Arnold Clark chief executive Eddie Hawthorne has told AM that the Scottish automotive retail giant expects to sever ties with more new car franchises after its exit from Ford and Toyota this month.
But while Hawthorne said that “two or three” more of the AM100 retailer’s established brand partnerships could be drawing to a close, he said that the moves were part of a refranchising operation as the group looked to the future with confidence.
Hawthorne said: “In terms of the manufacturers that we have got an issue with, it was just a case that we were headed in different directions.
“We’ve been with both Ford and Toyota for a long number of years, and I have huge respect for both brands, but it was just time to go.”
He added: “I’m sure there will be two or three more franchises that we’ll have to step aside from.”
Earlier this month Vertu Motors revealed that it would be taking on Arnold Clark’s West of Scotland Toyota territory from April 1 following reports that the group had also ended its franchised agreement with Ford.
Hawthorne confirmed both moves but insisted that “no jobs will be lost” and Ford approved aftersales, Motorstore used car retail or new franchises would be moved into all of the six Toyota dealerships and 20 Ford sites affected by the changes.
Painting a positive picture for the future of the dealerships vacated by the two major OEM franchises, and the future of the group, Hawthorne stated that the group was “absolutely not” downsizing, adding: “We’ll have new brands in all the Toyota sites by the end of March and in Ford we’re also going to change franchises, but that might take a little bit longer.”
Hawthorne said that Arnold Clark would honour all its customers’ existing order with Ford and Toyota.
He also said that it would remain a fleet customer of the brands, continuing to offer its customers rental deals.
Hawthorne described the changes with Arnold Clark as a “refranchising exercise”.
'Flying' in 2022
He said that the business was “flying” at the start of 2022 and was placing an increased emphasis on its ability to deliver an improved online customer journey.
After a COVID-hit 2020 trading period Hawthorne praised the “passion and grit” of his employees after its annual financial results showed pre-tax profits up 33.7% at £156.5 million as overall group revenues declined 14.9% to £3.8bn (2019: £4.7bn).
The increased profitability came despite a 20.2% decline in used car sales, to 204,627 (2019: 256,376), as new car sales outpacing the market with a decline of 26.5%, to 46,509 (2019: 63,310).
The group is understood to have increased its volumes and significantly increased profitability in 2021, with almost 300,000 vehicles leaving its forecourts throughout the year.
Its departing brands have experienced mixed registrations results.
Ford’s 23.8% car registrations decline, to 116,305, resulted in a market share of just 4.71% for the former market leader.
Toyota grew its UK new car registrations by 9.9% in 2021, meanwhile, with volumes rising from 100,895 to 91,793 and a market share from 5.63% to 6.13%.