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Mark Gasan, managing director of Gasan Enterprises, talks about the future for an established firm now close to 80 years in operation
As managing director of Gasan Enterprises, what exactly is your role?
 This is a company which was founded in 1928, so we are close to 80 years of operation in Malta. It was founded by my grandfather, initially with just Ford, but now the company represents Ford, Mazda and Yamaha since 1973, Volvo since 1985 and Jaguar since 1995. My father took over the business in the late sixties, early seventies, and I have been running the automotive business since 2004.
I developed experience of working in the car business in the US, started selling cars initially, then I was promoted to sales manager in a large Ford dealership in Delaware, and after 9/11 happened I was moved across into the used car section because we had tons of inventory coming in because of the zero percent finance being offered on cars. So I then managed the used car side.
After one year in the US I came back here and embarked on a project of restructuring the operation, before I took over the reins of the company. So I had to apply quite extensive restructuring plans; the thing is before we moved to these premises in 2001, we had a lot of different premises, different showrooms, different synergies and we had to address those in terms of staff complements and combined operations. So we had to downsize initially, and then reorganise by section, increasing them by section if necessary.
I also embarked on a project of business development, looking at the opportunities, and started a project with Libya. I still retain the responsibility for business development but in 2004 I took over the responsibility of managing the whole operation as managing director. It is pretty much a hands on role of management but I am still spending a lot of time on Libya. In Libya this year we do have some franchises signed up and we are about to sign up more, and initially we will operate in Tripoli but eventually we are looking to set up a network across the country.
Locally we have a good range of brands and we have some new things coming up this year as well, some new ideas on the local side. Was this superb “state of the art” building specifically designed for you?
We actually had a lot of outside help on design, especially of the showroom area, service and warehouse. All of our existing brands got involved with their own teams of experts, and we went on a number of visits to the UK, to take some ideas from the UK dealerships, but ultimately it was finalised by our own group property section, and built by our property division.
You have to understand that it was the concept of a multi-franchise showroom which in those days was quite a new thing. Initially it was just for the automotive division but now we have moved other group companies to the same location, including Head Office, Property Division, Contracting Division, and Melita Cable. The only group company which is not here is the insurance joint venture, GasanMamo.
Can you talk about any new business projects?
Well during this year we are about to launch a boat brand, Cantieri Capelli. We have a leading marine engine franchise with Yamaha, but we have never had a brand for boats to offer, so this is something I have worked on with a friend of mine and we shall be launching it in March.
We are also starting something which is a completely new concept in Malta, that is an approved certificate for a used car programme which we are calling “Gasan Approved”. This is a quality used car programme. Each vehicle will be valeted and retailed as pretty much in the same condition as you would retail a new car in the showroom. These cars will be no more than five years old, no more than 60,000 kilometres on the clock, and passed through a rigorous one hundred point testing programme. We are offering a minimum twelve-month guarantee on these vehicles, so it’s a brand promise which we are carrying with our name as a sign of approval.
Will this be just for the brands for which you have a franchise?
Initially we shall be focusing on our brands but eventually we can expand it to other brands, which we will retail through our programme.
Will it not depend largely on the ability to purchase good second hand vehicles?
What we are finding is that cars of this good quality are rare because people tend to hang on to their cars much longer so we are trying to buck the trend here. We can’t just wait for these vehicles to arrive, because they won’t, so we are actually trying to source these vehicles by going out to the owners. We can encourage them to buy new by cashing in on the old cars. Why wait until your car is six years old when you can cash it in at three or four years old, and get a good price and know where you stand?
Does it help to have class brands such as Jaguar, Mazda and Volvo?
Yes we have brands which are towards the premium side, in fact that is what triggered off this line of thinking. Traditionally most expensive cars depreciate more heavily as time goes on, so that is our main concern. We do not want our customers to lose money on their vehicles. That is probably the reason that most of the used car dealers out there do not deal in high price cars, they are happier selling off cheaper and easier. We are looking to change that and giving our customers better service both as sellers and buyers. This will mean we retain our customers as well.
