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After pulling through with healthy profits in 2020, JCT600 is on track for a record year as it celebrates its 75th year in business.
Yorkshire-based dealer group JCT600 is a long-standing player UK automotive retailing, celebrating 75 years in business this year. Since being founded as Brooklands Garage on Sticker Lane, Bradford, in 1946, JCT600 estimates that it has sold over one million new and used vehicles
It is owned and managed by the Tordoff family who have steered it to success over its many years of trading. Over the past two, the group, like others, has overcome challenges in the face of a global pandemic, and has emerged the other side with a 25% pre-tax profit increase for 2020 and a prediction of record results for 2021.
Motor Trader spoke to chief executive John Tordoff to find out how JCT600 navigated the crisis, harnessed its contract hire leasing business to boost used car sales, kept up its apprentice programmes and took care of its staff.
We asked Tordoff how JCT600 and his family have been able to survive 75 years of business, reaching an era of automotive retail that looks quite different to the one in which it started. He said: “I think it’s because we’ve always had an open mind to change. I think a lot of people are very fearful of that and let’s face it, the industry has changed a lot over the past 75 years, and even more so in the last 10-20 years. If you try to ignore it, you can very quickly become irrelevant and lose your place. Or you embrace the change and just get on with it, and that’s pretty much the secret to our success and longevity.”
So, with such experience of the challenges of retail, what does Tordoff see as the next hurdle? He said: “The next big challenges are the move to online sales and an agency model. With regards to agency, some of our manufacturer partners are talking about it, and we’ve just taken an open view of it all. We are obviously keen to protect our interests, but if you just turn around and say we’re not doing it, that is probably not going to change the direction unless every retailer in the network says that, and I think that is unlikely to happen.
“With online sales, we were already planning on moving towards that pre-COVID. And the last two years have just sped things up in terms of getting our offering live. We have invested over £2m in our online customer journey, and I can only see that continuing over the next few years. We are passionate about giving our customers the choice of buying in store or online, or a little of both. Not everybody wants to do it the good old-fashioned way of coming into the showroom and test-driving cars and then spending three hours negotiating with the salesperson.”
Clicks are important, but bricks are not something that will disappear for JCT600 as investing in property remains part of its plan. Tordoff added: “I can’t imagine us moving away from the physical dealerships. We have invested in new sites, opening Porsche York in October and we are nearing the completion of the new Ferrari Centre in Leeds that will be opening back end of Q1 2022. We’ve got some other redevelopments that are currently on the drawing board.”
New blood
Back in May 2021, JCT600 reported that it had recruited 13 young people in 2020 as part of its continued commitment to developing talent in the automotive industry and planned to recruit another 30 apprentices this year. Growing talent within the business is something that Tordoff feels is important, and the group plans to push forward vigorously with its apprentice and trainee intake.
Tordoff said: “We are looking to recruit more apprentices and trainees across the business. We are looking to employ more school leavers and graduates because we find that the best people are those that we grow ourselves. Our business is full of people that have got long service, that joined us as youngsters and are still with us 20 years later.
“We are going to be putting even more effort and energy into that side of the business next year. We will be going on a recruitment offensive in the early part of next year.
“We are creating our own academy programme so we can bring in youngsters into customer service roles, and all facets of the business. They don’t just see one side of the business; they get a proper grounding. So even if someone works in sales, they’ve got good understanding of what happens in the parts department, the service department, or the valet department. If people have a broad understanding of how each department works and can interact well with each other, it ultimately gives the customer the best level of service.”
Approved success
In April 2021 JCT600 launched its own ‘JCT600 Approved’ seal of approval for used cars. This also brought all its used car sales under one consistent brand across the group with the opening of JCT600 Approved centres in Bradford, Leeds, Boston, Doncaster, Grimsby and Rawdon.
On the launch of JCT600 Approved, Tordoff said that it has been a “phenomenal success.” He added: “It enables us to properly tap into the used side of the market, and this has really given us some great impetus to expand that side of the business. We have a successful contract hire leasing business, and historically a lot of the cars that came back from those fleets were being sold at auction. Well, 80% of those now are all being retailed through our own locations, particularly through the approved sites. So, we’ve got a real end to end business now. We are gearing up for further growth next year and I would say that it is fundamental to the business moving forward.”
