Life after Pendragon

It has been a little over a year since I stepped down as Chief Executive Officer of Pendragon PLC. Combined with the unprecedented times we find ourselves in, the year has given me the opportunity to reflect on the amazing time that I had with the organisation. Below I pick out a few of the key moments that shaped Pendragon PLC, that shaped me – and maybe helped shape the industry.

The company was floated in September 1989 and our aim was to grow through acquisition and become the number one dealer group on the London Stock Exchange. In the following years we bought and sold over 700 dealers in the UK, Germany and USA.

In 2006 we were the number one group by both turnover and profitability. It was clear to see that the industry in the UK (one of the most mature in the world) was changing fast and that the traditional dealer model was being left behind. In search of answers and inspiration, I went on a tour of the USA.

While the answers were not in the USA (as the dealer groups operated in much the same way as the UK), the trip did give me enough fresh ideas to shape a new direction for the company that would help us survive and grow in a market that was no longer reliant on manufacturer success, new car sales, servicing and localised market share.

The UK market was consolidating fast, something we had led, and consumers were also showing clear signs of different behaviour. This behaviour was mainly influenced by the impact of the internet and a number of innovative retailers in different sectors. This meant in the future there would be fewer traditional car dealership locations, with those remaining performing a different role: this is something that is even more clear in today’s market – especially with a number of manufacturers’ recent actions. This meant we had to think differently and act fast.

Along with several members of the internal team, we shaped a future in which we would increase our market share in the lucrative and fragmented used car market. In 2007, we launched a used car programme (UCM) with the impact quickly being felt across the market – and still making an impact today. Many in the industry saw it simply as a race to the bottom on price and missed the profound disciplines around stock management, vehicle preparation and sales process. Those dealerships that implemented these practices with commitment and trust saw great success.

In addition to UCM we were still growing our new car, aftersales, parts, software and leasing businesses. In the following years, we learned a lot about the negatives of fast growth in used cars. We were feeling the pains of a fixed price model, internal stock liquidity, logistics and preparation quality. But more importantly, we discovered how to overcome them in sometimes radically different ways. Between 2011 and 2015 bottom line used car profitability in our Evans Halshaw division increased 90% to ￡42.5m.

Our focus on the used car market attracted investors that were previously uninterested in automotive retail’s old structures but excited about the vision of growing used car market share and the huge opportunity that it offers. These shareholders were very different from the fragmented ownership we had seen in the past and were far more vocal. They wanted us to become a genuine retailer and to achieve our vision for used cars quicker than we were delivering.

In 2015, Car Store was born and on top of that, a clear strategy for the growth of the existing business’s used car performance. It was clear to me that we were a car dealer with a website not an online marketplace with a fulfilment network. We set about the changes needed to make the latter a reality and built a fully functioning online marketplace with buying, preparation and a retail network to support the customer demand.

By March 2019, the Car Store team had really accelerated the growth and profitability in a way we had not seen since the early days of UCM; the team had bonded, and the numbers and data were all going in a positive direction.

So, what is next for me? I have been subject to post-employment restrictions that limited my activity in the UK until now. But I have been busy, understanding the evolution of new and used car distribution and my future part in it. This has involved no fewer than 25 trips to European and USA markets which has reaffirmed what I see as the significant opportunity for used car profit growth.

I am excited to say that I will be launching the next chapter very soon – watch this space – but for now, I wish your family and loved ones well at this time.