FCA teams up with influencers, JLR shutdown enters another week, and what is a cluster fankle? – with James Wilson, episode 224

John, reckon you could beat Carwell's Matt Watson in a drag race?

Probably not with any of your stock, James, but I'll give it a go.

Well, John, it's funny you should say that.

Right now, Carwell is offering dealers the chance to win one of 20 spaces for a day on the track with Matt.

All you need to do is source stock in Carwell's daily online auctions in September.

So you're saying just by buying a couple of picantos, you could win a day on the track with Matt Watson?

That's right, John. Every vehicle bought and collected via Carwell's auctions in September counts as one entry.

So the more you buy, the more chances you get to race against Matt Watson himself.

You can sign up today, John, at carwell.co.uk slash partners slash win.

Terms and conditions apply.

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 this week from two floors underneath me in what can only be described as a hotel in Leicester is James Baggett.

James, how are you doing?

Fine thanks, John. Yeah, fine thanks.

I am in quite possibly the strangest hotel room I've ever stayed in.

I think it can only be described as a honeymoon suite.

It's got far too many mirrors from my bathroom.

Honestly, I had a little bit of a problem in my first room, which is like the air comms leaking.

So they moved me, they upgraded me.

Actually it was quite a nice room for.

I said, I don't know, we've got you an even nicer one.

And I came in here and it had very, very soft lighting.

There's lots of lever everywhere and everything is like a reflective surface.

I mean, even the bathroom door is mirrored.

It's very strange, very strange.

But yeah, we're up here because we've been on the road this week.

We've been out seeing some dealers, which has been fun.

I saved one of the visits for our stories,

but we spent quite a bit of time yesterday at top 555.

Which is a super car dealer for part of our selling super cars series,

the video series on YouTube, which was great day yesterday, wasn't it?

There were lovely, lovely chaps.

Really nice business, been running there for 25 years.

Fantastic story the owner's got.

I just thought the way he's kind of built that business.

He said left school without any GCSEs and just really kind of fought for it

to for nail all the way in 25 years later.

There he is sat there with very, very expensive car sat around him.

He has an AMG one, which is 2.8 million pound Mercedes in the showroom.

So yeah, he's done all right for himself, isn't he?

So yeah, I'm looking forward to putting that one together.

But I've got a new favorite thing, John.

Okay, what's that?

Sausage making.

Oh God.

We're actually going to talk about this.

So part of the other reason John and I are on the road is

because my better half had bought us a joint birthday present,

actually not John, which was a sausage making course in Leicester.

So last night we spent the evening making sausages

and never have I enjoyed so much innuendo in all my life.

Did you get a video?

No video, but there are some pictures.

I mean, James, we've done some, in the 13 years that I've been working here,

we've done some very strange things.

I mean, what have we done?

We've been to Tokyo and filmed Boris Johnson driving in Mitsubishi Outlander.

Well, we've tried to race a Mazda CX-5 with a canoe,

but I think probably standing in a pie making factory in Melbourne,

watching you try and stuff a kilo of pork mince into an intestine,

at that moment I thought, no, this is the weirdest thing we've done.

I mean, you know, I mean, when it comes to work,

colleagues, John, I mean, I'm glad you were there with me.

Let's put it that way.

We're very swiftly on from this whole link.

I mean, I should say as well, we've each got a kilo of sausages in our hotel mini fridges,

which I don't think is what they've been used for before,

or probably will ever be again.

Part of the hotel choice was,

has he got a mini fridge that we can put a kilo of sausages in?

Yeah.

Anyway, I'm going to introduce our guest now.

Hopefully some more civilised and normal conversation.

So I'll guess this week I'm thrilled to say is James Wilson,

CEO of Motorway.

James, lovely to see you.

Hello. It's great to be back.

I'm not sure how to follow up on sausage making and the honeymoon suite.

It's a combination that makes the mind boggle a little bit.

I feel slightly uncomfortable.

Oh, I am sorry.

Very nice to see you, James.

I'm looking very much looking forward to the podcast live next week.

You are our esteemed sponsors.

It's taking place on Wednesday next week.

We've got lots of people coming along.

We've got a really good panel on the podcast

and really interesting people.

What are you looking forward to?

Yeah, first of all, really looking forward to the day.

I mean, we just wanted it last year,

and what I loved about it is, yes,

the podcast, of course, is amazing.

You have some fantastic guests,

but the networking, actually,

catching up with people across the industry,

talking to dealers, getting their feedback,

and just connecting.

Part of the reason we're sponsoring this

and we sponsor other events like this

is because we do believe getting people together

is incredibly powerful, and we see that time and again.

So, yeah, really looking forward to it

and listening to your speakers.

You look great.

Yeah, we've got some great people.

People can get tickets online still, can't they?

There is a tab at the top of the page now.

You can go to the dealer magazine website.

You click podcast live, and you can book a ticket.

So, hopefully, we'll see some people there next week.

But, James, let's talk about Mosway.

I've got lots of questions.

Some of them have been put to me by some of your customers, too,

so we'll get on to those.

But, I mean, what's new with Mosway?

I mean, you've had some amazing growth

over the last couple of years.

I've noticed in the last couple of weeks

you've been well over 2,000 cars a day,

having you in the auctions.

What else is new?

Yeah, as you say, this is a very busy time for us

as it is for dealers through September and October in particular.

And really pleased with the number of cars

we were able to offer to our dealers.

So, as you said, I think it was last week

we had our biggest ever daily sale

with 2,277 cars for sale.

And that's continued, and we expect that to continue.

And that means we're offering great range to our dealers,

which is a really important part of our proposition to them.

I mean, the other part of the area we've been focusing on

is making it easier and quicker for dealers

to get the cars once they've won them in the day auction.

And, as of last week,

our pay solution, which I've talked about in this podcast in the past,

we now completed 7.5 billion pounds worth

of tractor's actions through pay,

which is a ginormous volume

and shows how that's been taken up by our dealers

because it's so much easier to make the payments.

It's quicker, it's easier.

We've managed all of the admin on behalf of those dealers.

Earlier this year, it was January, we launched stock funding.

So, those dealers who have a relationship with Next Gear Capital

can use their stock funding to fund the purchase

so they can just, at a click of a button,

pull down that cash and pay for the vehicle

and that will be automatically updated on their Next Gear account.

