Founded in 1926, family-owned Day’s Motor Group has grown from its origins in South Wales into a £291m turnover multi-franchise operation.
The timing was right. Motor Trader caught up with CEO and managing director of Day’s Motor Group, Russell Day as the group celebrates its Centenary in 2026. There was a lot of ground to cover with Day reflecting on the growth of the business over the decades, the importance of a company culture, placing employees at the heart of the business and the challenges and opportunities presented by the influx of fast-growing Chinese brands.
Day believes the group is strong because it is so diversified and adaptable. A weakness in one area of the business at any given time is compensated by strength in another part. It promotes stability.
“I think the company has always had diversification as part of our mantra. Having a separate leasing company, rental company, finance company, alongside the franchise dealership business is really what our strength has been over the years,” he said.
“The industry has changed. There are technology changes with AI now coming into our sector. I think we have just always adapted to whatever changes are in the industry more than changing ourselves.”
Profit focus
Like all dealer groups, Days had to battle through the COVID crisis, an extremely difficult period for automotive companies overall. In the UK, new car registrations fell 29% in 2020 to 1.63 million, the lowest level since 1992, according to The Society of Motor Manufacturers and Traders (SMMT). But dealers sprung back. In the years that followed, Day’s focused on driving growth across various areas of the business.
Day says: “Over the last six years since COVID, our rental business is the area of the business which has grown the most. Our rental fleet size if you go back 10 or 12 years, was about 2,000 vehicles, and today it is 10,000 vehicles. That is the area of our business which has expanded the most. We are across the UK now with rental locations whereas we are pretty much, primarily, only in South Wales for all our other businesses.
“We have been blessed with a number of good years since COVID. We were operating a number of fleet and leasing vehicles, and rental as well, so we took advantage of the fact that there were no new vehicles being made initially after COVID and all the values went up. We took advantage of that, as did many other businesses, and that helped us. The profitability has obviously come down a little bit, but it is still at a very satisfactory level. You will see our return on sales is always one of the highest, and that is the reason – we have got the other businesses performing well which helps the franchise business.”
Day highlighted the cost pressures that have impacted dealers and customers since changes announced in the Budget. These include hikes to UK National Insurance contributions (NICs) for companies and the cost-of-living crisis which impacts everyone.
“We are retaining our margins like we have always done. It is very important that you retain your profit on the bonnet. The bigger challenge is the fact that so many costs that have gone up,” says Day.
“When you’re talking about overall profitability, yes, that has been affected because we have larger costs now. With government changes last year to national insurance and the living wage, there are huge costs there that affect a company like ours, which is employing 550 people. Everything seems to have gone up in terms of expenditure.
“Margin wise, in terms of on the vehicles, we were pretty good at keeping where we want to be on our budget. Where we have obviously suffered, like all businesses, is the other costs that have increased.”
Portfolio updates
As Chinese brands strengthen their presence in the UK market, an increasing number of established dealer groups are choosing to represent them.
Day’s Motor Group is no exception, having broadened its portfolio beyond its traditional Ford roots.
“For us it was very much a business decision. We are historically a Ford dealer to start with, and we have been blessed with having two Ford plants locally that were on our doorstep and served the Ford customers in this area for 90-plus years,” says Day.
“As the product has changed with Ford and our Ford share has dropped a little, we have had to look at replacements to keep our infrastructure in place.”
And so, Days ran the rule over Chinese brands and the growing demand for competitively priced product.
Day says: “The Chinese brands are something that caught our eye. At the end of the day if we weren’t going to take on these brands, another dealer down the road was going to do so. We did our best to educate ourselves on as many different Chinese manufacturers as possible. We talked to a lot of them and are pleased to have the relationship with both Chery and Geely going forward.
“We feel proud to represent those two brands with two sites each. We are just about to bring on Lepas as well to our Swansea site. That gives us a good scope alongside our Peugeot brand and Ford. We will keep an eye out but for now we have got our showrooms all filled with a brand, and that is the most important thing. It is a tricky time to build new showrooms and new premises. So, for now, we are happy with the brands that we have got and the facilities that we operate.”
Showroom experience
You do not survive in any business without having a clear idea of your customer base and what they want. It is crystal clear that customers are at the centre of everything Day does.
“When I got involved in the business, my father always taught me that the customers are the most important part of our business. A repeat customer coming back year after year is so valuable to a business like ourselves, especially when you are in an area where people are familiar with your name,” says Day.
A century in business has reinforced the group’s belief that good customer service remains one of the strongest foundations of its long-term success.
“The way that we treat the customers, I like to think the family business side of it, the culture that we have got, encourages all staff to treat customers the way they would want to be treated.
“You always want to make sure the customers are treated in the best way possible and that is what we try to instil with the staff. We are lucky; we have staff here who have worked for the company for a long time and that has helped a lot.
“Our staff retention is extremely good compared to other parts of the country. We are lucky that we have the same people, seeing the same faces with their customers year in, year out and long may that continue.”
