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Peter Vardy has sold six franchises to Arnold Clark as he tries to pull away from the wave of car sales and head into more successful areas.
Speaking at the Car Dealer Live exhibit on Thursday, March 7, Vardy said he’s moving his business to three new and more successful pillars: premium franchising, his Car Money money brokerage and leasing.
Its Aberdeen, Kirkcaldy and Edinburgh sites, which included three MG franchises, two Omoda franchises and one Ora franchise, were transferred to Arnold Clark earlier this month.
It will leave Vardy with the BMW, Mini, Jaguar Land Rover and Porsche franchises and an Omoda franchise that will be based in the remaining used car in Motherwell.
Vardy said he made the decision because he needed to create “a higher return on investment” and that the volume market wasn’t doing that for him.
Vardy was the first keynote speaker at Car Dealer Live at the British Motor Museum and explained how he had to make those tough decisions for business intelligence.
He said it was hard to lose other people in his business, but he worked as hard as he could to find them new roles within the organization where he could.
Vardy said he’s now excited about the long term and confident that “higher margins will create higher multiples” for his business.
“We want to create prices at each and every level and in the broker world, the returns are one to two percent,” he said.
“I love premium franchises, they’re more sustainable and the returns are stronger and I’ll be looking for more premium franchises. “
Eddie Hawthorne, chief executive of Arnold Clark, told Car Dealer: “With the adjustments Peter made to his business, we were able to work with him a lot and make sure he was able to deliver on his plans temporarily with minimal disruption to staff and customers. .
“We are incredibly pleased to acquire all three Vardy MG locations, providing Arnold Clark with a wonderful opportunity to grow with one of our existing partners. “
During the interview, Vardy explained that the decisions he made had been difficult, but that they were aimed at getting the most productive return on his family’s investment.
He said he made the decisions earlier this year so that those he couldn’t offer work to would have the best chance of finding another, and said he was glad many did.
Vardy will now expand his auto finance brokerage business, Car Money, which he says is more technology-driven and offers much higher margins — “in the diversity of 27-28%. “
“While I don’t need to sell, I have to think about creating more prices in the business and while distributors through volume are priced in multiples of about 2 to 3 times, tech corporations like this have more than 10 times,” Vardy added.
“We are also expanding our van rental business: we have 1,200 vans lately and very soon this number will increase to 1,500. “
The in-depth interview and other Car Dealer Live sessions can be watched on occasion with a replay ticket.
The date of the occasion of the year will be announced in due course.
James is the founder and editor-in-chief of Car Dealer Magazine and CEO of parent company Baize Group. James has been an automotive journalist for over 20 years and writes about automobiles and the automotive industry.
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