Top 100 most profitable dealers revealed, Gerry McGovern mysteriously departs JLR, and Zipcar pulls out of UK – with John Veichmanis, episode 234

Welcome back to the Cardiola podcast where we pick our favorite stories of the week and

ask an industry guest to choose which were the best.

I'm John Ray and joining me once again this week hit James Bagger in a, well it seems

to be the boiler cupboard you're sat in at the minute.

I just keep getting downgraded in my own house.

I'm now in a new room which is a little bit echoey, sorry about that.

We need to fix that John for this podcast probably.

But yes a new room, been ousted from one upstairs which is now my daughter's bedroom and then

the dining room clearly didn't work for the family of me sat in there so I've been ousted

from there and put in as you rightly described the boiler cupboard because that is the boiler

just there.

So yeah it's always fun, Joyce anyway this is less interesting.

I might be in a boiler room but where are you John?

Well as you can see I'm also in a boiler room because it's not enormous this.

I'm in Japan James.

Of course you are.

We've got to invite you which is a bit awkward.

It is a bit awkward because we should be holidaying together but you haven't taken me have you?

No I haven't.

I was on something called an economy flight and you haven't been on one of those since

1996 so what can you do?

So true.

Nice to see you John though thank you for joining us on your holiday from Japan.

I have dedicated you what can I say?

And I see there was room in the luggage for the hat that's also good news excellent.

That's right yeah I mean I would take it off I've been walking around all day it's now

6pm here and if I take it off I'm going to have terrible hat hair so it's staying on.

The weird thing is John you might be in Japan this week but I have basically been spending

my entire week buying Japanese imports so it's a little bit of a slight sliding doors

moment there.

I bought another 13 this week.

Did you mention this on the podcast last week?

No you haven't but you've been offered some storage space haven't you?

Yes after the meeting we had well after the podcast I had a meeting with a local company

that's got they basically do aerospace stuff and they've got loads and loads and loads

of parking.

I just happened to be sat next to someone oh sorry that'll be him now.

That was your PR man John so I think you can jastise him after this we're interrupting

our podcast.

No the what I sat next to this chap at the Gospel Business Awards John so there was

a reason for going I know you took the mick out of me last week but he's got some space

he's given us parking for 16 cars which is very handy because as you know we will be

you've immediately filled it that's not how it works James you're supposed to go and

have extra capacity and then go all right fill all that now.

I got really excited with the fact we have more space so went on to the Japanese auction

website bid on some more cars and won a lovely Polo GTI so why are you out there could you

pick it out for me please?

I'll go and have a look at it for you.

But yes an interesting week it's been all fun and games but we should probably move

on to our guests because it'd be far more interesting.

I think so so our guest this week is CEO of Carwell John Vick Manis.

John lovely to see you.

Hey guys lovely to see you both again.

John nice to see you thank you for joining us so early on a Friday morning very nice to see you.

How are things in Carwell land then you've had a busy few months haven't you?

Yeah definitely it's been a super busy time actually as we come to the end of 2025 so

we're seeing continued to see really really strong engagement on the new car side obviously

stock sourcing continues to do really well and you know we've had a lot a lot more dealer

interest in our use car proposition as well so it's been really busy.

Yeah tell me a little bit then about that because there's been a lot of change over the last

few weeks in the in the use car space you probably heard on the podcast a couple of weeks

back we had Nathan Coe from WaterTrader on the podcast there's been a bit of discontent

that seems to still be rumbling on with the dealers that that I am talking to about the

changes that WaterTrader have made there's some news this week that they've launched some advisory

panels and they're listening to what their customers are saying but you're on the other

side of the fence aren't you you're probably chatting to these customers who possibly coming

across to you I mean is that happening? Yeah no I think there's a lot a lot of interest in

I suppose diversifying where dealers spend the marketing money to generate leads I think there's

unquestionably just a lot more interest in trying to distribute that money across

more partners I think the challenge is

I desperately desperately want to get to a place now where we can

provide a sufficient huge increase in in actual volume in terms of eyeballs and inquiries on

the use side which is I suppose in many many ways we are in a position where we have a generation

one sort of used car products and we are busily trying to make that generation two and then

generation three given there is just so much demand I suppose for dealers we have a lot of

traffic we'll need to make the product much better and that's what we've been focusing on that's why

I've got huge bags under my eyes not just getting up so early to join your podcast. We know the

feeling don't we we know the feeling I mean that number at number two space John he's crowded I mean

there's a lot of people fighting jostling for position WaterTrader have got a dominant position

in the in the motor trade you've got you've got motors you've got car gurus you've got

yourselves you've got Google vehicle ads what what should what why should people choose you?

Yeah that's a good question I suppose from my perspective that the one thing that we are perhaps

I should be careful how I phrase this actually you know the undisputed number two

is on traffic aren't on eyeballs that that is where we have you know there is a significant

delta between us and everybody else and my my pitch to dealers if you like is we have a lot

of eyeballs and they're very very relevant eyeballs these are people that are looking to

either buy a car or sell their old car and you know large proportion of those people that are

selling the old one obviously want to buy buy a new one and that in many cases is used it's new

to them rather than a brand new car so my job at the moment I I suppose if you look at many

marketplaces often they go out and and raise money from venture capitalists

and and that is often to to fuel customer acquisition it's to acquire more more people

to use the platform so in in the case of an auto marketplace that can generate more eyeballs for

dealers and therefore more inquiries we actually have the opposite problem we've lots of eyeballs

and you know lots lots of traffic on the platform but we have a relatively early product on the

use side and so that's the thing that we're desperately trying to fix and and that is somewhat

different to the other players in the market that perhaps have a more mature product so yeah

hopefully over the course of of of 26 you will see our products on the use side evolving at a

really rapid pace I know when we last spoke James you had some good feedback for me in terms of

making the calls more the the the call to action on calling more visible adding videos you'll find

