By looking at agricultural franchises, Ineos feels it has the perfect fit for the off-roader Grenadier
How an Ineos showroom might look
The Grenadier is being built at the old Smart factory
The no-nonsense Ineos Grenadier is a very different SUV to launch in the era of electrification and sustainability, so appropriately the company is planning a different type of dealership network to sell and maintain the rough, tough 4×4.
In place of a network of identikit standalone dealers, Ineos Automotive is blending agricultural equipment franchisees, specialist used operators with a core of established OEM car dealers into a cohesive network, whose 24 UK sales, parts and service sites were revealed last month.
The mix of locations is striking, with a rural emphasis reflecting the appeal of a car designed for living its life in farmyards and country lanes rather than supermarket car parks and motorways.
Big cities like Birmingham, Edinburgh and Nottingham are on the list. Yet Greater London, with its population of 10 million, is served by just three dealers; and one of those is in Kent.
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Meanwhile, country locations, like Belton in Lincolnshire, Ribble Valley in Lancashire and Bridgwater in Somerset will have their own Ineos dealers. “The cocktail we’re trying to shake here is the right partner, with the right mind-set, in a place that works, with resources that are useful to us and our customers,“ said Gary Pearson, head of UK, Middle East and North Africa for Ineos Automotive.
Pearson, an experienced sales executive, joined Ineos after four years developing McLaren’s dealer network and previously worked for 14 years in sales at Audi. “The usual approach for setting up a network is to use ‘drive-time’ data to place dealers as close to as many customers as possible,” he says “and that’s why we end-up with auto clusters all in the same place.”
Moving away from that template, the Ineos network will mix three agricultural dealers and three specialists alongside unique space at 18 conventional OEM sites, all run on the agency model including parts and service.
Labour rates and menu servicing items will be standardised across the country for “transparent pricing” and in remote areas, a secondary network of up to 12 service garages, many with Bosch accreditation, will fill gaps in coverage.
Much work is ongoing to ready the network for first deliveries at the end of 2022, with the first dealer set to open its doors in June, although demo vehicles will take several more months to arrive.
To prime the network, Ineos has been pre-selling the Grenadier globally since July 2021 using Ineos’ online configurators, presentations at shows and events and invitation off-road ride-events, which together are said to have established an order bank of “over 15,000” reservations, each backed by a £450 refundable deposit. Order books officially open on 18 May, after which customers on the reservations list will be contacted by Ineos to nominate a preferred dealer, followed by negotiations to seal the deal.
Although some 25% of the Ineos network are not established OEM operations, Pearson is expecting comparable standards of customer service and care, given that agricultural dealers often sell equipment priced in the hundreds of thousands of pounds.
“Our agricultural dealers are highly sophisticated and super experienced,” adds Pearson, “and are used to sending technicians into the field to repair equipment at short notice, often with their own fleet of vans.”
Ineos hasn’t said how much investment is required of each dealer, though a 2/3 car showroom added onto an existing property is typically a multi-£100,000 investment, not millions. “For all our partners it works from a financial point of view, adding a franchise to a building they’ve already got is incredibly efficient and everyone wins.”
The agricultural dealers are significant commercial hubs, too, combining equipment sales with countryside supplies and groceries. “Chandlers in Lincolnshire is a great example of that,” he adds, “they have a Ssangyong showroom, a pick-up business, an agricultural business and Massey Ferguson sales, but are also a country store business with animal feed, groceries, and 60 to 80 people going through there every single day. So being linked with other businesses completely works for us. Finding new footfall was a lesson learned at McLaren, too.”
Ineos is prepared to be flexible and practical about the design of its dealerships, too. There’s an ideal set-up — with a computer image of what that might look like — but the design is modular to allow dealers to choose elements that work for them.
At the international scale, for example, Ineos is not forcing dealers in Africa and the Mid East to buy, at high cost, centrally-specified items like sofas from a UK supplier to keep a rigid appearance at every site around the world. “In fact, we’re actively encouraging a local signature,” he adds.
Shopping local might well be the secret of success for Ineos, selling a specialised 4×4 right into the market where its customers are clamouring for a new rugged vehicle to fill a market niche that evidence suggests is ripe and ready for picking.
Dealer Case Study: Compass Tractors, Bridgwater
“When Ineos came along, we were very quick to link into them. We have lots of customers who are ex-Defender and we’ve a lot of clients looking for a rugged replacement for that vehicle,” said Justin Nichols, managing director of Compass Tractors.
“The Grenadier is the boss’s car, while pick-ups are the working vehicles.”
Compass stepped into vehicle sales three years ago, adding an Isuzu dealership to its immaculate site close to Junction 24 of the M5.
“When we’re at full chat with the full range of Grenadiers, we’ll probably be doing about 200 a year, that’s more than we’ll do Isuzus,” he added.
In a typical year Compass does £35m of business – about three times the size of an average OEM car dealer – from sales of agricultural brands like Fendt, JCB, Krone and Amazone. Its most expensive item is a £600,000 forager, which cuts and processes grass into animal feed.
Because such equipment is a critical business tool, Nichols is confident Compass can meet service and customer standards in the car industry. “When a machine like a forager hits a problem, we have to fix it 24/7, in the field. And it’s not all mechanical work. Modern machinery has diagnostics so we often see a problem developing before it actually happens.”
How are other start-ups doing it?
Typically, new entrants to the car industry prefer to side-step dealers to save costs; a comprehensive distribution system can be 40% of outlay. Tesla went straight to direct sales, as has Polestar. Both sell electric cars, which of course don’t need regular oil change servicing.
But Polestar, a sister company to Volvo, can fall back on its dealer network for repair back-up.
Genesis launched in the UK last year also with direct sales, uniquely for the UK/EU.
Sales are online-only and service centralised at a hub in Bicester, with customer cars and guaranteed courtesy vehicles trucked back/forth in covered transporters. “This model is being looked at very closely for other territories,” says Genesis.
Keyword: Why tractor dealers will be able to sell you an Ineos Grenadier