As we heard at today's presentation, this is not going to happen. 'Buy Right' may extend down to Hamilton. But it is seen as a 'top of the North Island' brand.
Slide 12 of the presentation highlighted 'Satisfaction' and 'Likelihood to repurchase' (I have added some more info).
Turners Buy Right Cars Satisfaction 87% 88% Likelihood to Repurchase 71% 77% Stock Turnover 35-45 days 60-90 days Price Sweet Spot $10k-$15k $15k-$25k
These figures are quite good although Todd wants the customer feedback figures to be even higher. Questioned on the relative out performance of 'Buy Right', Todd said that at 'Buy Right', salespeople would spend 3-4 hours with each customer getting a better feel for their needs. With Turners cars at a lower price point, there isn't the staff buyer interaction time required to generate the same depth of mutual understanding of the deal. The 'Turners' brand is more of a self service model. Todd also told us previous management at 'Buy Right'; had done a sub optimal job on stock turn, with some vehicles still on the yard after more than a year. As a result some $2.5m of the $6m earn out payments due by August 2018 (two years after the business purchase ) to the former 'Buy Right' owners will not be paid.
We also learned that Turners had looked at taking on a new car franchise. The problem here was car makers often dictated what sort of show room (usually a capital intensive design) is required to represent that manufacturer. Further, with new car sales at a peak, the price to be paid for acquiring a new car franchise would be high. So this idea has been shelved, but serves to highlight the value of being a 'brand agnostic' seller.
Aaron Saunders also chipped in with his experience of 'market resilience', what happened in the NZ car market during the GFC. New car sales dropped by up to 50%. But the fall in used car sales was a more modest 15%. There is less buyer discretion in the used car market! When you need wheels to get to work, you have to buy something!
SNOOPY