Delighted to have Kenneth Purdon from The Specialist Car Buyer Ltd with us this episode.
We discuss where the market is at the moment, what direction its going in, stock levels, and whether the Chinese Manufacturers will increase their presence in Europe and the UK.
This then leads us on to talk about electric vehicles with the challenges and advantages they bring.
Kenneth will be back with us in another episode to discuss the hot topic of the agency.
Here are the highlights:
{01:38} Arnold Clark
{08:40} Uncertainty
{12:18} Residual Values
{14:46} Chinese Market
{20:09} MG
{23:30} Volvo
About Symco Training:
Symco Training was founded in 2000 by Simon Bowkett and it was his belief that the business had to offer its clients something different. That difference was clear to Simon from his days in the dealership when he experienced many sales trainers who had all the answers, but were unable, unwilling or both to actually show the delegate how they could be implemented. It remains the ethos of the business today. You see, Symco only employ trainers that are committed to delivering not only in spiring and insightful training, but are equally as happy to demonstrate these skills and techniques with real customers in your own showroom. We believe in order for sales training to be effective and in Simon’s words ‘real world’, it needs to be tried and tested in the only place it matters the showroom floor. There is no room for theory when your goals are for your team to sell more cars, hours or parts and retain more profit. In dealerships around the world the focus applied by many of the sales executives is to try and sell a deal. Symco specialise in getting your teams to focus on selling themselves, the product and then supporting this with the deal.
To find out more visit
www.symcotraining.co.uk
Welcome to the Selling and the Motor Trade Podcast, an association with Symco Training. This is the weekly podcast where we share best practice tips and ideas on how to sell more cars, improve your service department and generally put more profit into your dealership or dealer group. I'm your host, Simon Bowkett. As some of you probably already know me as Skipping, I will start by saying thank you for taking the time to listen to this podcast. Hi and welcome to another episode of Selling and the Motor Trade. Today is my pleasure to be joined with Kenneth Purden. Now, Kenneth runs the specialist car buyer. So he's got his ear and his eyes on the market all the time on what's happening in specialist cars and the used car market. So we're going to put the world's right on where the industry is currently, where the industry is going, what the future looks like. So Kenneth, welcome to Boreden. Thank you for joining us on the show. Morning, Simon. Thanks for having me. So, Kenneth, the startup is, tell our listeners a little bit about yourself. How did you get started in the motor trade? Right here. Basically, a bump into a lovable rogue who offered me a job back in 2003, basically working for a used car centre top here. Chat called Arnold Clark. Yes, he's got a few little shops, hasn't he? Yeah, he has. Not too bad themselves. It started over there, then progressed very much. So, 2003, sorry, you'll be speaking to working directly with Mr Clark then. I wasn't working directly with him, but I was working in one of the branches that you regularly visited. Yeah, okay. I just love the Mr Clark stories about how he would visit so many dealerships all the time. Oh, it's phenomenal. Phenomenal. Just basically, he also knew everything about their first name as well when he came in. Yeah. You know, it was such a hands-on guy. You know, customers loved him, my customers were. It was very approachable. You know, I always remember the sales manager was always in the office. We must have clocked walked in if you're sitting with a customer because he knew straight away that deal was getting done, I respect it. When did he just throw the world at it? Yeah. Yeah. Absolutely. Hello, Mr Clark. I've done deal. Yeah. He loves closing deals and he was a salesman. You love doing that. That was what he was all about. Quite a business he fell off. Oh, exactly. Absolutely. I know Eddie Hamilton would listen to this podcast regularly. I don't know the truth of this story and these stories get embellished all the time and I quite love it. And it quite tells you a lot about the man actually. So again, this might be all made up. It might be wives, tales and all that sort of stuff there. But the story I did from a man working a Peugeot dealership actually up in Glasgow who worked for him apparently one day they're in the board meeting and no one disturbs the board meeting. But the receptionist coming and said, Mr Clark, it's just your wife on the phone. He said, well, I better take this. And Kenneth, apparently the conversation was something along the lines of no, no, no, no, no, no, leave it. Don't call an engineer. I'll have a look at when I get home. No, no, it'll be fine. Hangs the phone up and everyone's looking at him. So he feels like he has to explain. And he says, well, the heating's not working at home and she wants to get an engineering out. I know not why it's not working because I took the fuse out and he takes some use out of his body because she has it on all day. Now, I'm almost sure it's made up a little bit, but I kind of like the idea that he's built such a great business, but still keeps his eyes on the pennies all the time. That wasn't me though. That probably happened. That probably happened. That's probably happy. You've got to really respect what that man has built. So you started with Mr. Clapping. OK. And where was your journey from there? So then basically I went to work with Mercedes Benz dealership, another of the local Glen Henderson, Craig and Asher. Then from there ended up back with BMW, which was owned by Arnold Clark, who was under Harry Fairbhem back to Mercedes and then off to Porsche. It was quite interesting as watching a