The ‘Kelston Way’ of conducting business

THE Kelston name is well established in the motor retail sector nationally and especially in the Eastern Cape where the majority of the group’s dealerships and its head office are located. Dealerfloor put some questions to Peter McNaughton a Director of the Kelston Motor Group.

Kelston1 Peter Mc Naughton m
  • How did the Kelston Motor Group start?

We started in 1996 when Mike McNaughton purchased Kelly Volkswagen. Mike was previously involved in the tyre fitment industry and had a short stint as the Dealer Principal of the local Ford Dealership.

Over the years, we have acquired dealerships that we believed were a strategic fit and sold some that were not part of the long-term strategy. As Kelston stands today, we have 24 dealerships and are involved with 13 different brands. We are also partners in a Dealer Group in Mpumalanga that operates from five sites.

Our business model is to combine cost centres and functions as far as possible into one head office to allow for economies of scale and resources not normally possible for smaller, rural dealers. We believe this allows us to compete with our much bigger competitors.

  • What has been your personal journey at the group?

From a personal point of view, I have been involved in the dealerships from a very young age. As kids, with both our parents working in the business, we spent many an afternoon after school and Saturdays at the dealership.

We got to know our fellow colleagues, many of whom are still part of our team, very well. I officially joined the business after completing my BSc at Stellenbosch University in 2011. I was involved primarily in the parts division for two years and then moved on to the service side.

I had a small stint as a salesperson in Grahamstown while completing my MBA at Rhodes University, but I must be honest, I was not a very good salesperson.

I am currently the Director in charge of operations with my fellow directors being my sister, who is a qualified CA, running the admin/ finance side of the business and my father, Mike, who is the Group MD.

  • How did COVID affect the business and how did you mitigate its effects?

COVID has had a major impact on our business. We have, unfortunately, lost a team member as well as industry colleagues, customers and friends. So many employees have lost loved ones, and many were very ill and in hospital.

Obviously, full lock down in 2020 resulted in a major financial loss to us as a group but we are also currently experiencing a larger financial loss owing to the lack of product to sell caused by the current supply constraints.

Many of us are paid on a commission basis, and the lack of product available has impacted on not only the earnings of the Group but also our employees. April 2020 was a big knock but two years later we are at only 20% - 25% supply on some of our models.

Our staff are incredibly passionate about their brands and their customers. It is tough to accept a lost sale to another brand because they are unable to supply a vehicle let alone the cost to their personal earnings.

On a positive note, I believe our ability, as a group, to adapt and change at speed was our strongest advantage. We stayed close to our teams all through lockdown and tried our best to keep the motivation levels high for the return to business.

  • Why did you decide to change to a blanket corporate identity in 2020?

For us it was important to build and consolidate the Kelston name and dealership network within the area we operate in. Our goal is to have customers expect a higher level of service and ultimately derive better value when dealing with a Kelston dealer.

At the same time, we strive to be an Employer of Choice and to attract people who have the same moral compass and motivations as our Group. We often refer to a question when dealing with decisions, “is it the Kelston Way?” We are proud of what we have achieved thus far.

  • Give us some insight into your vision for the business over the next 12-18 months.

Our main focus for the coming year is our aftersales business and the absorption levels we are able to achieve. We believe through better management and improved technology; we will drastically advance financial performance and customer retention.

New vehicle supply is set to improve in the second quarter, which will change the game in terms of vehicle sales and the way we have been marketing. An increased supply of new vehicles has historically reduced the value of used vehicles, which has increased significantly since 2019 .

This is a major risk in terms of the value of existing stock and sales performance. We also hope to introduce a loyalty programme and an improved customer retention strategy that in fact adds value to our customer base.

  • As a large group, how do you plan to keep the ‘personal touch’ that so many independent dealerships use as a competitive advantage?

We may be a large group, but we are ultimately a family business. Our colleagues on the ground in the various towns are involved in their communities. Being part of local social, sport and charity events is part of our social objective.

There is also an added benefit of the marketing aspect. We encourage the leaders within our business to think of their dealerships as their own and that we are merely a support structure to assist them to make their own decisions as long as they are happy to shoulder the consequences – good or bad. We also try, as directors, to be actively involved at all levels within Kelston.

Our personal details are available on our websites, and receptionists at the various dealerships are encouraged to pass on our details if need be and our colleagues understand that they can contact us at any time.

  • · What makes the Kelston experience different compared to other dealers?

We strive to offer our customers a better value proposition than our competitors do. That value can be derived from customer service, peace of mind motoring, a fair price, the handling of special requests or anything of a similar nature that can lead to value creation for that specific customer. While price is very important, we believe the total value we add to a transaction along with peace of mind is what sets us apart.

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