MT Dealer Insight: Bowker Motor Group

With an eye on sustainability and cost management, Bowker is installing solar panels at its Lancashire dealerships. Bowker BMW managing director Chris Eccles talks Motor Trader through the project.

The Bowker BMW and MINI sites in Blackburn and Preston are taking steps to boost the sustainability of the dealerships in Lancashire by installing 1,600 new solar panels. The move will allow the car centre to generate a quarter of its electricity needs from solar energy. It will also help reduce its carbon footprint by saving 130 tonnes of carbon emissions.

Motor Trader spoke to managing director at Bowker BMW Chris Eccles about the group’s sustainability push, the transition to greater EV stock and the challenges of the coming year.

On the solar panel installation, Eccles said: “The solar project is across the whole Bowker group. But it started over 10 years ago when I had solar panels installed at home. It was a case of a lot of investment and the return on that. So, my breakeven point was about four and a half years at the time. That was with the old feed in tariff scenario.

“So I started thinking about how this could work in the business. We’re here in daylight hours with every single light on, air conditioning on and ramps going up and down. So, I investigated putting solar panels on the roof at Blackburn, and it was a very similar scenario whereby there was a return within around five years but with quite an astonishing 25 year saving while consuming energy and getting paid back from the grid as a feed-in tariff. That alone over 25 years would save around half a million pounds, and I daresay with the increase in energy costs as they are now it will far exceed that saving.”

Not just a push towards sustainable energy use, for Bowker using solar is part of a long term cost saving measure. Eccles added: “We looked at how best we could manage our energy costs, including things like buying our energy forward, which we have now done. So, the energy prices that we’re paying today are locked in until September next year. As a business we have not actually felt the sharp end of the energy price increases yet. This buying of energy allows us to sell the surplus, but obviously right now with the energy costs as they are we’re not selling anything, we’re keeping it for our own consumption. That said, we realised that we must do something because as soon as we are out of that tariff, we will have a significant increase in costs. So that led us to look at other avenues of how we manage our energy consumption and that essentially is the solar project that we have on board today.

“With the panels we will generate at least 25% of our own energy. The projections that we’ve worked on are very conservative in relation to what the energy costs are now, and so it will be a lot more fruitful. It is a key investment in our sustainability.”

Eccles feels that Bowker was able to pivot to this plan quickly because its size allowed for quick decisions. He is also aware of the impact the more powerful cars, such as the BMW M series, the group sells have on the environment. He said: “As we are a smaller group, not a large PLC, with a small team of directors, we can sit down every month with this on our agenda, and a pound saved is as good as a pound spent, never mind the impact on the environment. We’ve got to be mindful of that particularly with the powerful cars such as the Porsches and M series BMWs we deal in at the group. Forward thinking is a lovely way to phrase it but is it forward thinking or is it just a business that can make decisions and cares. With the solar project, we’ve acted swiftly because we believe it’s crucial to the future running of our business. It’s important to set the right tone.

“Last year we celebrated 50 years of the M series in BMW. But that’s changing and there’s a big line being drawn; the next variants of will be hybrids. We can now have the environmental side of the car along with the performance.”

On the subject of BMW and MINI’s increasing EV portfolio, Eccles feels that although the group is doing its bit by investing in infrastructure at dealerships, the switch is still being held back on a national level. He added: “Our biggest challenge with EVs is the infrastructure across the national road network. We’ve done our bit by investing heavily across the group in charging facilities. But, on the other hand, we’ve yet to really understand the true cost of that to our business. We know our petrol and diesel costs will reduce, but that will be replaced with an increase in electricity. So that again just made the solar panels an appealing thing for us to do.

“When fuel prices increased, we saw a much higher demand for EVs, and we were talking to people about that who had never previously considered them. That gave significant growth in the marketplace. This was mostly with the retail customer. There’s always been interest from businesses.

“However, towards the end of last year we saw a decline across all brands in terms of residual values, partly as a combination of bad press with the charging infrastructure, and then fuel prices started to reduce as well. I think this will lead to a fall in values within the used car market, and all manufacturers had a drive at the end of last year to get as many new EV cars as possible on the road to support their annual objectives in terms of their CO2 footprint. So, it was a bit of a perfect storm. But that said, there is still strong demand in the showrooms today, very much led by business purchases. There is still a level of intrigue in the private sector, but people are nervous because of range anxiety. I think EVs are here to stay, but whether they are the final long-term solution I think is up for debate.”

Highs and lows

Looking back at 2022, Eccles highlighted some struggles for the group, but also how it was able to overcome them for a largely positive year. He said: “Coming out of the lows were probably the highlights. We started the year with a great forward order bank across all our brands, which potentially gave us a false sense of security. It was a stronger, buoyant marketplace and the energy prices hadn’t really hit people then, and the Ukraine conflict hadn’t fully hit at that point.

“It changed around March. Consumer confidence fell and Russia invaded Ukraine in late February, which disrupted the manufacture of components in the country. At the time we had our largest forward order bank, and that was tipped on its head; we almost had to resell cars that people had already purchased from us to a different model or maybe a different gearbox. That said, consumers were very understanding of the situation.

“But ultimately, we had a very successful year. Residual values on used cars remained high, so there was less financial impact if cars were delayed because the customers’ cars held value and in some cases grew in value. I think as a business and an industry we’ve learned so much in the last three years and it has almost given us the confidence to be successful again.”

Finally, Eccles looked ahead at 2023, highlighting used car supply as a key challenge. He concluded: “Supply is still a challenge, and we are in transition with the ranges moving into more EVs. With interest rates increasing and everybody’s general and household costs are increasing, there are still plenty of challenges. I daresay it does feel a little bit more challenging now than it did last year. But we don’t fear that challenge. I think we’re used to working with the volume and throughput of cars that we have now.

“Our biggest area of difficulty is used car availability to feed our used car departments, which are probably running at 60% stock. I think the internet is a kind of machine, and we could sell cars nationally with the right stock at the right price. But that has become less available to us because we can only be as big as our new car business in terms of incoming part exchanges. There’s a lot more competition from the various buying platforms, so we must work harder to maintain the quality of used car stock, and that’s difficult.”