before before Father Christmas comes those changes will be made so so we are making some rapid

progress actually making the product better yeah so it's a big change isn't it for you guys I mean

we've advertised on the car world platform pretty much since you since you launched it and we have

sold cars off it and I've you know I've told you this personally we have sold cars off it

but there are some tweaks that need to be made to that platform it must be a big challenge

refining that product to to do all of the things I think a lot of dealers out there think well it

must be really simple just use our pictures use our words put our phone number on there and and

send the leads our way but it's I suspect it's a little bit more complicated than that I keep

telling my engineers the same thing James I'm like how difficult can this be um so uh yeah no

we're making good pro we've we've we've made some good progress we actually

sort of move quite a few of the the engineering teams uh around to make a bit more progress

because yeah there was just a lot of a lot of demand in the market and obviously we you know we

want to help partners I think you know we ultimately believe competition is good uh and and and if we

can if we can provide alternatives you know also traders a great product it's a phenomenal business

I'm not going to start knocking the auto trader but I do think um I do think in this cut you know

particularly the UK it's very different to any other classified market in in in auto if you go to

Europe you've got if you're into Germany you've got Mabili you've got auto scouts which is smaller

than Mabili but is is a really really strong number two competitor uh you go to the US you've

got car guries you've got cars dot com you don't see that in the UK and and that I think is

ultimately I think what dealers want to see they just want choice and and I I I desperately desperately

want to try and sort of help to help them achieve that goal so I think that's good for them you're

an ambitious man as we as we well know I can can car well be the new auto trader

I think what we're trying I I suppose our business model is slightly different in that we

we are helping dealers with stock sourcing and helping them on the marketing side both

for new cars now increasingly used so it is a different model the one thing about car that I

love is that we that the investments that we've made in content over the course of the last decade

so the youtube channel know the world's most popular car review channel we are an auto express

we own either we've made massive massive investments in content and that has allowed us to that that

is that generates a lot of high quality traffic on our platform and dealers want exposure to that

and so the one thing in terms of competing with auto trader I think it gives us a unique ability

because we don't have to pay for all the traffic and and that is the difficulty in competing with

auto trader in that it is a 40 year old brand it's very very well known and if you if you want to

try and compete by buying the traffic you're probably going to fail I think the one the one

advantage we have is is that 70% of our traffic is generated either people just come into car

while or via the content we produce and and that's hard to replicate what can dealers expect if they

think I think the most important thing is is high quality eyeballs and high quality enquiries

I think ultimately the thing that we're working on on the product side is to make sure that the

the experience of working with us the biggest challenge for me at the moment actually is signing

I actually have a waiting list because we really need to invest in the back office technology so

that it's easy to operate on our platform so that's that's the big focus at the moment

when you when you talk about what to expect that the thing that we really pride ourselves on is

having a level of you know connection with our dealer partners I think if you talk to a lot of

people on the sell my car platform a lot of dealers they actually appreciate the time that we put in

to help helping them make the most of the platform I want to do the same thing on used that's going

to take some time in terms of investing into the product and building up the team around it so

they have a good experience so you can expect good quality enquiries I want by certainly

you know Q1 Q2 next year that also that you're a dealer's interaction with us is good so if the

product's not working or calls up and we're going to do everything we can to make it work

and and that I think is you know we've worked really hard over the last two or three years to

you know a lot of the people that work in our account management team and our support team

or ex dealers they really understand the sort of pain points of being an operator you know we're a

technology company I've never been a car dealer you know I love what you've done because you know

you're you know writing from a dealer's perspective because you all want and that that's the most

important thing we want to make sure that we we have a level of empathy and understanding and

and that's what I'm I'm busily working on in the bank right and what when it comes to these

these big decisions that you've made over the years I mean you you've obviously had to make

lots of them to to launch this platform or also traders had to make some big changes

to their system recently you know with deal deal builder that would have been a big decision

what's your take on the way that was introduced and the and the feedback that cut the customers

have had off the as a result yeah it's a good question I mean

I mean I suppose the obvious answer is I suppose listening I I think the biggest

change in car over the past three or four years is we we have actively repositioned so that we

over index on dealer needs because I think actually when we started out in this space if you

talked to new car dealers 10 years ago they probably weren't particularly fond of carwire because

they they saw it as you know empowering consumers to basically you know bash the dealer network

around a little bit and and that as a marketplace that doesn't make sense ultimately I want to

provide consumers with choice and in order to do that I need to make sure that I'm providing a good

platform for dealers and therefore we spend a lot of time listening so you know one example on our

use car sites actually is that we yesterday we removed the price markers and parkers dealers are

saying well they don't really make sense yes of course consumers want to understand if something

is priced well but most of those price markers don't really reflect that you know the prep that's

gone into a car or you know the service history so we've removed them we're trying to figure out a

better way of doing that actually I've been talking to the IMDA this morning about well you know is

there a way of actually as if um if a customer came into a showroom and said well why is your

your Ford Fiesta 500 pounds more than the one down the road well well this is why

because I've prepped here look there's not a mark on it so how do we start to sort of move into that

space and and to be honest that's not because we're you know some kind of geniuses it's because

we're listening to dealers and we're trying to build a product that resonates with them and I think

is you know fair for both dealers and consumers I mean I get the price flag thing I mean we you

know we use it very we pay very close attention to it with the clever car collection but I can see

where there is anger when it comes to comes to these price flags because every year dealer margins are

being squeezed prices are going up but people are telling us how much we can sell our cars for

so you know the only way really that's fair is if you can set your own price for that car

because then you can decide the margins you want to make whether the customer buys or not slightly

different let let me ask this the deal being deal build a question slightly slightly differently

there like do you think customers want to transact online and reserve a car before visiting the dealer

I mean you you know online journey is better than anyone I mean do you think customers want that

