Mitchell Group is a solus-site operation holding franchises for Lexus, Mazda and Skoda, on a valuable five-acre location adjacent to the upmarket Cheshire Oaks retail park on the outskirts of Chester.

Mark Mitchell, who started the business some 35 years ago, is no ordinary business owner; while many dealerships proudly promote their customer service standards, Mitchell Group has long been renowned for taking such standards to another level, including providing 40 to 50 bacon sandwiches daily for service customers and free car washes every Saturday morning – on each of these the business will typically wash more than 130 cars.

Bucking the picture painted by plentiful industry headlines over tough conditions for the retail motor industry in recent times, Mitchell Group enjoyed a highly successful 2024, recording record volumes – 2461 cars sold with an impressive 4.8% return on sales. “Surprisingly our profit margins with each car were stronger than ever while the hard work we put into our service and parts, our aftersales business, continues to pay dividends as that grows each year,” Mitchell tells Motor Trade News.

This was despite starting the year with significant fears over the Government’s Zero-Emissions Vehicle (ZEV) Mandate, and whether Mitchell’s three brands, not the most high-profile of electric vehicle (EV) franchises, would achieve the required 22% of sales.

According to Mitchell the answer to the Mandate for his three brands reflected that of most manufacturers, focusing on fleet and Motability. “Rather than like in the old days having a Renault Clio for £99 deposit, someone could come into our Lexus centre and have a £50,000 Lexus with no deposit and a free charger installed at home,” he says.

Mitchell is never slow to highlight the pivotal importance of customer service to the success of the business, but in a challenging market does it become harder to maintain the standards the Group is known for? He believes that it requires an even greater focus.

“The things we do, that we take for granted and our customers take for granted, we need to keep fresh and focus on them. We are still renowned for our Saturday morning car wash – (with many dealers) such incentives might be the first to get chopped when things get tough, but in my view it’s the most important thing to invest in at such times.”

People power

It’s clear that the dealership teams buy into the ethos and one of Mitchell’s proudest figures is the level of staff turnover in the centre. “It’s slowed down across the industry to a degree, in the worst years the industry as a whole can see 30 or 40% staff turnover.

“We have 102 colleagues and in 2024, we didn’t lose anyone who had done more than two years with our business. We lost eight or nine who dipped their toe in and found that automotive retail wasn’t for them, in one of the 17 different roles we have here, but I’m rather chuffed that it was our lowest colleague turnover yet.”

At Mitchell Group 20 to 25-year milestones with the business are common, and have led to a different kind of challenge this year with five colleagues retiring in their late ’60s. “They are big holes to fill – the first retired last week after 20 years in our Skoda showroom, so we wrote to all his customers over the years and invited them to celebrate with him with afternoon tea at a rather splendid country house venue, and we were inundated. That was very special, his family came along and it was very much a Mitchell Group way of doing things. We have four more of these this year.”

Mitchell contends that for his business, the market so far in 2025 has not been as tough as widely portrayed, the dealerships seeing solid performances and good order banks. He points also to his three franchises reacting to the extra business costs resulting from the Budget in October.

“(Chancellor) Rachel Reeves’s National Insurance uplift will cost us £60,000 for 102 colleagues to go from 13.8 to 15%. The National Insurance we are paying on salaries which start at £9,000 now being £5,000 is about another £60,000, so that’s £120,000 in total. But the manufacturers have all lifted their hourly rates on their national service plan prices – everything is going up in price including the cost of servicing your car.”

The above inflationary increases in labour rates allows the business to pay its technicians more, aiding retention; “On our doorstep we have Airbus, which is offering a four-day week and split shifts with early starts and late finishes – at the early stages this appeals to people until they realise the sacrifice on home and family life. Attrition for technicians frustrated mainly by new products and software challenges can trigger departures, which can be a problem for us.”

So does Mitchell’s apparently bullish outlook come from a confidence arising from the recent Government changes to the ZEV mandate? “It’s a perhaps naïve confidence, but we are doing okay at the moment. Even with the recently announced changes the ZEV mandate has risen to a 28% requirement by the end of 2025, but the news on continuing hybrid sales have been encouraging.

“The stretch is going to be so much more, and hearing from manufacturers that they want to pull out of high-discount sales channels, which will include Motability of course, I’m not sure what they will replace it with. We have some way to travel with this and you might argue that the manufacturers should have had their feet in the stirrups a little earlier – we are still not overrun with cutting-edge electric products for some of the brands we represent.”

So what does Mitchell feel the industry needs to do to revive the retail EV sales market – or is it something the Government has to do? “Around the world, the EV market for retail customers has essentially been driven by massive Government subsidy. One only has to look at Scandinavia and see how they are pushing on with their EV market – in Norway it is off the Richter scale but that is driven by a Government involvement to look at infrastructure and supporting individual finance packages on EV cars.

“We are a long way from that – in the UK the Government are spending money on other things apart from the EV challenge at present, they have other things on their shopping list.”

