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Dealer Profile: Pendragon

Trevor Finn

“In five years’ time all this will be gone.”

That’s a pretty powerful statement, by anyone’s standards.

What makes it even more weighty is that it was delivered by the head of the UK’s largest franchised dealer group, Pendragon, at AM’s Franchised Dealer Conference.

(To read this interview in our AMe digital magazine, click here)

A delegate in the audience had asked him about the impact of the internet on motor retail.

Six months on, Trevor Finn told AM he is amused that none of the delegates picked up on that statement.

As he describes it: “Everybody nodded gleefully and we moved on, as if that was all right.

“What I tried to say was the way we do things today won’t still be taking place, it won’t be happening – it will be gone. The way we sell new cars today will have gone.”

If a £3.6 billion turnover group with more than 250 franchised dealerships and employing 9,300 people can make such a prediction, that’s a signal to all motor retailers that they must move with the times.

“Over the last 20-odd years I’ve done this job, every single year it’s become tougher.

"So there’s absolutely no realistic possibility of that changing. Everything is faster, more competitive, more transparent.

“Whichever piece of the business you look at it’s got to be getting better in order to stand still, or you’ve got to be getting better to stand still.

"A lot of people miss that.

"From a leadership point of view if a lot of people are doing what they were doing five years ago, the way they did it five years ago, their output isn’t as great as it would have been five years ago.”

So Pendragon is changing. Gone are the days of massive acquisitions of the likes of Reg Vardy and CD Bramall.

Now the group has to grow its own. Finn believes its profitability can be doubled, even trebled, by improving what it already has and does.

He is pragmatic about the new car market – production schedules are set, cars will come, and the cars will get registered, he said.

“So for us it’s quite an easy thing to predict.

"The only thing that’s difficult to predict is do we make any margin, and do the car manufacturers make any margin on the cars they sell, and that’s the thing that moves around.

"But it’s not going to be any less competitive than last year.”

Used cars and aftersales

Like many franchised dealers, Finn sees the areas of used car sales and aftersales as key areas for growth.

Pendragon has invested significantly in technology and processes which it believes will bring benefits to a business of such considerable scale.

One example is its support centre at its Loxley House headquarters near Nottingham, which has 300 operatives.

Every call to any of Pendragon’s dealerships is initially received here before being directed to the relevant person at the requested dealership.

That’s a total of five million calls per year.

The team also makes two million outbound calls a year to customers about deferred work or due services and MoTs, and takes 750,000 in-bound service booking calls from customers, with the operative systematically alerted to any outstanding work which had been previously identified.

It has the technology to input appointments in real-time into every dealership’s DMS, and the process ensures that customers’ data is gathered in full and efficiently.

If you would like AM to profile your franchised dealer business please contact am@bauermedia.co.uk



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Comments

  • kevthebass - 22/02/2012 10:05

    Perhaps no one was surprised because Mr Finn's comments were hardly new, people have been saying exactly the same thing for years. I'm sure there will be changes but buyers will still need to drive the vehicle they are contemplating purchasing, even if they then order it online. Aftersales has been more profitable than sales for the past 20+ years and yet is pretty much an afterthought for most franchised dealer groups, most need to improve CSI significantly and are too expensive. What's needed is a massive reduction in overheads, including the "glass palaces" that attract no additional customers, provide no customer service benefit (have you ever tried to park at any main dealership?) just additional costs which need to be recovered. A trip around mainland europe will reveal a totally different vehicle franchise approach, very few "glass palaces" and far more small owner-operated sites which would never meet the "franchise standards" imposed in the UK. Buyers will travel further for their exciting new vehicle purchase (or get it delivered!)but will not travel for the "distress purchases" of aftersales, so the network should reflect that. Given that new vehicles sales make minimal profits (thanks to the internet and dealers living off manufacturer rebates) it's not rocket science to work out that used vehicles and aftersales provide the best profit opportunities, that's why there are so many independents making a very good living. Of all the dealerships in the country I had rather hoped that Pendragon Group would be the first to disappear. Finally, centralised national workshop bookings, cheaper; possibly, better for customers; almost certainly not. A vehicle repair workshop is a very complex and fluid entity, it cannot be operated efficiently from a remote location, no matter how sophisticated the DMS, not even Pinewood!

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  • Paul Cape - 15/08/2012 13:26

    What is satisfying here is that Trevor Finn has identified a few key points: We can't keep doing things the way we did the world has changed and is changing, modern consumers have a truck load of information at their finger tips and use technology (I was skeptical about the call centre idea for after sales as a Pendragon DP but Trevor was right - it was my ego getting in the way and if we had only seen the writing on the wall then we should have put more effort into follow-up in after sales). We cannot wallow in the 'alibis of failure', its not my fault and its bad for everyone so its ok not to do well etc but face the truth and build great and enduring businesses based on positive people, great systems and processes that work. There is enough business within the business now for us to be successful so time to unlock it. No point looking back at small time Mom and Pop Dealerships whilst they provide great service locally they are difficult to motivate (ask the manufacturers on that one). I am convinced that we need to seriously look at the paradigm we operate in and make a significant change that reflects modern consumers in sales and after sales, the banking crash and continued disintegration into disgrace has taken the focus to ethics and our industry never did that well on the ethics front. Never thought I would say it but I wish Pendragon well.

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