Day also reinforced the value of face-to-face interaction, highlighting the continued role dealerships play in building customer relationships.
He explains: “I think when COVID hit, that was an interesting time for us all. Immediately, we jumped into action to provide more of an online presence. Not that we were behind in that, but it certainly accelerated our plans to have more of an online presence and allow our customers to choose an online option.
“We were doing deliveries up and down the country during COVID because we made that quick switch to online. We still offer delivery and we still offer online sale but we do find that most customers prefer to come in and touch the bonnet on a vehicle, have a good look around. It is a more natural way for customers to buy such an important purchase in their lives. It is probably the second most expensive purchase after a house, so you can understand why they want to do that.
“All the online platforms and tools are great, and they help provide information for the customer, but ultimately I still think that the face to face is the more perceived to be acceptable method.”
There is no clear age divide in how customers prefer to buy, with demand for both online and face-to-face interactions from all generations.
“It varies across all the age groups. There are people in the older range that you might not think would be into the technology, but we find that they are. I do not think there is a big difference between the age of our customers, in terms of whether they prefer online. Obviously, the way they search for the vehicles is different” says Day.
“From our marketing point of view, as long as we are covering all the bases with all of the different social media channels and catering to the customers that want a conventional approach, that is the most important thing.”
AI at work
Marketing is one area where AI is already making an impact, giving dealers new ways to target customers, personalise campaigns and work more efficiently.
“Generating adverts and the way that AI can help you with that is amazing. We have a forward-thinking marketing department that are always trying to be on the edge of what is out there,” says Day.
“We are continuing to look at stuff with AI. When you have got a DMS, you are almost restricted as to what you can bring in because you do not want lots of different systems. We are continuing to look at different things that we can do to improve our business and we will always keep our eyes open for that.”
AI may become a valuable tool but it cannot replace human judgement or technical expertise. Day gives the role of workshop technicians as an example of this.
He says: “I think when you have got 40-plus technicians in the group who are working on cars and, changing oil and tyres and all sorts, I think we’re a long way from a robot being able to sit in the dealerships to do that. From a sales point of view as well, I think human touch is important, and I think from that point of view we are a lot safer than some other industries may be but there are ways that it can help us and help the customer, too. So, if we can adopt those and be more efficient then we probably will embrace as much of AI as is necessary.”
ZEV Mandate
Day has strong views on the ZEV Mandate and the pressure it is putting on carmakers and dealers alike in terms of sales targets. A key topic of debate surrounding the ZEV Mandate is the gap between what the Mandate expects and what the customers want.
Day was speaking before the government announced that it was reviewing the Mandate.
He says: “Unfortunately, it is the manufacturers and the dealers that are put under pressure to fill that gap in and that is not good. I would be excited if there was movement on the ZEV Mandate. I think that would help things with the manufacturer and the dealer partners because of the huge cost pressures on that side of it. That is something we can pray is looked at.”
He acknowledges that the electric vehicles themselves are strong products with advanced technology. The charging infrastructure in the UK has also started to improve.
“There are more options now in terms of infrastructure for charging, but I still think that there is a large group of customers who are just not interested in an electric vehicle right now. It is difficult to force people to do something that they do not want to do.
“When you are here in the environment and you are listening to customers, the demand is not there to match the ZEV Mandate and that is what needs to change.”
While charging often dominates the conversation, it is not the only factor influencing customers as they make the switch to electric.
“There are a couple of things there, range anxiety is obviously one of them. We cover an area which has a lot of rural land, and therefore, charging infrastructure is not quite so good in this area as more metropolitan or busy areas.
“And there is fear over the battery and what happens to the battery after the warranty expires. Some people like to have their cars for a long time and they are worried about the cost of a battery replacement. Those things will go in time, once technology keeps on extending the range on vehicles which is happening every year as the new manufacturers are bringing out product. The range is getting longer and longer. The hybrid vehicles are a great stopgap between petrol and diesel, and then full EV.”
Looking ahead
“We have been fortunate since COVID with the profit that the company has made. We have expanded our commercial property portfolio at the same time, which is not necessarily motor related. Diversification is one of our strengths, and property is another part of our diversification.
“Our rental company continues to do extremely well and where there are opportunities in other parts of the UK which we have currently not got a site in, then we are always open to look for expansion there.
Reflecting on the Centenary, Day identifies the key to the dealer group’s success. He also shares advice for newer business looking for long-term success.
Day concludes: “The most important thing is cash flow and profitability. Those two things are key to success, and that is why we are still alive after 100 years.
“Treating the customers right and making sure that we have astute business sense to keep making profit as best we can keeps everyone’s jobs secure and safe and allows us to expand for the future.
“It is the staff who play a huge part in the success of a business that is 100 plus years. Recognising the importance of customer service and having astute business people leading the business – that is the key to our success. If we were to talk to a dealer who just started up five years ago, those are the sorts of things we would say would be the key for them to succeed too.”