And what I'm excited to say, actually,

is that we will be launching with early capital in October.

So, that'll be our second stock funding partner.

And what we've seen with Next Gear is we've got hundreds of dealers using that.

It's been very, very popular.

And we know that there are hundreds of dealers with early capital

who also use motorway.

So, overall, we're continuing to provide that range of stock for dealers

and simplify the purchases they make through motorway

because we know that's really important.

They want great stock.

They want it fast onto their forecourt so they can retail it.

Yeah, there's a lot of dealers out there that use stock funding

and if they weren't able to use it on your platform,

they couldn't buy from you.

So, I mean, that's a massive step.

Are you looking to push that into any of the other stock funding partners?

Well, at this stage, do you want to get early capital up and running in October?

But, of course, we continue to take on board dealer feedback

and we know that other stock providers out there.

So, certainly something we'll consider.

What's the market out there like at the moment?

I mean, some of the feedback I'm getting from dealers

that it is incredibly competitive,

that they're struggling to get hold of stock,

their margins are being really squeezed.

What's motorway seeing?

I think, overall, it's a solid market is what I'd say.

It's stable and I think you've been reporting on that

for the last few weeks in terms of pricing.

There's definitely lots of demand.

So, we've seen record numbers of dealers bidding on our platform,

record numbers of bids.

So, there's definitely significant demand for stock at the moment.

But yeah, overall, a solid market.

And as I said, we're seeing growth

and we're seeing good dealer engagement.

How big do you think these auctions are going to get?

I mean, I know it's only a few months ago,

it feels like that you were talking about topping 1,500

and topping 1,000, you're now well over 2,000.

How big do you think these motorway auctions are going to get

on a daily basis?

Well, I think a lot bigger, I hope, for our business.

But I think when you step back

and you think about the volumes you're doing,

yes, they're very, very substantial.

But as a portion of the total market,

they're still relatively small.

So, there's lots and lots of headroom for us to grow.

But what's important is we keep delivering for our dealers.

So, we haven't got a right to grow.

We've got to deliver for our dealers consistently

day in, day out, a great experience.

So, that means lots more relevant stock for them

and making it as easy and as quick as possible

for them to purchase through our platform.

And we've got to make sure we're cutting through

with private consumers who want to sell their cars

and make sure we're making it clear to them

why it's a great workplace for them to sell their car

and make more money than if they went through alternative channels.

So, I think the short answer is there's lots of headroom

and that's what we're aiming to capitalise on.

Tell those people listening.

I mean, I've seen a little bit myself

when we produced a video all about motorway.

I saw what goes on behind the scenes of motorway.

But tell those people listening and watching on YouTube.

What goes into the process of getting one of these cars listed?

Because it's not as simple as just somebody sat at home

putting the details in on their phone and pressing Go Live, is it?

No. I mean, it's that we...

There are many, many steps that you have to go through end to end.

And our strategy is to make sure each of those steps

is as easy as possible, whether that's for a dealer or for a seller.

So, from a seller's perspective,

the process they go through is they use our app to get an initial valuation.

They'll then profile the vehicle using our app,

taking photos, adding information about the condition of the vehicle.

That will then be submitted.

We will then review that vehicle and the condition of the vehicle.

And if there is additional damage, we will reprice that vehicle.

And then it will go into our daily auction.

The daily auction now runs from 4.30 to 3.30 the next day.

So we've extended very recently,

actually extended the length of the auction in direct feedback.

Sorry, in response to direct feedback from dealers who said,

look, I'm still in the office from 4.30.

I want to be able to bid.

Okay, we'll extend the auction to support you, make it easier for you.

So the auction runs, dealer's bid, a dealer wins the vehicle,

at which point we need to collect the documentation from the seller,

V5C driving license and bank account details,

and we verify this seller.

And we have a bunch of systems that run in the background,

some automated, some manual checks to ensure that that's all done,

at which point the dealer then starts to arrange collection

from with the seller or they can use Motorway Move,

our transport service to do that.

Then at the point of collection, the dealer or the Motorway Move driver

will inspect the vehicle and confirm the price,

at which point dealers using Motorway Pay can pay for the vehicle

and the transaction is complete.

That's kind of the end-to-end process.

And there are multiple steps that happen,

as you can hear, as you've heard, to do that.

And we're constantly focused on how do we make them better and better.

Tell people listening also about the dropout rate of those consumers

because I want to get on to some of the feedback I've had from dealers

and I'll ask you those questions.

But one of the things, I think it's important for people to understand

is how difficult it is for platforms like you

to actually get people to list their cars.

So I mean, we have what we call a funnel.

So we have lots of dealers will start the process of getting an initial evaluation.

Some of them are just looking to understand pricing

and what they could make from their vehicle.

Others have higher intent and they want to move through the entire process.

And that's frankly true across the entire funnel.

And I suspect this may come up from the feedback you've got from dealers,

but one of the challenges is making sure that sellers

are committed to the process.

And so when we are going through the process of revaluing their vehicle

to account for that additional damage that I mentioned,

we will communicate very clearly that our expectation is that they will continue with a sale

if the vehicle hits the reserve price or above.

Now that being said, there are a number of sellers that will drop out at that point,

even if they've got that price because they change their minds,

their circumstances change, there may be competitive offers.

So that does happen and I know that's frustrating for dealers.

We have a team that's dedicated to make sure that we're following up with sellers

to make sure they're confirming as quickly as possible,

because I think what dealers want to have is certainty.

They want to know, I've got the car, I haven't got the car,

because that enables them to then go back and say,

I haven't got that car, I can build on a different car,

get that into my full court and get it sold.

So we work really, really hard to ensure that we are getting commitments

and we have messaging through our app and through the customer support teams

that work directly with sellers to get that point across

and then teams to ensure that we are following up with sellers to get them to commit

to the sale so that dealers have that certainty.

Yeah, I mean, one of the points that was raised to me,

and I mean, I've experienced it this week on the car I bid on,

I bid on a Hyundai i10, one was the winning bid, was over reserve,

then get a message from Motorway saying,

well, the customer wants £121 more.

Well, you know, at that point, once you've worked in fees

and the slim margin I was working on anyway,

it makes the deal not worth going ahead with.

So I had to say to the Motorway team,

you have to cancel that one, I was right.

That is frustrating.

