Sytner Group Plc Business Information, Profile, and History

Company Perspectives:

Group Aim: To be famous for delighting our customers, employees, manufacturers and shareholders.

The Sytner Group is committed to achieving the highest possible levels of performance in each of its businesses from the viewpoint of customers, employees, manufacturers and shareholders.

We set ambitious targets and are determined to be the country's leading quality motor retailer. This will only be achieved by a Groupwide commitment to continuous improvement.

We will provide the training, equipment and environment that enables us to deliver on this aim.

History of Sytner Group Plc

Leicester-based Sytner Group plc is one of the United Kingdom's leading automobile retailers, specializing in high-end and luxury automobiles. Led by Chairman and former racing champion Frank Sytner and Chief Executive Laurence Vaughan, the company operates 45 dealerships--many of which are operated under the Guy Salmon brand--throughout the country, with franchises for BMW and BMW Alpina, Jaguar, Ferrari, Lexus, Lotus, Aston Martin, Maserati, Porsche, Jeep, Landrover, Mercedes Benz, Bentley, Volvo, Saab, TVR, Chrysler, Volkswagen, and Mini, as well as an agreement to sell the forthcoming new Rolls Royce model slated for release in 2003. BMW remains the group's leading brand, and Sytner is that brand's leading dealership in the United Kingdom. The company is also the country's number two seller of Jaguars. A strong acquisition program since the company's public listing in 1997 has enabled the company to quadruple its sales since 1996. In 2001, the company posted sales of nearly £597 million. After targeting the provincial market for much of its history, Sytner Group is now preparing to take on the London market. In 2001, the company opened its first dealership in the capital city, a 4,000-square-foot BMW concept store located in the heart of the city's financial district. The company has since acquired two more London-based dealerships and intends to make its London dealership its flagship operation. In addition to new and used car sales, Sytner operates an e-commerce capable web site and a customer call-in center linking prospective clients to salesmen. In 2001 the company overhauled its advertising strategy, focusing on tapping into its 250,000-strong contact database with what the company calls its Customer Relationship Management (CRM) strategy. The company also offers extensive repair and maintenance services, which account for 12 percent of sales and 45 percent of the company's profits.

Racing to Dealership Success in the 1970s

Brothers Alan and Frank Sytner began dealing cars in the 1960s. In 1970, the brothers were awarded a franchise for BMW cars, and their business, Sytner of Nottingham, grew into one of the United Kingdom's largest BMW dealerships. That dealership, which also built one of the country's largest dealerships of specialty used cars, remained the company's sole dealership for some 20 years. In the meantime, Frank Sytner also was making a name for himself as a race car driver and went on to lead the BMW Touring car team to the championship in 1988. After winning a second championship in 1990, Sytner retired from professional racing the following year and began devoting himself to expanding his car dealership.

Sytner of Nottingham had already expanded a bit during the 1980s, when the company was awarded the exclusive U.K. franchise for the ultra-high-end, custom-built BMW Alpine range. In 1993, the company added a second BMW dealership in Leicester. The company also gained franchises at the other end of the scale, adding the Toyota, Honda, and Mazda brands. Yet Sytner's interest clearly leaned toward the industry's most prestigious car names, and Sytner began targeting the development of an extended dealership network.

Sytner embarked on a series of acquisitions, adding six new dealerships with financial backing from investment group Schroder Ventures. By 1996, the company's sales had grown to nearly £145 million, selling more than 5,500 cars through a network of 14 dealerships, and the company had made considerable progress toward achieving its goal of becoming the United Kingdom's leading luxury car specialist. Yet Sytner remained decidedly provincial, preferring to invest in establishing itself in smaller regional markets, rather than in London.

As the U.K. economy began to take off again after several years in recession, Sytner's sales began to soar as well. Aiding the company was a growing trend of its corporate customers to turn away from larger mid-class models to smaller and higher-end cars. Meanwhile, the growing new wealth provided by the high-technology boom was widening the company's customer base, sparking sales for such luxury brands as Ferrari--in 1997 alone the company sold more than 200 of the famed Italian sports cars. Sytner's long relationship with BMW also gave it a new future prospect--the takeover of Rolls Royce by BMW, and the announcement of a new Rolls Royce model in the early years of the next century, gave Sytner hope to add the most famous of all luxury car names to its stable of brands.

Sytner took the company public in 1997, in a listing that valued the newly named Sytner Group at £50 million. Frank Sytner took the chairman's position, and Laurence Vaughan became company chief executive. The public offering allowed Sytner to put its expansion plans into high gear. Over the next year, the company acquired or opened 11 new dealerships, raising its total number of dealerships to 25. The company's acquisition spree not only gained it a number of new franchises, including one with Jaguar, it also gained it a prominent brand name--many of its new dealerships had come through its acquisition of Guy Salmon Group in 1998. The company was to retain the Guy Salmon name, which had also become a prominent name in luxury car rentals, for part of its existing and future dealership network.

