My Week: Clive Sutton of Clive Sutton Premier Marques

The luxury car dealer on responding to the industry turmoil by re-inventing his business online.

Last Updated: 06 Nov 2012

When the credit crunch started to bite into the luxury car market, in the second quarter of last year, I began thinking about strategies to change the business. My aim was to move more of the business online, making us less dependent on showroom premises, and we’re now seeing the fruits of this decision, having developed amongst other things, a new brokerage site. The idea was that people in different parts of the country wanting to buy and sell cars would be able to upload the details to our brokerage service; we’d then send people out to do remote appraisals, value them, promote them online and sell them to end users. One of the most successful things we’ve done is also one of the simplest, a live chat facility – we’ve sold two cars that way already. I’ve also got a Facebook and Twitter account. My approach has been to try everything and see what works.

One of the biggest challenges for the Government at the moment is propping up ailing manufacturers, but it’s failing to address the other end of the marketplace, the distribution chain – retailers, dealers and of course consumers. The scrappage scheme is designed to get people on the rung, but it only really helps the low-end, low cost manufacturers. I’m part of a fellowship for high-end automotive industry professionals, who meet three times a year, and at our most recent gathering I sat next to Paul Everitt from SMMT. He was seeing Mandelson the next day, so I asked him to put in a request that the scheme be extended to cars that are up to, say, a year old. People would still be buying something significantly better in terms of emissions, but it’d be enabling a much wider range of consumers and dealers to benefit.

The biggest single issue affecting my business at the moment is our ability to arrange finance for people who are quite capable of making the repayments. The changes to the Consumer Credit Act last March took out of the marketplace the low deposit high-balloon deals, which allowed people to drive away a £100,000 Aston Martin for a 10k deposit and £1,200 a month. There are also lots of people with negative equity, where the car’s market value is less than what they owe. So we might sell their car on brokerage basis, and negotiate with the finance company to settle 80% of the loan and get the other 20% refinanced as a personal loan. That’s becoming more common now. We also have a guy with an Aston Martin Vantage V8 Roadster 2007; he owes 85k and it’s now worth 65k. I’ve found someone willing to pay 20k to take the car off him for five months, after which he gets it back. So we’re having to constantly redefine the conventional deal.

The last 12 months have been the worst business climate I’ve seen – and I’ve been in the industry since 1980. But I’m a lot more optimistic now. The collapse in the new car market means the second-hand market is starting to strengthen up – we’ve now got more people wanting to buy than we’ve got cars to sell. And one thing we didn’t expect: thanks to the weakness of the pound we’re also exporting a couple of cars a month to places like Japan, Thailand and Cyprus. I had a Lamborghini Murciélago here from last July to this January, which is a £160,000 car. I couldn’t find a single person in the UK to buy it, and I did everything I could to market it – now we’ve sold it to a dealer in South Africa. This week we’ve also been shooting more videos, where we present the cars and go for a bit of a drive. It’s not Top Gear, but they’ve enabled us to sell cars to people in different countries or other parts of the UK; it gives them enough information to say: yes, I’ll buy it. So that’s another growth area.

Capital Bank, the car finance division of HBOS that I’ve been working with for five years, is being rolled into Black Horse, so this week we had to present ourselves to the new owners. I’ve also been busy writing letters of complaint to my MP about the appalling situation over business rates. My premises have been over-rated for years – if they re-valued it correctly, we’d be due a refund of about £70-80,000. But you can’t talk to anyone – they’re all jobsworths, nobody actually runs a business. And we’ve been preparing for the prestigious Motor Industry Awards; we’ve been shortlisted for both our website and our marketing activities, which I’m very enthusiastic about. Showroom footfall isn’t bad at all at the moment, but the internet and the site are now by far our most important channel of communication.

Clive Sutton is the founder of the leading independent luxury car dealership Clive Sutton. He has just published the first in a series of quarterly market reports to give readers a true insight into the high-end the motor industry. The report can be downloaded HERE.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

How not to handle redundancies

It can come back to bite you if you get it wrong.

Sarah Willingham: I will never start another business again

The entrepreneur and investor on top leadership skills, pivotal career moments and Dragons' Den.

A new etiquette for video meetings

Virtual calls are not the same as in-person conversations, so we need to change the...

There's opportunity in this recession

A Schumpeterian view of closing businesses.

Is it okay to spy on my staff if I think they're slacking ...

Everything you wanted to know about employee surveillance but were afraid to ask.

The psychology of remote working

In depth: The lockdown has proven that we can make working from home work, but...