You know, you've won a deal that you think is over reserve,

that customer has listed their car at a price that is already well above cap

and then even still they're coming back and pushing for more.

What can Motorway do to put a stop to that sort of behaviour?

Well, I mean, I don't have the perfect answer for you now.

What I can say and reassure dealers is that we are aware of the issue

and we're working on a number of different ways of solving it.

Part of it is around that communication and education of the seller

that they're getting a great deal.

Your frustrations, I've given them a great deal

and they've still dropped out.

I think we can do more to educate sellers

on the quality of the bid that they've got

but there are also some other areas we're looking at

to improve the commitment we get from sellers

because I know this is an issue

and by the way, it's frustrating for us as well.

You're going to pay for the transaction.

We're very motivated, dealers sometimes wonder

but we are very motivated to get that sale to go through

and so it is one of the areas we're focusing on

to make sure we can support our dealers

and frankly also support our business.

It's important for us.

We're as motivated as dealers to solve this problem

but it's not a straightforward fix

because part of the proposition to sellers

is that it's a free service.

They are not completely committed

and that gives them the chance to go through this process

and get to the auction,

get a great prize, be convinced by that

and then they continue through the process.

So it is a tricky balancing act that we're trying to manage

but we're very aware of the challenge

and we are working on it

and dealers will see more stuff on that coming out.

How many people who do evaluation on your site

actually go ahead with listing it?

What is it?

5 in 10, 7 in 10,

what's the percentage of people who actually go through with the process?

I don't have that number off the top of my head

but we do see there's a significant number

who are just going through the evaluation process

at the top of the funnel.

What we find is that there is quite a long process

that a seller will go through.

So they'll start there and they'll come to us to check the price

and then they'll come back

and then work their way through the funnel,

work their way through the process that I described,

getting to the sale because people are doing their research,

trying to work out where's the best place for me to sell my car.

Our goal is to make that as short as possible.

We've convinced them up front that Motoway is the best place

for them to sell their car because they're going to get a great price.

And that's a big, again, another focus area for us.

But typically, as I say, we see initial valuation

and they come back and go all the way through.

Isn't this process though pushing up prices just continuously?

Because let's face it, Motoway,

it's a very competitive market out there, isn't it?

For people when they come to sell a car,

they've got you, there's obviously car wow,

there's we buy any car,

there's the option of taking it to a dealer.

When these customers are trying to sell their cars,

there's lots of options.

So the only way you can really get it listed on your site

is surely giving them the best possible price.

But then for the dealers,

that means that the prices keep getting pushed up.

What would you say to people who think that way?

I don't really see it that way

because what we're doing is we're connecting,

if you go back to what we do at Motoway,

what we're doing is connecting supply and demand more efficiently.

And there are dealers out there who want to buy that car

for a given price.

And in the past,

they weren't able to get access to that stock

and make that transaction happen.

With Motoway, we're enabling them to see that stock,

which they wouldn't have seen

because traditionally they were just using public exchange

and they're buying that, buying that vehicle.

And so there are dealers out there who want to buy those,

buy those cars at that price

and think they can make money

and do make money margin for their customer base.

So that's what we're really doing.

We're actually democratizing access to that stock.

In the past, the really big dealers would have access to that

more so than smaller dealers because they've got more footfall.

And now we're actually balancing this off

and actually democratizing it so that every dealer,

irrespective of size,

irrespective of business model

can get access to that stock

and bid on it at a level that means

that they can make a margin for their dealership

given that they know what their customers are prepared to pay.

It's a great way of looking at it

because you hear a lot, if you're out there

and I'm sure you get it all the time

when you're out there chatting to dealers,

they say, I can't buy from Motoway

because the margins are too slim, et cetera, et cetera.

And the margins are slim on Motoway

but you've just perfectly explained it there.

We wouldn't have access to those cars

in other parts of the country

if there wasn't a platform like yours.

What do you say to those dealers though

who just say that I can't make money?

I'm taking an example this week.

I looked at a car and after tax, VAT and fees,

there was probably £600, £700 in it

if you work back from retail price and auto trailer.

That is a very, very slim margin

to be putting a warranty on one of those used cars.

What would you say to dealers out there

who's just looking at it and say, I can't make it work?

I think our goal is to make sure

there's enough stock available

that there is stock

where they can make it work.

And that's why what's really important to us

is not just growing,

it's growing that volume of stock

and the range of stock

so that dealers of all shapes and sizes

can find stock that is suitable

for their specific dealership

so they can make money.

And as we grow, those opportunities

should increase for those dealers.

So it may be today you can't make money

on that car but there may be another car

tomorrow in our auction where you can.

Dealers to continue to use our platform

to find those opportunities

and let's be clear, if it wasn't working

we wouldn't have the scale right now.

The dealers are buying, they are finding ways

finding stock that's profitable for them

and supporting the growth of their dealerships.

That's why we've been successful

but we remain very, very focused

on ensuring that we are listening to dealers' feedback

as we just talked about

and constantly trying to improve

the efficiency of the marketplace

so they get access to that stock

and once they've got it, what's really important

as well is that they can get hold of that stock

once they've won it fast

and get it onto the full court quickly

because days to sell is as important

as margin per car, as we all know.

So there are two things we really are focused on.

It's getting that profitable stock to dealers

and getting it to them quickly

and easily.

You know I use the platform regularly.

I bought three cars from Motorway this week.

I like the fact

it's there in my hand

wherever I am, every single day.

I also like the fact that you've extended those times.

It does mean that you can look at it

what is it, an hour after the auction's ended

it starts again.

It's a great way of doing it

and someone said to me, I think it was at one of your events

it was a case of

you need to get your bids in first

because if your bid is the same level as somebody else

it's the first bid wins it, isn't it?

I never realised that

until someone told me so.

That was a handy tip.

What are you going to do

about the

way that the customers describe their cars?

Often, it's a frustration I feel

a lot of the time, you go out there and see the car

it's not as described.

It's all very well when you go out

and pick it up yourself because you can have that discussion

but when you're using something like Motorway Move

it's harder to have that

discussion remotely

when it comes to chipping the customer.

What steps are you making to make sure

that those cars are more actually described?

For example, have you thought about

a video walk around of a car

something that we can

really interrogate and watch ourselves

and make our own assessment?

