Marshall Motor Group chief executive Daksh Gupta has given an insight into how the AM100 PLC will continue to adapt to the changing car retail market after a “pretty special” start to 2021.
Gupta revealed that the business is in the process of doubling its buying team as it applies greater focus to a fast-moving used car market buoyed by strong consumer demand.
But Gupta likened the burgeoning used car market to a firework, stating: “Someone said to me that its like a firework whizzing skywards, but every firework has a stick that has to fall back to earth and it’s that we need to be cautious of.”
The Marshall CEO was talking to AM following a week which saw his business announce that it will hand its 4,000 staff a 2020 ‘loyalty bonus’ and a backdated pay review – while forgoing all director bonuses – ahead of a trading update forecasting a record full-year underlying profit.
Marshall’s strong performance follows last month’s commitment to repay £4m in Government COVID-19 support.
“The last few weeks have been pretty special,” Gupta told AM. “The response to the AGM statement about the bonus and pay reviews has been amazing – my email inbox went mental after that announcement – and I could not complain at the 100% vote for my re-election by shareholders.
“The result of all that positivity is that everyone in the business is really revved up and motivated to continue delivering as we have been.”
Marshall’s recent trading update said the group had been riding the automotive retail sector’s “positive tailwinds of customer demand and appreciating used car values” to deliver its upgrade in projected profitability.
Gupta said that record results were predicted even in the group’s “worst case scenario”, factoring in any potential COVID-19 impact and that of supply issues related to the global supply shortage of semiconductor microchips.
Asked how the group had managed to deliver such strong financial results at a time of numerous challenges, Gupta was playing his hand uncharacteristically close to his chest, but told AM: “We’re doing some clever stuff around technology and we’re beefing-up our buying teams.
“We already have a big buying team but we are going to be pretty much doubling it.”
Cap HPI’s month market overview revealed the pressure on stock acquisition in the used car sector, the valuations supplier urging retailers to be “brave” with their used car retail values in order to maintain margins and avoid a situation where they are unable to afford replacement stock.
Used car values have risen by 13.5% in the past three months according to its head of valuations, Derren Martin.
Commenting on the issues of new car supply constraints, Gupta said: “The issue of new car supplies is going to be a challenge as the year progresses and different brands are in different positions.
"A lot of OEMs are keeping their cards close to their chest, but I don't think they know the full details of the situation themselves."