powerpoint presentation · subaru bmw vw mercedes jlr toyota s. strategic role of 3rd party dealers...
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TONY GEORGE GROUP BUSINESS DEVELOPMENT & HR DIRECTOR
Multi industry
experience: FMCG,
Retail, Chemicals &
Telecoms
Member of the
Group Executive
Committee
since 2007
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Inchcape as strategic partner to the world’s leading car brands
MANUFACTURER
RETAILER
VEHICLES, F&I,*
PARTS & SERVICE
DISTRIBUTOR
VEHICLES & PARTS CUSTOMER
Inchcape owns the value chain ex
manufacturing as a Distributor
Inchcape creates and
manages the network of
retail sites (Dealers)
Selective capital
allocation:
• Inchcape typically
runs 10-20% of the
network
• Inchcape appoints
3rd party dealers (B2B
sales of New Vehicles
& Parts) to complete
the network
INCHCAPE
* F&I: Finance & Insurance
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Pro forma Distribution Country
Inchcape owned sites (x4)
Dealer sites (x25)
Head office
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Light asset intensity - Inchcape’s Distribution Footprint
As at Dec 2013
Distribution and Vertically Integrated Retail (VIR) markets
479 332 147
102 49 53 EM
146 101 45 Australasia
9 - 9 South Asia
23 - 23 North Asia
199 182 17 Europe
Total
3rd party
dealers*
Inchcape owned
and operated sites*
VIR in city state markets
where a small footprint
covers the territory
Support
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Long standing relationships
Inchcape length of brand relationships
Inchcape
delivers on
market share
and customer
service
excellence
Established relationships with brand partners across multiple continents
0
10
20
30
40
50
Subaru BMW VW Mercedes JLR Toyota
Year
s
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Strategic role of 3rd Party Dealers
Our route to market where we are appointed as Distributor
• Highly efficient route to market / capital light
• Appointing dealer network to leverage local retail expertise from
partners / dealers
• Managing, motivating and incentivising dealer network
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Developing and managing the right dealer network
Location
(zone the
country)
Investment
Standards in
Facilities,
Operations,
Management, IT
People Training Quality Control
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Growing our Distribution presence New Distribution and VIR contracts
Inchcape is well positioned for attractive consolidation opportunities in the
fragmented global automotive market
Bulgaria Toyota
Bulgaria Lexus
Romania Toyota
Romania Lexus
Albania Toyota
Albania Lexus
Macedonia Toyota
Macedonia Lexus
Q1 1996
Q1 1996
Q1 2000
Q1 2000
Q1 2000
Q1 2000
Q1 2000
Q1 2000
Latvia BMW
Latvia Ford
Lithuania Mitsubishi
Lithuania Hyundai
Lithuania Ford
Chile Rolls Royce
Hong Kong Land Rover
Hong Kong Ford
Q2 2007
Q2 2007
Q2 2007
Q2 2007
Q2 2007
Q4 2011
Q4 2011
Q4 2011
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Strategic priorities for expanding our distribution footprint
• Premium / Luxury Brand
• APAC / EM
• Aspirational and growing middle class
Strict discipline on fulfilling hurdle
requirements:
Post tax IRR >15% for an APAC / EM
transaction
Regional and Group expertise to
complete due diligence
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ARIS ARAVANIS MD GREECE & BALKANS
Joined the
Group in 1991
Multi industry
finance
experience
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Distribution / VIR is a highly efficient route to market
Area Dealers Outlets
Athens 9 12
Salonica 1 2
Rest Mainland 18 22
Islands 7 8
Total 35 44
• Owned (30% vehicle share)
– Athens: 2 Toyota 3S outlets, 1 Lexus showroom
– Salonica: 2 Toyota 3S outlets
• Authorized Repairers: 38
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Strategic direction: “Fewer, Bigger, Better”
In the past decade, Toyota Hellas’ Dealers have remained strong and established an undisputed leading position in the Greek Market
Fewer and Stronger Dealers: from 77 in 2000 to 35 in 2013
Consistent high scores
in all Dealer
Relationship Surveys
(DRS) conducted by
Toyota Europe
77
34 35
0
20
40
60
80
100
2000 2007 2013
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Renewing the Network in Greece
• New installations (60%) and extensive renovation (40%) of older facilities
• Total investment of €100m
• Excellent visibility, accessibility and competition density
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The evolution of sales for the Network
Rightsizing of network led to a sustainable sales volume per Dealer
2007 Vs 2000
+125% Sales per Dealer
Sales per Dealer
77
32,042
416
34
31,869
937
35
7,141
204
2000 2007 2013
Dealer Sales Sales per Dealer
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Managing the downturn in Greece
Early detection of the Greek market’s
sharp declining trend led to a series of
measures and actions aiming to:
• Fortify Dealers against new conditions,
• Improve their competitiveness and
elevate further the quality of services
offered to customer
Strong Financial status
Lean and Agile
organisational structure
Operational Excellence
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Strong control of the financials
• Liquidity support
• Enhanced credit control
• Rigorous financial monitoring:
– Yearly Budget and Business Plan per Dealer
• Expanded revenue opportunities:
– Significant vehicle insurance income
– Focus on more profitable models and
increase consumption in Aftersales
Strong
Financial
status
Lean and
Agile
organisational
structure
• Reduction of
secondary outlets
• Headcount
rightsizing
• Business roles’
enrichment -
Multitasking
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Maintaining operational excellence
• Unwavering focus on front-line effectiveness:
– Enhanced role of Field Force Sales Managers
– Continuous support & guidance to network sales force
– Advanced Training
• Introduction of Inchcape Advantage +, in order to enhance retail processes and
intensify field force support
• Benchmarking through KPIs
• Customer Satisfaction Survey in both Sales and After Sales
Operational
Excellence
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Dealer performance vs. competition
Defaults remained remarkably low despite the fact that in the sector 39% of
outlets have shut-down and employment decreased by 53%
The Toyota Hellas Dealer Network demonstrated excellent
resilience during the period of crisis 2008-2013.
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Stronger network…stronger share in Greece
Toyota Hellas alongside
our strong dealer
network has managed
to increase market
share during the
downturn (2008-2012)
Ready to seize the
recovery in the market
28,624
19,064
7,181
9.7%
11.3% 11.6%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
12.0%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2005 - 2007 2008-2012 2013
Annual Average Volume Market Share
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The Greek Economy is stabilising and is ready to grow 2014 onwards
Q1 2014: Greek car market is up 19% YoY
Greek automotive market recovery since H2 2013
293 291 304 289
235
152
104
62 62 68
0
50
100
150
200
250
300
350
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
Car Market Evolution
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Ageing of the Car Parc to fuel the replacement cycle
23.8% 23.0% 19.6% 16.0%
28.1% 28.6% 27.4% 27.6%
14.6% 19.8% 22.0% 23.5%
33.4% 28.6% 30.9% 32.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2010 2011 2012
> 15 years
10-15 years
5-10 years
< 5 years
4.9m units 5.4m units Size of Car Parc
Average age: 10yrs Average age: 13 yrs
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Inchcape in pole position in Greece
Improved
competitive
position
Efficient
and highly
competitive
processes
Well organised
and highly
professional
network
Toyota & Lexus:
Strong Brands
and models
Customer
1st Strategy