Two ways we're thinking about this

first of all how we get sellers

to provide the information

and video is an obvious

opportunity for us

and we have started to explore that

but also

making sure that we're really clear to sellers

the importance of

providing a comprehensive

assessment of the vehicle

because at the end of the day

if they don't there's going to be an inspection

whether it's through Motorway Move or through the dealer themselves

at the point of collection

and they will create

a challenge for them and potentially

a repricing of that vehicle

so there's more I think we can do

just in pure education terms

in the Motorway App for Sellers

we've started to do that

and there are certain types of technology we can use to try and spot

spot damage as well

so there's a whole range of different options

that we're exploring

but that's really really important to us on that side

on the seller side of our business

then when it comes to collection

the reason why we launched Motorway Collect

our appraisal app

was to make it easier

for dealers

to understand

where additional damage has been added

if it has been added

the kind of reports you can get

from

other service providers

where you just get reports

completely independent from that original listing

you've seen on Motorway

with Motorway Collect you can see

the original profile

and you can see any additional damage that's been added

and the feedback from dealers

is that helps in making

an assessment now there's still more we can do there

and that's also

an area of opportunity for us

to get in additional bits of information

that dealers would like to see

and indeed things like video at that point as well

so we know that we're not done

and I think that's the message

I would communicate to dealers

we get it, we're not perfect

we've made a lot of progress

and we continue to invest

to make this as easy as possible

but we also hear the feedback

and we are working on it in the background

and they will see those improvements coming in the future

I'm a big fan of that

and they can

show you any additional problems

that they've found in the vehicle

and you can compare it like for like with the original listing

that's really really useful

have you thought about offering that to dealers

so like dealers like myself

we go out and collect the cars

it would be brilliant for me to be able to use that

it's really interesting you say that

we have considered it

and

at this point

I can't say more than that

there's a whole range of options

and I think actually that's the interesting thing

the interesting kind of actually is a challenge

we have lots of opportunities where we can improve

and one of the things we have to be thoughtful about

is where is the best

investment

of our team's efforts

and time to solve these problems

so

that is something that we've considered

and we need to work out what is that the right place

to invest our time and effort

or is it upstream with the sellers

these ideas are good ideas

they are things we've considered

they're in the mix

that's as much as I can say

I'll take that as a positive

what do you see when it comes to

electric vehicles on the platform

I just think anecdotally

when I look at the buy it now

after the auction is finished

I often see a lot of electric cars falling into those

and I just sort of assume that's because

dealers aren't buying them as much

as they would be other vehicles

what's the truth

what do you actually see

no it's interesting you say that

so electric vehicles are still a very small share

of the vehicles that we have on the platform

it's growing but it's sub 5%

so it's small

and you'll see that I think today we've got

what 1300 cars or something for sale

30ish EVs

but actually the conversion is pretty good

I would say it's at least a parity

certainly more recently

with ice

so actually although it's a small volume

they're converting

pretty well

but I still think it's early

it's still very very early

for used EVs

and again there's opportunity for us to support that

and that's another good example

of another opportunity for us

how can we support the profile of those vehicles

things like battery health

is there a way we can support dealers on that

which we haven't invested in yet

but that's something we're considering

and again it's a trade off

is that the right place to focus on

versus the kind of ice

and ice business when it's so much bigger

James I just want to go back

to the valuations because

I'd just like to have an understanding

of how

motorway values these vehicles

because there seems to me that

there's an also a trade of retail price

there's a cap value but then there's also a motorway price

which is very

different to the ones that we see

when we're valuing vehicles

how do you as a business

get to that valuation

is it pushed by the customer

or is it pushed by yourself

or is it a negotiation

give those people listening and understanding of how it works

so the process is we

have a

proprietary pricing

algorithm that we've built based on

the hundreds of thousands of cars that we've sold

through our platform so we've sold over half a million cars now

through motorway

which gives us a

really good database of

the pricing through motorway

which nobody else has access to

nobody else has that data or what a trade doesn't have it

no one else in the industry has it

and we use that and we do also take

feet of third party

pricing so we look at cap as well

as an input and we will

set a initial valuation

based on that pricing algorithm

and then

we will

assuming the car is in good condition

we then look at the state of the vehicle

the condition of the vehicle

as submitted by the seller and we will make adjustments

for that and again we're using data that we've

built up over time

from our

from the vehicles that we've sold

and that's it there isn't a negotiation

that's happening it is a

motorway led price

and then of course

dealers can choose to bid at the level

they want to relative to that price

an important point

that we make to

sellers is this is a guide price

and

our expectation is if the

dealer bids above that price

you will accept it because dealers

have made a commitment of their cash

to that sale

and we expect

you to accept that price

but we also give them we also

are trying to also

indicate that there will be instances

where dealers bid below that price

and that can still be a good price

at the end of the day the market

will determine the best price for that vehicle

and by the way we still

see a significant number of sellers

except below the reserve price

as dealers see it on

on our pro platform so

that's how we do it that's the process we go through

and we spend a lot of time

and we have a team dedicated to do this

understanding pricing

and looking at it in a very segmented way so it's not just

a blanket rule

we are looking at it by segments to make sure

that we're getting it accurate

and

it's hard it's really hard to price an individual

car what's most important is what

the market says that for the value

of that vehicle is when it goes into the

when it goes into the auction

I sent a good friend of mine

Motorway's way this week

he had had a party exchange price

for his vehicle and he actually got

1500 quid more for it on Motorway

and it never even considered it

he hadn't really heard of it so he obviously

hadn't seen you at first, I don't know where he's been living

but he was absolutely

over the moon as you can imagine

1500 quid more he's buying an electric car now

and that pays for his charging point

so he was absolutely over the moon

and I think it was because his car

was a popular one you know it was

it was a popular car do you take in

to account popularity

obviously AutoTrader has a retail rating

a lot of the time when we're buying cars

we look at that in detail

when we're buying our vehicle

and I know other dealers do too

do you take into do you have your own

inbuilt Motorway retail rating

well the way our algorithm

is constantly updating so it's constantly

taking data on which

on the selling prices

of vehicles and pulling that through

so yes it is constantly updating to reflect

the real time

market prices that are being

achieved for those vehicles

that's how we do it we don't have a

rating that we can expose to dealers

but the algorithm itself the way it's set up

is effectively doing that

yeah clever very clever

it's great to hear that

your friend got that deal

but it's also there's a dealer

on the other side of that

transaction who's purchased it

at that price and it can

still make a good margin as well

and turn that vehicle so that's a nice example

of where yes

of course dealers want the lowest

possible prices but

that's when it's working really really nicely

we're matching supply and demand

effectively the sellers got a great price

the dealers got a price that they are comfortable with

they can make margin and turn that vehicle

yeah absolutely

just before we move on to our story

just one last question for you

you're very close to the use car market

it's been an interesting year

what do you think is going to happen next

what are your predictions for the use car market

for

it's difficult to say

if I look at the macroeconomic

environment

it's

I think a good year would be a solid

a solid year next year

I hope that's the outcome it's going to be

I'm a little bit nervous about the macroeconomic

environment if I'm honest

obviously there's a lot going on at the moment

and we'll see how that plays out in the coming

in the coming months

but

I don't see it being

like it has been in previous years that we all experience

where it's been big swings

I don't anticipate that at all so

if you go into the head

I'd say it's going to be another solid year

yeah it's going to be interesting

especially with the budget

not too far away and find out what happens

you know next with the economy

I think and we've talked about this before

but I think

it just going back to the fundamentals

as a dealer and like making sure you're doing those

brilliant basics that everyone talks about

I think just remains really really critical

so it's working really hard

to find the stock that works for your dealership

pricing it effectively

making sure you've got a really good customer

experience when someone's

on your site or comes into

your dealership

and then looking at after sales and other

areas to add

additional revenue streams

which some of the dealers that you've been reporting on recently

have been using to bolster their revenue

and their margin so I think it's

consistently doing that stuff

which is not sexy, it's not a big headline

but that's how you're going to

build a great business over time

yeah absolutely

James thank you very much for coming on

chatting us today, I look forward to continuing our conversation

podcast live

next week and I do appreciate you

taking some of those tough questions

thank you very much

but John we should probably do some stories

and James if you'd like to ask James

anything about the fat content

of

pork shoulder

he's ready to answer that

25%

we interrupt this broadcast

for some breaking news

John I don't want to panic you

but the Cardio podcast live is coming round

really rather fast

yes I know that James because I own

a calendar but clearly you've been

not paying attention

day John if I hadn't been paying attention

how would I know that it's on the September

the 24th in Abandon

that we've got the Polestar boss Matt Galvin

Vicki Hart from Waylands

and Alex Bradley from Small Cars Direct

on with us

well technically it's closer to

Didcot but I'll let that one go

anyway I bet you've forgotten how people can book tickets

no John because on my script right here

it says head to

cardinamagazine.co.uk

slash podcast and people

listening to this can book tickets with

the special discount code PICCANTO

for 10% off

there's a social barbecue after the

recording and plenty of time

for a social catch up with other

like minded dealers

we look forward to seeing you there

this

is a paid partnership in association

with Dealerway

John guess what

oh god you've 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 pie exchanges for more money

