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Meridian MD Mark Robinson on why it won’t grow too big too fast

Sales and market share haven’t recovered from pre-2009/2010 recalls and 2011 tsunami levels. While performance is improving, Toyota’s overall rating in the National Franchised Dealers’ Association Dealer Attitude Survey remains at a record low. But Robinson is confident: “Toyota will recover and towards the end of this decade will be stronger than ever.”

He has a similar view of Honda, but from different beginnings. In 2008, Vantage was an approved future partner for the brand, but declined the acquisition opportunities presented to it, because “none were viable”.

The change in heart came despite the impact of the 2011 tsunami and the recession, which hit Honda harder than Toyota.

Vantage’s Barnsley deal was done after Honda proved the business was viable based on current volume, share and parc in the territory. Product launching this year (Civic Type R, NSX and Jazz) is “the first step towards recovery”. (See Honda analysis, Page 25.)  

Product power, with the DS range in particular, helped catch Robinson’s imagination and, in part, led to the acquisition of two John Wilding businesses.

The level of investment in Hyundai in 2014 – £5m in facilities, including a new centre in Stockport – demonstrates his commitment to the brand.

He also hopes filling an open point for Kia in Scarborough (“sea on one side, sheep on the other”), building a red box showroom and strong sales will see more interest from this Korean brand in Vantage.

“Kia’s got a very stable network. We’d jump at the chance for more and with the growth in parc and aftersales business it could lead to capacity issues for Kia – it will need more space.

“Our Scarborough business is too big today, but in three years’ time our business plan looks very different.”

 

How Pre-reg affects the market: ‘Probably about a third of registrations are artificial’

New car market sales figures are being distorted by an excessive volume of pre-registrations, believes Robinson. “On paper, the industry appears to be booming,” he said. “Realistically, this isn’t a true reflection of what’s happening. Probably about a third of registrations are artificial.”

German brands, in particular the premium marques, have been selling product to the UK, providing their own financial support to residual values making them very attractive buys, he believes. “This has left other manufacturers struggling to compete and in order not to lose share have had to find an alternative means of maintaining it.”

Robinson disagrees with the idea that the record new car market is a result of pent-up consumer demand being released after the recession: “The market is just managed extremely well. The German brands are adept at using product power to pull in business, while other brands are having to push product to market harder.

“But overall, UK retailers have a lot to be proud of. I visited a Toyota dealership in the US recently and another in Japan and while the Americans, in particular, are very good at customer retention, the UK is a global leader in terms of technology use, process and marketing.”  

Robinson said he hopes for more stability, or mild growth, in the new car market this year: “As the European market gains more traction, some manufacturers will start to reduce the financial incentives they have been offering in the UK, which has fuelled the growth in genuine sales and prompted high pre-registration activity. The German premium brands won’t support residual values the way they have been in the UK, as the previously excess production capacity will be sold more profitably in other markets.”

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  • Reg Willcox - 18/02/2015 13:59

    I know the problem

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