Management team restructure

Another major change since Doyle’s arrival is the structure of management teams.

There were separate managers for each franchise for both sales and aftersales and it was creating “unnecessary tensions” within each franchise and across the group.

Doyle said: “Let’s say sales took in a used 18-month-old Bentley Continental GT and go to aftersales, which would be a different profit centre with separate management, and ask how much it would be to prep. The answer would be £10,000 and then sales would say there is £10,000 in it, so trade it. That’s the kind of behaviour that would manifest itself. So now we have one person managing each franchise.”

Culturally, Doyle is trying to move the business on with investments in training, appraisals, employee surveys, and benefits.

There was a pay rise across the business in 2012 which hadn’t been done “in a long time”. New incentive schemes were introduced. There was a review of basic pay and alignments where required.

Doyle said: “My fervent desire is that I open a set of accounts one day and the highest-paid person in the company is a sales executive.”
There was a mix of internal promotions in 2012 and going outside the business to find new talent.

The group takes on apprentices every year, which Doyle describes as a long-term commitment for the brand. He said: “It takes a lot of time and effort to get the technicians up to the standard we expect here.”

The London bubble

It is difficult to benchmark HR Owen against other groups and plcs due to its current mix of high-end brands and high-cost locations.

The majority of its customers are located either in or around London. The group still has a lot of customers from the City, but not in the numbers it used to. Those numbers have been made up by international customers.

Doyle said: “There is a different economic climate here in London and I can see that when I look at the dealerships I have outside of London versus the performance of those that are in the capital.”

HR Owen has an Aston Martin and Bentley business in the wealthy Cotswolds town of Cheltenham and a Lamborghini site in Manchester. Doyle assures his businesses outside London have had a good year.

In terms of Doyle’s long-term plans for the business, it has to be focused on the highest concentrations of wealth.

He said: “We’re looking at London, the south-east, west of London, south Birmingham and south Manchester. If someone gave me a choice, I would always pick London ahead of anywhere else.

“The costs of operating here are significantly higher.

“It costs you more in terms of logistics with vehicle movements. It costs more in terms of people, with the wage that London brings with it. It creates space issues for us as well. It creates efficiency issues in terms of travelling just five miles across London, which can take 45 minutes. However, the opportunity is here to support that.”

HR Owen’s position as a predominant player for its luxury brands mean it is likely to have a good balance of power with its partnerships. Doyle confirms that relationships are strong across the group.

He said: “While the returns are there, we don’t mind having to make the capital investments required to keep up the standards.

“In fairness to our manufacturer partners, it’s not an every five minutes request. There’s at least a five- to seven-year cycle for corporate identity changes and they always appreciate when profitability is under pressure. As long as we work together through it, it’s OK.”

Most of HR Owen’s locations are standalone, which protects the business from any incoming demands for separations under a general block exemption regulation.

Doyle said: “I think outside London it would be difficult to operate these franchises as a standalone business on a sustainable basis. The requirement to have to have two or more brands on one site will be a reality to make it work. Any discussions I’ve had about growth with our partners have been quite accepting on that.”

Doyle would look to multi-brand showrooms outside of London should the opportunity arise. He would not confirm which brands the group would move forward with, but likely new car franchise targets are Porsche, Range Rover, Audi and BMW. These brands fit with HR Owen’s premium history, but would also give it a much wider service parc as a base to strengthen the business.