I mean certainly we've seen very little evidence of that I think to your point that you know the

one thing that we do see is and you and I have talked about this James that there is in a large

proportion of cases there is a desire for to purchase locally so that you can actually go and see the

car and I think that is still so so important to a large proportion of customers and therefore

the concepts of reserving online before you've seen it before you've driven the car certainly

for a large segment of our of our consumers isn't really a relevant feature and I personally I struggle

with it as if I was a dealer I would struggle with it ultimately because you know inventory is

expensive to your point car retailing is is is really challenging on margin and you know all

the dealers I talked to are trying to optimize the margin in the speed to sell and the reserve piece

does not aid that goal and so I'm not convinced I mean I think it is ultimately a route towards

trying to sell cars online you know I still fundamentally believe this is an omnichannel

category and and and that I think is the place to deploy technology people want to want to research

online they want to sort of build a short list they potentially want to find their perfect next car

but you want to go talk to an expert you know that that is the point it's not just sitting

in you want to talk to somebody that's you can tell you about and make sure you're making a good

decision these it's not like buying a pair of trainers when I worked at Farfetch I could put

you know a pair of you know Gucci sneakers on Instagram even though those were very expensive

and people would buy them people don't buy cars like that and I fundamentally don't believe that

is a good way of buying a car for most consumers you want to keep building this this platform

you need a war chest to do that I mean we reported on your accounts in September I don't think we've

spoken personally off the back of that but your losses grew in 2024 didn't they to 20 million

pounds revenue up drastically 55% but those losses increasing 21% I mean what would you

say to people that looking at those accounts on face value I was thinking have you got the funds

to do it yeah no good question I think it's important to recognize that we obviously in the

same year raised 52 million 52 million dollars from Bessemer venture partners who are a venture

capital business or venture growth business and and ultimately they want growth so if they if

they give us the money they don't want us to keep it in the bank they want us to invest it for growth

and to your point we grew 55% we did exactly what they wanted us to do they want this business

to thrive they see an opportunity to build a phenomenal sourcing business for dealers

we're also really excited about the opportunity to create a good competitor in the used car space

now that does that does mean we have to make significant investments to do that it's really

really hard but it's something we have a high level of conviction in and that's why we made

a loss because ultimately we we've employed a lot of engineering talent a lot of technology talent

and I think as we've talked about before it's you know my job to provide distribution so we

all of the the money all of our optics basically goes into content creation and marketing

now the question that the reason business you know anybody would invest in in car wear those if

you look at the unit economics at a customer level they are they are they are really positive

but we're investing for future growth and so you know there are no questions around the

sustainability of our business you know we could be profitable tomorrow but grow at a slower rate

and and we've made a conscious choice that we want it to grow faster now if we were making

losses and not growing I think you know well I probably wouldn't be on the podcast I'd be

uh we'd still have you on it's interesting those it's that it's that dynamic between

you know the way dealers do business and and a tech business I mean they're very very different

things and you can't you can't really compare them I said I wouldn't auto trade a batch but my only

one slight slight jibe would be you know the only um perhaps the only business in this category

that's making you know margins north of 60 percent is is auto trade I mean it I think that's why

competition is good that that you've got a large proportion of dealers that are making single

digit EBITDA margins and we make no margin that's the the charitable cause we are um and um joking

uh so that you know that suggests that there is an opportunity to create a good you know an

additional level of competition and that's uh that's the thing that I'm really keen on doing

I mean short of hiring Matt Watson when it comes to good decisions that car wow have made I mean

I'm I must say and I assume it's probably the same in house the use car platform purchase

was was one of the best decisions that you guys ever made I mean I use the platform daily I'm a

big fan of it I love the way it works it's it generates us some really good stock and it's

grown massively isn't it I mean you've now sold 75,000 cars in 2024 generated 1.1 billion of gross

revenue according to your last accounts how big is that platform going to get I think yeah I mean

it continues it's had another phenomenal year in 25 actually it's uh it's no significantly larger than

the new car business that we've been operating for the last decade or so so um yeah I know we

we love it because we think it's a great product it's you know that you know dealers really really

enjoy using it I think a lot of the new features that we put in place around wallet around transport

we're going to launch stock funding in Q1 as well so um yeah the the products moved on at a really

really fast pace and consumers love it I think I mentioned we had five million valuation we've

had five million valuations on the platform this year there's about nine million people change car

now obviously not all of those five million are going to change this year but a large proportion

of them are so it's um you know it's interesting it it works really well with uh going back to

math it works really well with the YouTube channel the one thing about for car wow we

we have built a brand through content so lots of people we have really really high brand recall

but the thing that I love is that people trust us you know if you watch the channels Matt has you

know he's no holes barred he's you know genuinely genuinely honest and and so consumers trust us

to go actually this is a brand that can trust to help me you know sell my old car get the best

possible price so I can get a brilliant new car as well and um and that's working phenomenally well

and then you bought the publications didn't you auto express evo and some some other great great

brands uh that that must have been 2024 when that happened I mean how how's that fitting into the

business now yeah it's great it's um auto express continues to go from strength to strength we

continue to invest in the team uh you know we believe in high quality uh journalism within

this space you know you can obviously you know sell your car on auto express when we think about

our ambitions in use actually in terms of use classifieds auto express again is really really

important you know we we're doing a lot of work to connect the reviews we've got a massive back

catalogue of reviews for cars that aren't aren't built anymore so do we build that into the the

DNA of the experience it gives us a lot of additional traffic again it's highly highly

relevant so uh auto express doing continues to do well really strong on uh visits uh we're doing

really well um most dealers probably don't know whether we also have a uh a growing media business

that historically has been um targeted at OEMs at the car manufacturers um we've built a lot of that

technology into auto express we've just launched sponsored listings actually so for those that are

using our used car products you can obviously boost particular cars or inventory and uh so yes

going really well actually my first uh my first ever jolly actually a car you know I have no time

for jollies but uh Stu Gallagher invited me and a couple of our board members to the uh Evo uh we

went to the um car of the year yeah we uh well we didn't get to go to car of the year I would love to

go to that looks amazing uh no we went and tested some hot hatches but it was fun though they wouldn't

let you loose on the Ferrari then so no no no I was in I was in a civic type R but it was amazing

yeah I bet it was really good what what's it like having a tech business that publishes

publications on the newsstand I mean does it does it feel a little bit counterintuitive at times

