete.
“We are in a good position – we can now make the business what we want to make it,” he says.
“We have a strong balance sheet and we have done a lot of the things that other people are trying to do now.
We are not constrained by the issues facing others and there will be opportunities coming.
“The heavy leveraged deals of the past will be hard to fund in the future – it’s about good businesses at realistic prices.” #AM_ART_SPLIT#
Jones rules out any plans to return to the top of the AM100 (Jardine spent one year as the UK’s largest car retail group in 1998, with turnover of £1.4bn).
The emphasis is on growing with the right brands that can drive profitability.
While there are “one or two” franchises on his hit list, most of the growth will be with existing partners.
“We are not driven by size, although there is a certain size you have to be for head office expenses. Size is a means to an ends – it’s a consequence of other parts of our strategy rather than being the strategy itself.
We are driven by return on shareholders’ investment,” he says.
He agrees with the view of some industry analysts who believe there are no real economies of scale in the car retail business.
“You have to be close enough to control what happens in all dealerships.
In a business where the margins are so fine, you have to have that level of control,” he says.
“But you can’t rule out someone finding the magic formula to operate a large-scale business in this market.
“It is unlikely with the current business model and I can’t see it happening within the next five years.”
Name: Jardine Motor Group
Trading names: Lancaster,
Scotthall, Appleyard, Minories, Abridge and Clover Leaf Cars
Turnover: £1.041bn
No of franchises: 53
No of sites: 39
No of staff: 2,275
New car sales: 19,186
Used car sales: 17,250
LCV sales: 568
Key franchises: Aston Martin,
Audi, Bentley, BMW/Mini, Chrysler Jeep Dodge, Ferrari, Honda,
Jaguar, Maserati, Mercedes-Benz, Porsche, Toyota, Volkswagen
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