Constellation's multi-million pound losses in detail, and was 2025 the year of the Chinese car? – with Tim Atkinson, episode 238

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Welcome back to the Cardiola podcast, where we pick our favourite stories of the week

and ask an industry guest to choose which were the best.

I'm John Ray and joining me in this lovely first of the new year podcast is, of course,

James Banger in his boiler cupboard. James, lovely to see you.

I'm glad the new year has rung in changes with your intros, John. That's very nice to hear.

But happy new year to you. How are you?

I'm very well. I woke up this morning thinking, is this the first podcast?

It sort of feels like we're halfway through the new year already.

Oh, it is.

There wasn't really enough news to talk about last Friday, so we didn't do it.

Well, it was. It was just I was the only one working, wasn't I?

Yeah, well, it would have been a lonely podcast for me.

It would have been. Very boring for our poor listeners, so yes.

But yes, lovely to see you, John. I'd like to see that you once again in my house.

So I mean, I suppose at this point you are classed as a lodger, aren't you?

Yeah, you shouldn't have given me a key, really. That was the first one.

We have a strange relationship, John.

Don't say like that, Jesus.

Anyway, what's been going on in your business, James?

What's been going on in my business?

Well, what we heard, you were stocking up for the January rush.

I mean, in your dealership for the last five days.

And well, I mean, the phone has not stopped ringing, James, has it?

Yeah, it has been a slight slow start to the new year, I would say.

We sold a few over Christmas, like that post Christmas week.

We probably got three out the door, which is amazing, but it tops up December.

We actually had a really good December.

I think Joe said it was our fourth best month for the year, which is pretty amazing, really,

considering it was supposed to be really quiet.

But as you say, we're properly stocked up.

We had something like 15 cars advertised.

I think as of today, we've got 15 cars advertised.

But it hasn't really kicked off in the way that I thought it was.

Last January came back and it was absolutely gangbusters straight away.

And it carried on all the way through January, February and into March for us.

This year has been a little bit slow.

And I can't quite put my finger on why that is.

We're getting leads, interestingly, from places like CarGurus and CarWow.

We've had a lot from those guys.

And we have sold some cars this week.

I think we've got four away this week.

But I was sort of hoping that it was going to be an everyday phone ringing.

And it hasn't been like that.

And just chatting to some of the dealers that I have been over the last week.

So they're saying some similar things.

So it's nice to know that we're not on our own.

But yeah, I'm hoping this January rush happens at some stage in January.

You've got about 20 days left.

So fingers crossed.

Yes.

But yeah, I've got a week off next week, which I'm very much looking forward to.

Handing the reins to our young Luke, who is going to be looking after the place.

So I'm sure we'll come back from our holiday and everything will be sold.

I mean, he looked mildly terrified when you told him that he was running it.

He certainly did.

Anyway, shall we introduce our lovely guest?

Yes, let's do that.

So our guest this week is founder of specialized or specialist used car dealer sports and touring is Tim Atkinson.

Tim, thanks for joining us.

I'm very glad to be here.

Thank you for inviting me.

Nice to see you, Tim.

Before we get into your business, I mean, what did you think of what I was saying there?

Is it similar with you as well?

I mean, how's the start been for you?

Well, it's interesting.

You know, I came into this business with no motor trade experience about five and a half years ago.

And I'm really glad I didn't bring any experience with me because I have just had to accept the landscape as it is with no preconceptions.

And people I talked to who are used to, you know, selling a lot of cars in particular months of the year have seen that turned on its head.

And yeah, you know, we again, we had a great December, actually.

It's a slow start to January.

That's partly because we've not got very many advertised at the moment.

It's also down to some other factors, which maybe we'll come on and talk about.

But the notion that that you can predict where the workload is going to be and where you'll sell, I think is a is a false notion.

We used to say in my previous world, randomness comes in clumps.

You know, you'd look at a data set and and say, that doesn't make sense.

You know, why have we suddenly got all of these happening?

And the answer is that randomness comes in clumps.

Yeah, I find I have found that quite frustrated.

If I'm honest, I've talked about in the podcast before, they're just the kind of the unpredictability of retail car sales, just never knowing when it's going to happen.

And I find it just so hard to plan.

I talked to other dealers and it's kind of say, how do you manage it?

And they I don't think anybody does.

I mean, you might have lots of data over the last few years, but it doesn't it doesn't point to what's going to happen in the next week.

Is it?

No, I think you have to be dynamic and ready to respond and and try to keep quality control where it needs to be.

You know, because I'm sure we've all been in situations where you suddenly have a rush of things that need to be done.

And the risk is that they're done, but they're done badly.

And that that is one of the biggest challenges.

Tim, let's talk about your business then give give those people listening and watching this on YouTube.

It's a bit of an idea of what you do, what you sell.

Yeah, so we're in a farm shed in a village in Hampshire, basically, and started out as the name of the business sports and touring suggests as kind of a generalist prestige and performance dealership about.

But the second car I bought into stock was an F type Jaguar.

And I went and collected it myself.

And by the third bend on the way back here, I was just hooked never driven one before.

I thought it was tremendous in every respect.

And for the first three years, we kind of always had one or two around maybe three.

We started to get to know them a bit.

We started to get involved a bit in social media on them.

And then I did a SWAT analysis for those not familiar.

That's a strengths, weaknesses, opportunities and threats analysis on the business.

And a message that came out very clearly was that F type Jaguars and some of the performance Jaguars were really good news for us.

And we decided to dig in very firmly.

And so of the vehicles we've got in stock at any moment, I say about 80% are F types.

We do some X KRs, X KRSs, X FRSs, the other, you know, quite rare and very powerful Jaguar stock.

And it suits us for all kinds of reasons.

So you haven't always been a car dealer, have you?

You've had quite an interesting past.

Tell me a little bit about what you used to do and then why you decided to swap that for selling precious used cars.