I don't think so I think um you know we've been I think the culture of carware is that we've always

had this focus on tech and content and the teams you know the I think the teams just you know really

enjoy you know it's quite a different environment I suppose you've got very different uh personalities

and different perspectives but I think generally the people we employ love that that's why they

join in part so you know we we I think the thing we're most excited about is how do you start to

combine the content and the commerce piece together um and so again when we come back to

price markers that's why we're actually on there we you know our journey if you talk to Matt ultimately

the way he creates videos is he he thinks about everybody has a mate that they were going to talk

to when they think about buying a car you know they make they go chat to in the pub

and and so for starters you know Matt's so excited about his adding us because you know anybody

recommending a car is not just going to say oh you should only buy a new one that that's not

good advice uh you know good for some people not for for everyone and the other point is

you know you would go back to that person say well I found this car what you know what do you think

um and a price marker is just a quantitative measure but it but it's not a qualitative measure

um and a used car you know there is a huge gradient of quality depending on you know the

previous owners the prep that's been done on it and and and so that's when I think I'll sort of

focus on content because ultimately you know that we've got 70 journalists that love cars you know

and they they would happily pay more for a car that's that's been well well maintained and they

understand that so if you put those people with a bunch of engineers then I think you can create

something that's that's really interesting and that's when the culture to me is is is is really

cool you you must have so many opportunities in this business especially now you've collaborated

those those great brands and you've mentioned there is putting some commercial aspects into them is

is a big challenge what what do you spend most of your time on you know as as CEO of the business

what are you focused on raising more capital to do used well um is number one priority so

we're we are we are determined to uh to put more investments so you're going to keep writing these

terrible headlines about my profit for for a few more years to come maybe wow more growth though more

growth um so yeah I spent a lot a lot of my time working on the on the on the strategy for the business

there's still a lot lot of growth to go and get actually I love the product side of the business

so I spent a lot of time with our products and engineers our business in Germany and Spain

businesses in Germany and Spain continue to grow so Germany's been quite a big focus for me recently

we launched my car there back in February growing really really nicely so yeah we spent quite a

bit of time I spent a lot of time on the international dimension plus product technology

and and time with uh with shareholders and you know talking to talking to shareholders

and one day they're going to want their money back aren't they I mean how how's the grand plan

coming along for for a listing is that the out at the end of the day oh James who knows who knows

I think we're just focused on at the moment you know we're focused on building a brilliant

business and it's good to you know it's an honor actually to be able to raise money from from growth

investors I I generally think you know there's a lot of doom and gloom in in the world at the moment

and you know particularly in Europe and the UK but you know there are some amazing technology

businesses in this in this country and I you know I the benefit of private ownership is that you've

got the ability to sort of go quickly make decisions you've got a level of autonomy

and you know I want to build a brilliant UK technology business and I'm living doing that so

you know we're not in any rush to IPO the business is more capitalized

but you know that one day I you know I think that would be a great aspiration for us but

it's not enough on the time and the rights and just yeah when it comes to pitching to these

to these big venture capitalist companies I mean what does it what do they think of the most

trade because I mean I just you know I rewind the clock back till you know when I was launching my

very small business talking to banks that you know they did not want to know you know it took me I

had to talk to 13 different banks to get just an account for a for a motor trade business

is it completely different when you when you're talking to these these vcs about a tech business

are they excited about the motor trade oh god yeah no no I think so it's um

I mean we talk about this this omnichannel model in terms of people moving from online into an

offline space and that that you know this is probably the last large consumer goods category

and it's not yeah it is a car consumer good it's difficult to say I mean it's such an investment

for anybody but it is the last category I suppose where the the bulk of the eyeballs if you like

or use as starting to think about changing cars have moved online now that no the bulk of them have

but the the opportunity to invest into technology to help them do that you know make better decisions

help them sort of figure out which car to buy that if you think about our sunlight car business

you know before car were a motorway merged on the scene a lot of the technology to do that didn't

exist and you know the the ability to build new products in this space

I wouldn't say describe it as it being immature but there's still there's still

gaps in the market for once of a better phrase to create new products for dealers and for consumers

and and that's what vcs are interested in and they didn't have their fingers burnt with kazoo

um I I think kazoo is a sort of special case to some degree I mean it's so different to

yes it's in the auto industry um but it was it's not a technology model in in many regards

and the thing I always struggled with with kazoo to some degree is you know all of the retailers

in this in this category are good retailers they've been retailing online for years it's not a new

concept my point is I think that there is there are technologies to create that help dealers do that

more efficiently and effectively not by copying what they do you know I'm not a retailer I'd be

terrible at it um but you know I can help them source cars because you know I've got I've got

millions of people that that trust our perspective that are using our our platform to help them figure

out what what to buy and therefore we can help them sell that car at the same time but um yeah

I think most vcs are tainted by kazoo actually I think it was a one-off one-off yeah one-off

we'll put it at that John thank you very much for taking our tough questions I appreciate you coming

on the the podcast I mean plug opportunity time for those people listening who are interested in

hearing more where can they go yeah so um if you um if you if you're particularly if you're

interested in the in the use car piece we actually have a waiting list at the moment for people to

join so um if you go to uh kawao the kawao dealer portal which is kawao.co.uk slash dealers

you can um you can find out more there or you can email me jv at kawao.co.uk I was on a

dealer way podcast the other day and lots of dealers email me so feel free to just email me directly

and um if you're interested in the use car site we've got some some quite good um

offers there to try and add more dealers onto the platform well I wish you the best of luck with it

thank you very much for joining us today but John it's probably time for some stories

this is a paid partnership in association with dealer way 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 dealer way 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

yes probably is so James and I are going to run through our favorite stories of the week

and at the end John gets to decide which one of us chose the best ones and who is the winner

