Two years ago we were in the midst of a very deep global crisis, which hit the car industry particularly hard.
We adopted vigorous measures to cut costs and reduce tied-up capital. One of the most important areas was to rethink and revamp our whole used car business.
The recovery began in the autumn of 2009, and 2010 brought increasing demand for new cars in all three of our markets: Sweden, Norway and Denmark.
The Scandinavian countries have emerged from the crisis in much better shape than the rest of the EU, where car sales declined during the year as government stimulus measures have ceased or been drastically reduced.
After a few years of defensive manoeuvring, we have gone on the offensive in both car sales and service. Above all we have worked to broaden and develop our service offering and our range of supplementary services. Sales of service subscriptions in conjunction with the purchase of a new car have been successful.
Our penetration now exceeds 25 per cent, and our goal is that at least half of our car customers sign up for a service subscription. Other areas that have developed well are tyre sales, and customers are increasingly opting to store their wheels in our tyre hotels. Window replacements and glass repairs have also increased sharply.
We have spent a lot more on marketing and used the medium of television in both Sweden and Norway with good results. Surveys show that the number of visitors to our website triple when we advertise on TV.
Operating earnings have improved considerably, and SEK 497 M in operating profit is the best earnings result we have ever posted. We have achieved all our financial goals, with regard to both earnings and capital. The operating margin is 3.1 per cent, compared with the goal of at least 2.2 per cent. Return on capital employed is 24 per cent (goal at least 14) and return on equity 26 per cent (goal at least 15). The growth goal of 5–10 per cent has also been surpassed, with a turnover growth of 19 per cent.
Our most important goal by far, however, is to make sure that all our customers are satisfied with our products and services. The surveys we conduct show that we are getting better every year, but there is still room for improvement in some areas. It is a never-ending process, and we live in a world where customer expectations are constantly rising – which is as it should be!
Cooperation with our suppliers is developing well, and today we are the biggest dealer in Scandinavia of the Volvo, Renault and Ford brands. As of 2011 we are also the biggest BMW dealer. We also sell Hyundai, Dacia and Mini in Sweden and Honda in Norway.
During the year our customers bought 35,200 new vehicles and 30,600 used cars from us.
But for us the most important thing is not to be biggest, but to be best...
After nearly eight years I have decided to hand over the helm. It has been the most exciting and rewarding period in my career. With Per Avander as new CEO and Managing Director as of 4 May 2011, I feel secure and confident that all our customers and employees will be quite content.
Gothenburg, March 2011
Jan Pettersson