Yes, so well, I left school early and ran a business back then.

But then I got into aviation first as a hobby and then I decided to make a career of it.

And I trained as a pilot, professional pilot, hit the early 90s recession and trained as an air traffic controller and did that for a few years to put bread on the table.

And then got into the airlines in the kind of mid-late 90s.

And I was an airline pilot and then moved into management and into what's generally known as safety but which I prefer to call risk and became an investigator and manager.

And that led to a really interesting career in roles in which I tended to be doing a bit of flying.

I've done a huge amount of flying in various aircraft of different kinds, fixed wing and rotary wing.

And then I ended up at the Air Accidents Investigation Branch and did 12 and a half years there as an investigator, a senior inspector of air accidents, as we were called.

And that was a genuinely fascinating thing to do.

I was very fortunate that I worked on some very big cases.

So the Air France aircraft which crashed in the North Atlantic, for example, the 737 of Turkish Airlines that crashed at Amsterdam and some other significant cases.

But that kind of also wore me down a bit.

And I left there, went consulting, ticked another box and became an examiner and instructor on the 737 series, which is something I hadn't done before.

And then decided, well, I'd like to do something totally new.

And we looked at all kinds of possible routes to go down and one that presented itself was motor retail.

And that came about partly because I'm a big petrolhead and have always been interested in cars.

And partly because it seemed, and my word is an insider powerful thing, to be a good area to go into.

Needless to say, I wouldn't dream of doing it again, knowing now what I didn't know then.

But, you know, it's been an interesting journey.

We've had ups and downs.

Of course, it's never quite the business hasn't yet delivered what it needs to deliver largely because although we came in as a disruptive force,

seeking to do things genuinely differently and genuinely better than many of the less reputable dealers do,

we nonetheless suffer from, for example, the difficulty of finding access to working capital at a reasonable cost and with reasonable terms attached.

And that's the big challenge the business has at the moment.

I like to describe that we've built a machine which is presently running at idle RPM.

We know that we can rev it up to three or four thousand and it'll deliver.

But we need to put fuel in the tank and it's getting that fuel that's proving to be extraordinarily challenging.

Yeah, I mean, getting hold of capital when you're in this business is hard work.

I mean, a lot of the banks don't realize motor retail, do they?

It's not just the banks.

And this is something I hope will come on and talk about presently.

One of the things that surprised me and delighted me.

In fact, when I started getting involved in, for example, social media groups where motor dealers talk,

I was very pleasantly surprised that there were people making suggestions about doing things that weren't maybe right.

And they were jumped on frequently by a number of dealers who clearly were doing the right thing.

I won't embarrass people by naming them, but a few individuals in particular really struck me with what they were doing and how well they were trying to run their businesses.

And the motor trade suffers and the more that you try to be disruptive and be really excellent and do an exquisitely fabulous job,

the more you suffer from these expectations.

I mean, I try not to listen to a program called You and Yours on Radio 4, but they did an episode on the 9th of December and it's worth,

if you're in this industry, it's worth listening to that because the motor trade was taken into the boxing ring,

put up against the ropes and punched stupid for 53 minutes with no one speaking up for it, really,

and with no one presenting the alternative. It's like car reliability or warranties, isn't it?

Very few people buy a car, keep it for three years, and at the end of the three years go online to review the warranty company who were fabulous,

although they didn't pay out because nothing went wrong.

Very few people will immediately go into the social media groups and say,

I've had this car for three years, it's been brilliant, I've serviced it, but it's never put a foot wrong at all,

hasn't cost me any unexpected money. Whereas, of course, in the siloed world of social media,

someone who's unhappy and happens to be a bit of a keyboard warrior will just be all over the misery.

It is hard to do things properly in this industry, I really do find it.

I think you've just got to stick to your guns. We certainly do it in our business.

This week, for example, we had a Kia Sportage come back to us, the customer had been complaining,

it had been using too much oil. If you look into it, Kia says using a litre within every thousand miles is actually fine

and within tolerances. I mean, it sounds ridiculous, that's a lot of oil.

She was a local customer, a local person who had trusted us, we just bought the car back.

We gave her her money back and said, don't worry, and she bought another car from us to be fair.

We swapped her into something else which she'd paid more money for and we'll get rid of that car somewhere else.

We might spare her repairs or decide to trade it on and explain the problems.

But it got me thinking, there is a lot of dealers out there that just wouldn't have done that,

who wouldn't have bought that car back. I just think that you do have to try and look after the customers

like you'd like to be looked after yourself, which is hard, isn't it, when the margins are so slim.

Absolutely. Now, we reap the rewards of that, particularly being so specialised,

that because we've got a really excellent reputation, nothing but five-star reviews,

which I know people will tell me it's wrong, I should be at 4.7, but I just can't push that across the line.

I've thought about trying to mildly upset somebody, so I only get a risky game to play.

But the other takeaway from that for me is that you didn't design or build the Kia Sportage,

you didn't specify the materials from which the engine is made,

you didn't determine what the manufacturing tolerances would be.

And we do carry an extraordinarily heavy burden through the CRA, for example, the Consumer Rights Act,

but also in terms of customer expectation.

And I actually see this crystallising in coming years even more,

because if that had been an EV with a significant battery problem, there isn't a route to parting it out.

There isn't a route to dropping another engine in without massive expense and so forth.

And I do think that we are very unreasonably exposed to the actions of others for which we become responsible,

and that's a real difficulty.

And of course, when you do the right thing and take a car back,

you've got to sell at least one more car, probably two, just to cover the loss already.

And then you've got to see what you do with that Kia that you now can't retail,

you can part it out, but you'll get a fraction of what it's worth and so forth.

Yeah, it is painful.

I mean, you have been vocal on those Consumer Rights, the fact that you think it is unfairly weighted.

I think there was a story on Cardinal Magazine, you were chatting to my colleague,

Jack, and I think you said the rules were written around fridges and televisions and not used cars.

