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Special feature: People make the difference at Sytner

Gerard Nieuwenhuys is quite clear about what makes Sytner a dominant financial success in the UK.

The number three group in the AM100 runs behind Pendragon and Inchcape in the volume charts but comes second to none of the listed companies when measured by return on sales or profit per employee.

“People,” is his laconic reply.

Sytner is the UK’s biggest retailer of prestige brands, but the managing director pushes that aside as the principal explanation for his doing better than all the big listed groups.

“Brands are increasingly converging. The key differentiators are the people who work for us,” he says.

Looking after staff has had an escalating reward, not just for the business, but for Nieuwenhuys himself. It is one of the things that give him a buzz.

“My sense of success comes in lots of different areas and one of them is seeing people grow through the company,” he says.

The business benefits are measurable. This year, more than half the near 5,000 employees were moved to tell the Sunday Times why Sytner was a good place to work. The newspaper decided that Sytner was the number four place to work in the country – a rise from 95th the previous year.

#AM_ART_SPLIt# The citation said that staff believed they made a difference, and that managers talked openly and honestly.

There is encouragement to work from home, while flexible contracts include term-time working, compressed hours and job-sharing. Dealerships give free health club memberships and employees say there is not so much pressure that they are unable to perform properly. A high proportion also say that work does not interfere with their responsibilities at home.

Chairman (and former managing director) Laurence Vaughan gives all employees his mobile phone number.

Everyone got a buzz from that, but the commercial impact came immediately and had enormous benefit: “The quality of applicants for our vacancies was sharply up.”

Nieuwenhuys doesn’t just encourage his company to look after staff.

He also encourages the staff to look after the community.

He recently adopted an initiative called Local Hero.

“Our weakest area was giving something back to the community. We have been doing it now for 18 months and we put up a prize of £10,000 for the best ideas from two of our businesses. Last time we ended up with three dealerships which we could not split so we ended up paying £15,000.

“We showed some entries when we had our staff conference. There was a very moving video of a guy with learning difficulties who has never had a job. We took him on at Guy Salmon as a valeter and he worked one day a week. It is the centre of his life, but just as important is what our guys see they have done for him.

“We like to give independence to our people to do what they think best. We are not command and control. We are all about people-managing with entrepreneurial flair. We act like a bank manager. If they want to put £1 million into stock, they put up a proposal to us and we will act like a central banker and decide whether we can sanction that or not.”

He says he is in “no panic” to grow the size of the company.

“We are very careful about the nature of the company and do not want to destroy what we have built. If we continue to do that, we think that we will have manufacturers keen that we represent them.”

Most of Sytner’s growth is by acquisition and most of the acquisitions come from manufacturers’ tip-offs. But, says Nieuwenhuys, there is no favouritism.

“We do get told about things that might suit us, but we do not get first bite at everything. The manufacturers are very careful.”

The big management focus is franchise issues. Then it is investment. “We are not shy about putting money in. We work through those issues and get them right,” he says.

“We use other companies as comparables – particularly the listed sector. We outperformed every plc last year on revenue and profit growth like-for-like last year. The nearest comparable was Lookers.” #AM_ART_SPLIT#

He accepts that the listed companies have “all sorts of pressures” but having been one (it’s now owned by US-based Penske Automotive Group), Sytner still runs on the listed model but without access to cheap financing that well-run listed companies enjoy.

Sytner is best known for its allegiance to BMW but is now exposed to the whole prestige car range. “BMW is our most profitable brand and biggest in revenue terms, but we are profitable with every brand and within every business segment of each of those brands.”

Sytner has been chosen to operate the world’s largest Audi showroom when the dealership opens this autumn. The £30 million outlet, named West London Audi, has seven storeys and a showroom visible to passing motorists on the elevated section of the M4 and Great West Road.

Margins across the group are now under pressure. “They are not going to expand. We compensate for that with volume and we have to look for other revenue streams. Mercedes dealers used not to sell used cars. But now you have to sweat everything. There is still more money in sales than in aftersales,” he says.

“We make mistakes. Of course we do. We get things wrong. But we try not to repeat our mistakes. I love the industry. It is fantastic and there are new challenges every day.

“Roger (Penske) is great to work with. He just loves the business. We have a very open relationship and he is a very easy man to give bad news to. Last time he was over here we had been having a conversation and he just suddenly said: ‘I am having so much fun’.”

Jaguar is perhaps the most worrying brand because of the switch to Tata ownership. “Tata talked to us before the acquisition very early on and we were impressed. There is an opportunity for Jaguar to do with luxury cars what Porsche has done for sports cars,” Nieuwenhuys says.

One of the hallmarks of Sytner is that it invests in property. “We have never spent too much on a property. However much we spend it seems to pay off.”

The new dealership for BMW in Leicester is one of the most expensive developments the group has undertaken. The 33-bay workshop cost more than £4 million. It has 80,000 square feet of accommodation. The showroom, which opens this month, is 25,000 square feet and cost more than £10 million.

The service area features a convenience borrowed from America. The service reception is now a drive-in and under cover so that the customer delivering his car for service does not have to risk getting wet.

“It’s so obvious that I can’t think why we have not done it before.”

#AM_ART_SPLIT# Who is Gerard Nieuwenhuys?

  • Born 1961 Dutch C&A executive father and English mother
  • 1979 Business studies at Trent Polytechnic, Nottingham. Caught motorsport bug and rallied Hillman Imp
  • 1983 Joined Mann Egerton Rover in Leicester as sales manager
  • 1990 Joined Sytner Nottingham
  • 1992 Became sales manager
  • 1993 Became managing director
  • 1995 Made principal of Ferrari Loughborough
  • 1996 Appointed Sytner group operations director
  • 2002 Appointed Sytner managing director

    The business

  • Name Sytner Group
  • Founded 1960s by Frank Sytner
  • Turnover £2.5 billion
  • No of sites 129 dealerships
  • No of employees 4,887
  • Key franchises Mercedes (15), Audi (14), BMW/Mini (13), Land Rover (12), Toyota (8), Jaguar (7), Lexus (6), Chrysler (6), Porsche (4), Volvo (3), Bentley (3), Ferrari/Maserati (3), Lamborghini (2), Smart (2), Rolls-Royce (2), Honda (1), Saab (1).

    Profile of Penske Corporation

    Like Frank Sytner, 71-year-old American Roger Penske is an enthusiastic racing driver and racing sponsor.

    Penske Racing – an Indy 500 winner – is one of the major companies within the Penske Corporation.

    The holding company contains the Penske Automotive Group (PAG), which changed from United Auto Group after news that the other PAG – Ford’s Premier Automotive Group – was to be broken up. It has been Sytner’s parent since 2002.

    Through the Penske Corporation, Roger Penske owns 40% (and therefore control) of PAG, which is a listed company and the second largest (franchised) car retailer in the world.

    But Penske Corporation also controls the private company, Penske Motor Group.

    It operates in California through just seven dealers, including Longo Toyota which is claimed to be the world’s largest single dealership, selling 20,000 Toyotas per year.

    Hear more views about Sytner's peope recruitment and retention policy from its head of HR Melvin Rogers at AM People Skills, sponsored by IMI, on September 17 at Sopwell House Hotel in St Albans. Go to www.ampeopleskillsconference.com for more details.

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