James won last week so he gets to start while I go and adjust my air conditioning it's very cold in

here suddenly those Japanese and their efficiency John thank you for that yes I'm going to go first

which is a rarity for me and I'm going to pick a story which has taken up a lot of my time

and that is about the car dealer top 100 which came out this week compiled by the experts at

Cooper Parry sponsored by Carwell no less they were JV I'm glad you're here to to talk about it

very interesting year for the for the motor trade so this this looks at 2024 accounts

the policy at the end of 2025 because most of those accounts come out at the end of September

so it gives the experts a bit of time to analyze them the headlines are a big drop in profit profit

is was down to two billion in total for the top 100 that's a 600 million pound drop overall for

those top 100 dealers revenue down as well 16 billion it was down in 2024 from 88 to 72

there are thereabouts so some big changes in fortune for the motor trade now we've been talking

all year about the the accounts of these big card in the groups we've been analyzing them

as we go but I just thought the opportunity arose from this this card in the top 100 to

do a little bit more analysis so I enlisted the help of AI John as his as his tradition for me

and asked chat GPT to look at all of the stories that we'd written this year about the car dealer

accounts just to find out what those directors had said what was the overall themes as to the reason

that 2024 numbers were down and it actually came up with a top 10 for me which was very good I've

written about it in my sub stack this week which will be going out after this podcast

but number one was rising operational costs so things like energy wages interest rates they were

all up considerably in 2024 that was the most cited reason for a for a drop in performance in 2024

then you had in number two those falling used car values and stock write downs you remember at the

end of 23 there was a big market correction in terms of used car pricing it happened just before

Christmas but obviously a lot of those dealers would have been carrying that stock into 24

and that stock was written down as a result number three reason was weak new car demand

during the year number four the reduction in manufacturer bonuses and number five the impact

of agency sales and franchise changes so they're the headlines really as the as to the impact of

those reasons which I thought was was very interesting I mean it was just it was nice to get AI to

crunch some big data really and just look at all of those different reasons because when we talked

about it on the video that you can find on this channel actually on youtube but if you're listening

to this find out on our car dealer magazine to youtube channel we chatted about the reasons

and that was the number one from from Ian McMahon he said it was the cost creep he called it

during 2024 that was the big the big driver of that that reduced performance in terms of the

other headlines John there were some fantastic performances from dealers you know it's not

all negative news Arnold Clark at the top of the list number one 380 million pounds of EBITDA

profit up from 366 million pounds the year before very very impressive performance a fantastic

business that that once again was was was in number one position the top 10 alone accounted for

more than half of the profits earned by the entire top 100 they generated 1.15 billion the top 10

dealers generated 1.15 billion of the profit for the top 100 I mean that's an incredible figure

also in terms of incredible figures you've got the best independent dealer Tom Hartley Jr our

outstanding achievement winner at the used car awards he was up 40 places in this list to 16th

that's ahead of Lister's John Clark, Hendy and HRO in generating 31.2 million pounds of profit

from the sale of 100 cars in terms of superstars I mean he really he really is up there but I love

this list I think it's absolutely fascinating to look at it the most important thing is we focus on

the profit not revenue nobody cares about revenue it's how much money these businesses make that's

why all these guys are here in the first place and that's why we focus this list on the profitable

numbers so if you want to go and look into it in detail you can have a look on our website

cardielamagazine.co.uk find the full details but yeah I've been pouring over this this week

and yeah I found it absolutely fascinating what did you think John I think this probably came out

after you'd left for Japan it did which is why currently all over the time this podcast is live

the link at the top of the page will go to it but it currently does for top 100 so I need to fix

that because I'm the only person that can thank you this is true I didn't want to mention it because

we're on holiday but I'll deal with it yeah lots of interesting stuff in here I mean you've covered

it very well there but one thing one thing that stood out was Tom Hartley of course which we knew

sort of was coming I mean I was half listening there James to be honest because I'm slightly jet

lagged but did you all the businesses that Tom Hartley Jr has overtaken overtaken Listers,

John Clark, Motorpoint, Stephen Eagle, Car Giant you know bigger EBITDA than all of those

which is just incredible and from a team of as he said at the awards about 15 staff members

which is as possibly bonkers the other thing is looking at the top 10, Arnold Clark of course

stuck at number one, Sittner's number two but the gulf between Sittner and Arnold Clark just to

show the sheer size and power of Arnold Clark the top two and three combined is still smaller than

Arnold Clark so Sittner and Lookers combined would still not hit the EBITDA of Arnold Clark

which is mad yeah I mean Sittner did drop dramatically this year 205 million pounds EBITDA

compared to 246 the year before but yeah I mean you're right when you're looking at that way

the top two and three nowhere near as big as number one it just shows you how good that business is

doesn't it it does and then of course on the biggest fall as I won't go through all of them but

BAP child motoring world which of course is big motoring world ominously at the top of the fall

as list at minus 50 so they've dropped 50 places down to 86th in the list which is a bit painful

