Though a region with lower than average car ownership, the North East excels at selling and servicing cars. An earlier generation of paragons in this included Sir Peter Vardy and Sir Tom Cowie. Today it’s Robert Forrester at Vertu and also the Squires family firm which, of course, has excelled throughout – ever since their business, now Benfield, first opened a tiny garage at Addison Road in Newcastle’s then “working class” Byker district, back in 1957. Sir Tom’s T Cowie, once sold, evolved into Arriva, today’s German owned pan-European public transport giant, while Sir Peter’s Vardy has been absorbed by Pendragon which claims to be market leader.
Two of Sir Peter’s former lieutenants, however, Forrester and Nigel McMinn, carry the banners of leadership in the region today. The Journal newspaper’s new listing of the North East Top 200 companies shows Vertu, the country’s ninth biggest operation, with Forrester chief executive already the region’s sixth biggest business (and in business only since 2006), a spot Vardy often used to occupy.
Addison Motors (alias Benfield) at 17th is distinguished as the region’s foremost private company, with McMinn its managing director. Is a new Benfield marketing strategy, focused on customer service experience, a bid to steal a march? Not at all, says McMinn.
“Robert Forrester is a personal friend. Apart from us both having worked at Vardy he has just moved into a new home about 50 yards away from me on the same Gosforth street.” No question of any neighbourly dispute of leylandi proportions, then? “One of the great things about the motor industry,” McMinn explains patiently, “is that dealers have great camaraderie. We don’t see each other as arch rivals or big competitors. We approach the job very differently but have respect for each other.
“Success can be achieved in different ways. Robert has very much a national strategy, which obviously is very different to us. But I am sure it can be as effective. So they tend to have a different culture, market themselves differently, as you would expect of a national group. We get on very well.
“While they are based in Gateshead, they onlyhave a handful of dealerships in the North East. They are a big national player but not a big North East player. If they had the same amount of dealerships as we have in the North East we would clash as head-on competitors more. We don’t do that very often.” Benfield has long contained its empire to within two-and-a-half hours’ drive of Newcastle. So while AIM-listed Vertu reaches from Dunfermline to Exeter, privately owned Benfield focuses its 30 dealerships, 11 brands and several backshop businesses between Wakefield and Dumfries. Its new TV marketing approach is the support, not the vanguard, in an overhauled customer service. “This brand marketing,” McMinn explains, “comes about a year after we started a big cultural programme internally.
“So already in our Be Benfield culture change every staff member has been on a course to consider customer service, and on one of customer standards training. We have developed probably the fullest set of customer service standards any motor retailers have ever developed themselves. We see a three- to five-year journey to delivery of the sort of world-class service we would like to deliver.” This involves a wider intake of apprentices. Benfield has always had service and parts apprentices, and now has a female apprentice in car body repair and painting. Sarah Shaw, 19, from Newbiggin Hall, Newcastle, is at the same time working up her NVQs in Gateshead College. Benfield is determined to counter an official statistic of women being 10 times less likely than men to work in skilled trades such as the motor industry and mechanical engineering.
However, Benfield has also taken on sales apprentices; 18 males and females. “There isn’t a sales apprenticeship course,” McMinn says. “So we developed our own four-year programme. Those apprentices are working in our dealerships and going through the basic customer service training the North East Chamber of Commerce gives. We supplement that with our own sales development training.” Adaptable people unversed in car selling are being recruited.
“You must have an aspiration in all this culture change,” says McMinn. “It would be a misinterpretation that we claim to deliver world-class service all the time. We say we aspire to that.” The firm’s television spots accordingly are a little like the manufacturers’ long-projected fantasy concepts – the sleek, shiny car snaking through the Alps.
But McMinn, 42, explains: “Part of that is to remind motorists of emotions they have felt if they have ever driven through the Alps – or even the Lake District as we set it in. “More, however, we are reminding viewers of car journeys they took earlier that were significant to them – bringing a new baby home from hospital, dropping a child at university all packed up with their belongings.
“We are saying: ‘We want to prove we know what it’s like to be a customer because we are customers too. The car is so important to you on those journeys you can’t afford a breakdown en route. And for us it’s important for you to feel that if something like that should happen you will feel you have a number you can ring with someone there who is going to try to solve your problem.’” What about performance of the goods? Many motor-obsessives may not want screen romanticism but knowledge about what a car will do. McMinn’s reply is unhesitating. “The guy only interested in performance still wants to know that if something goes wrong with the car he buys the dealer will be behind him to look after that. “Through the internet, all customers can get detailed information at their fingertips, 24 hours a day.
We provide that information on our own website. Thousands of other websites do that job too. A TV ad gives 30 seconds. There is no way in that time you can push all the information out.
