ILC ARTICLE

Steer in the right direction

15th November 2022

Steer Automotive Group has in a few short years gone from not existing at all to becoming one of the largest repair groups in the UK.

Since acquiring four sites in 2018, owner Richard Steer has managed a breakneck growth strategy that has seen his group mushroom to 56 sites today.

Half of those have been acquired in the last five months, and although he’s predicting a quiet time between now and Christmas – just one more deal – Richard is expecting growth to ‘really take off’ off in 2023.

Speaking to delegates at ILC’s Exclusive Motor Claims Conference, which took place at Landing Forty Two in London and was headline sponsored by Enterprise Rent-A-Car, and sponsored by EDAM Group and LexisNexis Risk Solutions, Richard revealed there are at least another 30 businesses on his radar.

He said, “We’re probably having conversations with 10 people at any one time, four or five of those conversations are serious. We see a massive runway in front of us. We take two or three calls a week from people who want to talk to us; a lot of those calls are from older men who have had enough. It’s our job to the be acquirer of choice.”

Acquisitions during this volatile climate might appear to be a risky strategy, but Steer Automotive has an enviable track record of success that has withstood the headwinds of Covid – and all the subsequent challenges the pandemic has brought.

People

Every single business it has acquired has been more profitable after acquisition and key to that, Richard explained, has been winning over the people.

He said, “We’re very specific who we want to acquire and in every deal we’ve done either the owner or the number two has stayed. We’re particular about that for a very good reason; our executive is just three people. Most of the decisions are taken at operating board level so those people need to feel like they’re invested.”

He believes this localised approach has been fundamental to everything the group has achieved.

He said, “We’re a dissolved government. We don’t have a head office with a central team saying, ‘do this’ or ‘do that’. We have local teams managing local people. Our colleagues see real people, people they know. That is crucial because there is a shortage of people across all industry so the most important thing for us is the engagement of our colleagues.”

Richard spoke of a sustainability model that has been introduced covering the financial, mental and physical wellbeing of colleagues, the introduction of mental first aiders within the group, and explained how diversity of the workforce (33% of the operating board is women) and investment in new skills is also a key priority.

After the recent acquisition of AW Repair Group, its Head of Academy was promoted to Head of Academy for the entire Steer Group, and with 55 apprentices already on board and another 30 set to join, Richard is now predicting that there will be more than 100 apprentices within the group by the end of 2023.

Sustainability

This focus on sustainability goes much further than just people. Every organisation has been challenged to reduce its carbon footprint and Richard knows that businesses are looking to Steer Automotive, as the largest repair group in the UK, to set the right example.

It is a responsibility he takes seriously.

Apart from pursuing PAS2060 certification and hiring outside consultants to provide a forensic analysis of how it can achieve its ESG goals, Steer is also taking more immediate steps.

For example, it is now changing its entire paint system across all sites to a more environmentally-friendly alternative that will reduce emissions and energy usage – and therefore costs.

He said, “We’re not going down a green wash route. We want to do something serious. ESG is front and centre of what we do and although we don’t get everything right, hopefully we get more right than wrong.

“We’ve also just appointed a Head of Sustainability in Repair Process, and his number two starts in January. So we’re not just talking about it, we’ve got a team dedicated to actually achieving it.”

Challenges

Of course, while operating at scale does bring with it certain advantages no organisation is completely immune from the challenges of the day, and Richard admits that the problems being faced throughout the entire UK repair sector are the same problems his group is dealing with.

Chief among them is capacity.

He said, “I’ve never seen capacity challenges the likes of which we have today. We’ve got 20% more work than we can possibly handle so we have to choose which cars we’re going to repair. But the repair industry has a habit of accepting every job offered. It’s ridiculous. Why take 40 repairs when you can only manage 30? It just adds friction and cost to the process. We need to change that mindset so we’re setting the scene right at the front end instead of waiting for it to go wrong at the back end.”

He explained that his sites allocate a certain number of spaces to each client – he eschews the ‘work provider’ phrase – and then controls capacity going in. This provides clarity and control of workflows, while also delivering a consistent level of service and repair times that are well below the industry average, which has now escalated to around 60 days.

He is urging more repairers to adopt a similar approach or risk dire consequences.

He said, “There is a monthly cashflow challenge in the industry with work in progress growing, utility costs rising, wage inflation, and increased courtesy cars costs; we’re paying £1.2m more for courtesy cars now, so mobility has to change. But I think there will be casualties before that happens. It’s only going to heighten before it gets easier.”

The other notable challenge is around parts, and he believes the UK market can learn a lot from looking beyond its borders. He pointed out that in America alternative parts make up 40% of the repair among good operators, while in the UK the average is just seven per cent.

“Why? That’s a price opportunity and access to that market is critical to improving parts delays.”

Example

In many ways Steer Automotive is a one-off, bucking the trend in terms of investment, growth and strategy. The unveiling of its new 28,000sqft prestige site in High Wycombe, which required an investment of £1.2m not including property, it just the latest example of how it is doing things differently.

“We wanted to make a statement that not all body repair sites are the same,” Richard said.

Not every business can follow this example, or will even want to. But perhaps every business can find something in the way the Steer Group does things that they could incorporate to the benefit of their own organisations.