I just wanted to ask you about that, because I agree with you.

I think a lot of it is unfairly weighted towards the consumer,

especially when you're selling 10 to 15 year old cars.

It actually makes selling older cars really, really difficult as a dealer.

It does. And I mean, you know, we've just sold a 16 year old XKRS convertible,

which happens to be utterly fabulous.

And I have no qualms at all about seeing that drive off with its new owner,

partly because, and I don't want to give away all the secrets,

but Jaguar reliability is just really very good if you know what you're doing with them.

But yes, the CRA is not designed for the motor trade.

The motor trade copes with it, but it's again, it's not just that.

It's, you know, in the UK we have statute law and we have case law.

And again, and again, you see judgments which appear to,

and I'll try to be kind to the judiciary,

that there may be a flavour amongst those decision makers on the bench,

that they don't hold the motor retail trade in the highest regard.

And instead of looking and saying, OK, well, a balanced decision has been arrived at here.

Sometimes there is a lack of balance to the decisions.

And of course, once case law is with us, it's very difficult to shake off.

But I do think from the point of view of the motor retail sector,

it's overdue time, at least for a very sensible conversation about this,

if not for some legislative change.

And yeah, I'll take the conversation there then.

One of my concerns is that we don't have a voice,

that there are a couple of organisations which you can join

and which would perhaps say that they speak for, in particular, the independent motor retail sector.

But really they don't.

And that's something that's at the very forefront of my mind at the moment.

And you're planning to put something together on that front?

I am, yes. Not just planning to, but actively doing so at the moment.

This came out of the whole auto trader piece that we've been living through, of course.

But I've got a mind map in front of me on one of my other screens here.

I'm a great mind mapper.

And as I started to put down areas where we should at least be talking,

if not acting and representing ourselves, you know, you look at the franchise dealers

and they have quite a powerful and effective voice with full-time office staff

who are out there, for example, talking to government, talking to trade organisations

and representing what they're doing.

We don't have anyone doing that.

There are some who are talking about doing it, but without being unkind,

I'm not sure they've got the skill set and the ability to flex into some of those landscapes

and some of those conversations in a way that I know I can.

The roles I've had in aviation, which has included running an airline and that kind of thing,

have left me very well able to talk to a government minister to go on.

I do a bit of media work still around air safety.

Now, when there's a crash, you'll see me on Sky and the BBC.

I had a lot of media training, so I can put forward a case.

I can represent a point of view and so forth.

And I think we need someone doing that.

I'm very happy to be the person going forward to do it.

And what we're looking at now, I'm looking with a small team of people,

we're talking regularly, about the mechanics behind that

and how we form an organisation and so forth.

I'll come onto the automated piece in a moment,

but just on this organisation front and your ideas behind it,

where do you think the independent motor retailers need the representation?

What are the big things?

I mean, we've mentioned the consumer rights.

I mean, where else do you think it could help?

Well, everywhere.

We are under pressure from a number of monopolies, including auto trader.

I would also say BCA.

We don't buy from BCA,

but if you look at the conversations from people who do,

my word, some of it is deeply shocking.

And then you've got, for example, car well and motorway.

You've both come into the industry to disrupt.

The effect they are having is that it is becoming harder and harder

for the retail customer to buy a good car from a car dealer,

because we are all having to pay far too much.

I saw an F-type go through.

I think it was motorway a couple of days ago for 800 quid below retail benchmark.

Now, that is so far from being sensible.

And that's before you put in their 500 quid fee for auctioning you the phone number

of the person who owns it.

And again, a pressure which appears to be on the industry,

but actually on the retail customer as well,

because the guys who seem to be winning through at the moment

are the ones we were talking about a short while ago.

Buy it, wash it, photograph it, stick a warranty on it

and hope that cover all the things you didn't look for in the workshop

and hope for the best.

Tim, let me just play devil's advocate,

because I've had a very similar conversation with the likes of motorway and car well

and said very similar conversations about cars going for 500, 800 pounds under retail.

And they would say to me, there's a dealer out there buying that car

and there's a dealer out there making profit on that car in some way, otherwise it wouldn't sell.

So sometimes I look at it.

I mean, for example, there was a Nissan Prime area that went for a motorway auction this week

that was up for 1200 pounds.

It was 20 years old.

It was up for 1200 pounds reserved and the front end was absolutely stoked in.

I mean, it looked like a cat end.

I mean, there was just, I was thinking, I wouldn't give 100 pounds for it

and then the scrap man would probably not want to take it, but yet they're asking 1200 quid.

And it's just, I think there's January is part of this.

January is obviously a hard time to buy cars, but also there are people out there buying these cars.

So what would you say to that?

There are and they are delivering poor value for money to their customer.

I'm going to make some sweeping generalizations.

So please, please understand that these come with that caveat.

You know, look at a supermarket, which is going to load up an unnecessary and very expensive and very poor value products

and just use that metal as a vehicle for selling things that people don't want,

which have massive profit margin across them.

That's bad for the retail customer and no one is flagging that.

And Motorway and Carwell, you know, there are organizations who talk about trying to be good

and trying to do their best and all that, and they're not.

They're being disruptive, of course, but they're being disruptive in a really damaging way.

And they're making it very difficult for us to run dealerships properly

and for customers to buy cars, which are good because yes, people are buying that.

And if I was a lazy buyer for a car supermarket operation,

I can sit there and buy cars with 800 quid across them all day long through those mechanisms.

And if my operation is of such low quality that we can work with an 800 quid margin on the metal,

then, you know, the business, I suppose, is going to succeed.

Sorry, Tim, what I just wanted to say on that front.

Motorway and Carwell are not going away.

And to be fair, we buy a lot of cars from both of them.

But do you think with these margins being squeezed like they are,

there is a future for independent motor retailers like us?

Have we got a future? Or is it going to be the point where the margin gets squeezed so much

that the people who want to do it properly just can't?

