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Devonshire Motors dealer principal Nathan Tomlinson reveals how the dealership was transformed in this special Dealer Insight sponsored by AutoProtect.
For Mitsubishi dealers recent years have been a roller-coaster ride. Those who weathered the recession were then plunged into a punishing exchange rate which nearly spelled the end of the franchise in the UK.
Yet through this period Devonshire Motors, based in Barnstaple, Devon, has not only survived but flourished and is today ranked as a Mitsubishi five-star dealer. Furthermore, despite only being an authorised repairer for Honda its service department tops that brand’s CSI score with 97.2%.
Year-end profits for 2013 were a healthy £90,000 yet just three years ago Devonshire recorded overall pre-tax losses of £44,000. The answer was a root-and-branch review of its processes, initiated by promoting the then aftersales manager Nathan Tomlinson to dealer principal.
Tomlinson had spent a decade in the Devonshire aftersales department, winning Motor Trader’s Aftersales Innovation award back in 2011. The department was praised by ASE founder and industry guru Trevor Jones for being in the top 10% of all automotive dealers nationwide. Naturally it was hoped that promoting Tomlinson could turn around the sales department in similar fashion.
“At the time our overhead absorption was in excess of 100%, our bodyshop, parts and service operations supporting all overheads of the business and putting money back in but sales was losing so much it was having the net effect of a loss on the business,” he said.
The key to the turnaround, he believes, was appointing management from outside the sales department.
“It’s easier when you come into it with no preconceived ideas or experience because you can look at everything with a fresh perspective
“Aftersales is a very management-driven analytical exercise whereas sales tends to be driven by passion and personality. With a few exceptions the industry norm is to promote your best sales person to sales manager, and eventually dealer principal. This can result in a very unbalanced strategy and leave one of the most profitable areas of the business under developed.”
Tomlinson cites Jones as being a key influence on his management style, and credits the dealership’s turnaround to attending a profit clinic run by Jones at Mitsubishi. Attendees were invited to score their business on best practice techniques a department at a time, and having been pleased with his department’s result in the aftersales session, Tomlinson sat in on the sales session and realised Devonshire was not meeting any of the criteria.
The basis for the turnaround centred on analysing every layer of every process undertaken in each department.
“We started at the top with the sales process because it’s the most obvious one – and asked: is it efficient, are the team demonstrating the products often enough, are the offer sheets accurate? We ironed out the problems, bolted it down and moved on to the next thing.”
Processes were key to the turnaround with Tomlinson analysing KPIs in the ASE composites and aligning them with his experience in the dealership.
The results have been impressive – the sales department’s loss had become an healthy profit which Tomlinson expects to double in 2014.
Mitsubishi today has a market share of 0.5% whereas Devonshire’s has closer to 6% of its market. While the rural area and customer demographic suits the franchise, Tomlinson also faces competing head on with volume competition from Ford and Vauxhall.
“It’s a key aspect of our marketing. Customers need to be brought into the Mitsubishi brand – once they are in they are customers for life.”
Understanding the staff is of equal importance to this success.
“It’s getting to know our strengths and weaknesses and working around the weaknesses, rather than looking for a perfect solution from everyone. For example almost every dealership forces its sales staff to work weekends. If you’ve got a phenomenal sales guy who can’t work a weekend or who isn’t motivated to, why force him to? You want a happy productive workforce and you want quality people.”
Tomlinson describes his team as small and close,
a very flat organisation with unusually no specific sales, service or parts manager.
“Decisions come through to me along with our finance director Janet Jones and ARC Director Graeme Bennet. We make quick and effective decisions, but a lot of people in key positions self-manage, we encourage that within defined parameters.”
And such success has been recognised outside his franchises – in July 2013 Tomlinson won Motor Trader’s Dealer Principal of the Year. In the future Tomlinson believes the Mitsubishi franchise and his dealership are on the cusp of change, driven by the plug-in hybrid (PHEV) technology just launched in the Outlander and set to expand into other models.
“We thought PHEV would not necessarily produce a great deal of business in this area, but from the minute it was released we have been inundated –
the demand has amazed and at the same time almost paralysed us,” he said.
He expects the demand to grow but also to bring new challenges.
“The qualification, demonstration, handover and administration of a PHEV is much more time-consuming than a typical new car sale – if we carry on at this kind of volume we and every other dealer in the network will need to increase head count.
“We need to hope that dealers can manage such growth but also that head office can. We need to maintain PHEV at a level and then introduce further product lines to maintain the growth, not have peaks and troughs in our volume.”
Looking ahead he is highly confident; “Year-to-date has been phenomenal, we are at just over four per cent return on sales – that is absolutely unheard of for us and will put us in the top percentile for Mitsubishi dealers in the network.
“With Mitsubishi’s extra marketing spend generating lots of enquiries across the range, I can only see it getting better.”
Devonshire Motors Factfile
Established: 1976
Location: Barnstaple
Brands: Mitsubishi, Honda (aftersales only)
Staff: 51 (including bodyshop), 12 in aftersales
Ramps: 6 (inc MoT)
