The Steer Automotive Group has undergone phenomenal growth in the UK. Sam Street met up with chief executive Richard Steer in Frankfurt to discover how.
Richard Steer started out in the collision repair game just before COVID and lockdowns hit by acquiring four collision repair shops in July 2018. The group now stands at nearly 200 shops and represents 11% of the UK collision repair market.
Steer is steeped in automotive but doesn’t come from a repair background. In fact, he started out in paint working at ICI where he was involved in the launch of Aquabase, the world's first waterborne refinish coating. He was approached to work for a paint distribution company that was struggling.
“ So, effectively I working my way down the food chain, making the paint, then selling the paint into bodyshops in and around London,” he said. “We had a really good time there for about six years but I couldn't get enough skin in the game.
His journey as an entrepreneur started when he branched out and bought a single site distribution company. It had a bodyshop attached to it which he sold. “You couldn’t run with the hare and the hound. You couldn’t distribute paint to bodyshops and own one.”
Steer grew that single site into the biggest paint distributor in the UK over the course of 13 years. All the while he was keeping a keen eye on what was happening globally especially in the US with the giant LKQ parts company buying AkzoNobel's paint distribution business.
“AkzoNobel had sold its 40 stores to LKQ. In my world, if you’re in parts, you’re not in paint. It’s like train tracks, they never meet. But these parts guys had bought into paint distribution. That was a transformational play. "
LKQ came to the UK and bought a business called Euro Car Parts. “I called it my tsunami. The water level had just risen in the game,” Steer says.
Steer realised that one of the paint companies or consumable manufacturers would inevitably capitulate and start supplying product to LKQ and then his business would be threatened.
Steer approached other large paint distributors and as a consortium they went to see Euro Car Parts. A deal was struck for six paint distribution companies on 6 August 2013 and the following day Steer was running all six distributors and set about creating LKQ Coatings. When the business was integrated with Euro Car Parts, Steer was put in charge of the whole shebang and was interacting with every body shop in the UK.
In 2018 he bumped into a multi-site bodyshop customer who had mothballed a shop after his dad died and was considering selling out.
“Normally when someone said that to me, I’d introduce them to someone who was interested in growing their business. But I actually went home that night and I thought maybe I’ll do this - I fancied another roll of the dice.”
In July 2018 he bought four body shops in Buckinghamshire and after about nine months he was approached by private equity firm looking to get into the collision repair space.
“I had a conversation with them and that ultimately didn’t lead directly to a deal as the meeting was the day before lockdown. As I told them - now’s not the time to be signing documents when the world’s turning upside down.”
Over COVID Steer added another five shops with money from his back pocket. In March 2021 he completed a private equity deal with nine shops in his network.
In March 2024 the business sold out to a bigger private equity fund, Oakley Capital with 125 shops in the group. So today Steer Automotive has grown from 9 sites to 192 sites in just three years with a turn over of around £500 million employing 5,000 people.
The acquisition rate has been dizzying with at least one deal a month including, recently, the Gemini Group from Tim Hopkins.
“Effectively I made the paint, I sold the paint, I use the paint, that has been my journey. That’s probably going to be on my headstone.”
Explaining how he’s managed to acquire so many business Steer says: “The demographic is a very predictable one. Most people have been in the industry for a long time, typically 40 plus years. I’ve been around them for a long time supplying product.
“There’s not a lot of succession planning in the UK sector. Most of the guys are in their 60s and beyond and the opportunity to exit is very limited.
“Also, because of the success we have enjoyed with growth, people approach us. A lot of that has to do with the fact that they know culturally how we work. We’re very specific about what we identify as a business we want to acquire. I have turned down five in the last two weeks,” Steer says.
“There’s a number of different things that form why we buy a bodyshop. That’s become more sophisticated as we’ve grown.
“But culturally you know that they’re the right sort of business. They repair cars the right way, they do the right thing. They’re well recognised by insurer clients, accident managers, vehicle manufacturers and dealerships. We found that then it’s easy to culturally align and culture’s the single biggest thing you struggle with when there’s a change.
“You can’t just bolt businesses on – it’s like plasticine. When you buy a business and you put it in on the outside of the plasticine, if you hit the plasticine, all the bits just drop off. You need work out how to integrate them. If they act with honesty, integrity, treating customers and colleagues as they would want to be treated, then that aligns with our culture.”
Steer offers different deals depending on whether the owner is looking to retire or wants be part of a larger organisation without the stress of being solely responsible for the success of the business.
