JSE-listed vehicle retailer Combined Motor Holdings (CMH) achieved a significant turnaround in its financial performance in the second half of its financial year to end-February 2021.
- Industry News
- 7 May 2021
Dealerfloor recently caught up with Hugh Morgan, Managing Director of the Morgan Group, to talk about cars, running dealerships in the city and the countryside, as well as life away from work.
According to Hugh, it all started way back in 1989 when he and his then business partner started trading used cars in the Vaal Triangle. “We were fresh out of university, had no experience at all and were forced to learn the ropes of the business by default,” says Hugh. In 1991, the partnership came to an end when he decided to move his enterprise to Johannesburg and the surrounding areas.
“I had to work very, very hard. The lack of initial experience, as well as basically non-existent cashflow, forced me to do almost everything myself,” says Hugh. “But it was a good and important learning phase, forcing me to better understand this trade of selling, re-selling and servicing cars while at the same time running a business successfully.”
Within 14 years since purchasing his first Nissan Dealership in 2006, the Morgan Group expanded and recently acquired a dealership in Lydenburg adding to the current established six Nissan dealerships, three UD trucks and a Renault dealership, which cover five provinces.
DF: Most of your dealerships are in rural towns, is there a reason for that?
HM: “First of all, I have to emphasise that relationships in business are built on service levels, and they are a priority on our service values,” says Hugh. “But it is more than just delivering a service the customer pays for, it is the kind of service through which we gain customers!
“Secondly, we pride ourselves with the fact that each branch of the Morgan Group is run as if it belongs to the Dealer Principal, with additional ownership by our staff at each branch.”
Hugh’s philosophy is that people buy cars from people, meaning someone they know. “As a buyer, you want to trust the car salesman, the dealership and the service delivery. These things come much more naturally in the countryside where there is a bigger sense of community.”
And the proof of this statement is in the numbers. According to Hugh, the effect of the lockdown was not as damaging to the Group’s dealerships in Welkom, Vryburg, Harrismith, Bethlehem, Kimberley and Ermelo compared to those in the city. “I am proud and grateful to say that those dealerships are almost back to where we were in February this year. And I can promise you it is because of well-established relationships.”
DF: How did you, and the DPs at your different locations, negotiate the national lockdown?
“This was definitely a major challenge that none of us ever thought would happen. Time for planning was minimal, and we had to react fast by understanding the rules and abiding by them. To be able to provide the essential services to our communities in the aftersales departments, we immediately obtained the required permits.
“The sales teams from each of the dealerships focused their time and energy mostly on online advertising, while at the same time making a conscious effort to obtain as many as possible leads to follow-up on when we could open during Stage 3 of the lockdown.”
DF: Were retrenchments a possibility and how did you communicate to all your employees how you plan to journey through this challenging time?
HM: “This is possibly the toughest, most heart-wrenching outcome of the lockdown for most businesses in South Africa. Unfortunately, we had to enforce limited retrenchments at all branches and communicated our decision to apply the LIFO-method of last in, first out, combined with performance-based evaluations.”
DF: Having dealerships in five provinces must be challenging. How do you manage it?
HM: “I think it is important to visit all the branches twice a month, which sometimes results into some creative diary planning. That said, I have to emphasise that I rely a lot on a very strong management team at each branch to perform the day-to-day running and decision making at those branches.”
DF: How do you think the current record low interest rate will influence buyers and what is your advice to your customers?
“Although the prime rate is at an all-time low, I will be remiss if I don’t warn customers to take the necessary care when making decisions. In an ever-evolving world, you have to budget for a higher rate in the future as well. If you can negotiate a fixed rate at this point, it will be an advantage, giving the customer some much needed breathing space. Unfortunately, I am going to be the one that will remind buyers that this will most probably not last.”
DF: Tell us about your family
HM: “I am blessed to have married my Potch-love from our Varsity days, Suzette. We have four children with an even split of two girls and two boys. Our kids definitely have pharmacist mom’s brains, with the eldest currently doing her LLM at Berkley in the USA. My second oldest daughter qualified as a veterinarian last year. My eldest son is currently studying Actuarial Science at UCT and the youngest son is on a tennis scholarship in Pennsylvania, studying business.”
Dealerfloor fired some quick questions to him:
Which car(s) are currently parked in your garage?
- A Navara LE 4X4 and Nissan Patrol
Tell us something most people don’t know about you.
- I hide my short fuse!
Away from cars, what are your personal interests?
- Travelling and hunting.
What is your favourite sport and your favourite team?
- Tennis and Rugby, Federer and Western Province.
Coffee or tea?
- Lots of coffee. I mean, a LOT.
Beer or wine?
Early bird or night owl?
- Both! I don’t sleep much.
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Steve Jobs, the late CEO of Apple, once said that great things in business are never done by one person, they are done by a team of people.