View from City Road: Making two business cultures compatible
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Your support makes all the difference.Inchcape appears to be adopting a Japanese approach to business. It has seen the way kereitsu operate and is adapting the Japanese style of corporate association.
It already has a long-standing relationship with Toyota - it has distributed its cars for 28 years - and is now building on its association with Ricoh, the Japanese office machine producer, through its Gestetner deal, announced yesterday.
Inchcape sells Toyotas in Guam and Saipan, Ethiopia and Belgium, Greece and Hong Kong. It is also Toyota's exclusive distributor in the UK, where the Japanese company's Derbyshire plant is turning out cars for domestic and export markets. Toyota has paid for 51 per cent of the UK distribution business - but does not take control for another five years - and acquired 5 per cent of Inchcape three years ago.
Whether the relationship with Ricoh will be as close remains to be seen. Inchcape already does about pounds 50m of business with the machine company but Gestetner does far more. Ricoh and Inchcape will land up as co-shareholders of Gestetner, both having directors on the Gestetner board. This should give them time to get to know each other.
The advantages of building long- term relationships with successful companies are obvious. The challenge for Inchcape is to make this sort of association compatible with Anglo-Saxon shareholder concerns. If there were any suggestion that Toyota or Ricoh were doing better out of the arrangement than Inchcape, its strong following in the City would soon give up.
Partly as a result of these relationships Inchcape is increasingly reliant on partly-owned companies. Its shareholding in the UK distributorship is set to fall to 49 per cent in stages and it has the option of acquiring 25 per cent of Gestetner. Shareholders must hope this does not result in poorer performance. If Inchcape is successful - and the pointers are encouraging - it will have shown that the two business cultures are compatible.
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