Motor Trader caught up with Stoneacre Managing Director Shaun Foweather at the group’s headquarters in Thorne, Doncaster.
It is early June and Motor Trader is trying to set up a time to meet with Stoneacre MD Shaun Foweather. We settle on the 26th as it becomes clear he is unavailable on the 27th due to Stoneacre signing a deal that day to buy a dealer group. It could have been a small local acquisition, but it turned out to be the Trenton Motor Group.
Trenton is ranked 156 in the MT Top 200 Dealer Groups with annual turnover of £69.5m in the year to December 2022. The deal added Nissan, Dodge, RAM, KGM and Citroen aftersales in Grimsby and Nissan in Hull together with a New & used Van Centre and a standalone used car site.
Stoneacre goes about its business in an understated but highly effective way. It began its trading journey in 1994 with chairman and founder, Richard Teatum. This year, it is gearing up to celebrate its 30th birthday on 21 December.
Teatum, along with his partner Mike Keen, established TK Motors in their 20s. After selling this business to Evans Halshaw, Richard initially retired. However, he returned to the motor trade and was joined by Shaun Foweather and they set out to establish a Motor Group.
The group’s first acquisition was a former Peugeot dealership in Scunthorpe, named Stoneacre. Teatum retained the name to avoid the expense of changing the signage and this is how Stoneacre Motor Group was established.
Under Foweather’s leadership, Stoneacre expanded its operations with Suzuki, Abarth, Fiat, Alfa Romeo, Citroen. Stoneacre gained strength and is now the largest UK dealer group for Mazda, MG, Suzuki, and Volvo. Stoneacre boasts 47 business acquisitions, 65 branches, partnerships with 33 franchises serving 120 franchise locations, and a team of over 3,000 employees. The company sells around 60,000 vehicles each year.
Used car performance
Stoneacre’s roots are in the used car business, but Foweather acknowledges this area has been a “rollercoaster” with a meteoric rise in values during the pandemic due to an acute shortage caused by a shrinking new car market.
Falling new car sales in successive years due to COVID-19 combined with the shortage of microchips led to high demand for nearly used cars causing values to rise and dragging the rest of the market with it.
When supply improved and the new car market ‘normalised’ values in the used car market fell. “Used cars are very important to us and we’ve had a bit of a rollercoaster with used cars in the last couple of years, mainly because Covid hit and that pushed used car prices so high – way above what their true values were. This was great for the trade and everybody did well and then last year used prices crashed and came back to a more normal situation but that was just the renormalisation of used car values.”
Foweather said the current used car market be impacted by the ZEV Mandate on new cars with carmakers having to meet a 22% BEV target. “It’s difficult for the manufacturers at the minute. They’ve got these targets that they’ve got to achieve with electric cars but from what we see there is not the appetite there from customers to want these cars. We’ve been force fed from manufacturers with electric cars which is forcing us to force electric cars onto customers that don’t really want them,” he said.
For Foweather the government drive to go electric by 2035 does not make sense. The deadline is too ambitious, the infrastructure is not ready, and the market is being pushed too hard.
“They (the Government) could reduce the targets and be more realistic and accept that the motor trade is a big business within this country. I do not understand is why it is so urgent to get these electric cars by 2035.
“It does not make sense because when they are talking about zero emissions, they are not considering the production of the batteries, the lifetime of the batteries. I do not understand why they are pushing something that’s not actually true for zero emissions.
“It doesn’t look like it’s been fully planned out, it’s not just the infrastructure of putting the chargers in place. They are not considering the electricity [supply] side of it, that they are going to need the power to charge these cars unless the technology is going to change drastically in the next 5-10 years.”
Foweather suggests that hybrids are the way forward. In Stoneacre’s experience of selling hybrids and pure electric vehicles, hybrid sales are much better because people can avoid range anxiety.
“Maybe when we get the new generation of batteries and EVs where we are seeing 350 – 400 miles true range that will alleviate the range anxiety. Manufacturers are being forced to develop this technology which consumers are not quite ready for yet. They should have given them more time and then it would have been a smoother transition. I feel for the manufacturers because they are right in the middle of it, and they are dropping it back to us, but we have got choices because we can sell used cars.”
Foweather reiterates the importance of hybrids as the market evolves over the next decade. “If the government could help put more emphasis on hybrid that would be the way forward for the industry I think, andmanufacturers would buy into that and then maybe make the zero emissions 2050 when we have got the technology and the resources.”
For Foweather, training is pivotal for dealer staff to sell cars to customers in the rst place, explain the ups and downs of running electric cars. But he believes there is a training gap. As recently as March this year, Startline research found that just 43% of used car dealers had not undertaken formal training to improve staff knowledge about EVs and increase sales as a result.
Foweather says: “Theres a lot of knowledge that our people need to understand in getting that across to customers. EV ownership is not just about the car, it’s a whole package of how you charge, where you charge, when you charge. That knowledge is critical for our people. That’s the thing that customers need to know to give them more confidence into owning an electric vehicle.”