“The internet also makes quality of service transparent. Just as hotel service is ranked, you will see on the first page of every BMW dealer’s site, for example, a rating of up to five stars for sales and service. We realised some years ago our service was going to be publicised all over the internet. If you don’t take that seriously you will be caught out.” Benfield, which employs 1,200 people, has done “excellently” through the Scrappage scheme.
McMinn says: “We represent mostly volume brands and they benefited mainly when people brought in old cars to replace.” Now Scrappage has ended, how do you persuade motorists not to hang on to their vehicles? McMinn replies: “For about a year we have not had Scrappage, but we find as the economy recovers that retail demand is picking up the slack. It was good temporary help when most needed. Underlying retail demand is now stronger. Our fleet volumes also have been growing fast for two years. This suggests firms are replacing company cars and employing people again. How do we persuade a customer it is worth changing their car? “When fuel prices hit 148p a litre and they are already seeing rising food prices, rising electricity prices and other higher costs, a natural reaction is to put off spending on a new car. It tends to be seen as a big capital purchase and unnecessary.
“‘Maybe not just now,’ people think. But we prove to them that what they are running is a car low on miles per gallon, with expensive road tax, probably about to cost money to get it through its MoT. And it is going to be out of warranty.
“‘Now is exactly the time to be changing,’ we say. You could be paying the same monthly finance payments but with much reduced road tax, much reduced fuel bills and obviously covered under warranty and cheaper servicing. It’s cheaper to change.” Benfield’s optimism is also driven by Nissan’s decision to have one of its first partners to sell the electric, zero emission Leaf. “Electric motoring will infiltrate all manufacturers in time,” says McMinn. “We are ambassadors for the Leaf so I suppose I speak from a slightly biased viewpoint.” He, chief executive Mark Squires, and other members of management already run them as everyday vehicles.
He praises its roominess, its fittings and adds: “It drives really well and is as quick as a two-and-a-half litre V6 off the mark. It also has zero road tax and zero fuel duty because there is no fuel to buy. For a company car user it is totally free.” Doubters question price vis a vis a conventional vehicle. McMinn says: “Depending on mileage, it can be very affordable – about £400 a month. If you are saving £200 or £300 a month on fuel and you have zero road tax it’s pretty compelling, isn’t it? On 18,000 miles a year you find the car paying for itself. Fuel saving would equate to a monthly lease payment.” He agrees the 100-mile maximum distance may dissuade some for whom frequent runs of 100 miles-plus are necessary.
“But many people will buy the car as part of their job or as a second vehicle,” he says. Also he is confident that technology will trumph. “Range extenders are already being installed in some lorries. For now you need a big enough vehicle to take the cassette as the technology has not been adopted for a car yet. But the manufacturers are only just warming up on this.” McMinn cites Tesla Motors, the niche manufacturer that Silicon Valley engineers set up in 2003 to prove a future for electric motoring. Tesla has already proved a 300-mile range possible. He believes that range will be widespread in the next three to five years.
“Look how mobile phones and computers have developed and become many times more powerful,” McMinn suggests. “Apply that sort of thinking to something as simple as a battery and you know things will leap forward.” Despite the present limitation, demand already exceeds supply. Benfield had taken 50 orders even before a Leaf floated onto North East streets. It got a delivery of about three dozen Japanese versions and soon found homes for them.
“There was also a cancelled order somewhere in the country for 17 white ones,” says McMinn. “We took those and sold them too. I think we are now quoting early 2012 to get one.” They will be built in Sunderland from 2013, but until then 2,000 a year are coming in from Japan this year and next. McMinn says: “Companies want to be seen to be green and doing their bit for the environment, so some companies are already using them as pool cars.” With this argosy in sight, yet some other firms’ showrooms distressed still, is Benfield hungry for acquisition? McMinn replies: “Our growth plans are based around the right opportunity with the right franchise in the right geography. We consider ourselves regional dealers. Our knowledge of the market is around the North East, Yorkshire, Cumbria and the South of Scotland. Our view is that we should stick to what we know.
“There will be lots of opportunities with prestige franchises where we would like to be. We get offered quite a lot and we turn down a lot because they don’t fit our criteria.” While Tyneside and Northumberland might be considered satisfactorily covered, Benfield sees opportunity in Yorkshire maybe, given its size, on Wearside where it has no presence, and on Teesside where it has three dealerships. It might even return to Edinburgh, which it left earlier to gain size in the North East under a reorganisation of dealerships.
“Edinburgh is a market we all know and would gladly go back to,” McMinn says with feeling. He was a regional director for East Scotland there. Edinburgh would fulfil the two-and-a-half hour criterion. But could you still drive there non-stop in a Leaf? ......