comment, they all put up recently in Suzuki, a bit of mystery shops. And I was working with a Porsche brand and so, so heavy into customer care. Just very, very so switched on about how to look after that customer ownership, John Lee, not just the purchase, the ownership, John Lee. So feel successful there. And then went to that was a sitner and went over to Edinburgh to Bien, Edinburgh. And they probably enjoyed working there as well. Fantastic brand. Really good people around the business as well. And basically we ended up being an award winning centre. That's phenomenal. Kenneth, this is a question that we ask all our guests. It really sorts out the motor traders from the real people that have it in their blood. Do you remember the first car you sold? I do indeed. Yeah, that was a Rover 25 impression. A Rover 25. Okay, that is the real run screen, April is an option. Love it. Absolutely love it. Now, this is a shameless plug for our first 90 day program where we often say that the skills that we learn in our first three months, good and bad losses for the rest of our career. Hey, Kenneth, is there anything you learn in that first three months at Arnold Park there that you think says relevant today is it is for someone who's just starting the motor trade right now? Definitely. Two years and one mouth. Yeah. Yeah. It really really basics. Certain lesson and lesson to what they're saying and respond to what they're saying, not what you think they've said. Yeah. Is that so, so true there? I tell you what, we often say there's three styles in any sound. You have to sell yourself first, the product second and then the deal or the numbers and too often in the market we've been through recently, Kenneth. I still hear salespeople trying to sell the deal first, the deal second, the deal third. And then they're just not listening to the customer and sold themselves and showing empathy. Yeah. So the big, big problem we have, I spoke about obviously the agency model and it's a big issue because thinking about things over the weekend, when was the last time somebody had to prospect? When was the last time you had to pick up that phone and make that first impression over a phone call? And sales is all about the individual, particularly when it's coming to buy in a car because the second most expensive thing you end up committing to. Yeah. It's the market's starting to change now, isn't it? You talk about prospecting and it's, I suppose it's the VIP events that Rhino do and stuff like that. I see it on some social media that they're starting to do some of those. Yeah. And you're starting to get some of our clients are saying, hey, we need to start speaking to our database again there. So it's starting to change. You've got your ear to the ground. Well, it's happening to the market out there on the use car side of it. The use of car markets is certainly on the spatialist division. This point in time is very, very buoyant as a seasonal industry, this level. So the market is going well. We monitor basically the current stock position across the media streams out there of what there is out there for sale. And we do see a drop off of aging stock. So tell us that, you know, those people are selling their buying cars, certainly people are contacting us to represent and source vehicles as well. So it's picked up, but you know, this industry and the spatial side of things always does tend to run between, you know, now all the way up to probably November when it comes to December, January and February, you really, really are, you know, you're working doubly hard and you're more of a hunter as opposed to actually a farmer at that point in time. And it comes to obviously, you know, likes of the middle market as well. I think there's a wee bit of a drop off just now is bit one set in the market because, you know, what do we go out and buy? You know, do we buy an electric vehicle? Do we buy a diesel? I mean, there's a lot of cities putting in your ULE Z laws as well. So it's interesting times. I've never experienced it as quite as it is. Yeah, that's true. There's a stat that you told me on your center on LinkedIn or one of the social media programs that what percentages of the cars over, I think it was 100,000. You said we're at 90 days. Yep. What do you have that number to hand? Yep. So basically you're looking at roughly the average of stock in the recent of 50% in some of the brands, but across all the brands, no, so looking at the likes of Ben, we asked Martin Flary, Lamborghini and McLaren, it's sitting at 28% as an average. The 28% of those vehicles are over 90 days. Yeah. And you have to get to the stock, can't I just know? Now, I wouldn't know that market, that specialist market at all. I don't deal with it all the time. Yeah. So is that normal? Is that, listen, from a volume dealer, that sounds scary, that sort of thing, especially with what we've been through. Is that standard in that world? It's fairly standard just because of the type of cars and just the type of marketplace it is. What I would say though, which I find really, really quite interesting, is that actually 60 days, 29 to day point, you know, it's, you know, you've got cars installed, which are 90 days old and older. And from 60 to 90 days, the sentencing's probably a lot less of them. And there's a lot of fresh stock that's been bought recently as well, which you can see in the market. So you know, the market's in a good shape, very good shape in specialist cars right now. Yeah. But also over the last couple of years, I suppose that specialist car dealer, what are that cars just going up every month, isn't it? And it kind of continues to go up there. Is it really an issue having 90 days stock? If it's, you've got a Rolex that keeps going up in value or you've got a time and keeps up going up in value? Yeah, well, you know, the manufacturers will increase the prices of the cars and they keep them, increasing the prices of the cars as well. So that has an effect