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Growing sales for six years, a new SUV in the pipeline but a miserable showing in the recent NFDA dealer attitude survey. We ask Neil Williamson why?
Background Former managing director of Mercedes-Benz Retail Group, previously held senior roles at Nissan and Renault. Promoted to an international role at Volkswagen Group in April 2015
On the surface Seat is doing rather well. It started the process of revitalising its car line-up two years ago with the new generation Leon and the process continues this month with the addition of the all-new Leon X-PERIENCE, effectively a Leon estate with four wheel drive. There’s also the promise of new products to follow and a clear hint at its future direction with the 20V20 concept (pictured), unveiled at last month’s Geneva Motor Show, which is the basis of next year’s belated entry into the SUV market.
Sales are on the up with the brand increasing its volumes by 18% last year to a record 53,512 units, just 32 units shy of Honda’s grand total. Yet, judging by last month’s NFDA Dealer Attitude Survey, its retailers are not a happy crew with the brand faring badly across many categories ranging from the value of the franchise to its future profit potential.
Leading Seat for two years was Neil Williamson, the former UK boss of Mercedes-Benz Retail, who we interviewed prior to him taking up a senior international job with the Volkswagen Group in April 2015.
How would you characterise Seat’s sales performance in 2014?
“We were up 18% in a market up 10%, so more or less double which is where we set out to be. Our retail sales were up 26% so we really outperformed the retail market and that’s where we’ve tried to get back to over the last couple of years since I joined. We appeal very strongly to retail buyers and we’ve made sure our dealers understand that. The new Leon was a massive contributor and we sold as many last year as we sold of the Ibiza, which in the past had been our biggest seller by miles. That’s really important for us as we’ve moved the centre of gravity in our business to the bigger Leon. Our customer base is growing so we’re into the renewal cycle now on PCPs, that’s a huge chunk of our sales right now and that’s only going to grow as our PCP penetration grows.”
Why did Seat do so badly in the NFDA survey?
“I’m disappointed. It didn’t reflect what I’m hearing and seeing as I spend a lot of time with dealers. We also have a dealer association meeting once every quarter and they give us some really good input and are straight with us; we make better decisions because of it. It’s not easy being a Seat dealer and I say that every time I’m standing up in front of them. It isn’t easy and we are quite demanding as we are growing our volume. It was also a very small sample size but we’re ready to deal with it. Our profitability is improving so that will help. We’re on the edge of a really big change in our network, the product plans are all confirmed and when the CI change is complete in 18 months we will look and feel very different with new showrooms.”
How is the rollout of the new CI progressing?
“JCT600 has just opened the second new look site in Bradford. Our existing CI is around 14 years old, so even though it has been looked after well it is a little tired. Our plan is to get pretty much all our sites rolled out in time for the new SUV launch. The CI looks amazing and the staff loves it. It’s a big deal for us to transform our sites in terms of look and feel. We’ve been very sensible about investment levels with the average site costing around £75,000 and we’re paying half of that.”
How is dealer profitability performing?
“Last year we ended up at 1% RoS which equated to about £65,000 a site, the previous year was about half of that, so we’ve more or less doubled our dealers’ bottom line profitability in a year. It was a big improvement but it’s not enough, we want to be around 2% RoS and we’ve said that to our network and that will come with new cars and volume. When our SUV starts to land in 2016 that will transform our volume and our margins.”
Do you have any open points?
“We have some open points which we are closing this year. Our biggest job to do is in London but we have some candidates and we are going through the process of appointing them. Some are existing operators and some are brand new operators who will start trading in the middle of the year. Existing dealers want more sites and those who haven’t got us want us. We have 125 dealers and by the end of the year we’ll be approaching 130.”
How is your service plan penetration looking?
“Our biggest growth area is where we link a service plan offer to finance. If you take our finance then you get a significantly better deal on your service plan. I used to run dealerships and it’s all about tying people in. If you give them a great service they will come back to their authorised dealer. There are some good independents out there but on a service plan we can usually compete and surely at a higher quality as we have master technicians who only work on Seat products and they’ll do a better job than the bloke who does everything else.”
How important will the new SUV be to dealers?
“We took the dealers to see the new SUV last summer in Barcelona and we showed them the future of our products. What we’re trying to do is move the centre of gravity of our business from small front wheel drive cars to medium sized SUVs and that’s coming. We have one that is confirmed and hope to have more. All that investment in product, as part of the VW Group, is coming and our dealers will start to feel really good about that when they start to see the new products arriving.”
This interview can be found in the April 2015 edition of Motor Trader.