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ATECO’S Neville Crichton, a serial launcher of auto brands in the Australian market, is taking on a unique challenge as the distributor of Renault.

Mr Chrichton is renowned for establishing the infrastructure for selling unknown brands and building their reputation and owner base before having the OEM step in and say: “Thanks. We’ll take it from here”.

But with Renault, instead of starting from scratch as he normally does with no dealers, no owner base to generate service and parts revenue in the early years and no parts infrastructure, Renault has all that in place with 80,000 Renault owners generating parts and service sales and 58 dealers all with their trained staff, signage, showrooms, workshops and customers all in place.

Renault comes into Ateco as a going concern and that represents a huge saving in establishment costs.

The newly appointed general manager of Renault Australia Glen Sealey says the management team at Mr Crichton’s Ateco Group are wracking their brains to think of a previous example of an independent distributor taking over the role from an OEM’s national sales company.

Mr Sealey told GoAutoNews Premium: “We see that as a big feather in Ateco’s cap.”

Mr Sealey says that the position Renault found itself in with its own national sales company “says a lot about the Australian market”.

“We are ultimately a very small market, compounded by the fact that we are right-hand drive and we have unique design regulations which makes for it to be a difficult market to be in to begin with. And then add the fact that we’ve got 68 or so brands floating around in a market that’s just over a million cars. It is one of the most competitive in the world,” Mr Sealey said.

“Many manufacturers are looking at why they are here at all. Holden has obviously pulled out. Others have pulled out over time. Others have reassessed their strategies and for Renault their reassessment was to let us take it over. And we think we can do a good job with it too.”

Mr Sealey said that his view was that any brand running its own national sales company selling less than 10,000 units a year would struggle in Australia.

Glen Sealey

“If you’re under 10,000 at the lower end of this market you really shouldn’t be here.

“Why do it to yourself. Generally they will employ more people than they should and they will put in onerous requirements on the network. It becomes a cost base and it is probably not worth being here.”

But, he said, that does not apply to Renault, which is running at a rate of about 6000 units this year, because Ateco is able to spread the overheads across all its brands including LDV and Ram which cannot be done in a national sales company running a single brand.

Mr Sealey said that Renault was therefore able to benefit from the overhead coverage from the combined Ateco volume which is greater than 10,000 units a year.

He said that the “fairly significant Renault car parc and established network of dealers “was a major factor” in taking on Renault.

“You are not starting a brand from scratch, which we have done many times. And we know how hard that is. So for us to be taking a new brand with an existing car parc is a luxury. And it’s something that we really value. There’s over 80,000 Renaults in the Australian car parc today. So it’s no mean feat to start off with that.

“In addition, all 58 dealers have come across to us; which they didn’t have to do by the way. We see that as a feather in our cap as well.

Mr Sealey said that Ateco is already looking at changes to the arrangements Renault dealers had with the factory sales company.

There certainly will be changes for the network. Dealers will see a simplified model. Our biggest advantage as an independent is that we can say No. We can say no (to the factory) to things that don’t suit the Australian market.

“And at the same time, we can say Yes to things that we deem as opportunities for the market. So whereby it might not meet the OEM business case to do something in this market to get a return, we may decide to do things, for other reasons, whether it’s branding, throughput for the network, or the like.

“Overlaying that you have a very specific and well-researched team and a strong experienced team on the Australian market. So we know the Australian market quite well. Plus, we also know how to retail because we do have retail in most of the brands that we have today.”

Neville Crichton

Asked for an example of the sort of thing that Renault under Ateco might be in a position to do that a national sales company may not, Mr Sealey said: “We can simplify things. So whether it’s simplifying dealer margin, whether it’s simplifying a fleet programme. We can do things like that.

“We can take a decision on warranty. An OEM may take time to make a decision on a particular warranty situation whereas we can make the decision to take it on our own chin and move forward so that the network is not impacted at all by any delay and we don’t have to clean up the mess afterwards. But that’s our decision.

“And we know from history that that works when you look at some of the brands that we represent. We look for greater dealer engagement. We have retained all field staff or dealer-facing staff from the previous company. And every dealer has an open line to my phone number.

“So those sorts of things help. And then finally, because we know the market here we specialise in the market here. We know how to build a brand here.

“And, as more and more brands centralise and become more and more generic, which they’re doing today, that allows specialists like ourselves to take a different view in an independent way on the market,” Mr Sealey said.

A Renault dealer, who asked not to be named, said that he was looking forward to working with Ateco.

“They are taking over a business that’s already got 80,000 vehicles on the road and they are taking over a solid dealer network and they are very confident that they have the knowledge on what they need to do,” they said.

“So, my thinking is because they are used to starting from scratch and having to build something like this, then this is happy days for them. It is already done. All they have to do is tweak it and improve it, and off you go, because it’s already got momentum.

“We also like the fact we are dealing with business people. They have skin in the game like we do so as owners of the business we are dealing with people with a different motivation to those who work for OEMs who just move on from their mistakes to a different job,” he said.

“As owners of a business it is a very different motivation. So we’ve both got skin in the game. Whereas before we were totally controlled by people who had no skin in the game.”

By John Mellor

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