I mean we talked about the results before but yeah painful to see a hill like that yeah I mean a

fascinating list this year and John was we obviously spoke about it on that video but I mean what we

now you've had probably a bit of time to digest it and read all the stories I mean what was your

takeaways yeah similar I think there's been some quite significant changes and as far as we do see

some movement as different different businesses make different investment choices see many were

investing in in new sites obviously in in broader expansion and that does cause some movement between

years I say Tom Hartley Jr amazing amazing performance just such a good business which I

could afford to buy a car from there but and again Arnold Clark an absolute powerhouse in this

category phenomenal phenomenal retail yeah it's nice to celebrate some success I mean it obviously

has been a slightly tougher year but there are some businesses and they're doing some amazing

things so congratulations to all of them but John that's my first one over to you okay so I'm

going to talk about Professor Gerard McGovern OBE yeah so quite a big story this week for

certainly anyone interested in JLR which is Jerry McGovern who was their chief

chief creative officer I think was his title very bizarre story come out via auto car and

a report that he's been effectively marched out of the building allegedly allegedly

are marched out of the building and asked not to return so well number one that's the slight

strangest of that this extremely senior person in JLR this sort of figurehead of their new

direction and indeed their direction for the last at least decade really he's been there for 20 years

but he's been leading it for a very long time being well parting ways with that company is big news

and also the nature of how it's how it's happened very little information to go on on this the

so Auto Car India report to this Auto Car UK picked it up JLR themselves have been absolutely silent

on it they've kept stem they've just said no comment on this at the moment so we can only draw

our own conclusions from what on earth is going on there but talk about incredibly poor timing to

have your most senior design person somebody who was very as I understand it very in control

over everything that was going on you know normally you you see stories about car designers

come and go don't they from car manufacturers that you know someone will come in for maybe five

six years uh leave leave their mark on the design of that particular brand and then they'll move on

to a sister brand or they'll move on to a different one somewhere else whatever you know Jerry McAvon's

been there for a very long time as I say I mean Range Rover Defender uh current evoke the discovery

obviously this new Jaguar all penned by him um I mean we don't have a lot of information about

what goes on at JLR but I will quote a bit of what Steve Cropley in Auto Car has said about this

and sort of opinion piece which is that he effectively had control over a lot of things

beyond what a normal designer would have so you know control over obviously the design control

over marketing what the brand actually means over the timeline for when products are going to come

out enormous um enormous amount of responsibility he had whether it was necessarily a good thing or

not is up for debate I think um so quite how this is going to play out we don't know because this

type zero zero is that it will come out very shortly they've been parading it round it's been

seen in spy shots as an actual car and he's really the the one pushing it and he's gone

very strange times and of course the other the other thing I mean there was a story

funny enough an opinion piece in Auto Car giving Auto Car a lot of a plug here but a few days before

this all came out saying where are JLR's new products because the last new JLR product that

was launched as in an actual car in showrooms was the well the current Range Rover and Range Rover

Sport which was 2022 so that's now three years old three years is quite a long time to not launch

anything or any form of facelift it's been this bit of an empty gap particularly as Jaguar has

disappeared completely so yeah I don't know there's a new person at the helm of JLR of course

who's come over from Tata so one wonders if something has happened there in this particular

person has decided to sweep through with a clean brush well it's a very witty text messages John

from from car dealers this week I mean one wag said perhaps Jerry McGovern was the one who clicked

on the fishing email from the Russians and they I mean yeah allegedly etc etc I did what I did find

interesting with this one is I mean apparently according to those reports is he did leave the

building on Monday he was marched out by security apparently I mean there were eyewitnesses reported

in a number of these other publications we did obviously didn't see it ourselves and

JLR are saying no comments so we haven't got any any clear detail as to what's happened but

that often happens when someone goes somewhere else you know I mean if he's been offered a job

by you know one of these Chinese brands I saw some comment pieces in other publications like

you know he would be a catch for someone like BYD who could spend a huge amount of money and

being in a position that he's got that he's had he would know absolutely everything about the

product plans so if you if you are going to arrive all you need to be taken out of the

building as quickly as possible you know that needs to be stopped isn't it I mean that is

that is one thing I mean it could just it could just be the fact he might just have a new job

elsewhere it is a bit weird that he hasn't said anything a bit weird that has been no because

you know some of these stories I looked at were you know there was there was some a lot of people

saying he's been fired like and I mean that's a very strong word to use you know if he hasn't

been fired that's a very very strong word to be used and without going him going to him for

right reply you have to be very careful using that word because it has very negative connotations so

I think you know we would rather hear from the man himself as to what's happened I mean the

closest we could get to that was asking JLR and they've said no comment when you read into a no

comment if this was untrue they would have categorically said that this story is untrue you

know no comment basically means you know in in our world yes it's true but we're not going to say

anything so I think this is I don't know I mean it's it's an interesting story but I was shocked

when he left because he's had such a big impact I was at that Jaguar re-launch and he was the man

hosting it it was all him it was his idea it was his plan in he's the one who's come up with this

whole new concept for Jaguar and now he's gone and the CEO's gone so a lot of the other dealers I've

got text messages from were saying what do you think is this going to mean that Jaguar's coming

back it coming back in its old shape are they going to stop this new relaunch I said you know

personally I think it's probably a little bit too late they're going to be very hard to row back on

that but they're strange strange as things have happened John yeah I can't I can't see that happen

personally I don't think he's going somewhere else do not if if I'm honest I think he's in

his in his well I don't know I don't want to say he's in his later years but he's 69 approaching 70

he um he's elevated himself to a very high position in JLR he is you know he's the man

that designed the first Freelander you know what was that 1998 he lives and breathes a rover group

as it was then you know I don't think I don't can't see him being tempted by BYD and I also can't see

BYD going yes we're going to give this Englishman a lot of oversight over whatever he wants within our

frankly enormous company I think he was a big fish in a relatively small pond and I can't see

anyone else giving him that kind of opportunity somewhere else interesting John what do you reckon

yeah what do you think John yeah I was equally surprised actually um I'm actually quite excited

about the the time 00 I think it looks really cool um of our team saw it sort of mock at

probably the same prototype you saw James and uh we're we're really excited I do think you know

I think it's a I think I think whenever you talk to to anybody outside of the UK about Jaguar