to it. You know, it's supplying demand time. And that's what it comes down to, you know, very much down to supplying demand. And it's the same in every area and faster of the motor trade, you know, supply and demand, you know, after supply is there and the demand is not there. Then you have stock issue problems. It's very much more focusing on stock fund. Yeah. Yeah. It's one of my very first sales managers. He went off and bought himself a garden centre and it's a really nice guy. And he said, what a brilliant business I'm in. My own rage stock, I increases at the price of it because the plant just keeps on growing and growing and growing. So yeah, it's more for it. Whereas in our world, it's all about turn that stock. But that brings me on to EV vehicles. Okay. So we know that Elon Musk, Tesla registered something like 20%, or 25%, I think it may have been Kenneth of last year's volume in December. Of course, I think it was the 6th of January. The discounted cars was at 19% or something like that. There's a further reduction. I wouldn't like to be the customer picked up their car on the 23rd of December, wake up to news that killed the residual values, not just on Tesla, all electric vehicles. I think there's lots of people that had a bit of pain there. Now, having said that, I want to get you used. The price of all these electric vehicles in the market came back lots. However, the dealers who turned their stock very quick took the first pain and then went out and bought electric vehicles at the right price. Yeah. I tell you, I think they're doing really good money. I know that I pieces out there at the moment, we work with the client that's doing exceptionally well with them. Mark Napton, great friend of the show. I know they've done very, very well with electric vehicles as well. I just want you to get your views on the current market electric vehicles. Yeah. Is it time to get into them? In your world, I'm sure you're looking at Taycan or however you pronounce that. Yeah, it's very much down to an individual choice. If it's something you're buying for you as a personal purchase, then if you're looking from a residual point of view, we have this objective of 2025 and 2030 coming over. So we have to go into these years with already having electric cars being bought in EVs. The way I look at it is from a 0-0-0-2 point as opposed to actually just electric is hydrogen coming on board as well. So again, there's a lot of change. One of the things that I'm sitting looking at and sitting at the markets looking at is effectively depending on what you're going to use the car for. If it's an electric vehicle, you're looking for small in-town journeys. If it's a longer journey vehicle, maybe you should be looking at a hybrid instead of queuing up all these charging points up the M6. So it's getting that balance and making that balance work. Then there's this focus and fatigue fuel. And this is the point. Simon is a belief Tesla made another price reduction in the States as well. So they are Elon Musk, very successful business, knows what he's doing. But a lot of the success that they've had has been when everyone else has been closed, been shut down. The options really, if you want to go buy a car, you'd go buy a Tesla because it was easy and it was attainable because you couldn't get out of your house, you couldn't visit dealerships. And then I'm just looking at it, small thing actually over in China is basically roughly in 2022, they produced 27 million cars. 7 million of those were EV, right? And that's a market is growing. That's a market that's the opportunity that is there. But the previous year, they produced 21.5 billion vehicles. The domestic market are doing phenomenal. They're sending a lot of cars and a lot of the marketplace with the OEMs established here in the UK are regressing. Yeah, I'm just thinking from the dealers perspective, buying used electric vehicle at the moment. We know that 2030, this is when we have to go an all internal combustion engine. It has to be hybrid or electric. We understand that. Everyone tells me that infrastructure is not going to be there. Do you feel that's going to roll back? Governments, it depends on which government is in power at the time. But is that going to happen, do you think? I mean, Volvo, for example, they're saying 2025, I think, is a full electric range. Two years away, that's not long. It's not long at all. And where do you charge them? And where is it reliable to charge them as well? I mean, you mentioned Porsche Tika, one of the stats I've got here is just now on that individual model. There's actually 36% of those cars on 90 days in old and stock. So we have to wonder just exactly how are fines progressing. And electric cars, it's got a price point. And what is that price point? Is it from 30 to 60? Because certainly from the stats here, showing over £100,000, or £80,000, even because that's how it best upon 56% of them are effectively 90 days old. That is a very, very interesting stat. I suppose the other thing with electric vehicles, and I think it's a challenge. I don't know how the manufacturer does this one day in my life. I mentioned to you before that I drove the Taycan. It was the Audi, the e-tron, same vehicle. I'm sure it was an EV6, and it was the Hyundai equivalent. It was lots of these different cars all the one day. And the downside is if you could shut your eyes driving that car, you didn't know which one you're in. And I think that's going to be a challenge where electric vehicle, electric motors, electric motor, batteries are a big battery, or it's a small battery. And I guess I added all those cars in the day. I think the Kia EV6 was probably the nicest. Now, 10 years ago, you would never be comparing a Taycan to an EV6. And maybe people think I'm mad for still making that comparison. But I'm good to say it drove very, very nice. How does the manufacturer make an electric vehicle different? And what challenges do you think the traditional, the