quickly and easily

there's no sellers fees and buying

a car cost 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 PICCANTOS

I know where to send them

dealers can find out more at dealerway.co.uk

we'll be right back

now John I'm really enjoying

how easy it is to pay sellers on car well

I presume you'd rather not pay them at all

no that is true but

now I can do it with car well wallet

you can pay sellers finance houses

and more instantly

literally in one click

it's secure easy to use

and gets rid of all the pesky

finance back and forth

it's a total game John

that does sound pretty good

if you want to find out more

dealers can log on to carwell.co.uk

slash partners slash car well

dash wallet

now back to the podcast

so James and I

are going to run through our favourite stories of the week

and at the end James gets to decide

which one of us chose the best ones

and who is the winner

oh no I won last week

yes right so I'm going to start

and I'm going to start with

I'm not going to start with JLR because you're going to cover that

inevitably James

I'm going to talk about the FCA

so the FCA has and of course

this is about the car finance scandal

in inverted commas

so the FCA is teaming up

with influencers

we've written influencers here but I think the term is

thinfluencers

on the likes of tiktok

and instagrams

financial influencers James

you are one of those

am I

I don't think anyone would

want my financial advice to be

completely honest with you

but they're teaming up with influencers

to highlight the dangers

of all these car finance claim

adverts and using third party

companies to go chasing car finance

companies for some form of

compensation and I mean we've all

seen this it is all over

the place it's in Google ads

it's on I assume it's in TV ads

but I don't really watch anything

on terrestrial television so I'm

not entirely sure I've had it come up on youtube

I mean it's all over the place

isn't it and also you've

seen like I keep seeing

relatively popular

motoring youtubey people like

me and Alex Kirsten

you know they've both been paid by

different claims management firms

to tout this sort of stuff

so it is everywhere and it has been everywhere

for quite a while now

and I think the FCA has suddenly woken up

and realised this that they can't just

you know mention it occasionally

in like a common select meeting

or something like that they need to

actually get it out to people who

the FCA is for example

and put it in their sorts of language

so they're doing

a one million pound campaign

which well it sounds like

a lot of money I don't know if it will be enough

to be honest to counteract all this sort of stuff

because the horse is sort of bolted in a way

but anyway I do kind

of welcome them

at least trying so at the minute it's just

one guy on instagram that I can see

is a guy called Cameron Kaza

Smith who as far as I can work

out is a bit like sort of

Martin Lewis

it's all written in the story

Kaza

like Kaza

I think is sort of like

Martin Lewis for people that

would use the word side hustle

where we might

perhaps use the word second business

James

I think it's targeting a slightly different demographic

than us but anyway

they are putting the word out to

basically stop using claims management firms

just sit tight

and wait for the FCA to

launch the whole redress scheme

that is sort of part of the problem

is that there's not actually

all these claims management firms are here

you can go on put in your reg

it says your road millions of pounds

and then you sit and wait

and they probably send you lots of marketing

activity for the next six months

to say that they're

working really hard on your claim

whereas the FCA

they've got no news at the minute

there's nothing to actually do

so I guess at least they are doing

something in the interim

what did you think James

I think it's interesting

that they've come out with this campaign

but the more I think about it

the more I think about how the FCA is going to deal with this redress scheme

and I know we sort of covered it before

but I mean it is such a headache for them

and I can't help thinking

that it's just going to be bowled down to something very very simple

which will obviously cost the

the banks and finance companies quite a lot of money

but something as simple as

did you have finance during these years

yes or no if it was yes

you'd do this amount of money

because if they don't do something as simple as that

it will be so

incredibly complicated

I don't think anybody will ever get any money

so I genuinely think it will come down

to something as simple as that

you just have to prove

actually you might not even have to prove

that you didn't

have financed during those years

and then you'll get the money

from the affected businesses

because not all of the businesses were doing the things

that they shouldn't have been doing

you know

so I think it will have to be a simple job

which is in some respects quite good

because if loads of people suddenly get

950 quid in their bank accounts

more often than not

they end up putting it down as a deposit on a new car

so

that's very true

James other James what do you think of this

yeah I mean I agree both of you

I think first of all it's good that they're doing this

you know we want to try and avoid

although you're right that the horse was bolted

to some extent a full kind of PPI

claimed process

industry popping up

if we can

probably need to do more than this

in my experience of educating

people about new propositions and new processes

they have to go through

you could imagine this becoming

incredibly complicated

and by the way very costly

for the FCA to manage if I just think about it

operationally they're going to have to have a whole claims

management process that's going to have to flow

through to all the different companies

they're going to have to push back information

so the simpler they can make it

the better

I think the financial service

the financial

the financing companies will probably

want some proof James

otherwise it's an open

checkbook

but I think they have to keep it super simple

the thing that for me as I read this article

this week was just

when is all this going to happen

when's it going to start

we got the result

from the

Supreme Court

there's no deadline

for when this is now going to start becoming

operationalised and being

accessible by consumers

industry we just want that transparency

and clarity

and then I think the different companies that are affected

can prepare accordingly

but at the moment unless I've missed this

that doesn't seem to be forthcoming

no I mean

I'll quote our story

it says the FCA says compensation

could begin next year

it's going to take

not very solid

James

can you move this on

and you have rightly predicted John

the story that I'm going to go with which is JLR

I feel bad

talking about it again on the podcast

but it is such a

difficult situation that manufacturer is in

I just think we need to cover again

I spoke to a number of people

this week for a story on the website

I spoke to cyber security

experts

one renowned author of our cyber security

I spoke to professor David Bailey

who is

a professor of business studies

in Birmingham

who focuses on the automotive industry about this

and also John while we're around the road

we popped into a dealer didn't we

we popped into a JLR dealer