Land Rover they have those two brands are just you know phenomenal phenomenally sort of well

respected brands and do you think the time 00 is it's it's very different and innovative I think

and yes it's probably got a smaller market but I do think it's um it operates in a completely

different space I think why it potentially could be really successful so let's see yeah it'd be

interesting to see what happens shall I move us on John go on then okay I will um my next story

is news uh from autotrader this week um some positive news actually on this front it's some

analysis that they've done of the market that they think it's going to return to pre-pandemic

levels next year but they say major challenges remain so they are predicting that the UK

car market is going to grow they're forecasting 10.2 million new and used car transactions will

take place in 2026 levels which were last seen back in 2019 so those numbers have been significantly

significantly down since the the outbreak of Covid says this story dealers and manufacturers

have been forced to battle those years of unprecedented volatility according to autotrader

but they think things have been slowing slowly improving since 2022 uh it's now confident that

there's going to be a full retail recovery by the end of next year which is very positive news

it's nice to have some some good news especially off the back of the budget which went down pretty

badly with with most of business um so it look reading reading between the lines here it potentially

we could be back to some good times in 2026 yes i can see john celebrated um it's what we need i mean

it's been it's been a difficult few years um off the back of Covid ups and downs very very strange

strange times to be operating but some normality um is predicted for next year so i just wanted to

put that one in there john because it's a bit of positivity did you see the story um i didn't

actually james because i don't know if you're aware but i'm on holiday can i mention how are you

it's really pointless to be being here um but i'm going to hand it over to john who will have

hopefully more interesting to say about it i'm beautifully swerved beautifully that's what

yeah that was a beautiful swerved um well you know we we have the same name john so you could

have been directing the question of me anyway um yeah i i read this um i i think we're definitely

seeing a similar trend actually um i think the one the one difference um i i think all two trade

of forecast three percent growth unused one percent are new i think we're a little bit more bullish on

new based on the volume of enquiries coming through on the new car side particularly on a lot of the

new entrant brands we're seeing a lot of growth there actually um and you can see that reflected

in smmt data as well so we're actually more bullish on the new side um and um but i think it

tends to the general trend yeah we we're seeing exactly the same thing in terms of i i think we

will get back to sort of 2019 levels of growth next year what's your take on these chinese

challenges then i mean it's uh it's a very interesting point isn't it these these new

brands are coming rapidly we've seen them arrive thick and fast this year next year they're really

going to be bedding in aren't they and changing changing the market i mean consumers happy happy

to to accept them oh god yeah i think we've seen uh it's interesting actually that that we saw um

we that the great thing about our new car business is we can see the levels of interest

based on what people are actually configuring on the platform and it's interesting we saw

early last year actually the jq7 had huge volumes of configurations obviously this year reached more

than three percent share really from just one car so uh i i think consumers i think they're really

well positioned in terms of price point for for for the quality and um you know capabilities of

those cars and then consumers again we go back to the point you know consumers ultimately will

research online and then go into a dealership and and look at a car and i think if you if you're

going to sit in one of those new brands and drive it you know it's amazing quality uh the cherry uh tgo

eight one car wow uh car of the year this year yes that's all i remember matt text this car is amazing

for the money it is and and i think consumers realize that as soon as this sits inside it you

know that's good so i i i i think we're seeing across the piece it's really interesting space

at the moment that you know a lot of the european brands are uh are the this sense of you know is

the european car industry and i think you know there's some amazing brands and i think they're

doing you know adapting quickly actually i think in the in the in the smaller segment as well

particularly the v-segment the launch of the rano five i think the new mini um i i think consumers

have just got a lot more choice uh it's perhaps a little bit more uh more time consuming to figure

out what you want to buy but there's there's the the market is really active at the moment i think

we see a little bit of interest rate movement as well that's definitely going to help um hopefully

that's on the cars despite the uh the budget and um yeah we should be even for a good year i think in

terms of total volumes well we like that a bit of positivity for december yeah we should be james

yeah good news we like that john follow that one up uh i've got some bad news

um but i'm gonna play to our uh london-based guest here and talk about zip car oh i'm sorry

sorry about zip car you see i knew this would work i knew this would work um so zip car for people

who don't live in the capital or go into the capital was a car sharing company um owned by

enormous car hire company avis and the idea was you they're all parked around london you can walk

up to one with your avis app or your card or whatever unlock it some of them you can drive to

around the bits of london and park them and leave them there some of them you have to return to the

same spot but it was a great way of getting in a car uh when you needed to well for lots of people

escape the capital as well you see them quite often you know bimbley around the m25 or the m40 or

whatever off to have a nice weekend somewhere um but they've decided to pull the plug so they'd

already pulled the plug on a couple of other uk locations i can't remember where they were oxford

camies and bristol it says here last year they got rid of those in order to focus on london

um and very sadly by the end of the year they'll be going here as well and i just thought this was

such a surprise because i've always thought it was quite obviously never having looked at the

financials of it i always thought it was quite a successful business because you do see them

everywhere you know i know people who rely on them to well not rely on them but have used them

quite a lot to get around um particularly helpful when there's things like a tube strike going on

of course but there are no more and i it's it's just another one of those things where i think

we've been told for years that car ownership will change and people are owning less cars now and

the other the other and this is maybe one of the solutions that will come about but they just don't

seem to have stuck um i know in france there was a similar thing with tiny electric cars admittedly

that disappeared and folded after a couple of years as well um and i think there's probably been

some other players that i've forgotten about who've come and gone in between so yeah i was surprised

by this i mean james were you surprised before i asked john yeah i was a little i was a little bit

surprised i think you hit the nail on the head there you know everybody's saying this is the

future of the industry future of the industry and car ownership is going to be a car sharing and these

sorts of schemes and then on the other next breath they they disappear so yeah very disappointing

really what's your take john do you have you used them yeah well i use zip van uh normally to take

junk to the tip etc and sort of move stuff around but it was amazing for yeah you just

want to sort of go rent a van for a couple of hours there's one around the corner so definitely