Agency and adaptability
The agency model has been one of the big issues impacting dealers over the past few years. Some car brands like Mercedes-Benz had pushed hard and introduced agency for their networks. Others, like Suzuki say they have no plans for Agency while brands like Ford and JLR have revised their plans in the face of market challenges.
Foweather said: “We’re under a non-genuine agency model with Volvo which we have adapted to very well and to a degree that works but to another degree it doesn’t. I think some of the manufacturers are holding back. It’s another thing we must adapt to. There’s one great thing about the British motor trade and that is we adapt very well to anything that’s thrown at us: we’ve always done that.
“It’s a complicated business we’ve always had to be adapt to things that manufacturers, Government, competitors throw at us, like Cazoo, disruptors that think they can disrupt our business.”
Foweather has strong views on Cazoo, the online only disruptor which launched on the stock exchange in 2021, valued at US$7bn (£5bn). At the time It expected to achieve revenues approaching US$1bn. Its case to investors was the UK and European markets were ripe for expansion, with no dealer group having a market share above 5%. It expanded fast in the UK and then Europe and burnt through millions of pounds before retrenching and selling off assets to keep it moving.
The story ended with the administrators pulling the plug and selling off assets. Cazoo filed for administrators and talks with parties such as G3 Vehicle Auctions and MOTORS resulted in sales, with G3 acquiring the Cazoo wholesale business and MOTORS acquiring the Cazoo brand.
“I think we should thank them, when Covid hit and Cazoo came on board they had the perfect opportunity. If somebody said to Cazoo I’ll tell you what you do, when you launch your business, we will stop every dealership from opening and they will only be able to sell online same as you… but you have got the perfect model. That was the perfect storm for them, and they still couldn’t do it.
“What we did was we adapted, and we became great sellers online. Much, much better than Cazoo could have ever done because they didn’t have the infrastructure and the people behind them because they weren’t employing people from within the motor industry. I suppose they did us a favour. It woke us up a little bit to online selling,” he said.
Lessons learnt
Stoneacre struck the right note during the pandemic when its directors gave up their salaries to show solidarity with hundreds of their staff who were on furlough. The business underwent a transformation, shifting most of its marketing from offline to online.
“The pandemic was huge for us. It was a curveball. I think we always thought we were indestructible because we were always so well structured within our business, cash wise, people wise, we thought nothing could disrupt that and then the pandemic came along. It was something you could never have expected.”
Stoneacre’s use of digital tools to capitalise on leads and cut response times proved to be effective. The Group kept in touch with customers despite the lockdown, deploying technology such as CitNOW, Rapid Response, video and Teams.
“I think it proved how adaptable the motor trade is in the UK. We handled it amazingly well. Without the Government we would have all been stuck and out of business, but they came to the party, and I struggle to understand how people give them such a hard time,” continued Foweather.
“They got tucked up by a few people who were taking loans and not paying them back, but the government saved our business by doing what they did with furlough. Because it’s such a cash intensive business we needed that help. I think we learned how to work with pricing, customers, and we got through it, we came out the other side a better business.”
The future of Stoneacre
Stoneacre has invested time and resources in developing the Stoneacre Academy, which is headed up by Claire Perkins, group academy manager. Individuals can gain qualifications equivalent to GCSEs & A-Levels. The academy nurtures around 100 apprentices each year.
Foweather says: “We had a big Ofsted visit and wewere the only employee provider academy to achieve outstanding in all five categories from Ofsted and on the back of that Claire got invited to Parliament to talk about how academies and our apprenticeship should be run.”
The Stoneacre Technical Training Centre offers a level of equipment that can be found in latest workshops and vehicles. The Technical Apprenticeship programme is designed to grow the next generation of technicians into Stoneacre’s business and the automotive industry.
A Customer Service Specialist programme can lead to roles in service, sales, parts and specialised roles in Head Office and Stoneacre’s Parts Hub. The Business Administrator programme grows the next generation of Business Administrator’s and accountants.
Choosing to leave school at 16, apprentices would not have had a graduation. Therefore, upon the completion of their apprenticeship, Stoneacre arranges a graduation ceremony to reflect the importance of their training and what they had achieved.
Foweather is optimistic about the future, he says: “I don’t see challenges. I see opportunities because with every challenge opens an opportunity and we will always head towards the opportunity.
“I think the key thing that we do as good as anybody if not better is how we treat our people. They are the most important asset, so we have made sure we look after our people, we give them a great place to work, a good pay plan and opportunity to move within the business because we are constantly looking to expand.
“I don’t know what the future looks like, and it doesn’t really matter to us because I know that we will react and adapt faster and better than most out there because of our core strengths. We will take each day as it comes knowing that when we need to change, we will change. We will go where we need to go for our people so that we can all succeed.”
Foweather signs off with what could be the motto of the dealer group which is looking forward to its 30th year celebrations in December. “Nothing fazes us.”