Car sales going strong after ‘strange year’

The chief executive of Turners Group says the car market has made a quick recovery in recent weeks despite disruptions to the industry caused by coronavirus.

It comes after what Greg Hedgepeth describes as a “strong year” for the company with plans to continue expanding its retail footprint and market share in the current fiscal year.

“Everyone would be surprised at how buoyant the market is right now,” he told Autofile Online. “No one expected it to be quite so strong and here’s hoping it continues. Our expectations have been exceeded over the last month or two in regards enquiry levels and sales.

“How long that continues at that level remains to be seen and it’s difficult to accurately predict how it’s going to end up. Most months you can tell and know what’s coming. But right now it is anybody’s guess what the market will look like in three to six months. With the pandemic, it has turned out to be a strange year. However, we’ve had a pretty strong year.”

Hedgepeth, pictured, says as the whole industry enjoys an uplift, June is also looking good for Turners with strong sales so far. “We haven’t seen too much of a change in who is buying cars. It feels strangely like it was before the crisis came along.”

While expansion plans were put on-hold because of Covid-19, he adds the company is now pressing ahead with ambitions for further “retail optimisation”.

“We’re always looking for what are the best laid-out and located sites for us across the country. In the lockdown period, everything was on hold. But we’re back to normal, looking at other opportunities. There are a few we’re working on at the moment, including a new site in Westgate, Auckland. That’s opening in October.”

Pause on imports

Turners has hit the brakes on importing vehicles and is making people redundant as it closes its compliance operation in Manukau, south Auckland.

Hedgepeth would not reveal how many of the 35 jobs at the service centre in Ryan Place will go, but says the site will still continue to service and process vehicles.

“We bought that business with its internal compliance operation a few years ago, whereas a main part of our business has been buying and selling imports for many years and outsourcing compliance,” he explains.

“We had to decide whether doing it internally or externally was better for us, and externally you have a high level of expertise and more flexibility.”

He says the onset of the coronavirus pandemic sped up the company’s thinking and, after pulling the pin on imports for the immediate future, it made little sense to maintain its own compliance team.

“Early March, as soon as we heard of Covid, we stopped buying imports out of Japan. We’ve paused our import buying for the time being and think there’s a lot of local opportunities here and a lot of volatility around getting cars out of Japan.

“We haven’t stopped importing, we’re not out of imports. We have just put a pause on them and will see how things go before we get back into it. With no imports to comply, the Manukau site wasn’t going to be the best solution for us long term, so it made sense getting out of doing our own compliance.

“We feel it’s not best for our business and those guys would have nothing to do for the next six months, so it didn’t make any sense to have that internal compliance operation any longer and Covid accelerated that decision for us. It’s unfortunate having to part ways with staff, but we will go above and beyond for them.”

Hedgepeth is confident Turners will be able to maintain a broad range of stock levels despite the decision on imports. “The good thing about our business is we have really strong supply lines of local inventory and imports make up only a fraction of our business.

“We have got a lot of local-inventory opportunities and there’s a few rentals floating around at the moment – although not the levels people predicted – and more opportunity in that space, so we don’t feel pausing imports should have too much impact on our business. 

“We’re pausing imports and monitoring it on a monthly basis. When the time is right, we will get back into it but possibly on a smaller scale. For the time being, there’s plenty of reasons to focus on local buying.”