quite sad uh it's my only sort of uh trucker experience um yeah you know it's in i i think the

interesting point is yeah we we're obviously surrounded by predictions of the future and

obviously we are times are always changing and um you know often there's this this focus on you

know the death of the car people won't drive cars don't want cars you know it's a sort of asset that's

depreciating on the driveway i've never really bought into that at all i think um you know there's a

large population of people that just really like driving actually like they enjoy the freedom that a

car gives and uh and there's another large segment this it's a practical part of the family and

actually just being outside the house every you know permanently is is really important and um i

don't think we should ever lose sight of that so however many predictions we get um that suggest

otherwise uh and it's a shame i think the problem with that model is ultimately i think the uh the

utilization of those vehicles plus the amount of damage that they uh they absorb makes makes our

model really economically challenging yeah because having used a few before from different companies

there's always an element of like right well you need to walk around and check for damage do all

that stuff because it's parked outside on the street in london so it will inevitably like of

their hundred cars or whatever there's going to be damage every night isn't there from something

that was the only problem with my iphone you never quite knew what you were going to get

when you got in it and it definitely had some compromises but you know the flexibility to just

use a car or a van in my case whenever you need it it's really quite cool so yeah sad to see see

that move on right i'm going to wait one last one in john i know we're running out of time but

i just want to talk about uh the other big thing that's taken up a lot of my time this week and

that is the launch of car dealer life uh our conference for the motor trade which takes place

on march the 19th at the british motor museum in gayden warwickshire tickets went on sale this week

they're on early bird discount for both dealers and suppliers 10 of that price is going to

ben we're very proud to have supported that charity over the last few years we did it use car awards

to this year so helps raise lots of money for them we've got some amazing headline speakers

we've got sohyb from infinity motors he's built a business within three years from a five car

dealership to 200 cars in swindon he's going to be telling his story about how he's done that

we've got nicola dobson another one of our headline speaker she's the managing director of

perjio in the uk she's held a number of positions at stillantis i'm very excited to be hearing from

her about that brand and what they're going to be doing we'll have a franchise dealer panel

lots of names to add to these panels in the in the coming weeks but so far we've got richard

ennis the ceo of heading and sam luskin who was on the podcast last week the md of luskin motors

our independent dealer panel's got umesh samani the chairman of the imda and steven douglas he's

the founder of really easy car credit a business up in newcastle and also co-founder of dealerway

and then we've got a really exciting panel of challenger brands so we've got a number of these

ones that we've been talking about adam harkin he's from geely steve betty from byd victor zang

from a motor in jacu and farrell farrell sue i'm going to absolutely murdered his surname there

was that right john it was right yeah oh god i've done well there uh he's the uk country

manager for cherry so we've got some really interesting brands there that are going to be

coming along um some partners including autotrader or headline sponsors motorway we'll be doing a

fireside chat with tom leith he's the co-founder of c and ceo of motorway coxsort motive key loop

and impel the ai business and much more including google who are going to be giving a an insight into

how consumers are using ai to search for their next use car so a packed agenda a very busy day

we're adding lots of stuff over the next few weeks um to that but if people want to put their tickets

cardy live dot co dot uk but i'm incredibly excited about that i really enjoy that event every year

and we will be focusing on it between now and march won't we john yes we will yes and also

did you mention hotel rooms though you can book a hotel room the night before and be

entertained in inverted commas by us in the bar will you wear will you wear one of your hats

i'm signing up now i'm convinced i'm signing up

john will do a little bit karaoke on more sale lovely

but yes i just wanted to wait for one in a little bit of a plug but a story that we

we published this week tickets now on sale absolutely uh and early bird pricing ends at

the end of the year so in january it's going up to full price i'm afraid so actually now

to avoid disappointment um so that's all the stories john before i ask your verdict are there

any you think we've missed this week no i don't think so no it's uh i think that's a good list

it's obviously been a busy week of uh of news um yeah i think there's a good mix of upbeat

uh and to and to your point john maybe slightly downbeat topics uh but never the yin and the yang

we try uh so i'm gonna have to ask you who chose the best stories who is your winner or what was

your favorite story john uh given you you've uh given up your holiday to do this podcast i'm

gonna go with one of your stories i'm gonna go with the zip car story uh i think quite sad that

to see see the the end of zip car but i think also to your point often there are many predictions

of the future uh that we may worry about um and uh i think we should also always stay so fast in

the belief that people are always going to want to drive cars that's my prediction um and um and

we should we should continue to uh to focus on uh on the industry that we really love and

continue to do a phenomenal job in helping people find great cars that they enjoy using

well well done john i mean i don't feel too sorry for you because you did uh send me a picture of

the world's largest katsu curry that you were having for dinner last night and i'm very jealous

about all the food you were going to be enjoying in in japan so have a lovely holiday um you're

away for a couple of weeks though aren't you uh i'm away next week as well does that mean you're

the james wow sign this off uh who signs this off at uh a car dealer hq i'll be telling me about

the time in lou so don't worry yeah commitment this hour and then the next hour next week

well we very much appreciate you being here john thank you thank you thank you it's just

straight away you go that's lovely well all that's left for me to say is thank you to john

for coming on today it's been lovely to have you on and thanks for getting up so early to meet with

us after your other meetings today um and thank you as well to james uh for uh where we're in a

we're in a nice jumper in the boiler room in the boiler room no no i can't seem right no still

nothing thank you james and thank you for listening we'll be back next week with another episode so

make sure you're subscribed so you can be notified when that goes live if you want to check out the

store as you've mentioned today take a look in the show notes below or head to cardi the magazine

dot code uk and don't forget to head to cardi the live dot code uk to book your ticket while

early bird pricing is on thanks for listening and goodbye

Top 100 most profitable dealers revealed, Gerry McGovern mysteriously departs JLR, and Zipcar pulls out of UK – with John Veichmanis, episode 234

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