Interview – Darren Edwards, CEO, Sytner Group
An Interview With The CEO of Britain’s Largest Automotive Retailer
DARREN EDWARDS IS CEO of the Sytner Group and has overseen the Penske-owned company’s rise to become the UK’s largest automotive retail network, buoyed most recently in 2017 by the acquisition of used car supermarkets CarShop and The Car People.
Here, he outlines why he thinks Sytner is so successful, why the car industry is a great place to work and his thoughts on some of the challenges and opportunities it will soon face.
Do you use your own career experience of starting as a bodyshop apprentice and reaching the top as an example to colleagues?
“I’ve just come from a meeting with some of our new managers this morning, and we went around the room introducing ourselves, telling our stories. There was a mix of long-time colleagues and new recruits, but what was clear was that this is an industry that rewards talent – and a mix of it too, as we don’t look for a set type of person.
“We love to recruit from within, but we absolutely want new people, too. When we recruit salespeople now, we shortlist based on their CV but then hold a live assessment where the recruiting managers don’t have access to a person’s history, they just see what they present on the day. This change has had a significant impact on the quality of people we employ.”
Is it getting harder to attract people into the industry?
“It is hard, and all the headlines about how much it’s going to change don’t help, because people don’t want to work in a field where their job might not exist in future. But that’s missing the point, because this is a thriving industry that presents a huge number of opportunities to learn new skills that are transferable.
“There are great rewards, too. We run all sorts of competitions and events for our best employees, and the rewards are really fulfilling, from meeting top sportsmen to heading to Detroit for the IndyCar race.
“It’s an inclusive business, I believe. We have a huge amount of work to do on diversity, and we recognise that. It’s at the centre of our values, and we can already see our activities are making a positive difference to the make-up of our company.”
What’s it like working for a legend of the industry like [Sytner owner] Roger Penske?
“I speak to Roger weekly, sometimes two or three times a week. He’s here every December for our budgeting, when we go through what we think we can achieve the next year, and for our managers’ conference each summer, but fundamentally he trusts us to run the business. He’s a great supporter of the business and has a love for the UK that stretches back to his time in Formula 1 in the 1970s, his relationship with McLaren and the fact he set up a base in Poole to make racing cars.”
Did Penske set you the goal of being the UK’s biggest automotive retailer?
“No. We just wanted to be the best, by which I mean famous for delighting our colleagues, customers, manufacturers and shareholders. By focusing on each area of that aim, we grew. The right values meant we attracted really good people, so we delivered great customer satisfaction and repeat referral business, so we sold lots of cars, so we attracted investment.
“Back in the 1970s, Frank Sytner had one dealership. By the time we floated in 1997, we had 30 dealerships and were turning over just under £1bn per year. By the time Roger got involved, we had 40 dealerships and turned over just over £1bn. Now we have 144 franchises and turn over just about £6bn.
‘In the 1970s, we had one dealership. Now we’re turning over about £6bn’
“We’ve acquired business along the way because we’ve been invited to; people know our reputation and want to work with us. But we’re quite choosy now and have looked in other directions, like acquiring CarShop and The Car People.
“That was a decision based on a prediction that the new car market had peaked. We saw the used car market had grown to 8.5 million transactions per year, and we wanted to take a bigger part of it. There are synergies – not least moving part-exchange stock – and interesting learnings; with no manufacturer requirements, we have some freedoms that we can’t have on the new car side.”
Are you in favour of incentives to push consumers into buying electric vehicles (EVs)?
“In 2020, we’re going to have the perfect storm of low BIK tax rates and a glut of presumably excellent new vehicles, such as the Mercedes EQ range, BMW i range and Volkswagen ID range. But the risk is sales are driven by an artificial stimulus – a tax incentive, rather than demand.
“I’m not against the stimulation of the market at all, but it’s true that political messaging has a huge impact on our industry, and what we don’t want is an artificial boom followed by the withdrawal of incentives creating another major change. We’re not alone as an industry in that, but as we’ve seen, the impact can be significant and we bear the brunt. We need to be fleet of foot and proactive.”
Are there long-term risks as the popularity of EVs grows?
“A drop in aftersales is inevitable. Yes, there is a long tail to it; there are something like 40 million cars on our roads today, and they will need looking after. But electric cars have far fewer parts that need maintenance or repairs, and most predictions suggest the majority of cars will be electric by the 2030s, so that’s an issue we’ll have to address.
“Although that’s a problem for the future, it’s pertinent for today; over the past 18 months, we’ve invested in technicians and grown our aftersales service profit by strong double-digit figures. It’s a concern, although I imagine it’s an even greater one for fuel retailers.”
Presumably, your short-term goals conflict with the long-term outlook, too?
“Maybe ‘conflict’ isn’t the right word, but we are looking to grow our aftersales income. We have a metric that measures it against the cost of running a dealership, with the goal of it hitting 100%, so that any car sale represent profit. That was the norm a few years ago, but it has slipped, and we want to get back to that position by increasing our capacity.
“For instance, a ramp is there for 24 hours. We open for eight hours a day on average, and it might be in use for five of those. My view is that we should open for 18 hours and have the ramp in use for eight or nine, by having shift work and different working patterns.”
The knock-on effect is that the customer wins too, then?
“If a customer wants work done overnight, it’s now possible. We can do used car checks, recalls and prep cars for sale. So yes.
“Already we have something called Pole Position in some of our centres, where customers come in at 7am, eat breakfast and have their car serviced while they wait. We put two people on that car to get the job done faster. As a result, the customer won’t need a courtesy car, so it’s cheaper for us and more convenient for them.
“There are still lots of ways this industry can innovate, and that’s what makes it so exciting.”
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