I think you've got to be...

I'm not going to reveal the recipe of one of the secret sources that makes sports and touring what it is.

But I think if you look at how you're running your business

and how you can work without those organisations, I'll go on then.

About half of my stock is offered to me and doesn't come through any channel

because we have our reputation, we have our name and an F-type buyer or owner rather

who is in the F-type forums and on the Facebook pages

and is thinking of selling is quite likely to think,

need to sell the car, oh, that guy sports and touring, I'll give him a ring.

And he gives me a ring and we have a sensible conversation and we go and see the car.

We always travel to them, we don't ask them to come here.

And we bring great vehicles into stock that way which are not accessible to other dealers

because they don't have that position in the space where people are coming to them.

And that was never ever part of specialising and it has just come as a delightful surprise along the way.

And when I started the business the idea was that we would copy and paste

and end up with four or five businesses.

I don't kind of sense that that's going to happen because it is just too difficult being in this business.

But I would now be doing similar things in social media with maybe Porsche, Maserati, Aston and so forth

with a long game in mind that will establish those same criteria in the public perception

and that will then deliver in the unexpected way which it has.

It's a bit more exciting than the automatic Volkswagen ups I've got in stock.

I'm mildly jealous I must say.

But there's a business in Andover just down the road called DA Cars

and the guy who founded that very cleverly a long time ago set up Facebook groups

called for example by cars in Andover, by cars in Bath, by cars in Bristol and similar things

and he ended up with hundreds of thousands of people in Facebook groups.

And yes, automatic Volkswagen ups amongst them, people who were in those groups

and just knew oh I can stick my car up here.

Now of course he was moderating all of the posts and he was able to

oh right, Mrs Smith would like to advertise her Volkswagen up.

I'll just send her a messenger message and we'll have a chat about it.

All of us have got a car in stock.

Very smart, very smart.

Let's just, in our final few minutes, let's just touch on the auto trader thing.

You came to prominence off the back of the changes that they made, the deal builder introduction.

They have obviously made some changes to that since.

I'm interested just to get your take on that and why upset you so much?

I have a very profound sense of right and wrong

and from my first engagement with auto trader it felt wrong

and I got to know their corporate psychology, their modus operandi and so forth

and it was quite familiar actually.

It was something I'd seen because when I was accident investigating

you know when you're dealing with something like the Air France crash which I mentioned

it doesn't all happen in the flight deck of the aircraft.

It reaches back into the design of the aircraft and the design philosophy in Toulouse at Airbus.

It reaches back into the boardroom at Air France and decisions made there about pilot training and recruitment

and operating principles and so forth.

And I had seen a certain kind of corporate psychology which is around a perceived excellence

which actually is entirely false.

And auto traders think that they are just fabulously brilliant at everything they do

to the point that they're in a real emperor's new clothes situation

where they can't even begin to think of the possibility of a question being asked about their brilliance

having any validity.

This is a company which is so nuts

not only did they decide they would bolt some cars upside down in a corridor in their offices

they had to build a fake corridor to do it in.

That's what we're dealing with here.

Tim, do you advertise with them?

I do, yeah, yeah.

Advert performance has crashed recently.

Your performance has crashed is it?

Who else do you advertise with and who's your best performer?

I'm just interested how it tallies to us.

I don't know who our best performer is

and that landscape has changed very rapidly in the last couple of months.

We've gone down to Starter from Ultra a couple of years ago

that'll perhaps be part of it

but that's partly because I know my audience.

We get rid particularly through YouTube

and anyone who's using YouTube

dig into the analytics on YouTube

because they are fantastically granular.

Now I know that the people who walked through my door

and I regret this actually because having been an aviation

which is an incredibly diverse industry

and worked with all kinds of people from all over the world

and loved that.

My buyer is between 50 and 70 years old

is white middle class British

and on the occasion we get someone who isn't.

It's an absolute delight

but we know that granularity

and we know that to them

the place you go and buy a used car is Auto Trader

and that's why when this thing kicked off

my position was and is

and will continue to be

that we should be able as an industry

to lean on Auto Trader.

They've built an enormous presence

as a marketplace.

They are without doubt the largest marketplace.

They have a monopoly

but we're lucky enough to live in a country

which has quite clear

and quite stringent laws

about how you must behave if you have a monopoly

and Auto Trader are just ignoring them

and there was quite a body of opinion

towards well we'll just

cancel our subscription with Auto Trader.

That's great. You put a fresh clip in

you take the safety off, put it on full Auto

aim at your feet and hold the trigger.

All you've done is deprive yourself

of talking to 80% perhaps

of your audience

and I was about no that's not right

you shouldn't be bullied into that position

even if it's for good reasons.

You should be able to use Auto Trader

but you should be able to use Auto Trader

on reasonable terms

and it's very clear that their terms

aren't reasonable, weren't reasonable

they then of course introduced Deal Builder

which was the final straw

and all of a sudden the camel

is just lying there in the desert with its back broken

and

yeah without that

I'm glad they did that with Deal Builder

because we needed

you know we needed someone to strike a match

Auto Trader obviously not here to give their right

reply but in

two weeks time Nathan Coe the CEO

is coming back on the podcast

he was on it just before Christmas

and he's going to come back on

what question would you like me to ask him?

