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Sheffield steal

EVERY year, dozens of dealers desert the motor trade, defeated by crumbling margins, grinding competition or manufacturer purge.

Many of those who stay remain out of love of the industry or determination to keep a family business going. Few could these days declare hand on heart that they are in it for the money.

So eyebrows are inevitably raised when a steel firm with no background in the motor trade takes on a dormant Mitsubishi franchise and invests £1m in a greenfield site which it believes could be the first of four or five outlets covering south Yorkshire and north Derbyshire. For Sheffield-based Hillfoot Steel Group – a steel merchant founded 75 years ago and still run by the same family – the move represents a chance to prove its mettle in a sector in which it has no preconceptions about how business ought to be done.

Not that Hillfoot is a pure industry virgin. It has recruited an experienced hand in David Hellewell, formerly with Major & Barnes’s Mitsubishi franchise in Derby, to manage the venture. It also says years of supplying steel to the auto components industry and running a fleet of company cars has given directors some insight into how the car business ticks. And Hillfoot’s marketing executive Helen Green – grand-daughter of its founder – has a quick riposte to suggestions that making a profit from cars will be tough: “You should try steel!”.

Ironically, the decline of Sheffield’s once great steel industry has provided prime sites for dealers. Used car supermarket retailer Carland has just opened on former steelworks next to the city’s new airport. And Hillfoot will by the middle of this year open its new Mitsubishi dealership on waste ground next to its steel stockholding warehouse. It will become part of a “motor mile” of car dealerships strung along the busy A61 near Sheffield Wednesday’s football ground.

Another irony is that Hillfoot’s entry into the motor trade was made possible by the departure from it of the previous Mitsubishi incumbent in the city. Graham Fowler quit the industry in 1997, shortly after being terminated (Motor Trader 7 April 1997) for what he claimed was his refusal to become an “identikit dealer”. Hillfoot has taken over and renamed his Central Motors premises in the centre of the city as a stopgap measure until it opens the greenfield site.

Despite Fowler’s insistence that it was his business approach that caused the split with Mitsubishi, part of the reason Hillfoot was chosen after a year without Mitsubishi representation in the city was its willingness to invest in premises. Despite being near the city centre, the Central Motors site is on a back street and suffers from lack of parking for customers and used cars. “It’s the wrong location,” says Hellewell. “The problem is that there is no subliminal message to passing motorists every day. People weren’t sure where the Mitsubishi franchise was or even if there was one at all in the city. Nowadays, it’s imperative that you are seen.”

The new site will have a 12-car showroom and room for around 70 used cars. Hillfoot may keep the existing site for a specialist sports car franchise – it is talking to a number of makers. One area the company will be concentrating on is the business sector which Hellewell says has huge potential in Sheffield but was untapped by the previous franchisee.

A corporate manager has come on board and Hellewell believes the company can achieve between 40 and 50 per cent of its sales from the business sector. “Mitsubishi has always been strong among small businesses, say with a managing director buying a Shogun for years. What we want him to do is put Carismas or Galants into his sales force fleet,” says Hellewell.

One advantage Hillfoot has is its name. The company was founded as a steel forger in 1923 and has grown to become an international group with sales of £30m. According to Helen Green: “We’re known as a family-run, good, solid company. If you ask anyone in the city they’ll have heard of us.” Hillfoot launched the Mitsubishi venture with an advertising feature in the local evening newspaper, which stressed its heritage in Sheffield.

Green says Hillfoot is coming into the motor trade with a positive outlook. “Optimism – a fresh approach and a new attitude is what it’s all about,” she says. Although she and Hellewell are reluctant to discuss future plans more specifically and what sort of investment war chest the company has to spend on expanding its motor trade business, Hellwell says “five or six sites in the next three to five years” are within reach. They’ll all be in the south Yorkshire or north Derbyshire area but won’t all necessarily be Mitsubishi, he says.

Hillfoot certainly won’t be incurring the wrath of its new franchisor when it comes to grey imports. Mitsubishi importer Colt Cars is one of the worst-hit by and fiercest opponents of the tide of Japanese unofficial imports arriving in the UK and Hellewell has no problem toeing the manufacturer’s line. It has been following the advice of managing director Stephen Dixon and actually turning away owners of grey imports who come looking for a service or parts.

“During the past three months we’ve had two or three grey imports turning up every week. Now it’s down to one a week as the message gets through,” he says. Although refusing to work on grey imports may mean lost revenue in the short term, eventually it helps your business, insists Hellwell: “You’re simply reducing your used car market and your new car sales as well.”

With even more Shogun/Pajeros likely to find UK customers through the backdoor thanks to the new Single Vehicle Approval scheme, that sort of defiant attitude from one of its newest dealers will be music to Colt’s ears.

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