in Northampton because on the way up here

we were just chatting about it

just thinking yes it's very

very bad for JLR so I mean the headline

story is the fact that they have

Paul's production until

Wednesday of next week

but everybody that I'm speaking to

is very very unlikely

they're going to be starting it next week

if I was to hazard a guess

and I put my neck on the line here

I can't see them restarting

production maybe

for the rest of this year

I genuinely believe that John

I think they are in such

a difficult situation

there are so many different

computer systems

involved in those production lines

most of them are run by robots

which are obviously run by computer

systems

when those cyber security experts

I spoke to said every day that goes on

proves that this hack is even

deeper than it

first thought so

the fact it's dragged on

this far we're 19 days in now

with no production they're already saying

they can't start until the 24th

it's going to be incredibly difficult just to restart it

I mean just think about the restarting

of that production line you've got thousands

of JLRs, sound production lines

and JLR factories around the world

all with completely different specifications

you have to clear all of those lines

you have to start up again

afresh

obviously I'm no manufacturing expert

John but I can't see that

being easy

but I mean park that to one side

park JLRs, head offices

problems to one side

I want to know what this meant to the dealers

there are dealers out there who have had

a rough time over the last

last few years

I was reminded by one of our listeners

who listened to last week's podcast

that you remember like not long ago

we were talking about a past crisis with this manufacturer

this manufacturer

couldn't get parts out to dealers

you had customers with their cars

sat in dealerships not being fixed

for months on end

which meant that a lot of these dealers

had to buy back those cars

because the customers were so cheased of

so they've already taken a hit

and this is really kicking them while they're down

so going back to that

dealer visit we went

we popped into Northampton JLR

it's run by Sittner

huge site just off the M40

on the A43 junction there

beautiful site

it was quiet John wasn't it

it was very quiet

there was a huge row outside

the dealership of unregistered cars

lots of Range Rovers sat there

you do expect to find a dealership

but they were all

kind of PDI'd and ready weren't they

everything was ready apart from the number plates

which is

we know

that's the problem

we popped into the dealership

there was a few people in there but nowhere near

what you'd need to keep the

lights on in terms of revenue

there was a couple of people having their

cars looked at

but we spoke to one of the salesmen

and just said

if I wanted to buy a car when could I get it

and his answer was I don't know

he said specking it

would be quite difficult ordering it

is a possible but I can't tell you

when it's going to be made or when you might get it

he said if you want to use one there's plenty

out there and we can deal with those

these dealerships operate that

by a different system

but I said so what about servicing

if I've got a car that's got a problem

can you fix it he said depends what the problem is

he said we've got the parts from the shelf

we can help you

if we need to order the parts in

it's going to be a struggle

it was at that point having to look around

this huge business

that must need huge sums of money

on a daily basis to keep the lights on

I was thinking there's going to be

some JLR dealers out there

who are in serious trouble very soon

if this carries on

and it just shows you the severity

of this issue it's not just the manufacturer

they're in really difficult circumstances

it is

that big dealer network they've got

these big gin palaces they've spent millions on

and I really

feel for that supplier network

there's been a lot of stories come up this week

but they describe JLR as the hub business

with all these

suppliers relying on it

and they've been told by some of these

workers to go on universal credit

I mean it needs government action

now I think it needs a furlough scheme

or something

it is a very very worrying situation

John I honestly can't think of a bigger

story for years than

this JLR hack

and it's multifaceted as you say

we were driving along yesterday weren't we

and saw a tramp-stag in front of us

and I was looking at that and thought

well as you do

but I was thinking when was the last

time apart from Covid

that you saw a car manufacturer grind

to a halt in quite this

way

with previous hacks with Honda

or however previously had them

it was kind of a few days a week

wasn't it and then they sort of got things back up

and running again

I think this has been the longest since

reason I mentioned tramp-stag

is since like British Leyland or something

when it was just constantly

stopped starting with strikes

it's just an unprecedented

I'm bringing that word back

situation and I guess

cars and that perhaps that's a different system

I don't even think it's

a different system I reckon

it's a bit like well Arnold Clark had their big

hack what you soon realize

after you know X number of

hours of it being down is right

what can we actually just do with

a pen and paper here and probably

you can sell used cars

with a pen and paper just like

you would sell them James if your system went down

what you can't do is start making

Range Rovers you know that's

the line isn't it and I did all

I saw another story as well not in our publication

but in esteemed other publication

suggesting that

JLR had lost track

of a lot of new

cars that were produced in the

time between this

you know being made and then the hack happening

I think it was into the thousands

they reckoned it just disappeared

well not disappeared obviously because they were on lorries somewhere

but they'd you know in

whatever distribution system that

they have presumed that they come out the factory

they sit in Solihull

or whatever in an enormous

yard or they go to Southampton and sit by the port

ready to go out that of course

has all gone into disarray I should say

JLR issued a statement saying that was nonsense

and they know exactly where every single car is

but that sounds

slightly implausible

based on everything else is all

I would suggest so yes a

giant giant nightmare

we talked about when

we were in the dealership earlier this week

it takes us we have to log into

12 different systems to sell a car

at the Clever Car Collection

12 different systems to sell a car

and that is us selling

sub 10,000 pounds used cars

I mean can you imagine the systems

that they have to log into and being locked out of them

at a JLR dealership is

it's absolutely devastating and I know

it's I just

really feel for them I really feel for everybody affected

especially those in head office because

I mean the stress that must be

involved in trying to get this sorted

and knowing that it doesn't matter how much money

you throw at it

it's not going to fix it because

they're locked out

and if they pay the ransom

will they even be given

that's if they are being

they are being you know

yes we don't know doing

but if they are being blackmailed and they do pay the ransom

they might still not get access to the system

I don't know it's worrying

James what do you think?

