Dealerships will not be entirely ready for the quantity and the complexity posed by the various Chinese electric vehicle (EV) brands hitting the UK market.
Speaking on the China-Britain Business Council roundtable event on the Institute of the Motor Industry on 14 September, Jason Cranswick, chief operating officer at Marubeni Auto Investment, welcomed the prospect of more diversity but warned that it got here with challenges.
“We do see that Chinese brands are going to bring some great opportunities to us so we’re keen to collaborate. Likewise, we’re very mindful that we will not be ready yet for the quantity and the complexity of what is coming so we’re working really, really fast to create this as our vision and to deliver this for our shareholders.”
Marubeni Auto Investment is an £800 million-turnover business with around 1,300 employees across 40 locations across the UK, selling around 50,000 cars and motorcycles annually.
“I do know there are ships on the water about to dock any day with one among our Chinese brands – MG – with 7,500 cars about to hit the UK market,” he said. “As one among their large dealers, meaning I will get just a few 100 cars arrive any day now.
“I’ve got to fund them. I’ve got to maneuver them. I’ve got to prep them. I’ve got to get them out to the client. After which I’ve got to get well the debt. Now, when money was at 1-1.5-2%, that was okay, we are able to absorb that. Now, money costs are up on the back of 5.75-6.5% rates of interest, suddenly on £10-15-20 billion price of inventory, that has put real pressure on our business.”
He said the business’s bid to turn out to be a connected dealer at scale with electric vehicles on the vanguard meant latest skills were needed throughout the dealer network. “I now need system architects. I want product managers. I want data experts. I also need the technicians that may take care of batteries. I also need salespeople that may perform that within the omni-channel. It’s a really complex world but how do I make things easy, useful and surprising because in a connected, digitised, omni channel world, theoretically, things ought to be easier?”
He said the business desired to pursue each online and offline relationships with customers. “We would like to place the control back into the client’s hands but likewise I actually have colleagues employed across 40 bricks and mortar businesses and we still see a spot for the dealer – even though it must be omni channel.”
“Digitization should make things more efficient but I actually have to let you know that it is very hard to deliver easy, useful and surprising outcomes. A variety of automobile dealers are run on hand-me-down knowledge. Everybody desires to be seen as modern, but in an unstructured, uncodified, hand-me-down knowledge world, innovation is a challenge.”
He said OEM partners shifting to agency agreements and manufacturing partners selling direct to the buyer were further challenges. “I’ve set to work out how can we slot in to that ecosystem of disruptors so what we’re doing is learning fast from disruptors, shifting to omni channel retailing where we’re raising our bar by way of customer support.”
He said the business had due to this fact adopted a collaborative mindset with its business partners. “We hold many franchises, mainly with Asian brands: Japanese and now Chinese brands. Our philosophy is to collaborate and again, it’s interesting that for a few of our OEM franchise partners, the concept of collaboration is a challenge or a brand new philosophy. We definitely don’t see it as a parent/child, or a captive situation though.”
This Article First Appeared At www.am-online.com