The shortage of used stock is well documented throughout the industry. How has this shortage affected JCT600? Tordoff said: “Like everybody else, we have been short of stock this year at various points. But having access to all these ex-leasing vehicles has helped us. I can only see it going from strength to strength moving forward with the plans that we have in place, and they should ensure that it becomes an integral part of the business for many years to come.”
Stock is also short on the new side of the business, but that isn’t stopping customers ordering said Tordoff. He explained: “We are seeing a phenomenal new car order book. Through all brands, right at the very top end of the market with Rolls-Royce right through to the volume brands such as MG. There is an incredible appetite from customers to buy a new car and they seem to be very tolerant long lead times.
“We have changed all our systems to make sure that we have a robust CRM platform in place to keep in regular contact with customers, which we have always had in certain brands, but for some this is a completely new dimension. There are a lot of brands that have been used to being able to sell a new car and have around 50 of them on site ready to go. Well, that’s not happening anymore. Even some basic models are taking six to twelve months to deliver.”
Learning from lockdown
JCT600 turned in a strong performance in 2020 with pre-tax profits up 25% to £19.6m on turnover down -12.6% to £1.117bn.
Like most dealer groups it was hit in the first lockdown with the temporary closure of showrooms but recovered “quickly and effectively,” delivering what it described as an excellent result for the year.
On the 2020 results, Tordoff said: “2020 seems such a long time ago. We were caught out with the first lockdown, and we were almost making it up as we went along. We didn’t have a procedure for closing the business and working from home, so we were thinking on our feet and making big decisions. But we are a small team and therefore agile, which again I think is one of the secrets of our success and longevity. And everyone that works for the business stepped up to the plate and made sure that we were the best possible position.
“As soon as we closed the businesses down, we turned our attention to reopening them again. There was a famous quote doing the rounds at the time from Winston Churchill, ‘Never let a good crisis go to waste,’ and that became our mantra. We put all sorts of steps in place to make sure that when we did come out of lockdown, we would be absolutely flying.
“I think one of the key things that we did was to continue paying all our staff at 100% pay. We’ve done that throughout every lockdown and it created an enormous amount of goodwill.
“We were quite pleased with the 2020 accounts. When we came out of the first lockdown at the end of H1 2020, we were looking at some significant losses. But Q3 2020 was just a phenomenally successful and busy period. So, we went from looking down the barrel of a scary loss at the end of H1 to costing profits of £19.6m by the end of the year. That was helped by government and manufacturers’ support. Everybody did a good job of looking after each other. But the bounce back was beyond our best expectations.
And so, because of the goodwill that we created in the business by paying everybody 100% we were in the right position make the most of it. We will be posting record results in 2021, which has been incredible, despite the lockdown in Q1.”
Although a successful year for the business, there was also great sadness with the death of Jack Tordoff, 86, chairman of JCT600, following a lengthy illness. Tordoff left school at the age of 15 to start work as an apprentice motor mechanic in the business following the passing of his father, and founder of JCT600, Edward Tordoff at a relatively early age in 1950. He was instrumental in building the £1.3bn group that we see today.
Tordoff, who is the son of Jack Tordoff, said: “The low point of this year was my father passing away in early October, following a long illness. But as I keep reminding everybody, I’m sure he’ll be looking down with a big smile on his face and be proud of what you see in the business and how hard everybody’s working and how successful it’s been this year.”
What’s next?
Finally, we asked Tordoff what is next for the group, and how does he see the market shaping up for 2022. He concluded: “Next year we’re expecting things to start out like they are now.
There’s going to be a massive shortage of new cars for at least H1. I can’t see used vehicle values going up much further. But obviously Q1 is traditionally a busy time for us so I would imagine that will very quickly turn into a shortage of stock again for most people.
“There’s a lot of nervousness about when values stop going up, but our personal view is that we will see a levelling off and then a nice glide down to normality rather than a big drop. I think that’s the view shared by most in the industry and all the signs in the economy are looking reasonably positive.
“Moving into H2, I think once the new vehicle supply opens, we will see a return to normality. But whatever gets thrown at us, we’re an agile business and we’ll just deal with it.”