I'd be delighted to do a double header with him

I really would

what question

would I ask him

the big question to me is

are they doing this

knowingly

do they have really excellent

in-house counsel

who are talking to them and saying

yeah yeah we're getting further

and further into what we shouldn't be doing guys

and maybe

someone is saying yeah but are we going to get away with it

and the council are saying

yeah

very close to the wind now

very close to the wind

and they're saying yeah okay close

to the wind but we haven't yet

crashed shived

and

and I don't think that's the case

because

when I look at aviation safety

aviation risk is all about data

the way

autotrader have got a fantastic

body of data

the amount of data they have

and yet they just have no

competence in analysing it and working with it

and I'm afraid my opinion is

the same on this front

I just think

it's likely that

they're just

plowing their own furrow sorry I'm using lots of analogies

all of which are getting mixed up here

and there's a thing

which we call

in the risk world you call drift into failure

and where it's

a procedure

or an organisation

becomes slightly deviant

and it reaps the rewards of that deviancy

and the deviancy develops

and goes from being tactical to strategic

and

you reach a point where suddenly you realise

you've drifted into this awful situation

where everything is wrong

and that I think is what's happened with autotrader

Tim let's park it

and we'll give them their right of reply

in a couple of weeks time and you can come back to me

once you've listened to that one

I'll look forward to that very much

let's try and end our chat on some

new year positivity

what are you looking forward to this year

oh gosh

when I think about

the things that worry me day to day there's nothing to do

with motor retail at the moment

there to do with the world which has turned on its head

I used to say to people

if you told me when I was 14

that at my present age

of 58 I wouldn't be able to fly on a supersonic aircraft

and there'd be a war in the middle east

I wouldn't have believed you

and that's looking like a very very low bar now

we've got an amazing incredible world

to navigate

I don't think we've seen the effect of that

on the motor trade yet

and maybe I hope we won't

because there's actually a bit of me that some of my customers

coming along at the moment almost with a

you know the world's just gone so terribly wrong

I just like a big fast car on the driveway

that looks great

and you know there seems

there's almost a kind of

hopelessness sometimes

but what else am I looking forward to

I'm particularly looking forward to seeing

the new Jaguar

I was with Easyjet for five years

in the early days

my desk in the office was not far from

Stelios's desk

and he was a massive believer in no such thing

as bad publicity

and last year we saw

probably the best advertising campaign

I have ever seen

from Jaguar

they didn't push people's buttons

they tweaked people's nipples

if that's not too far

and they

exquisitely

upset their audience

and started the most

massive conversation

I've spoken to someone who's driven the new car

and

we're starting to see reviews coming out now

I was delighted

was it

I can't remember which publication it was

which said not only is it great

but it's a Jag

and I thought

that's what we need

we need a fabulous

electric grand touring car from Jaguar

and people will be

down to the mill in us

for a fresh supply of hats for dinner

in a way

that

will surprise and I hope to light a lot of people

so that's my big hope

for 2026 in the motor train

I hope you're right

I also hope they use that on their marketing

Jaguar here to tweak your nipples

let's

let's move on

Tim

thank you very much for joining us

thank you for giving us your forthright opinions

on all of that and please stick around

for some stories but John we should probably do some of those

now

a quick word from one of our sponsors

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John guess what

oh god

you bought more ducks haven't you

no ducks John wrong there

I've actually got a new habit

I've signed up for Dealerway alongside more than

two and a half thousand

other rated and vetted car dealers

to sell my trade part exchanges

the site is designed for dealers

to sell their part exchanges for more money

quickly and easily

there's no sellers fees

and buying a car costs just £99

one of the cheapest around

and when I haven't got the time to list the car myself

I can even watch out them the details

and they do it all for me

that sounds awfully familiar

so are you selling all your stock there now

not exactly John

but if I do have a sudden influx

of Kia Picantos

I know where to send them

dealers can find out more at

dealerway.co.uk

now back to the podcast

so James and I are going to run through our favourite

stories of the week and at the end

Tim gets to decide which one of us

chose the best ones and therefore

who is the winner

slightly complicatedly James I looked back

at our last proper podcast

and it was a draw

unprecedented draw

so I'm going to let you start

as a new year I mean you did win

by your own rules the Christmas quiz

so let's start this as a new

series

and I will actually write down the scores

whatever that means a new series

sure new series excellent

okay thank you John I'm going to start with

some news

excuse me that came out in that

quiet period between Christmas

and New Year which wasn't

so quiet for Companies House

because they had to deal with

Constellation Automotive Group's

huge businesses

accounts and their annual

reports and those included

We Buying a Car

Cinch, Marshall

and also their

whole business Constellation Automotive Group

so this is a massive

business John as you know

we've talked about it many many times

before it's got what

most people would assume

is the perfect motor

trade business you know they've got

We Buying a Car that acquires cars

from members of the public

the ones they obviously buy them under

trade prices as we well know

those that they don't

want they put in their auctions

BCA which they obviously

own and they make money on the

car and also make money on the fees

they also can cherry pick

the ones that they do want to retail

they can put those into their Cinch

used car dealerships

or if they're really good

onto their Marshall 4 courts

so they've got this perfect

business really this perfect circle

of used car

retailer, new car retailer

acquisition channel

and trade disposals

but for some reason they're not making

it work so I looked into this

in a lot of detail

in 2025

they turned over

£9.5 billion

but yet still

turned a profit of

£130 million just shy

of £130 million

and that comes because of many

different things but most

importantly Cinch cars

if you look at their accounts in particular

now remember this is the business that

launched during Covid at the height of the

the kazoo fame

wanting to sell

online cars

exclusively delivering them

to people's homes

and since then it has

changed lanes quite dramatically really

it does still offer home deliveries

but at the accounts point out

they no longer do that free of charge

they're charging people to deliver to their homes

but it has also

opened a number of

of dealerships

ironically in a lot of former

Kazoo ones as we know

Are they calling them dealerships James

or are they calling them customer handover?