“We have a really good integration team. The last thing we would do is walk into a newly acquired business on day one and say ‘right signs down, here’s your work wear, answer the phone like this, there’s your paint system. We absolutely don’t do that.
“We walk in there and ask them how they do things and if it’s better than the way we do it, we’ll adopt those practices.”
The group is split into key divisions. There’s the mainstream business that includes some prestige. Regional directors run those with around 30 sites under their stewardship.
The luxury sector is for high end brands such as Ferrari, Lamborghini, Rolls-Royce, Bentley, Aston Martin and McLaren, which the group has OEM approvals for. There around 45 vehicle manufacturer approvals across the group.
There’s also a commercial division and that looks after light commercial vehicle and heavy goods vehicles as well as a relatively new fleet division.
Finally, a technical services division which looks after Steer’s apprentice academy, ADAS and calibration and in-house services used across the group.
“The key aspect we have from a scale perspective, is that we can repair any vehicle from a tractor to a Ferrari anywhere in the UK. We just triage it into the right place to make sure it’s repaired the right way,” he says.
“And now we’re number one. We’re the largest operator in Europe.”
The next biggest UK competitor has 65 sites, number three has 32.
“The spine of our business is about the technical repair and everything hangs off that. The thing we ask of every site is that we repair the cars properly. I don’t care how long it takes, how much it costs. Repair the car right.
“When you start from there the outcomes become positive. You keep your complaints reduced which means the policy holder churn is reduced. We work really hard around customer retention. The average google score for a Steer site is about 4.5, which when you think that we’re a volume player, that’s quite difficult to achieve.
“Auditable, open, honest, transparent, those are the key pillars of our business in terms of our integrity and every site is British standard 10125 which is an independently audited standard. Our sites all have and will work on being PAS2060 which is the carbon neutral standard in the UK.”
Steer Automotive recently carried off the Group Sustainability Award at the Greener Bodyshop Awards. “Just because you’re big it doesn’t mean you can’t be half decent about what you do.
“We’ve worked hard around sustainability in the last two or three years in particular, driven by a number of factors, not least of which is the lack of availability of parts. To counteract that we have a strong parts repair methodology and ethos in the group. That has also reduced repair costs for our clients as well.”
Another advantage of a such a large and diverse group is that as has been evidenced in Australia, is that insurers like to have as small a network of repairers as possible to cut down their own internal costs and complexities.
“Insurers see opportunity and benefit from scale and now we’re a big part of the supply chain. If we don’t perform for them, it has an impact on their results and if they don’t perform for us, it has an impact on our results.
I don’t come from the Punch and Judy supply chain management play in terms of you hit me, I’ll hit you. We work collaboratively.”
There’s always concern when one player dominates the market. “We’re probably 11 or 12 percent of the UK market, so we’re small in relative terms. If there’s 200 sites that we own, there’s another 1,400 that we don’t. We’re not in a position whereby we’ll have market dominance which is going to change the pricing structure for the UK industry.
“If you think about the likes of us in comparison to the big US boys, 1,700 stores at Caliber, 900 at Boyd Group, 550 at Crash Champions, 300 at Classic. - they are huge and in most cases all either quoted or private equity owned businesses.
“This is not my first rodeo. I built the biggest paint distributorship in the UK and it’s no coincidence that I’m now building the biggest bodyshop group in the UK.
“We’ve typically been bringing people in who are the best at their roles regardless of whether they come from the bodyshop space. They naturally challenge the norms, because they ask 'why do you do it that way? ' We don’t have a big glass tower head office. I don’t even have a desk we try and remain agile and lean.
“We’ve found it’s much more effective to have strong regional operators looking after 30 or 40 shops than it is having us centrally dictating local operations. Our job from the central function is to support the regional operators and individual sites, not dictate what they do. We set the tone and we set the drum beat and strategy but ultimately it’s about helping them to execute the bit that comes behind that.”
Steer touches on ESG (environmental, social, governance) “We’ve been very driven that way, in part through our investor partners because ESG is really important to them,” he said.
Steer has its own training academy. There are around 11 different programs with apprentices including accounts and estimator programs, parts apprentices, and technician apprentices. An impressive 12 percent of Steer’s productive workforce is an apprentice – there’s over 350 of them with a strong mentorship program to support them. The company has consistently won Diversity and Inclusion Awards and is ISO 27000 accredited for IT security.
“It’s something that I’m passionate about - we’re a tough, hard-working team. We just want to get the right results for the business and for all the stakeholders and that doesn’t need to be mutually exclusive,” Steer said.