Yeah I mean my first reaction to this

is massive sympathy

the JLR, the dealers and their suppliers

I mean this is a criminal enterprise

that's taken down all of them

and it's

I mean I think lots of other businesses

look at it and go thank god it's not us

because it could very easily

be another business

and by the way this enterprise has gone after

M&S Co-op

a whole bunch of businesses

and it's

it's terrible, absolutely terrible

given the impact it's having

I think the

if they get it back up and running in three weeks

they will have done very well

I'm not an IT security expert

but my understanding is

what happens when these

hackers get into your system

is they work

from one system to the next

to the next to the next

fully encrypt them

with the data

so the story about not being able to track the cars

may not have been correct

but it doesn't surprise me

it wouldn't have surprised me if it was correct

because where's the data

we can't get into the system

so it's

fundamentally breaking your IT

infrastructure

and my understanding from M&S

was that when they

have this issue

they had to rebuild the technology stack

because they couldn't encrypt

decrypt their systems

and that takes a long time

I think it took them three to four months

to get back fully online

for everything so that was

I think they were faster on deliveries but click and collect took longer

and this is not

they're not a manufacturing business

with all of the complexity of the supply chain

so if they get it back

I think it was the 26th

next Wednesday

that will be an amazing achievement

I'm not credit for that

but I could also see a world

where it does take them a lot longer

maybe partial, they get partial systems recovery

and then it takes a number of weeks

to get everything back up and running

but yeah it's

it's horrific to be honest with you

and I think a lot of

it's just

as an exact leading tech business

one of the things

you have to do is you have to have the detection systems

you have to have the testing systems

actually getting people to try and penetrate the systems

and then you need the

the training of your teams

so that they don't fall prey to these

kind of

hackers but then you need plan B

if it goes down and part of that

is how you

set up your architecture so you've got air gaps

between the different systems

but it's easy to say that

after the event

it's really really challenging for the general

and let's say the dealers and suppliers

so a huge sympathy

I hope

they can get up and running in the next couple of weeks

I fear it might take them longer

but I don't know I don't have all the details about

what's what's happened

by the way I would be amazed if they're not being subject

to extortion as well

yeah

I mean James you know

in a tech business

it's not about throwing money at this is it

I don't think you know JLR has got

deep pockets when it comes to

support it's got from the Tata Group

but even then

it's not about throwing money at it

it takes time

if you've got to do what I described

which is rebuild your data

and your systems

effectively from scratch

that takes time

you can throw them up to some extent

you can throw money at it but it will take time to do that

and this is just based on looking at other examples

as I say you can take M&S as a good example

where they effectively

told the markets

that's what they had to do

and it took them three or four months

so again I don't know the details of JLR

I'm not in their company

but

it's quite an undertaking if they have to go down

that path

I can't imagine a scenario where

if they did the M&S thing

of saying right we'll start one

M&S started well we've got to get food

into supermarkets first let's do that

don't worry about deliveries

you can collect all that sort of stuff

I can't imagine in a setup

such as JLR what would you not

prioritise because if you're

making the cars in the factory

they've got to go somewhere all the parts are going to come in

there's lots of different

it's all just in time isn't it

the whole entire thing almost has to turn on

as one unit all at once

and I suppose it hasn't stopped

since Covid and perhaps even then

didn't stop in quite the same way that it has now

so I move us on

well I mean please do

I mean the more I talk about it

and again the more it stresses me out

I know

well I'll move on to

another very stressed individual

I imagine which is

Cardila or former Cardila I suppose

Kevin Mackey

who has not had a very nice

18 months 24 months

it's a situation that's fumbled on for a while

21

oh my god right well

anyway Kevin Mackey for those who have forgotten

or haven't heard of him before

had a very successful

Renault dealer up in

Scotland

had been going for it it was a family business

Mackey Motors had been going for quite a long

time decades

and then one day in 2021

as you say James

he alleges RCI

pulled the plug effectively

so if you're mainly a franchise

Cardi or as he is I don't know

had any other franchises apart from Renault

or perhaps he had a Nissan one as well

RCI

is Renault and Nissan's

joint bank

and

a little bit like the JLR situation

a lot of things all tied in together

so

Renault, Nissan, Bank

and Renault pulled the plug effectively

on his business and they

I think there's

it's difficult to talk about because it's going through

a legal case so he's taking

the three of those

three companies to court

over what happened because

in effect they turned his company off

overnight because they withdrew

funding which as anyone would know

is well it's an immediate stop

isn't it as I understand it

they pulled his new car

franchise

I believe they pulled the

servicing

authorized repairer situation

so almost overnight

he didn't have a Renault dealer anymore

which is quite hard

to come back from when you employ

the number of people that a franchise dealer

employs they're all working

commission etc etc

and we've covered this case quite a lot

Kevin's been talking to

one of our staff writers Jack Williams

extensively over

the period about all this but of course

it goes a bit quiet because things are

going through legal matters blah blah blah

I can't keep talking while that sort of stuff's happening

but it's come back into the news

because he's appeared on

GB news which

I admit it's not an outlet I particularly like

but it has given him some

great coverage of this matter

so he's been talking to none other

than Nigel Farage

about the situation

of course well they describe it as

GB news described it as him being debanked

which in a way he was but I think

that marginalizes

the issue really because it's not really

about the bank necessarily it's about

the entire

being pulled from under him across lots

of different situations you know it's not just

