Mike McNaughton is a Director of the Kelston Motor Group – Kelston is an independent Motor Group representing a number of brands across the country.
In the stable of the Kelston Group are Ford, Hyundai, Volkswagen, Toyota, Citroen, Mahindra, FAW and Peugeot Motor Car Dealerships.
Mike has been involved in business for 40 years and his initial schooling was at Grey Junior followed by Muir College when the family moved to Uitenhage. Mike remembers fondly his time spent in his Father, Des’ Uitenhage business, Algoa Retreaders where Mike balanced tyres and did general work from Standard 6 on.
Whilst at Rhodes University Mike met the love of his life, Lyn – a Riebeck College Head Girl. Mike and Lyn have three children; Lindi, a CA in London, Sally and Peter. Sally and Peter work with Mike within the Kelston Group.
Mike ran Algoa Retreaders from the age of 19 – sadly his father suffered a heart attack six months after Mike took over the reins at the family business.
In 1994, Mike was offered the Dealer Principal position at Ford Uitenhage and cut his teeth in the exciting world of motor car sales. A particularly good month in 1996 saw Mike sell 33 Ford Escorts in one month. Summoned to the Ford Head Office in Port Elizabeth, Mike fully expected to be feted for his achievement only to be retrenched…
Looking back Mike says that it was one of the better things to happen in his career as he, along with Stephen Dondolo and Jannie Potgieter, then bought Kelly Volkswagen in Uitenhage for the princely sum of R225 000. A R990 000.00 loan from the East Cape Development Corporation gave the young entrepreneurs the necessary finance to purchase stock and the fun began as they traded as Market Square Volkswagen.
McNaughton has a bi-company structure – Kelston Motor Group and a property business. Money from the motor car dealerships funded the property group which now is strong enough to fund the motor car dealerships.
At the age of 40 Mike saw the need to marry solid theory with what he had learned in practice over the years and on the advice of Prof. Kobus Jonker began studying towards a diploma at the then PE Technikon. Mike went on to not only complete the diploma, but also a degree and finally attained his MBA. He has lectured in the field of marketing and sales and still serves as an external examiner and moderator.
According to Mike the margins across the four facets of each business – New car sales, Used car sales, Parts and Service are tight with overall profit margins in the 1 to 2% category.
Adding to the high barriers to entry are stringent requirements from OEM’s around servicing and dealerships.
The Kelston name came from a dormant company attached to the Kelly’s Volkswagen purchase in 1996.
With reference to his VW Dealerships Mike says; “I am very happy with our relationship, VW have looked after me and I have loyalty towards them.”
According to Mike – no-one builds a bad car anymore and the most difficult thing to deal with on a day to day basis is people and their emotions. A product of my era Mike believes strongly in old fashioned values – the ability to converse face to face, eye to eye being a strong one.
McNaughton has watched the motor car. sales industry change over time and cites that 85% of his sales are to previously disadvantaged buyers. The last two years have been lean but many years in the business have taught Mike and his group that the industry is one filled with highs and lows.
Asked what Mike sees as the disruptor to the traditional motor car sales industry he said; “The way that electric cars are going to effect the motor industry. The distances that the cars can travel is increasing. The charge rate is decreasing. You can go to sleep and overnight your electric car will be re-programmed to almost be a different car as technlogy advances. Couple that with concepts such as car sharing like Volkswagen is doing in Rwanda and the traditional motor car sales industry will be severely disrupted.”
Asked if he was happy after 40 years Mike said; “No Question! I love what I do, I love the products and I have great people.”
It is always a pleasure and privilege to chat to long time Port Elizabeth business people and Mike is one of the stalwarts – polite and grounded, he has seen much and experienced more and his 500 employees can be well proud of the Kelston Group and it’s founders ethos.
Alan Straton
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