Well I think there's a little bit of both

but actually I think they are sort

you can go in there and buy a car

which in my mind is a dealership

but yet still

Cinch cars in particular

lost a huge amount of money last year

it clocked up losses of just over

£100 million

so you've got this business here that

is struggling

and just

focusing on the Cinch front

I sort of wonder quite why that is

they had a lot

of expense when it comes to marketing

that business they were like Kazoo

on front of shirts and all sorts

of football teams

that has all since come to an end

but yet still they are making

a very very heavy loss

that has weighed heavily on the group

overall BCA

on the other hand made

£152 million EBITDA

profit so

they are a profitable business that was up

a third

on the year before we buy any car

meanwhile added

£61.5 million of profit

to the group

they bought half a million cars in

2025

which is a staggering amount of cars

512,000 cars to be exact

but the biggest problem this group

has is its financing costs

and Tim mentioned

the problem with capital during our chat

their account show

£210.4 million

of financing fees

during that year with a one-off

finance cost of

£23.6 million

I mean that's quite an overdraft

so yeah very very heavy

financing cost there

if you look at it on an EBITDA

level and

you've got to be fair to them

I think we look at car dealers on an EBITDA

level

they made a profit of £360.5 million

but

this is a business that is

heavily leveraged

that is a lot of money that they're paying

in financing costs and it does make it

very very difficult to run

so I just found

these accounts absolutely fascinating

I created

a couple of videos for the Cardinal Magazine

YouTube channel all about them

go and check those out

I've written about it in my substack today

in my newsletter because they are

one of the biggest companies

in our industry

and it's very very interesting to see how they're performing

what do you think John?

