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While many dealers describe themselves as family businesses, Milton Keynes-based Delgarth Motor Group has more claim than most.
Dave Turney set up the business in the new town in 1981, initially selling Reliant and Lada. A Hyundai franchise was secured in 1986, followed a decade later by Kia, by which time Dave’s son Steve was working his way up through the business, taking over as managing director in 2010.
Under Steve’s leadership the growth has accelerated. Delgarth now has five sites around Milton Keynes, including a new dual franchise Kia and Hyundai outlet which opened in Bletchley in 2014 and a Mitsubishi franchise added last year.
Your father founded the business in 1981. Is he still involved?
Yes. Dad is still chairman and he comes in three mornings a week for a couple of hours a time, checking where we are and whether there are any problems. He’s great for running ideas past and drawing on his experience. With the family business, of course, comes family values. They were established very early on with Reliant and Lada.
How have you maintained these values as the business has grown?\
We achieve it by keeping the staff that have grown up with us. We have staff that have been with us for over 20 years. They know the way we work. Our values are simple, they are about looking after the customer and treating them the way we’d expect to be treated. If there is an issue within any department we deal with it. If we need an extra loan car because a customer has a problem we find one. The customer comes first.
We’ve also benefited from our operations manager Alan Hunter rejoining us from Marshall Motor Group. He brought with him larger company experience and procedures, such as budgeting and weekly forecast meetings, that before I tended to keep in my head. The staff better understand where we are and as a result I don’t need to be tied to one site and that helps maintain the traditional values of our business.
What was the rationale behind opening another outlet with the same franchises in Milton Keynes?
Opening the new site was initially a challenge, we feared we might dilute the business of our existing outlets, but our manufacturer data showed our dealers in the north of Milton Keynes were not getting customers from the south. It had nothing to do with our marketing, simply that there seems to be an invisible barrier in Milton Keynes. Customers from the south don’t go north and vice versa. We expected to lose a little but with both Kia and Hyundai chasing 100,000 units a year we needed to be ready for future capacity issues.
Both brands are very ambitious and driven and we now have the capacity to keep pace with their growth. With these two brands in particular it’s about investing in our business, our staff, buying extra land to grow into, being fully on board with what they want to do.
How do you make your service department work efficiently when it comes to customer care?
Service is half the business, and thankfully in recent years manufacturers have picked up on that, particularly in terms of service plans. They are a vital marketing tool. With a service plan the work is done for you as the customer comes back and sees the new model that wasn’t there a year ago.
We make a big effort to sell new cars through the service department. For a customer with a service bill of say £400 and on a monthly payment, buying a new car will only cost them say £10 a month more. And if they do buy we waive the service bill, as we will have to prep their car for the used forecourt anyway. That becomes a sales cost. It’s your best opportunity: they know you, the business and the service department. And again there’s that trust through staff retention.
How do you maintain your high levels of staff retention?
We have a loyalty bonus scheme for staff. We take
a percentage of company profits at each site and pay a bonus in four grades dependent on the role each member has in the company. Day to day any staff member knows they can talk to me about anything. I have an office at the Mitsubishi centre but I visit each outlet every week and sit in the general manager’s office on their day off.
How are you faring in recruiting new technical and sales staff?
It is difficult to recruit technicians. The more premium brands tend to price people out of the market and they are growing. We train our people to a very high standard, putting them on all the courses available, and the loyalty bonus helps with retention but it’s still difficult to compete against higher wages.
We try and recruit sales staff from outside the industry and have staff that came from Harvester and Frankie & Benny’s restaurants and Currys. We tend to question why sales people from other car dealerships wanted to move. I’d rather recruit from outside so we can teach them our way of working and our values.
In finding staff I’ve discovered some online resources, particularly the Indeed.co.uk jobs website, to be very useful. We also pay staff an intro fee if they find someone for us. This works really well because they identify people who will fit into our environment.
What is the biggest challenge facing your business today?
Currently it’s getting the stock. We’ve never had so many forward orders. We are taking so many for March and April. Apart from that it’s ensuring we don’t lose service customers, particularly those with older cars, to independent rivals. We need all our customers and the manufacturers are helping with schemes as fixed-price servicing and price-matching.
How was 2015 for you and what do you expect from 2016?
From 2,900 cars in 2014 we sold 3,603 in 2015, 1,200 of them new and roughly in line with expectations. This year, however has seen our best start ever, 362 in the year to date, which would see a year-end total of 4,893 if it carried on. I don’t expect it to continue at that pace, but we are budgeting for 4,200-4,300.
We are doing all we can to not pre-register vehicles. Kia in particular are very good at not pressuring to pre-register. I think the market will have another good, but forced year. We have a lot of new product coming, Kia’s Sportage and Niro electric car, Hyundai’s Optima Sportwagon and hybrid and the Ioniq hybrid, so I think we will have a product-led good year.
And are there plans for further expansion?
We are talking to one of our manufacturers about a possible opportunity, but that’s at an early stage.
Factfile
Delgarth Motor Group
Established: 1981
Brands: Hyundai, Kia, Mitsubishi
Locations: Milton Keynes (5 sites)
Staff: 108 (45 in aftersales)
Ramps: 28 (plus 3 MoT)
New sales: 1,200 per annum
Andrew Charman