New brand challenge

To a great extent driving the EV switch has been the influx into the UK of a host of new brands, mainly from China, and these have been aggressively signing up dealer networks and offering what is now considered good product. Are more traditional outlets under pressure from this new challenge? Mitchell is not convinced.

“One could feel threatened – you could race off to China on an exploratory dealer visit, and replace your established brands with something new. But we have been with Lexus 25 years last year, Mazda for 20 years and Skoda 23 years. That stands for a lot in terms of understanding each other, what makes one’s better half tick – it’s like a marriage in many respects.

“Alongside that, in our locality we are known for these three brands – we are the go-to guys for two, six, eight-year old cars with these brands, so to start from scratch would be quite a huge sacrifice.”

Mitchell also highlights an element often overlooked by analysts, the part played by aftersales. “We have a very significant aftersales operation here in which 20 technicians are fully geared and trained up to service the brands we represent. Every day we complete 160 hours servicing on internal-combustion engined brands in a way we wouldn’t if we suddenly switched to a brand that was stronger on EV.

“One must never underestimate the financial impact of having a good aftersales business to cover all the foundation costs, overheads of a business this size. We have £150,000 a month here of just overheads, not departmental costs – it’s insurance, business rates, management charges, depreciation, heat, light and power. All that goes with it is covered in its entirety by the aftersales contribution. We would be saying goodbye to that if we switched to say a Chinese brand.”

Would he not, however, be tempted to add one of the new brands to his portfolio, as an expansion? “The day job here is demanding enough without wanting to take franchise four, five or six alongside our three. You have to know your limitations, be wise as to how you make business decisions.

“Over my 40 years in the motor industry I’ve seen too many people want to take over the world who have sometimes fallen flat on their face. We think we know the secret of being content and we are content with these three brands.”

No melting of ICE demand

Surely, however, a reliance on an ICE-based business can only be a limited-life strategy, with the well-documented intention by Government to ban the sale of new ICE cars by 2035 at the latest. So does Mitchell Group have to plan for an electric future? Mark Mitchell is unfazed; “That’s some way down the line and between now and then there will be franchise decisions taken by manufacturers and dealers alike.”

He points to a development from Lexus which he thinks will aid future business retention, the service-activated warranty; “Your three-year manufacturer warranty is extended to 10 years if you continue to have your servicing done at a Lexus centre.

“The number of claims we have on Lexus between year three and year 10 is infinitesimally small but when there is a claim it goes straight through the system and is authorised. It means we can trade with confidence right up to a car’s 10^th birthday – that’s an instant supply of service work for cars that traditionally you could lose at the three or four-year mark to the independent network.”

Another area of continuing success for Mitchell Group has been in used cars, described by the dealers teams as “previously loved” and a market that has traditionally been strong at times when the new retail market is under pressure. More frequent fleet-change cycles are helping to keep dealers supplied with plenty of stock. “Traditionally a two million new-car market is a million retail and a million fleet, last year it was closer to 60% fleet,” Mark Mitchell says.

“Companies buying fleet cars on short-term change cycles means that we have a very good supply of 12-month-old cars coming to us. In terms of monthly payments and PCP sometimes new car finance packages stack up very favourably against a used car but if someone is a cash buyer and they can save £10,000 on a £50-60,000 car, that’s where the supply of six to 12-month old fleet cars really comes into its own. We’ve pushed on very hard with that and it’s producing dividends.”

Again, however, with the fleet sector leading the push to electric due primarily to favourable tax incentives, could this future supply be affected? “The fleet market that supplies cars on a three-year lease has gone the EV route but if you look at the rental companies, they are running a mile from EV.

“The likes of Enterprise, one of the big players in the market, are not running EVs. You just have to make sure the provenance of the car is right and something that at 12 months old you are happy to put your name to – there are some you wouldn’t want to get involved with.”

End of year wish list

Mark Mitchell is clear as to what he needs to see from the rest of 2025 to end the year as happy as he was at the same point in 2024, and first is a greater continuity of new car supply; “It can be a bit fits and starts at times – it’s vastly improved but we still need the confidence to know we have good supply coming to us.

“We also need to have highly retained customers who aren’t going to brand-hop – brand loyalty is at an all-time low, with the market being so shaken up, and we are doing our very best to retain customers with the myriad of tools we have at our disposal.

“We also need to convince people to keep their cars serviced within the dealer network once they have their third birthday, and we need to have good people working with us shattering some of the stereotypes people have of working in the motor industry.”

Surely the dated image of the less than trustworthy car dealer is not still a feature of the industry? Mitchell believes in some places it still is; “That stereotype remains because some large groups still maintain the image of a sales person with a crisp white shirt 10 or 12 washes past its use-by date, a bright red tie, showroom colleagues out-dressing visitors rather than meeting them on their own terms.

“The difference is employing people with a genuine empathy who want to do a good job for the customer – often it comes down to how people are remunerated and how their performance is monitored. You have to press the right buttons with people…”