Lookers expects to deliver a “quick return” on a muti-million-pound investment to grow its fleet of mobile service vans as it pursues growth in cosmetic repair and alloy wheel refurbishment.
The AM100 PLC’s chief operating officer, Duncan McPhee, told AM that the business now has 20 vans and 26 fixed sites to deliver the service after the wheels were set in motion on a plan to prevent leakage of cosmetic repair and insurance work to third parties.
And the early success of the operations means that the business now plans to scale the operation with the addition of 10 more vans and 20 additional fixed sites in 2023.
“Scaling the business will undoubtedly cost a few million quid, but the payback is pretty short, and the margin achieved to be better than the type of margin generated by the typical body shop,” asserted McPhee.
“Generally, people in Britain care for their cars and we believe there’s a real appetite for cosmetic repairs beyond fleet and insurance work.
“Keeping a car in mint condition also plays into the trend we’re seeing of some people wanting to hold on their cars for longer as a result of the cost-of-living crisis.”
Lookers’ cosmetic repair offering will also be used to ensure that its new car customers keep their cars in prime condition – potentially reducing refurbishment costs when the car is re-sold at a later date.
The business offers minor damage protection at the point of sale and McPhee said the product presents “great value for money”. He said: “A customer can make a fixed number of claims and it’s a great product for them because the claim rate is pretty high. For us, it’s also a strong retention tool as a result.”
Lookers’ fleet of remote cosmetic repair and alloy wheel refurbishment vans are fully liveried and, once the additional capacity has been added to the operation, McPhee said that Lookers may market the service more widely.
The vans are complimented by “ready-made pods” at existing Lookers sites, McPhee said.
While the retail group has had to recruit technicians to bolster its cosmetic repair operation, it has also re-trained staff from its traditional body shop facilities that were recently closed.
Lookers has also taken on apprentices to fill certain roles.
Last summer Lookers ytook its car retai offering on the road with the help of a TV advertising campaign to promote its ‘click and sell’ used car buying platform, and accompanying home delivery service.
McPhee described the new cosmetic repair business as a venture that is “in its infancy”, but expects impressive results.
Emphasis on this part of the business comes as the group targets growth in the new car market with a handful of emerging brand partners.
As well as developing a new Lotus Cars dealership in Belfast, the group is opening Great Wall Motors (GWM) Ora dealerships in Braintree, Belfast and Wolverhampton, BYD in Middlesborough, Sheffield and Northern Ireland and the XBus electric van brand in Gateshead.
McPhee told AM: “Used cars, aftersales and new fleet has been really strong so far this year. You can start to feel new car stock freeing up a bit and we generate a large volume of our own used cars, so that’s not been a real worry for us.
“The new brands are another exciting prospect for us. There’s an awful lot going on to keep us busy.”