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The last time Motor Trader visited W R Davies in late 2016, the group had undergone a period of major change, selling off its Ford outlets in mid-Wales and acquiring Nissan and Toyota outlets in Telford and a Toyota centre in Shrewsbury. The group was looking forward to a period of steady growth and consolidation.
Seven years on and as we arrive at the brand-new Nissan centre in the north Wales seaside resort of Rhyl, new paint being applied to the gate signifies more expansion for W R Davies – the first of any significance after a period which no-one could have foreseen. But according to managing director Jonathan Davies the group has successfully navigated the Covid pandemic and the supply-chain shortage that followed – this year it has broken into the top half of the Motor Trader Top 200, rising from 104 to 100 with an annual turnover of £124.6m.
Before the pandemic, Davies explained, the group undertook a lot of work integrating the new businesses. “The way it went incorporating them into our way of thinking was quite pleasing. Then the pandemic came along and confused the job a lot.”
The group closed all its dealerships for six weeks with only Davies and one other dealing with emails. “I’d not worked quite as hard for some time,” he said. Even once the centres reopened there were further challenges due to the Welsh Government’s generally more stringent regulations. “We were operating under two different jurisdictions, with half of our business in Wales and the other half in England.”
Davies was surprised how well the business recovered. “We all wrote doomsday budgets. But because of the speed that we had closed in March we had a fairly large used stock carried forward. We’ve always been a used-focused business and that proved a big help for the rest of the year. We budgeted to lose quite a lot of money in the year and we didn’t.”
Davies believes that Covid and the later supply-chain issues changed the business. “Our partners, particularly Toyota, had been very good during the pandemic in not drawing back from ordering semi-conductors. While some manufacturers were struggling for stock we were selling cars and the lack of supply turned the industry on its head from a supply-led to a demand-led business model. Customer expectations changed – when they bought a car they weren’t expecting it in the same month but possibly six months on, so we were building an order book, a virtuous circle.”
The pandemic also changed some aspects of how the group functioned internally, including the rise of the Zoom meeting. “With our business as geographically spread as it is, Zoom was quite a good way of keeping in touch with managers and staff. Having said that we have since gone largely back to traditional meetings as there is no substitute for face-to-face contact – we try to get people together as often as we can so long as it doesn’t disrupt the business too much.”
An outgoing call centre set up by the group is another direct legacy of the pandemic. “Simple things, such as the extension to MoTs threw our systems into disarray, we were sending out reminders at the wrong time. As part of addressing that we’ve set up an aftersales call centre, for service reminders, warranty stuff and such like. That has given us a more consistent approach as a group rather than relying on individual branches as we did previously. We are still developing what is a fairly new team – as it proves itself, we are giving them more to do and the team will grow accordingly as time goes on.”
So, have sales returned fully to pre-pandemic levels? It’s a mixed picture according to Davies. “Toyota sales have been fairly consistent all the way through and we are above where we were pre-pandemic, But Ford’s natural plans, dropping the Fiesta and moving towards higher-end electric models, mean that we obviously won’t sell as many £50,000 or £60,000 cars as we previously did Fiestas.”
It is this change of emphasis which has directly led to the new Nissan centre in Rhyl. Ford’s future lower-volume plans require fewer points of representation so the brand’s current seven outlets in Wales, of which W R Davies had three, is to be reduced to just two.
As a result, the new Nissan centre has been created on what was the group’s smallest Ford outlet. “We looked at what we had – our two bigger Ford dealerships are in Llandudno and on Anglesey, so we are keeping them. Meanwhile North Wales was an open point for Nissan, there hasn’t been representation for several years, and it fitted well for us and for them.”
To go with Nissan was an easy choice for Davies. “My general rule of thumb is if we are going to expand it will either be in an area we are already in or with a brand we are already partnered with. For us Nissan ticked all the boxes and we no longer needed the amount of Ford representation that we had, so it all dovetailed in quite nicely.”
The Rhyl outlet will offer the full Nissan range while retaining Ford aftersales, including for the first time Commercial. “By taking on the Nissan franchise for the whole of north Wales we’ve been able to invest money in this site to enlarge it, adding 30% to the showroom and doubling the workshop size – for the commercials the door of the old workshop wasn’t high enough to get the bigger vans in and we didn’t have the larger lifts.”