U.K. Luxury Car Leader for the New Century

The next big step in Sytner's development came in 1999, when the company paid £13.5 million to acquire Ixion Motor Group, owned by Formula One car designer Tom Walkinshaw. The deal gave Sytner 11 new dealerships throughout Oxfordshire and the Midlands, including new franchises for Volvo, Saab, and Lexus, as well as an additional Jaguar dealership, two BMW dealerships, and one each for Land Rover and Jeep. The Ixion deal was heralded as a major step in the consolidation of the United Kingdom's new car retail industry. It also provided a major increase in the company's sales, bringing total revenues past £405 million, on a total of more than 15,000 cars sold in 1999. That same year, the company was granted a BMW franchise for the City of London.

Sytner continued to pursue acquisitions through 2001, taking advantage of a downturn in the industry to pick up a number of more fragile dealerships. Part of the reason for the downturn came from consumer outcry at the disparity between new car prices in the United Kingdom and those on the European continent. While car manufacturers announced their intention to cut prices in order to bring prices in line with those in the other European markets, consumers put their purchases on hold, waiting for the price cuts to take effect. Despite originally being proposed for the beginning of 2000, most manufacturers dragged their feet, and only came through toward the end of the year.

The company launched its next round of acquisitions in August 2000, when it acquired Yarnolds, based in Stratford-upon-Avon, giving the company new Land Rover and TVR sports car dealerships. At the same time, the company acquired the Mercedes-Benz dealership in Weston, which was incorporated into the company's existing dealership there. Meanwhile, the promised price cuts came through at last, dropping prices on a number of luxury models to within the reach of the middle-class consumer. The result was a strong finish to the year for Sytner, as customers returned to its dealerships.

Not all of the company's growth came through acquisitions. In April 2000, the company opened a Lexus dealership in Leicester and the company also was preparing to open its first dealership in London, located within the city's financial district. Billed as a "BMW concept store," the new 4,000-square-foot dealership offered a wide selection of BMW-branded clothing, bicycles, and other products, in addition to BMW automobiles. That store opened in March 2001 and was soon joined by two new BMW franchises in Kensington and Chelsea. The company, which had long avoided the London market, now sought to make its London operations its company flagship dealership--as Sytner claimed the position as number one BMW dealer in the United Kingdom.

By then, the company had been expanding its position as a Jaguar dealer. In November 2000, the company opened a new Jaguar franchise in Barnes, then acquired another new Jaguar franchise the following month, at Hendon and Highgate. The company further extended its Jaguar operations with a new franchise in Stratford-upon-Avon, which, operating under the Guy Salmon name, represented Sytner's seventh Jaguar dealership and helped the company take the position as the country's number two Jaguar seller. By the end of 2001, the company operated 45 dealerships and included more than a dozen of the world's top luxury brands.

As the company sought to complete its focus on its luxury vehicle portfolio, it began to divest a number of its newly noncore dealerships, including those for Toyota, Mazda, and Honda. At the end of 2001, the company's luxury car ambitions were given a fresh boost. In October 2001 Sytner acquired the Ron Stratton Bentley and Land Rover dealerships in Knutsford for £1.2 million, marking the company's first dealership for the prestigious Bentley brand. This acquisition followed on the heels of the company's nomination, in September 2001, as a representative of the first line of Rolls Royce cars to be built under BMW's ownership, expected to be ready in 2003. Frank Sytner continued to indulge his passion for racing, both as a pilot in "historic" racing events--and in his race to build Sytner into the United Kingdom's largest automotive sales company.

Principal Subsidiaries: Sytner Limited; Sytner of Leicester Limited; Sytner Sheffield Limited; Cruickshank Motors Limited; Graypaul Motors Limited; Goodman Leeds Limited; Hallamshire Motor Company Limited; Hyde Car Centre Limited; Sandridge Limited; Guy Salmon Honda Limited; Guy Salmon Jaguar Limited; W A Hatfield Limited; Sytner Holdings Limited; Prophets Garage Limited; Prophets (Gerrards Cross) Limited; Yarnolds of Stratford Limited; Guy Salmon Highgate Limited; Hughenden Motor Company Limited; Sytner Properties Limited; Sytner Finance Limited.

Principal Competitors: C D Bramall PLC; Dixon Motors PLC; H.R. Owen Plc; Inchcape plc; Pendragon PLC; Quicks Group plc; Reg Vardy plc; Rygor Group Limited; Ryland Group plc.

Chronology

• Key Dates:
• 1960s:Alan and Frank Sytner begin selling automobiles as Frank Sytner begins his racing career.
• 1970: The Sytner brothers open their first BMW dealership in Nottingham.
• 1984: The company is named exclusive U.K. dealer for custom-built BMW Alpiner model.
• 1991: Frank Sytner retires from racing and launches the company's expansion strategy.
• 1993: The company makes its first acquisition, a BMW dealership in Leicester; further acquisitions are financed by Schroder Ventures.
• 1996: Sytner's dealership network grows to 14, providing sales of nearly £145 million.
• 1997: Sytner Group goes public; company continues to open new dealerships.
• 1998: The company acquires Guy Salmon Group and expands its network to 25 dealerships.
• 1999: Sytner acquires its first London BMW franchise, and it acquires Ixion Group for £13.5 million, adding 11 new dealerships.
• 2000: The company acquires Yarnolds in Stratford-upon-Avon.
• 2001: The company opens London BMW concept store; the company is named representative for future BMW-Rolls Royce model; the company acquires first Bentley dealership.