New SUV will enable Seat retailers to improve on 2% RoS
11 October 2018
Seat retailers who operate the franchise’s 128 outlets are likely to have their circa 2% average return on sales consolidated or improved when the brand’s new Tarraco flagship SUV comes to market early next year.
That is the message from Seat UK’s head of brand Richard Harrison, who highlighted that the network had enjoyed significant profitability and higher retained margins from the brand’s expanding SUV range, driven by the Ateca, demand for which had been underestimated.
Mr Harrison, who took over as brand head in the UK three years ago, said: “As the fastest growing mainstream volume brand in Europe and the UK our British network average RoS is close to 2%, my strategic target.
“We like dealers to run controlled, appropriately scaled businesses and particularly with SUVs they enjoy an SUV rich mix upwards from Arona, half of which involve top-end specifications, which helps achieve higher retained margins.”
He said that Seat had transformed its sales strategy in recent years from a predominantly push strategy to predominantly pull and, underpinned by what he described as rock solid RVs, most retailers started each month with a high proportion of vehicles already sold and healthy forward order books.
With an anticipated price of over £30,000 and 70% conquest rate Mr Harrison said a substantially increased budget was devoted to dealer training. This focused particularly on customer handling, and improving launch processes, which he admitted, had not been a particularly strong suit.
Despite an optimum 135-outlet network size he was in no rush to reach that figure. Future or current consolidating partners’ viability and locations were critical. Expanding workshop capacity to cope with a growing parc prompted by a 2.9% share of TIV up to the end of August remained a priority.
Mr Harrison admitted: “We want to move to 3% market share – the tipping point in retailing self-sufficiency terms. We are pragmatic and don’t demand multi million pound showcase gin palaces. It is about the human side and the quality of facilities whatever their size, scale and scope.”
There are no plans to add to Seat’s Lakeside, Watford and Westfield, White City, London, shopping mall stores, run jointly with Group One, despite them generating above national average local sales penetration. Lessons learned from the initiative, particularly on the online digital sales front, would be integrated at a heightened level into the overall network selling experience during the next 12 to 18 months.
Echoing Mr Harrison’s outlook, Seat’s president Luca di Meo said the brand’s higher centre of product gravity translated into the Tarraco offering three or four times the profit of an Ibiza, or the sale of one Tarraco equating to four Ibizas.
Seat’s Cupra performance brand within a brand, which will involve around 25 specialised UK outlets providing dedicated facilities, also provided a benchmark reference for the company’s move upscale.