Interview – Darren Ardron, Managing Director, Perrys Motor Sales

Many reasons to be positive in challenging conditions

Darren Ardron is the managing director of Perrys Motor Sales, his career notable for having been forged over a period of 32 years with the company, working his way up through the ranks after starting from school as a trainee technical apprentice.

Today, the firm nestles in the top 30 dealer groups with a turnover approaching £600 million per year.

Here, Ardron outlines some of the challenges the industry faces this year – and in the long term – and why he remains optimistic for the future.

How bad was 2019 for new car sales?

“The end of the year was hard. Quarter one was good, quarter two more challenging and then… we had a lot of cars in stock, and the loss in confidence stalled the market. We dealt with it well – at a cost of margin – but that set us up for a decent fourth quarter.

“But it is tough out there. You just have to stay positive and take the opportunities you get; even in a market that’s 10% down, there’s still 90% of it to play for, and probably enhanced used car opportunities within that.

“The issue with used cars in 2020 could actually be supply. The new car market is down, not helped by a succession of price rises and many manufacturers pulling back on rental. That will starve supply. We have to make the most of what we get.”

‘There are no hiding places for salesmen now; they need razor-sharp product knowledge’

Some of the mainstream brands you represent are having a particularly hard time, aren’t they?

“There are no difficult brands; get the right people around you and you can sell cars. Sure, there are ups and downs, but if you employ people who understand a brand, and the brand itself is realistic, then there’s always good business to be done. I’ve always been fortunate in having great people around me.”

You represent Vauxhall. That, surely, has been a hard sell in recent years…

“It’s just about managing expectations. Sales are down, but the company is in transition. We have a decent view of what’s coming and it’s impossible not to be excited by it. Look where Peugeot was five years ago compared with where it is now; good product can change things quickly.

“We have 13 Vauxhall businesses and 23 PSA Group businesses – so we’re close to them, and we’ve seen what PSA can achieve through other brands. Until then, we need to manage expectations, but the good news stories aren’t far away.”

Where do you find great people, then?

“Not so long ago, we scouted the industry, but we are slowly opening our minds now to looking at recruiting from other industries. We want a mixture of die-hard industry experts and people who bring new ideas.

“We’re making some progress on that, but it’s difficult. People from outside the industry find it a hard business to get their heads around. But if they can break into the mindset, they never want to let it go. It’s very different from almost every other business – but all the more fascinating for it.”

Do you think traditional sales skills will always have a value?

“A good salesman will always be a good salesman, but the need to bring everything you know is more crucial than ever. There are no hiding places now; a salesman needs razor-sharp product knowledge, from specs to pricing. They need to accept that the consumer probably knows as much about the car and what to pay for it as them.

“What a customer now expects on top of that is someone who can take them through the process and deliver what they want. No hoops, no hindrance; just make this process one I can feel in control of.”

What’s the biggest challenge facing salesmen?

“Because we’ve got a great training department, I’ll assume everything I’ve just described is happening. If that’s the case, then I think the move to electrification is our immediate concern.

“Everything in terms of product knowledge – and knowing if a car will suit a buyer – is now on another level, and so are the expectations around the facilities retailers need to supply. Putting 50 charging points in – one for every dealer – is neither cheap nor simple. It’s a big investment and it requires a long-term approach to the outlay.”

When you say ‘electrification’, does that include plug-in hybrids?

“If I’m honest, the uptake of plug-in hybrids is harder to predict. As a technology, it’s a halfway house, so I don’t think demand will be as high as it will for full electric, assuming car availability is the same. Buyers don’t always find it a simple proposition to buy something that’s trying to do a lot of different things – even when it actually offers the best solution for their needs.”

‘I don’t think demand for plug-in hybrids will be as high as it will for fully electric vehicles’

What sort of time scale are we talking about?

“Actually, I think electrification will accelerate faster than most people think. The rules and regulations are coming thick and fast and I think a lot of people considering the switch will swiftly find themselves considering it as a no-brainer – especially when the manufacturers get focused on ensuring they sell the volumes they need to in order to avoid fines [for not hitting EU average emissions targets].”

It adds more complexity to your business, though, doesn’t it?

“Yes, it’s true: a lot of brands are making it a condition of our bonus terms that we sell a set number of electrified vehicles. But that’s the partnership we’re in: they need to sell these cars and we’re the ones who can do it.

“My only caution would be to avoid complication. Selling is at its most efficient when it’s simple, but there is a tendency in this industry to try to overcomplicate things, especially on the new car side. The used car side is much simpler, and look how strong that is.”

Car manufacturers are trying to go around you with online sales, though, aren’t they?

“No, I don’t think so. They know they need a blend of clicks and bricks. More and more people are undoubtedly researching online, but I still believe the vast majority will want to visit somewhere and talk to experts prior to buying a car.

“Maybe that will change in time, as digital natives grow up, but I still think the retailer has a fundamental role in the purchase journey. And before we have to worry about that, we have a few challenging years ahead of us to negotiate.”

How so?

“This year is a big one. There is so much being thrown at the industry, from things it can’t control – including Brexit – through to things it has to control, such as CO2 targets. The complexity is immense – but you have to be upbeat and say that if they are negotiated well, and confidence returns, we could be in for a positive time.

“Like most big dealer groups, we have pretty sophisticated retention policies. That should make business simpler than it has been in the past. Customers are confused about diesel, electric and so on; we can take an opportunity there. And we’re more efficient than ever, so we should be more profitable. There are many reasons to be positive.”

 

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