Do you have a reputation for a high standard of maintenance and service?
We believe in having the best people in terms of skills, so we invest a lot of money on training, whether it is in-house or sending people overseas. Training is an ongoing process and is extremely important and of course we are always trying to improve our operation.
Do employees end up with qualifications/certificates?
Yes, there is a City and Guilds certificate for which technicians qualify, we are also working a on a certificate for our body and spray people as well, so this means that our people operate with manufacturers approval.
Does this mean that you work in cooperation with bodies like MCAST?
Yes it does, we take on apprentices into our structure; some people end up with employment contracts, some people move on. People want the opportunity of technical training to give themselves a fully-fledged qualification.
Do you offer your purchasing customers a finance deal?
Yes, we do offer our customers an in-house financing scheme, based on a percentage above the bank’s base rate. We try to offer competitive terms and we have to tailor the terms to the customers’ requirements. The banks have their own schemes but we compete pretty well. In the past the purchase was cash but now a business has to have facilities to offer finance.
Do you offer leasing?
This is one thing we don’t do. We work with various companies who offer leasing deals.
What about spares, it is often difficult to obtain spares in Malta?
Well we have one of the largest spare parts warehouses on the island, we carry over 45,000 line items. Unfortunately, being on an island it can be difficult to get regular supply and frequent shipments. If we were attached to the mainland it would be easy to get trailers to make a 24-hour delivery from a central warehouse. In our case, it’s either airfreight if it’s very urgent, or otherwise the delays of shipping. So you have to keep yourself reasonably stocked with fast moving items, but no-one can always get it right because there are so many different components. Of course stock sitting in a warehouse is a big money cost and what you have to avoid is keeping too many items which must be written off each year.
What about the publicised loss troubles of Ford, do they affect you?
I think it needs to be put into perspective; the company as a whole is doing a major restructuring in the United States. On the other hand Ford in Europe has achieved very positive results in 2006, with a reasonable profit. So good business has been done in markets like ours and in mainland Europe.
Therefore it must be put into perspective; I am confident that there will be a turnaround in the USA which will put Ford back in the black throughout. The premium brands such as Jaguar will also turn around in 2007. On the whole I would not say it is affecting us negatively, obviously there is publicity in the press, but with the brands we have here I am expecting a good 2007 and future.
Is the Jaguar brand going well in Malta?
Yes, in fact the Jaguar brand is showing year on year growth, and our main seller is the X type with the diesel engine. We’ve also done reasonably well with the S type and last year we launched the XK, which is not your volume model, but it’s the most prestigious one they have. What is also very positive for Jaguar is that the design team they have is led by Ian Cullen who designed the DB7 and the DB9 for Aston Martin which has re-established the roots of creating beautiful fast cars, which is what Jaguar is all about. The XK is the first one which is from the same sort of DNA. They do best at making specialist premium cars not volume cars, which is what we will see in the future. The saloon is good value for money, because people can now see themselves driving the Jaguar for a fair price.
How do you think global warming is affecting the car industry?
Everyone is aware that the CO2 emissions factor is there and every manufacturer is trying to produce cars which cut down emissions. What concerns me is that there is concentration on cutting emissions from new vehicles but no-one is targeting the old vehicles which produce far more emissions. This is a big loophole, at least in Malta. Internationally it is a big issue, and eventually it will probably be fair to tax vehicles on their CO2 emissions. The polluter pays principal should apply; we in this business will be happy to support this. Ultimately if we are selling cleaner cars the world gains, but I am concerned that in Malta we have over 90,000 cars which are over 12 years old, which are certainly not contributing to a cleaner environment.
What about Bio-diesel?
Bio-diesel is only just coming here in Malta, and now we are seeing more and more stations offering it, so yes, I believe there is some scope for us to promote that, something we are looking at, at the moment. |
