Interview – Karl Howkins, Managing Director, Citroën UK

Interview - Karl Howkins

An interview with the Managing Director of Citroën UK

Karl Howkins was made managing director of Citroën UK in June 2018, charged with growing the brand despite the prevailing market headwinds.

One year in and buoyed by the launch of the French firm’s new SUV line-up, Howkins and Citroën are making progress, in terms of sales, market share, dealer ratings and more.

Here, Howkins, 47, discusses the challenges they have faced, the solutions he’s putting in place and the difficulties that he believes are still to come.

What set you on this path?

“It certainly wasn’t school! I started washing cars in a car dealership in 1988 and worked my way up. I spent six years there and rose to become dealer principal, before moving to the manufacturer side, moving around, taking opportunities in Germany, back in the UK, in the Netherlands, Switzerland and the UK again; I’ve moved a bit.”

Did you think you’d make it to the top back when you were washing cars?

“I probably thought I would, but I suspect the people around me thought I was an arrogant, snotty-nosed, over-confident little 16-year-old – which I was. In all honesty, I didn’t know what I was going to do. I was simply pleased to have a job.”

Would you recommend it?

“It’s the best industry in the world – and the toughest. People will always talk about cars. Whatever brand you represent, they aren’t just rational purchases. There’s an emotional part to the equation that opens up infinite opportunities and complexities.

“The diversity of the industry is a testament to that, from the brands to the variety of channels that we operate in. It’s cut-throat tough, and the old adage that ‘the harder you work, the luckier you get’ is also true. The competition isn’t for the faint-hearted, but it does make certain personalities tick.”

What’s the most overlooked aspect of the job?

“The difference getting out of the office makes. It’s hard, but you can’t learn unless you’re talking to your team, your retailers and your customers. At least two nights a week, I’m out.

“It’s amazing how many problems go away when you have the sort of relationship with someone where you can pick up the phone and just talk straightforwardly to them.”

Surely you can’t be friends with your retailers and do successful business, though?

“You can, but it’s a very fine line. Of course, I want my retailers to be motivated. But I’m not going to make their lives easy by harming my business just to make them happy.

“In my experience, retailers just want honesty. Be up front and fair and they will engage. Yes, sometimes you’ll have to go toe-to-toe and exchange views, but if you do it with honesty on both sides, it works. You push, they push, sometimes you move, sometimes they move; the main thing is that you listen to one another and work toward solutions rather than issues.”

Having in-demand cars, such as the C5 Aircross, must help…

“There are no easy rides. If you have a hot car, you want to sell more – more to customers, more than rivals and so on. You have to search for ways to be relevant to the customers, and that’s a never-ending challenge.

“There are always strong cars in the market and less strong ones, even if that’s just because your model line-up is older. And on top of that, you have the brand considerations. You need people to have an affection for the brand, not just a model.

“The truth is that the day you think you’re on top of it is the day before someone or something sends a Sidewinder missile in to change all that you thought you knew.”

‘We’re still having to be more aggressive than I’d like. I hate pre-registration’

How was it when you arrived?

“We’d lost the dressing room a little bit, although I say that with no disrespect to my predecessor; everybody does things differently.

“My view is that there are two groups you need to engage 100% before you start. Your internal group need to know what you’re about, what your vision is and how you’ll get there. They need to believe in it, too, and move with you; go too fast or overcomplicate things and you’ll lose them as quickly as if your plan is rubbish.

“Also, you need the retailers to be part of your goals, because they sure as hell will be integral to you achieving them. And, as I say, that means listening to them, not just dictating. You have to understand what’s on their mind, what they’re doing and be collegiate. Offer a return on investment and most retailers will come with you.”

Are you making progress?

“Yes. It’s not as good a story as I’d like, but you have to measure it all against the constraints of the industry and the moment. These are tough times.

“I think my team is clear on where we want to get to, and the retailers are starting to feel some of the upsides. Our share of voice is up in the media. We are in a broader range of media. Some of our advertising is first-class. It’s cooking.

“We’re now asking a lot of the retailers. I always preach that ‘nothing starts until we sell a car’. That’s down to them. We can all have the conversation, but are they converting leads?

“In terms of where we are, we’re still having to be more aggressive than I’d like to sell cars. I hate pre-registration, but the industry is tough at the moment. We’re at step three or four of 10, if 10 is where we want to be.”

Is the UK market overblown after years of great exchange rates making it profitable to sell cars here, even cheaply?

“I can tell you my philosophy, and that is that I won’t have one decent month to the detriment of the next six. It’s madness, and it has the knock-on effect of devaluing the brand. We’ve held back from pre-registration this year to the detriment of volume but probably over-attacked on rental. But we can rebalance the rental side, helped by the fact that fleet business is up, as is the commercial vehicle side. Retail is down, of course, but the key is to be agile.”

Is Citroën chasing volume or profitability, though?

“You want both, of course, but another lesson of recent years is that profit per car sale won’t keep a business turning. Retailers need to get smarter, because the profit in some cars is tiny now. That extends to putting emphasis on things you might never have considered before; Citroën merchandising is now worth €5 million per year. That doesn’t divide very far between all the dealers, but it makes a difference. The UK is the fastest-growing market for accessories, up 700% or so. That tells me we have massive bandwidth as a brand; the affection for Citroën is huge.”

Was that true a decade ago?

“No. I’m not sure you would have been so proud of owning a Citroën that you’d buy a T-shirt to shout about it! Our range today is transformed, both in terms of quality and in terms of the image it presents. People know what Citroën is and what it stands for now. We’ve reinvented ourselves.”

What’s the key to that?

“Agility. We’re spending less but achieving more. We’re lean compared with rivals, not just in the UK but globally. Not just in terms of numbers, either, but also in terms of our hierarchy.

“[PSA Group chief] Carlos Tavares and [Citroën CEO] Linda Jackson are straightforward and direct. As a result, there’s a culture in which we can go to them, make a suggestion and be heard. They push us hard but also ask questions and listen. Great bosses don’t ask for the good news; they ask ‘What aren’t we doing well?’ and ‘What can we change?’

“Change is the one certainty we have. This industry will suffer a lot more before it gets better, and not just because of our own need to change. Look at Brexit as an example of an outside force we need to face, or how politicians sometimes change their minds seemingly on a whim. Look at diesel or electric cars as challenges we must embrace. Then there are online sales, smaller retail sites versus bigger ones and so on. It’s tough. But, as I say, that’s why I like it.”

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