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Benfield Motor Group is celebrating its half-century by becoming the largest North East-based retailer at one of the toughest times in its 50-year history.

The company has remained buoyant during a year that has seen some sectors of the UK car market fall by as much as 20% ( and during the same period some of Benfield's business has risen by the same amount. Benfield is nearing the conclusion of its current five-year business plan that put in place sound contingencies for just such a scenario.

In an extremely strong position with zero term debt and very low gearing the company says it is ideally placed to ride such storms with impunity as others flounder.

Ironically it is soaring house values that have conspired to hit consumer spending, with millions of home-owners saddled with ambitious mortgages at a time of increased interest rates. Motor traders are chasing fewer customers and sales are generating tighter margins so, for now at least, it is very much a case of the survival of the fittest.

Times will improve for the trade as they always do and Benfield believes it will be one of the strongest survivors to capitalise upon the misfortunes of others when a number of companies decide to bow out. Indeed, despite what the company now regards as a period of consolidation after several years of significant growth, Benfield is constantly being urged to take on more major franchises and is actively considering a range of exciting possibilities.

Chief executive Mark Squires says the group is currently looking at opportunities for further expansion following several particularly attractive approaches from major manufacturers anxious to get Benfield on board or to expand existing territories.

At least one of the approaches under consideration is a completely new franchise that would complement the current portfolio of Volkswagen, Renault, Nissan, Ford, Toyota, Skoda, Fiat, Alfa Romeo and Lexus.

These sought-after franchises operate out of Newcastle, Morpeth, Wallsend, Hexham, Gateshead, Carlisle, Kendal, Leeds, Guiseley, Harrogate, Wetherby, and Wakefield, including several individual operations in some of these towns or cities.

For example, Benfield has ten separate outlets in total in Newcastle and Leeds representing nine different franchises.

Despite what the company refers to as its period of consolidation the group has invested more in the last year than many companies spend in a lifetime, opening new premises and maintaining existing stock.

January saw the opening of a Skoda franchise in Harrogate adjoining the existing Ford outlet, followed by a visit in March from the president of Toyota Europe to the group's new pounds 3.25m Wakefield dealership.

Accompanied by a team of top Toyota executives the delegation was keen to see for themselves what is now acknowledged to be the UK's leading purpose-built flagship retailing operation.

It follows additional investments by the group in Leeds, Harrogate, Newcastle and Carlisle amounting to a total investment of pounds 4.6m.

The company is also investing heavily in its new technology marketing strategies, which it sees as an essential tool for growth in a rapidly changing consumer society.

On-line enquiries have more than doubled, with sales to customers as far away as Aberdeen and Devon ( plus an Alfa Romeo to a buyer in New York, America ( and Benfield says that as much as 10% of sales can now be attributed to the Internet. The company is investing a further pounds 50,000 in its website to include improvements to navigation and content, plus a further pounds 30,000 at its mail centre where it can handle direct mail shots at the rate of 1,000 an hour.

Benfield's 350,000-customer database includes 20,000 e-mail addresses, which is a marketing tool of growing importance and the company now has its own on-line newsletter and is about to launch an enhanced intranet for direct communication among staff and management. Mr Squires is passionate about adopting the most pro-active approach possible towards the growth of the business, epitomised by the company's intention to increase its share of the region's older car market.

This sector of the market traditionally accounts for four times as many sales as new cars yet this is often not reflected in the level of business among established high street dealerships.

Benfield says it intends to prove to potential customers that despite its upmarket image it is actually no more expensive to buy a second-hand car or to have it serviced using genuine parts from a Benfield dealership than rival independents.

"We are focusing on growing our used cars, especially vehicles up to six years-old, where sales are up by 25% so far this year as a direct result of recent initiatives," says Mr Squires. "As the biggest local motor retailer in the region we want to position ourselves as the leading seller of used cars in our market, offering a broad choice and helping more customers find the vehicle that is right for them."

Another area of growth is the light commercial vehicle sector of the market where Benfield's business has risen by 20% in a year. Franchises include Nissan, Renault, Volkswagen and Ford whose all-new Transit is expected to increase its lead further as the UK's favourite.

Even in the unglamorous world of tyres Benfield shows business can grow, with a doubling of sales in a year based on the belief that the group is best placed to beat so-called specialists at their own game.
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Publication:The Journal (Newcastle, England)
Date:Jun 21, 2006
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