I've got a couple of takeaways I suppose

I mean the cinch thing is interesting

because that's predominantly the only thing that

Constellation are doing that's making no money

really

it's almost a bit of a

bit of an anchor dragging them down

and you just think why is it

why is it not working is it just

that

that model is flawed

and it just doesn't work anymore

you know take a look at car supermarkets

car supermarkets some have

been up in 2025 I think

and towards the end of 2024

but it's a difficult

market to operate and you've got to be very

well as YouTube both know

you've got to be very on it on every single car

in terms of pricing

and preparation and everything you can't

really do things on mass anymore

in quite the same way and I think that's

probably part of the problem for cinch

the other part of the problem as you say is marketing costs

which are enormous and yet

I don't think

they're as well known as they perhaps like

to be in some ways I almost

think they should have bought the kazoo name off kazoo

because that's you know combined at least

you know throw a couple of million at

whatever that brand name would cost

and at least you would cover the entire

we are the online

director consumer

sales channel

the other thing I thought was interesting

is the figure for we buy any car

the number of cars they sold is up

you know it's up modestly it's 512,000

cars rather than 487,000

cars but in the times

where you know we're looking at

car wow and motorway

getting bigger and bigger every year

every month it seems like there's more cars in

those auctions there are not more used cars

dramatically appearing in the market

like I thought they'd have made more

of a dent in we buy any cars

yeah I just in figures

totally agree with you on that front I went

along to film some footage for these

videos I went along to the local

we buy any car centre and it's based in a

car park not far from

where I live and I just found

and obviously it was sort of their car park

so all of the cars were the cars that they bought

and I found it absolutely fascinating to see

the sort of things that are in there

stuff like Tesla Model Y

to really cheap Kia Picantos

the sort of stuff that they probably gave them

pennies for really

but there's still this large amount of people

out there who just

who don't want to have to sell not a motorway or car wow

and just are happy with

that terrible price

they notoriously get from

we buy any car yeah that's very true and I think

you know having spoken to a few people

recently well actually strangely

chatting away to I think it was like the

manager of the venue of our used car

was she was sort of she was a bit frustrated

with I can't remember where she sold a car on motorway

or car wow but she was frustrated

by how slow the process was because she'd

in her mind she'd sold it

her lovely car that she was very proud of

and it had been a week and nobody had come to get it

she was sort of like well I kind of want it gone now

you know and that's

the one positive thing you can say about

we buy any car is you take your car along

it's gone yes that is true

that is very very true it's instant

isn't it I just yeah interesting

stuff Tim did you check out any

of this what's your take on it

well I'm actually going to say some

words in favour of we buy any car

because you're here to disrupt

today Tim aren't you I am yeah

two or three times a year

we will have

a customer who's got a part exchange

and we buy any car

we'll make a stellar offer

for it and I

presume it's driven by you know they particularly

want that make model for Cinch

or for BCA

certainly offer way more you know

I've seen well you know

thousand two thousand pounds more than we

can offer as a part exchange

price and

I know the guys that we buy

any car and hand over

I think it's a little bit unfair that they

they have a reputation

for for chipping

people but I've said to people

this is only what anyone will do

a competent private buyer

will go around your car very thoroughly

and see the things that are wrong and talk to you about

putting them right I would

do that if I'm taking a car in part exchange

we buy any car just happen to

be in the window for this

they're where the public see this happen

and the guys in hand over certainly

are scrupulously fair

and indeed work

to lower numbers on the repairs than we

do therefore if we're looking at a part X

that needs a door panel doing

I have a figure in mind

which is considerably more than they do

and so as I say

two or three times a year I'll have a customer

and say to them take your car to we buy any car

they're only a mile and a half away

I'll come and pick you up once you've transacted

there we'll stick you in your new Jaguar

and you can drive off

I use them all the time

I say to every single customer

have you had a we buy any car price

for your car and they

invariably either say yes or no I'm

yet to do it I say we'll take it along to

them find out what they'll give you

once they've seen it and I

will definitely beat it

and I often buy their car as a result

okay so you're playing this a different way

around interesting right

okay you see I don't

want stocks that isn't Jaguar basically

no true

so that's

that is interesting yes I think

it is a fascinating

story you're dealing with

a behemoth organization here

and how the people

who sit in the boardroom even have

the vaguest idea what's going on at shop

floor level is a

tremendous

mystery and

if their performance isn't great

then that's where I would probably

with my investigators hat on

start and I'd say

it's just a dilution

of message from

top to bottom and

and a lack of

understanding and transparency

of cost

and profit from bottom

to top

but equally you know if you're running

a company of that size and you're making

money that I think

is quite a quite an achievement

and

you're employing people people are buying

cars people are selling cars there's good

stuff happening you know

it's not

I

I don't think business should

only exist to create

more and more wealth for fewer and fewer people

right John

over to you

I'm going to this is a bit

of a like we're rounding up all the things from

last year in a way but I'm going to talk about the

manufacturer winners and losers of

2025 as you have

called it James Banger in your

very informative article

thank you thank you

thank you for that performance review

pay rise

so lots of

the big winners for this I mean you've

helpfully categorized all these for me but the big

winners are unsurprisingly

two Chinese brands

so BYD

51,000 registrations

mid-table but that's a

485.1

percent rise on 2024

which is

well staggering really

number two a moda

up

447.1

percent again

so that's 19,000 registrations

I mean the rest of them are all well the rest

quite interesting actually Alpine I didn't

expect to see in third but of course it's

still a modest number of registrations like

1,700 but that's been

increased dramatically by

the new A290

affordable electric hatchback thing

Polestar also doing well

Alfa Romeo surprisingly doing well

Cooper, Peugeot, Jeep

Renault and Mazda the other ones in the top

10 and there was

another enormous riser which you've sort of

slid under the radar haven't you

which is JQ because they've not

they you know they sold maybe two cars

in 2024 because they haven't really

started telling them so they had something like a

13.5 percent

13.5

thousand percent rise sorry

but it's not really a fair bit of accounting

that

but the thing that I just wanted to

talk about JQ in a moda and BYD

really because not just the percentage

rises because I mean percentage rises

are slightly fallible

but the sheer number of cars that they've

shifted from a standing stars

and where they've ended up in

this table now so

JQ particularly is now bigger than

Seat, Honda, Citroen

Porsche Alpine

Suzuki, Lexus, Jeep

Fiat you know all these

pretty solid brands

it's overtaken I mean Citroen

really is the big one I'm surprised they've

overtaken but maybe that's more telling of

where Citroen is now in this table

and BYD I mean BYD's

creeping towards the top slightly

bigger than Mini, Cooper

Mazda, Dacia and all the ones

I've just mentioned so

incredible changes really

you know they're not

these are not the best selling brands yet

in the UK they are

what you would say mid-table aren't they really

at the minute but that has to be sort of caveated

with the fact that

BYD has predominantly been

EV until most I don't know halfway through

last year they sort of started introducing

more plug-in hybrid stuff

and I mean JQ

JQ had one model

pretty much until let's say

September

and even then the second one it

introduced was you know partially electric

as well so I just think it's an incredible

performance and this is not

news really in the sense that we've been talking

about this for a year that they've

just sprung out of nowhere and done

incredible number of sales

but

yeah it's interesting to see the

hard facts of what they've actually managed to achieve

in 2025. Yeah definitely

I mean I think the other side of this

story is where it

come from you know that's a

if you look at it in cars

that's a hundred thousand cars

that had to come from somewhere

else and it's the

the second part of that story is

the brands that have suffered, the BAF

down 71%

Fiat down 38%

SEA down 37%

and I wouldn't say they are

directly affected by the Chinese but

you know brands like Audi

they dropped out of the top three

best-selling cars they were down 9.2%

last year Nissan

down 10.3%

and Mercedes down 13.1%

they are all brands

that have got cars that

the Chinese probably are

rivals to

these much cheaper

SEVs that are available at ridiculous

PCDP prices

when people are finding it tough

and the cost of living has been hard

for the last couple years they're going to go for the cheaper

option you know I think I liken it to that

that Audi little

supermarket you know people like

to think they're getting a bargain

and I feel the Chinese have tapped into that

the other thing

that really struck me with these figures John

is Ford

Ford in fact in the top three

for the first time in quite some time

