New Pendragon leader given a mandate for ‘customer-focused’ growth

The post-Covid years have seen an unprecedented level of change across the boardrooms of FN50 companies.

Long-standing luminaries such as Peter Cakebread (Marshall Leasing) and Mark Hammond (TCH Leasing) have retired, creating opportunities for new strategies and new directions to take hold. Others, such as Zenith CEO Tim Buchan, depart early in 2025.

This year alone, eight FN50 leasing companies have new leaders at the helm.

One of those is Pendragon Vehicle Management. After 18 years, new owners – US-based Lithia acquired both dealer group and leasing company in February - and a new focus saw managing director Neal Francis quietly step aside in July.

His replacement is Phil Wilbraham who brings a background as a chartered accountant and an appetite for growth that is matched by the new parent.

Outstanding customer satisfaction

Underpinning his business strategy, though, is a simple philosophy: outstanding customer satisfaction.

The phrase echoes across the leasing sector, so what makes the new group vice president’s customer service ethos stand out amongst his peers?

“My main focus is on how I think a company should be run: customer-focused and easy to work with,” Wilbraham tells Fleet News during a break from talking to those very customers at this year’s Fleet & Mobility Live.

“When I order things or interact, the companies I remember are the ones that make things easy for me. It’s about the customer experience – how we look after them and how we keep hold of them because winning new customers is hard!”

Three months into the role, he has been able to reflect on a “solid business with strong heritage”, but he also recognises it was commonly overlooked for investment by a head office more focused on the car retail division. Priorities have now been adjusted.

“Lithia has the desire to invest and grow the business to take it forward,” Wilbraham said. “We have a one, three, five and 10-year view on what Pendragon Vehicle Management looks like.”

He’s not going to share too much detail at this stage, of course, other than to disclose that the initial objective is to get the business back to where it was in pre-Covid 2019, when it funded almost 19,000 vehicles; today it sits at a little over 10,000.

But he is willing to state that, longer-term, he wants to be “one of the biggest independent leasing companies in the UK”.

“Lithia are in it for the long-term. They are putting their head up to see the size of the prize with sustainable growth,” Wilbraham said.

“But they understand the limits – it’s not growing at the expense of customer experience. We’ve not got that pressure on us.”

Four brand pillars

A key part of his role is to instil the four Lithia values: customers for life; improve constantly; take personal ownership; have fun. “These are key. There is a way to do business that is a net gain to everyone.”

Several factors are behind the four-year drop in PVM’s fleet size. As well as the apparent lack of investment in a de-prioritised operation, another issue is profile; the company had not been as visible as it could’ve been, believes Wilbraham.

“My priority is to engage with customers and suppliers,” he said. “I’m out in the market and one of the first questions I ask is: what do we do well; what can we do better?”

The positives include the knowledge of the staff, who are widely respected among the customer base, but this has also resulted in some strong individual client links which have possibly overshadowed the company itself.

Wilbraham explained: “It’s not felt like a whole team effort. But it’s not the individual’s customer, it’s Pendragon’s customer. We have to join the dots.”

Lithia views leasing – and therefore PVM - as a fundamental cog in its objective of becoming a provider of mobility services: offering solutions wherever and however the customer wants. This means from daily hire to seven years-plus leasing and “everything in between”, encompassing small cars to large vans.

PVM’s mission is to provide those solutions, which will see it expand its ecosystem, but also – crucially – amplify the message about those services. One of those areas is salary sacrifice, which Pendragon launched in 2010 and then rebranded in 2017.

It’s another area of the business that has suffered from a low profile but has now been relaunched for a second time with a mandate for growth.

Van expertise

Wilbraham also intends to lean on the company’s expertise in the van market – LCVs account for more than half its funded fleet and have remained stable while the car fleet wilted.

“We have some critical customers with challenging VOR (vehicle off-road) times that we deliver on,” he said. “We have to leverage that – it’s a big opportunity for the next few years.”

The SME sector is another focus where “lots of companies need solutions”.

Wilbraham added: “We can leverage our expertise and offer consultancy services where they don’t have an internal fleet manager. We can be their fleet manager by proxy.”

Given the steep decline in its fleet size, it would be easy to view PVM as a failing business, struggling to remain relevant. That’s far from the truth, according to Wilbraham.

“This is not a business in crisis; it’s done well and supported its customers, especially through Covid,” he said.

“We have a good foundation and it’s just amplifying that and tuning into their business needs. If we invest in the team, the growth will come.”

Wilbraham on…

Electric transition

“We have customers at different points in their journey. Our job is to pull all those conversations together and play them back to people, to help them understand what good looks like. It’s shared learnings.

Residual values

“We are probably going to see them drop a little bit more, but they are more stable than they have been. We are open and honest with our customers and put some into extension if necessary. Electric is fast moving technology – before you might see small performance improvements; now it can be completely new technology and new entrants which is a challenge. We work with manufacturers to understand their pipelines and that can feed into our RVs.”

SMR charges on EVs

“The criticism (about high with maintenance costs) is unfair. It’s new technology and we are learning from the pricing and making adjustments to reflect our knowledge as it grows. The propensity for something to happen is lower but when there is a problem it can be expensive.”

Second life leasing

“There is an opportunity, but the challenge is the route to market is different, going direct to consumer. It will have a role to play, especially with electric vehicles and we can facilitate that through the retail part of the business. Customers are happier to run cars for longer; Covid helped to put processes in place to demystify that. The average term at point of order has increased by 12 months since 2019, from three to four years, as customers realise they can get more shelf life out of their vehicles. We’ve not seen as much appetite for them to take on used at the point of order.”