MT Interview: Tim Tozer, Vauxhall, CEO and chairman

Just 14 months into the job and Vauxhall boss, Tim Tozer, has lost no time in changing the way dealers operate to drive higher profitability into the network

Vauxhall and its dealers started the year well. Car registrations in 2014 were up 3.7% and van sales increased by 9.7%, a combined total of over 301,000 vehicles. Importantly, it was a record year for retail sales with 127,398 cars sold to private buyers through its dealer network. Sales in Q1 of this year have been a mixed bag rising just 1.2% for cars after a lacklustre March – with new Corsa volumes yet to kick in – as vans grew a remarkable 32%.

This solid progress, especially in retail, is particularly pleasing for Tim Tozer, the industry stalwart (having led Mazda in the UK and Mitsubishi in Europe) but GM outsider, who took the reins just 14 months ago having formerly headed up Autobinck, the Dutch-based car importer and retailer.

He did not take long to make his presence felt at Vauxhall with several senior management appointments, the withdrawal of the Lifetime Warranty package, which dealers were obliged to contribute to financially, a new national stocking facility, slimming down over-expanded product

line-ups, and a toning down of predecessor Duncan Aldred’s rhetoric about outselling Ford in the UK.

How would you characterise Vauxhall’s sales performance in 2014?
“Our retail share went up and our true fleet share dropped a little, principally because in 2013 we still had some Astra vans in the frame which we didn’t have in 2014. Our retail organisation sold the highest volume of retail cars in its history and we were number one in retail in Scotland. It was a good year, although the average age of our product portfolio was absolutely at its low point of 5.2 years old. But now that number reduces year by year and that is a function of the investment that GM has put into the business. The oldest vehicle in the line-up now is the Astra, which is six years old and will be replaced later this year.”

How is the rollout of the new CI programme progressing?
“The CI programme is well under way and we’ve had a great reaction to it. I’ve been a retailer and I’ve sat in rooms thinking ‘no not another corporate identity upgrade at a huge cost’. But, a good number of our dealers have done it and have found it uplifts the whole business.”

How have you addressed dealer profitability?
“When I came in a year ago I absolutely acknowledged that we had more to do to improve what I call the ‘financeability’ of the franchise. The RoS measure, which is running at 0.9%, is all good and interesting, but for me it’s as much about the return on capital employed and we were a bit heavy. Since then we have a new centralised stocking plan that we put into play which enables me to say to the network: ‘your job is to retail and look after customers and not to stock cars’. Of course they need a bit of stock, showroom display cars and demonstrators, but I don’t want their sites jam packed to the detriment of where customers can park their cars. We have made a shift to facilitate that.

“As a franchise we are also very good at getting the manufacturer-receivables paid to dealers quickly. Having been a retailer, if you’re selling a car – with a lots of tactical support and there’s a big receivable – the worst case scenario is then waiting a long time for it. That’s a burden on your balance sheet.

How balanced are dealer operations in terms of selling new and used car sales and servicing hours?
“We still have work to do for dealers to get more scale and balance in their business. Their used cars need to be sweating as much as new cars and as much as service is contributing to the business. I am a firm believer that if a dealer is not doing a fantastic job with used cars and servicing then they will never stand a cat in hell’s chance of getting their new car volumes to the place they need to be.

“Some of our dealers, only a few, don’t run a balanced business and having been on the other side of the fence, I could only make retail work on the basis that we had a balance. We can see in the composite where dealers are under-performing in their used car businesses and we run self-help clinics through our franchise board. We still have a journey to make on network profitability but a lot of it is about self-help and getting that business balance.

“We are a volume and share conscious manufacturer. What that means is that no Vauxhall dealer will ever be able to get away with a quarter, against their target which doesn’t mean they have to break into a sweat. That’s the reality.”

What will be the strategic role of the new Vauxhall Viva?
“It will be the new entry-point to the Vauxhall brand when it goes on sale in June. With Chevrolet we decided there was no point having it around to keep eating our lunch, so we needed a new entry-point and we’ve now got one. The Viva will be 90% retail with a very simple line up and price pointed from £7,995. We will be supply constrained this year, because I know what we’re going to get and it won’t quite be enough, but we’ll have a great start and then next year we’ll do 15,000-20,000 units.”

This interview can be found in the April 2015 edition of Motor Trader.