Lookers’ success in outperforming its bigger rival Pendragon is a result of placing emphasis on franchises rather than sales regions in the management structure.

Ken Surgenor steps down from the position of chief executive of the dealer group at number four in the AM100, with the significant parts of the business in good health.

On the morning Lookers’ results to the end of June were released to the stock exchange, Surgenor told AM that “used cars had been good, aftersales had done very well and parts had been outstanding”.

Lookers is still opening new franchises and closing badly-performing businesses. There are now 121 franchises for 33 brands on 79 sites. Is there an intention to get the full range of brands in the UK?

“We still want Audi and BMW. We do not want them simply for completeness. We select businesses in order to make money – nothing else.”

There has also been a heavy emphasis on dual franchising where the business was ‘overfacilitised’. Quite a few of these have been done with Renault because it has dropped to a market share of 4% from 8%.

Surgenor said one of the reasons he believed Lookers had outperformed Pendragon in financial terms was the concentration on franchise directors rather than regional directors.

Though turnover was down 16% to £870m, pre-tax profit was up 13% to £17.6m compared with last year. 

Pendragon reported a 46% fall in first-half pre-tax profit to £11.4m. Lookers’ new car gross profit was 7% lower to 22% compared to last year with both aftersales and used cars taking up the slack.

Lookers also, reportedly, spent £1.8m on adviser fees in the last 12 months for an aborted acquisition. Surgenor revealed the money went towards due diligence for “quite a sizeable acquisition”. He declined to reveal more.

Surgenor has turned 65 and is going to take charge of the Northern Ireland subsidiary, Charles Hurst, while Peter Jones, who was in charge of motor operations at Lookers, steps up into the job of chief executive.

The choice of Jones led to the resignation of finance director David Dyson who was interested in the position. His place has been taken by Robin Gregson, also late of CD Bramall.