Interview – Martyn Webb, Managing Director, LSH Auto UK

Interview - Martyn Webb

An Interview With The Managing Director of LSH Auto UK

Europe’s largest Mercedes-Benz retailer has just opened in Stockport, Greater Manchester. The 10.5-acre site houses 30 servicing bays, 70 new display cars and 100 used cars, plus an entire floor of the three-storey building is dedicated to AMG performance models. If that’s not enough, the £65 million development also holds a six-metre-tall three-pointed star on its roof.

The development is the work of Hong Kong-based retail group LSH Auto UK, which globally employs more than 24,000 people and sells more than 170,000 cars a year. It’s managed in this country by Martyn Webb, 46, who moved from Mercedes-Benz Retail when the firm sold its portfolio and has since enjoyed rapid promotion through the ranks over the past three years.

The Stockport site follows a similarly ambitious opening of a used car facility in Erdington, Birmingham, and signals LSH Auto UK’s determination to combine scale and innovative retail thinking in order to grow its market presence.

Here, Webb explains the rationale of the Stockport site.

What inspired you to build on such a large scale?

“We spent a lot of time looking at the landscape of the automotive retail industry. The biggest realisations were that it is inefficient and that everyone does the same thing, replicating the inefficiencies. This is our answer to that: one site where we can cater for an end-to-end customer journey and everything between purchases, too.”

We keep hearing that the future of the dealership is in question, though?

“Well, we could wait and see which way the industry is going, just replicating what everyone else is doing and biding our time. But we have a focus – we’re 100% Mercedes and we have the funding and energy to aim at being brilliant – so we’re going for it.

“Look at what we’re doing globally as a group and you’ll understand that this is the way we do business. This facility will pay for itself in 10 years, and we have very clear data that shows the model will support it well beyond that date.

“I’m a great believer that we need to lead change. It’s brave to spend this much, of course, but actually I’d lose more sleep if we weren’t doing anything.”

How can you be confident there are enough Mercedes customers to keep it busy?

“These days, we can put science behind our instincts. We know the demographics of the area, we know the ownership profiles of our customers and we know the sorts of cars that local people will want to buy.

“This business is about entrepreneurialism, but the science is there to make instinct far more efficient. We plan to use the efficiencies we gain through scale to put more energy into front-of-house interactions with customers.”

Can you give an example of an efficiency you hope to achieve?

“One is that we will put all the used cars we buy through the same processes on-site. Here, for instance, the plan is to be able to do 32 sets of alloy wheels a day. We can prepare, photograph and film our used stock in an efficient way. There are countless examples, but if you simply imagine moving cars around to do all that versus doing them all in the same spot, you get a very clear idea of the time and effort we can save.”

The 30-bay workshop is quite a statement as well, no?

“It’s about efficiency, both for us and the customer. They can drive in, drop off their car and then we can start work on it immediately. If they want to wait, we’ll be running six express bays, Formula 1-style, with two technicians per car. There’s a 60 minute promise, starting from 6.30am, with breakfast available if you want it and showers if you want to get ready for work.

“Having facilities on that scale brings pressure, but we’ve done the maths; we’re confident of keeping it rolling.”

‘We’ll be running six express service bays, Formula 1-style, with two technicians per car’

Beyond that, presumably you want to create a space that’s about more than just selling and servicing cars?

“It’s fundamental to us that customers can come here and feel welcome even if they aren’t buying a car. They can come and use a desk, have a coffee or watch a movie. We even have a barista and a golf simulator. “The belief is that if they experience the brand, they will consider it when they’re in the market to buy – and there’s a lot of science that supports that hypothesis. It’s quite a shift in thinking, but we have to build long-term relationships, building loyalty by offering services beyond buying a car.”

Automotive retailers aren’t famed for their customer-first approach, though.

“Many modern car dealership groups are great retailers. My view is that flexibility is the key to attracting talent, and diversity within that talent frees up your thinking to achieve more success. The evidence of that is clear, and we’re well down the line with that.

“But the absolute game-changer is to shift the target-driven mentality that is at the core of our industry. To be truly customer orientated, that’s the system we have to break, and it will have to come from Mercedes-Benz itself – a top-down change.

“If we can break that cycle, we can transform the model; whether it’s realistic remains to be seen. But targets are the curse of customer service in this industry, because they drive the wrong behaviours. They’re the foundation of the opposite of good retailing.”

What if customers don’t want to visit a dealership, but would rather buy online?

“Some don’t, and that’s why we can’t stick our heads in the sand regarding digital retailing. But digital isn’t one-dimensional. Some people may never want to set foot on our premises, and we must cater to them, while others – I suspect the majority – may want to choose the car online but collect it in person. The key is to ensure we offer an experience everyone wants to be involved in.

“Digital isn’t always a race to the bottom on price, and we need to take control of the process to ensure it isn’t. That doesn’t mean we won’t work with partners, but we need to work to make our business – and theirs – sustainable.

“Look at retailing in general: the winners are the ones who have had the agility to change. Primark has just opened its biggest ever store, but it has put a restaurant in there, a hairdressers and more. It’s bringing people into its space, and that means a visit is an experience as opposed to going in because you have to.”

Will electrification change car retailing? What about greater connectivity or autonomy?

“Change is everywhere, and where there’s change, there’s potential for the model to shift. Electric cars are of obvious immediate interest, because we’re just launching the EQC.

“So, in this showroom, we’ll have an area dedicated to the car and offer a more bespoke service, with experts on hand to help explain the truths and myths. We’ll have 30 charging points of various capabilities: 7kW, 22kW and 50kW.

“We’re ready, and we think customers are, too. That’s the point of developments like this: they’re a confident statement that we’re ready to invest in the future and take positive action to prove we’re ready for any changes that may come along.”

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