they sold a hundred, just shy

of 119,000 cars last year

which I

I think we discussed it didn't we, it's like well why

have they sold you know because they've got fiesta

anymore so Puma has clearly gone very well

they're ending the run on focus

maybe that was it, maybe it was buoyed by

the end of focus, everyone going and buying a focus

I don't think that's what happened, the other thing is

Puma Jenny came along

and Puma Jenny although I'm a little bit skeptical of it

I think actually

it's quite a good value for money

I think I've seen one on the road though

no I still haven't, I still haven't

but anyway that's a, that's not really a

what's the word, that's a

the legalese has gone out of my head because it's

nine in the morning

and I've been caught

would it, I've not seen one yet

so they can't be selling any

but fascinating figures

I just love the yes men

two figures in January looking back at

who's won and lost the year before

and it's clear last year was the year of the Chinese

and I think this year

we're going to see some very very different things

I mean a lot of people are saying

sorry John

I was just going to say a lot of people are saying

they think this year we could see

some major casualties and I wouldn't be

surprised if that's the case

well I feel like I was right to say 25

was the year of the Chinese, I know some people say

it will be this year as you said

I think you're right, it's the year that they really took a

foothold, I think this year we'll see them

accelerate big time

the other story I just wanted to roll into this

before I come to Tim for his opinion

is

my cause and his thoughts

on these figures

and particularly

he's sort of, or at least the story we've written

has been around

EV discounting and there's just a figure

in this story that I thought was incredible

he reckons

manufacturers discounted new EVs

by a total of 5.5 billion

pounds in the UK last year

which is the equivalent to an average

of more than 11,000 pounds

per car sold

just incredible amounts of money

off and when you think okay this is spread

across the whole car industry

and there are plenty of Chinese manufacturers

who I'm sure are discounting heavily

and have lots of margin to work within

but lots of manufacturers

like you Ford's and your Vauxhall's

and Renault's and so on aren't making that much on EVs

in the first place to be lopping that much money off

so I can see why he describes it

as unsustainable

over to Tim

Tim, what did you make of these

well, the Chinese MT figures

well it's amazing

how we flex

in order to save money

you know

China is a state

which is

a huge threat

to

to us

and to other democracies around the world

a human rights record

is appalling

it is a

communist state

where

the average person

I think it's fair to say

is not treated well

and

we put all that to one side

and buy a cheap Chinese car

and you know

morally we're not making a great job

of being the human race at the moment

wherever you look

the thing that has always worried me about the Chinese

is

if they get quality control right

we're finished

and I'm hoping they haven't

but I remain to be convinced

I think they probably have now

they've done it by stealing our technology

if you research

the manner in which China

has been gathering

information and knowledge and expertise

in the UK and in America

and in other developed countries

that is terribly frightening

they are hoovering up

what we do and how we do it

in the most

distressing way

and

I'll mention

we've heard a lot about tariffs

in fact goodness me

I look back on times when we heard about tariffs

as the golden age of

modern living

because that whole thing's gone

in an appalling direction

where is

the protection of our industry

the obvious thing to do is

wax some tariffs on these Chinese goods

and give

our native manufacturers

well I was going to say in Europe

we had Brexit

with the illiterate voter to burn down the library

didn't they

so maybe it's fair enough that all the European manufacturers

are kicked in the dirt

I don't think it is though

I think we've got so many things

terribly wrong and we continue to get them

more and more wrong

and

yet people are so

selfish

and so

disinterested in doing what's morally right

that this has happened with

with those Chinese numbers

and yeah I mean it's

it's a fascinating time

I wonder what are those vehicles going to be like

in four years

well that is a very good point

and to be honest

well I've got a couple of

I mean you could lay out concerns about

Chinese cars or new cars for about an hour

couldn't you on a podcast but

the ones that I've driven

have they feel like

they've been rushed to market a little bit

or certainly rushed to this market

put it like that you know

let's say they perhaps function very well

in China or Europe or whatever but they

don't quite understand how UK

works work at this point with their lengthy

persistence on it just seems to be completely insane

things like the infotainment

not really fully resolved

yet which actually

considering you have to control everything through the touch screen

should be a bit better than it is

all that sort of stuff and yeah

you're right I sort of think

I don't think this is a problem

unique to Chinese cars though

if you were to say you know there's a new

let's say a cherry coming out with a brand new engine

that's supposed to be well-renowned and it's very clever

and it's very thermally efficient etc

how reliable is that going to be

we should probably ask the same about

Ford EcoBoosts when they first came out shouldn't we

is very difficult

yeah I do agree

with you I think the difficulty is

that

the lines are so blurred aren't they what we're really

talking about is Chinese brands coming here

in a way or Chinese car manufacturing

versus I think the argument that's put forward

a lot is look around your house and try and find

something that isn't made in China yeah and we've

been buying those for 30 years you know

computers or TVs or radiators or whatever it is

you know why does the buck stop

at cars it's a

it's a difficult one to answer

that

their march has been insidious

and as you rightly say

in

large part unseen

there's an old adage that

sorry excellent

is the enemy of good enough

but conversely

we've seen some

organisations and I think Tesla are

problem this is only my take on this okay

Tesla

are absolute masters

of just good enough

in their early days

my comprehension is

that they were going to go bust if they continued

refining and they simply had to start

selling cars and they sold cars

which were a long way from where

they should have been I mean interior

you know

and they got away with it

because they got cash flowing in

and it's kind of

it's not a Ponzi scheme

model but think about

the expansion of low cost airlines

in Europe

and the world it's great if you're an airline

that's flying 100 flights today

and you're selling tickets

for 200 flights in six months time

that on the balance sheet

looks sensationally good

but it falls apart

when Covid comes along and suddenly

tomorrow you're not flying anywhere

and when the expansion

stops and what's fueling that expansion

and what's going to sustain your brand

and if

it does turn out that these

novel machines from

novel manufacturers

are problematic in the medium to long term

again going right

back to a conversation at the start of this pod

whose shoulders will that be on

that'll be on our shoulders

when we're selling a four year old

bid which has

got a battery problem coming up shortly

and a customer whose expectation

is

that it's going to be perfect

Well at least we've got something to look forward to, Tim

They've taken all the sharp things out of my office

you know

I'm glad they have

John, I mean we've sort of

we've run out of time, we've done a

two big story double header there

haven't we, you know

maybe we should just commit those to the house

and see how we get on

I think so, so Tim

before I ask for your verdict on those two stories

are there any

stories you think we should have covered but we didn't

I mean there's quite a few

we didn't have time to cover

My goodness me, where would you start

No, I think you've

focused on exactly the

exactly the things that have

kind of caught my attention

Constellation, you know Marshall Jagger in Newbury

who've done our servicing

I have the most amazing

deal with

Marshall Jagger in Newbury, as an independent

specialist

the things they were doing for me

were unbelievable

and were such an enabler of my business

and that huge facility

is now closed

and you know

next year's Constellation

accounts might be even more interesting

and it's good

to have a hobby, James

You know

Keeps me busy

I'm sure it does

I think for me if I had to choose between the two

it's the

the march of the Chinese in the market

If for no other reason

than that, if

three years ago we'd all sat here

and challenged each other to come up with

what's going to be the significant thing in 2025

I don't think any of us

would have dreamt

would have seen figures like that

No, I don't think so

That's a good win for me

if at the expense of the European car industry

On balance

It's all over the street

That's lovely

Well Tim, thanks for joining us today

all the stuff we'd say is thank you to you for coming on

and chatting to us about your business

and your very interesting background

I must say

It's been really enjoyable, thank you very much indeed

for having me

Lovely to see you Tim, thank you

Best of luck this year

Yeah, fingers crossed

Absolutely, thank you as well to James

for turning off his boiler for the

duration of the podcast

and thank you for listening

We'll be back next week with another episode

James won't because he'll be skiing down a slope

so make sure you're subscribed

so you can be notified when that goes live

If you want to check out the stories you mentioned today

take a look in the show notes below

or head to CardiTheMagazine.co.uk

Thanks for listening and goodbye

Constellation's multi-million pound losses in detail, and was 2025 the year of the Chinese car? – with Tim Atkinson, episode 238

About this episode

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