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Neil White explains how he built up a £30m business in Surrey representing Mazda, Hyundai and Suzuki, in this special Dealer Insight sponsored by AutoProtect.
In 1980 Neil White took a 50% pay cut from his role running overseas operations for a major consumer goods company to become a salesman at the family firm. Back then TW White & Sons was a garage on a single site in Milford, near Guildford in Surrey, selling 150 used cars a year.
Today White heads a £30.7m business with Mazda, Hyundai and Suzuki franchises, plus Kia aftersales and a major trade parts supply operation across six locations selling around 2,000 new and used cars
a year.
Last year the business celebrated its 50th anniversary with growth plans which will see its newly refurbished Orpington Mazda outlet ready to accommodate an as yet unnamed additional franchise.
Mazda was the group’s first franchise, added in 1984 and soon expanded to three more sites. The business branched out with its first Hyundai site in 1994. When White’s father retired in 1996 Neil was named joint managing director of the business with his brother Ian, but in 2004 he took a four-month sabbatical to drive to Australia with his son and on his return de-merger talks commenced.
The resulting agreement saw Ian retain the Milford site, then worth 25% of the firm’s assets and today trading as Guildford Mazda. Neil took over the remainder and retained the family trading name.
Since then the business has grown. In 2007 a parts distribution centre was acquired in Leatherhead. It now employs 16 and supplies parts to more than 1,000 accounts with dealers in all the group’s franchises. Turnover this year is expected to be around £8m.
Suzuki was added as a third franchise in 2011 and in 2012 a 20,000sq metre site was purchased in Byfleet and refurbished to become the group’s aftersales centre.
Much of TW White’s growth has been achieved on the back of delivering high levels of customer care, a factor acknowledged by the business being named Mazda’s Elite Dealer of the Year in 2014.
You took over the business before the recession hit. How did you navigate it?
The market was tighter, but people were still going to buy cars. If we were competitive on price and provided customer care we could grab a larger slice of that pie. Customer care has been around for ever but whereas once people would visit their local dealers and make a choice between cars, now they know exactly what they want, so you have to try and exceed their expectations every time.
How do you achieve that?
In terms of being competitive, our used cars, for example, have for many years been sold with a three year warranty. As part of our 50th anniversary celebrations last year we introduced Triple 3 Plus, a full belt and braces approach adding three years’ servicing and MoT tests.
We also try to make our customers feel as if nothing is too much trouble. While that is easy say, particularly when you sell new vehicles ranging from £6,000 to £36,000, you do get a huge variation in customers; some have traded up from a marque, that may not be as good, some have traded down from a German franchise, but the customer who once drove a BMW X5 will want exactly the same standard now they drive a Santa Fe.
This puts a great onus on your staff?
It does, but the staff have it in them. You have to go that extra mile, it’s the same in every business. We can learn from attitudes you see in America: “I’m your waiter for the evening, I’m here to look after you.” Service receptionists are there to look after customers. If a customer needs to drop their car off, but they’re late for the school run, they’ll get them away as soon as possible. Any upselling can be done later.
Upselling is an important part of the business though.
Yes but it has to be balanced against customer care. We used to make money on the bonnet of a car, but with bonnet profit now you need the upsells – it’s a very difficult balance to maintain. Today the customer pays quite a lot of money for products such as GAP and paint protection, but they are not ripped off, they get a decent product at the end. But such products should be cheaper. Today the motor trade, both dealers and manufacturers, are the new banks – we are fuelling the entire economy. There’s constant talk about banks and responsible lending, but now you can buy almost any car on a PCP with no deposit, which is great if you keep the car for the term.
How are you addressing your FCA compliance?
We are using a third party, Automotive Compliance, so we are not directly registered, we fall under their umbrella.
As an expanding business what operational challenges have you faced?
We added Suzuki to the business in 2011 and at the same time refurbished our Hyundai showroom at Weybridge, and with the new and used car markets in difficulties at the time we hit a low point of a £350,000 trading loss and a £500,000 balance sheet loss.
However our bank understood we needed to invest and the following year we set up our standalone aftersales centre. We realised after scrappage that Hyundai’s vehicle parc, in particular, was going to explode, they had doubled the business and weren’t going to let that go. Our aftersales premises of 6,000 sq ft would not cope but our new 20,000 sq ft standalone facility has been refurbished and has now been open nine months.
Successfully navigating the downturn also gave me me a chance to balance our portfolio of properties. After the demerger we had one freehold property and four leasehold – we now have four freehold, two leasehold, which is far healthier. We’ve just bought the freehold of Orpington and refurbished that.
How do you manage your staffing levels?
Our staff levels in our current facilities are great, but our planned growth by acquisition will mean taking staff that we acquire and remoulding them,
or recruiting, which is expensive and takes time. I would rather bring in sales staff from outside the industry because they don’t have predetermined ways of doing things. Recently we panicked and took on some long-established cars sales executives and it didn’t work out for us.
Technician recruitment is also a major issue. They are difficult to find, so you try to train your own but you can only take so many apprentices. Youngsters between 17 and 20 change so much and while they start off okay with the long-term plan they then leave because their friends have more money. I don’t have the space to accommodate 10 apprentices, knowing I’m going to end up with four.”
How do you feel about current and future trading?
I’m very upbeat – the business is healthy and where I want it to be. We are making decent profits, we represent very good franchises, all three from a sales point of view offer organic growth and we are lucky in that respect. We’re also starting on the acquisition trail again.
Fact File
T W White & Sons
Established: 1964
Brands: Mazda, Hyundai, Suzuki, Kia (aftersales)
Locations: Bookham, Weybridge, Effingham, Byfleet, Leatherhead, Orpington
Staff: 106, including 55 in aftersales
Ramps: 25