that he's had his bank account frozen

or they've said you can't bank with this

anymore they've said all of those

cars on your forecourt you're going to need

to find funding from someone else and that's a very

different situation

to you know being told you need to move your savings

somewhere else so

he's been on there and

he had quite a bit of publicity from

that which is a good thing

and since then he's

had his I'm trying to find the right

story he's had his

case brought up by his local

MP

in some sort of commons hearing as well

who was

quite outspoken in the situation

described it as a

I'm trying to pronounce this in a

Scottish no I'm not going to do that

described it as a

I want to use the f-bomb so I've described it

as a cluster fankle up

which is another term

I'm familiar with

I did love that that term John

and I think I slightly worried about

what AI thinks of me

because in my last few searches

to chat GBT I've got

can you give me the Volkswagen Up 2013

spec

who's Cameron Kazasmith

and what does cluster fankle mean

but you're right

what was the answer

was a Scottish way of saying

cluster the rude word

but without saying the rude word

which I was quite impressed he did

in the House of Commons

without saying the rude word

well yeah true

I mean presumably you are allowed to say the rude word in there but anyway

sorry John

so hopefully

that will

it seems a very complicated matter

we want to get into all of the ins and outs of it

but there's been a lot

of finger pointing between

I mean I'll quote the MP

my constituent has been to the Financial Conduct Authority

who told them to go to the police

who then told them to go back to the FCA

who then told them to go to

Citizens Advice

you could not make this up

I mean yeah

no one seems to know really

what to do in that sort of situation

so hopefully

Kevin will get some answers

it's hard to comment

on this one John as it is

going through the course

but I mean one thing I have to say

is I do admire Kevin Mackie's

persistence on this

he's certainly not letting

it lie and I can

completely understand why

I do feel for him

I mean we obviously don't know all of the facts

in this case but

he's certainly trying hard to keep this one going

and to get some justice

and I do hope like you say

he gets some answers as well

do you want me to move on?

James I mean I don't really

it's been quite hard for him

it's kind of difficult to comment on this one

because I mean first of all I can understand

why he's fighting

for his livelihood

it's just difficult to comment

when you don't know the other side of the story

I don't know what's precipitated this

and so it's just harder

to come to a point of view on it really

it sounds terrible but

I don't know the

we don't know the other party's

perspective on it so

hard to comment on that one

John have I got time to wedge one more

please wedge, wedge away

wedge away, I'd just like to talk

there's a number of car dealer results come out this week

there's quite a few of them coming

it's obviously getting towards the end of September

where it's the point that you have to

get them in with companies house

and it's an interesting time for us because we get

real insight into how people

perform last year and the one I just want to

highlight is

Toyota specialist Stephen Eagles

results I mean he is a

fantastic operator

he turned over a record

1.09

billion in

2024 when pre-tax

profits up slightly to 15

million pounds

despite very tough market conditions

he said they sold

and just remember this is a guy that only represents

Toyota and Lexus

albeit at 30 sites

the largest Toyota dealer

in Europe

he sold 55,000 vehicles

I mean it's just

an absolutely staggering result

and they paid themselves

8.27 million pounds

in very well deserved dividends as a result

but congratulations to

Steven Eagle an amazing business

we did an interview

with him on the Cardiola magazine

YouTube channel there's a podcast out there

about inspiring leaders

and he is certainly one of those

and for those people interested I would say go and check that out

because he's got an amazing story

how he started that business

with Toyota's help back in the day

and has built it into an absolute

juggernaut so congratulations to him

yes and obviously

has their trust

as a manufacturer doesn't he

well in the last two years

he swept up a lot of Marshall

Toyota sites which were X motor

line weren't they

so yes he's obviously a preferred

partner of theirs

I mean he's talked about eggs in one basket though

it's very Toyota centric

isn't it but it obviously works

that's my word

June done

lovely I won't ask for James

to comment on that because

of this hotel very soon James

so I can

so James

before I ask for your verdict are there any

stories you think we've missed this week

I think we've got a good coverage

nothing for me to add

I mean there are other stories but

conscious of time so

you need to get your sausages

out of the hotel rooms

that is a real danger

we'll leave them behind

not now James

so I'm going to have to ask you

who chose the best stories

or what was your favourite story

it's hard to call it a favourite but I do

think the JLR story is

the one that stands out because of the

impact it's having and the importance

of that

for not just JLR but

as we talked about dealer suppliers

the whole industry so

definitely that one stands out for me

and hopefully

they manage to get themselves back online

and it doesn't take too long so fingers crossed

and all the best to them

and the dealer suppliers are impacted

I will take that win

thank you very much James

what's up at the scores in the series

John?

I'm going to say 14

I'm going to write it down on this Novitel

little pad here

I didn't get one of those

must be exclusive to the lovely sweet

you're in

all that's left for me to say

is thank you to James for coming on today

it's been lovely to chat to you

and chat about Motorway and of course we will see you

next week on Wednesday and

if anyone listening wants to come see you as well

and have a good chat just go and buy a ticket

to Cardila podcast live

with a complimentary barbecue

very nice to see you

thank you very much

lovely

and thank you as well to James

for regaling us with tales

of ground pork

we'll be back next week

with another episode and of course there probably will be

an interim episode as well

from podcast live

so make sure you're subscribed take me 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 cardilamagazine.co.uk

thanks for listening and goodbye

FCA teams up with influencers, JLR shutdown enters another week, and what is a cluster fankle? – with James Wilson, episode 224

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