old guard has got? But the Chinese coming through in that? Yeah, it's interesting point, because they all have a shared platform. So Lotus, Polestar, the Gileo organization, two cars, the Polestar 4, the Electra, and Lotus. Great looking cars, but you can see some of the design cues and some of the design points in the interior of the vehicles as well. Volkswagen group have the same situation with ID4, outies offering, Volkswagen's offering, and seats offering right now. So, and scooter? Yeah, so individuality could become an issue because they have these shared platforms, but they're not dynamic enough with the way the cars look. When I was growing up here in the UK, a four-day store, my store looked totally different. I'm not sure my age now, but it's very much more, shall we say, uniformity and all looking very, very similar to each other. Having said that, Volkswagen Outgroup does have the MBA and MBQ, who I think platforms, which they even train all of their salespeople now, that yes, this 80% of the car might be the same from the say, it ranged to the Audi range. This is the unique things there. So I suppose they have been doing that for all. Maybe I'm being paranoid about something I don't need to. But the reason why I say that though is, what about the Chinese coming through? The Chinese are coming in different markets. I think they're already there for those established, but in Europe, they're definitely coming. But I mean, I'm not just the wrong way, but a lot of it's been put upon a lot of different dealers and different dealer groups in the UK. This agency-based model really, really has got a lot of people's backs up. There's a limited supply of used cars out there, so what is alternative if they choose to take the signs off the door? The opportunity is China. We've seen it before. You just have to look at MG right now. I walked off the MG Rover brand, Phoenix Days and before Phoenix Days. I now look at MG right now. It's really, really coming back. I mean, that can be able to launch the Shanghai, stunning, stunning looking car. And guess what? The dealer network is going to be in place. The dealer network is in place and they're very much capitalizing on that interaction-based interface. So they have a good hybrid model. I think the answer is that a lot of dealers in the UK will put simpler enough these cars into their dealerships and into their business. Yeah. I'm so impressed what MG has done because they're electric offering right now, lockdown. When a lot of people couldn't get EV vehicle, I think they could still get it. That must have helped them. But again, the range, what they've done with that car, I think it's really, really helping. Yeah, definitely. Fantastic. And the brand is so appealable to the masses as well. They've really done and have done a fantastic job. I mean, I remember a trache, I remember a way back in the days of selling city at Overs. And you look at what they offer now in such a short period of time. I say 10 years period of time. It's amazing how that brand has came on and how they're performing. But again, this is something that a lot of the manufacturers in the UK have to be really, really aware of because people deal with dealers and deal with retailers and they will be able to showcase these products to those people. Yeah. Do you think the traditional OEMs, the Ford, the Volkswagen Group, the Peugeot Citrum, they have to be worried about the Chinese coming through. Definitely. Definitely. It's not, you know, the market is ever evolving, it's ever changing. And everyone wants to gain what's called fixed costs. So if you're to, for example, BYD announced that they're bringing a vehicle called the Seagull, which is going to be a market at $11,000 currently just now in America. US dollars. US dollars. Yeah. So yeah, that car coming over here, it's a Hyundai i10 size vehicle, comes over to the UK marketplace. If you're to sell it at finance transaction using a PCP on it, it's fixed costs. And that's what people are looking for because they don't want to necessarily spend more and have less. Yeah, it's even the name, some of the names when you think build your dream. Yeah. And when I first heard of this, I thought, oh, hold on, build your dream. Is this really good? But again, making huge waves out there. Great wall. It's huge waves. I think they're going to continue to happen. And all the others out there, it's going to continue to happen. Definitely. I mean, it's growing. You have to also gilly, for example, the sales day pattern, what they've done in the industry. And you're a Volvo. I mean, look at how fantastic it's a Volvo. I mean, they really, really have changed things around. And that brand is massively successful. I remember selling BMWs and Mercedes and some people came in and said, oh, I'm looking at a Volvo. You're like, OK, please go ahead. No, I'd be quite concerned. Yeah. Well, even Kia, I'm going to say Kia has 10 years, 15 years. The Koreans have really changed that. Kia is almost premium. It's going into that premium level, isn't it? It really is there now. Again, some of the people listen here, so BMW say, no, don't be so silly. But when you jump in that EV6, you go for a drive. It's stunning car. Yeah. So I mean, Kia, you know, I mean, if we work to, I mean, I don't know, but you're signing. But I remember watching a program at used to be in TV, a regular called 24 and that series, the drove Genesis product, you know, and what's that? It was available in America. We never had it here in the UK, but now it's here. I mean, look how good they are. Phenomenal. Yeah, it is. That just leaves me to say that all details of this episode and other episodes on the selling in the motor trade can be found on our website simcotraining.co.uk. Go there to get a copy of our book, Words That Sell Cars. Go there to sign up to a free trial of our sales fitness online sales training program. Easiest way to get hold of me is Simon Bowkett, food linked in. Thank you.
