"It's been whispered that the Irish aren't ready for the BMW. We don't believe a word of it."
So read an advert in The Irish Times on January 4th, 1968. Over the preceding decade, as Frank Keane struggled to make his franchise work, it must have seemed the whispers were right.
Having signed a deal with BMW in June 1967 to import its cars to Ireland, the first few years were effectively a one-man show, with Keane criss-crossing the island in search of customers. That first year he only managed to sell 28 cars, and 18 of them were in Donegal, an arduous trek for a Dublin-based car dealer.
Now 83 years of age, the gregarious Keane is marking a 50-year association with the German premium brand. But he shows no signs of slowing down. While he has cut back to a four-day week, his motor business has rapidly expanded, even during the recession.
With more than 200 employees, it took over Maxwell Motors in Blackrock in 2011, where it operates a BMW and Mini outlet separate from the firm's landmark dealership adjacent to the Naas Road. The same year, it added a Volkswagen retail outlet to its portfolio, later purchasing Bill Cullen's former Liffey Valley showroom for a reported €2.5 million to house the operation. Last year he took over the sole rights for VW sales and service in south Dublin from MSL Motor Group.
Mitsubishi
Aside from these, Frank Keane Holdings is also the national distributor for Mitsubishi cars, Fuso trucks and Stoneridge Electronics.
It’s all a far cry from those difficult early days driving demo cars to potential customers in Donegal.
Leaving school at 17 to start in sales for a builder’s merchant, Keane’s initial car sales experience began in 1952 at the old Smithfield motor company, the largest Ford dealership in Dublin. Within months he had moved to PR Reilly, a multifranchise dealer with mainly British brands such as Austin, Morris, MG, Hillman and Hunter. He became sales manager in 1956, at the tender age of 23.
He then left to join Three Rocks garage in south Dublin, but did so on the understanding that he was looking for an agency.
“BMW was the agency I had in mind. I love their motorcycles and the pre-war 328 model.” The problem was that only avid Irish petrolheads knew anything about the brand.
I did roughly 67,000 miles in the first year – huge mileage in those days on awful roads – and all in different demo cars
"I simply couldn't get dealers to sign up. I used to advertise in the small ads of The Irish Times and, if a customer rang me from Galway today, I'd get into a 1602 and drive down to demonstrate it to the customer.
“I did roughly 67,000 miles in the first year – huge mileage in those days on awful roads – and all in different demo cars. You’d go to Donegal and no one wanted to see you before 8pm. You’d have to meet with them, have a chat and then you’d have to drive home. It was the same in Cork: I couldn’t get people down there to meet me during the day – it was always late in the evening and then I’d have to head home.
Life on the road
“I was a one-man show, with cash paid to BMW up front. The cars were delivered 10 at a time and you had to order three months in advance so you had to take a risk on that. I was paying myself £22 a week (roughly €270 in today’s terms) so I wasn’t dipping into the kitty.”
Despite the hard work, the numbers simply weren't adding up. Keane had borrowed money from Ted O'Driscoll, managing director of the Hire Purchase Company of Ireland to get the business off the ground.
“I think it was 1971 when Ted O’Driscoll rang to say he wanted to see me urgently. He said: ‘You owe us £62,000, your figures show you lost £22,000 in trading and you’re not even paying the interest you are borrowing from us.’ He said they were planning to write off the business at about €25,000 but I told him I was going to make this thing work and he finally told me to go away and do it.”
“Before 1973, we were paying 75 per cent duty on those landed cars and we weren’t in the EEC [the precursor to the European Union]. I had taken a gamble on us joining and in that year when we had the first official agreement, the tax dropped to 37 per cent. By 1976, I had paid Ted back and I was making profits.”
"By the mid-1970s, I had a handful of dealers and things were picking up." Still, Donegal remained a BMW hotspot. "I had a fellow up there called Willie Crawford who sold more than the rest of the dealers put together."
The end of the 1970s saw the business in profit and sales reached the heady heights of 1,070.
Then in the 1980s, Garret FitzGerald’s coalition government introduced a tough new tax regime. The overall tax on cars went up by 73 per cent and BMW’s annual sales fell to 380.
“We had to cut employee numbers from 64 to 38. It was the saddest time in my career. It took us a long time to get back to over 1,000 units a year.”
Amid the turmoil – and to keep the dealers on side – he took on another brand. In 1985, Keane secured the Irish franchise for the Japanese brand Mitsubishi. “I had to ask permission from BMW but they agreed as they saw it was necessary, otherwise the dealers would sink.”
Absolute gents
He is full of praise for Mitsubishi executives, who he says have always been absolute gents to deal with.
“Frankly when we started with them, they were so kind in terms of support that, in reality, the Mitsubishi deal is what made me.”
However, he admits the Japanese brand has struggled at times to deliver on its potential, largely down to a limited range of models. So far this year, in a new car market of 83,802 by the end of April, it had recorded 427 new registrations. Keane holds out hope for a more promising future with the plug-in hybrid Outlander crossover selling well and an expanded new line-up on the way.
Having built up the BMW brand in Ireland over the space of 30 years, the German firm's decision to terminate Keane's national importer contract in 2002 clearly hurt
In the 1990s, Keane considered adding another Asian brand, Hyundai, to his portfolio. However, he was warned by BMW that, if he handled the Korean brand, he would lose the German franchise.
His managing director at the time, Eugene O'Reilly, left the Keane operation and built up Hyundai Cars Ireland. It's now one of the top four brands in Ireland and its Tucson crossover is the bestselling car on the market. Keane refers to its success as a model for how a good local importer can do a better job than a company-owned operation.
The BMW breakup
Having built up the BMW brand in Ireland over the space of 30 years, the German firm’s decision to terminate Keane’s national importer contract in 2002 clearly hurt. It still seems to rankle. “I was sad and emotional about it.”
The decision was part of a wider plan by BMW, which saw the car giant take over national rights in several markets previously operated by local importers.
Asked if he ever considered washing his hands of the German car firm entirely, he pauses for a few moments and then says “yes, but logical thinking kept me in the business”.
It was a matter of cool head over emotional heart. Keane stayed on as a dealer and invested in the business. He did, however, treat himself to a new car, a Porsche 911.
I don't know what else I would do. I can't stand playing golf because I was lousy at it
The compensation package for losing his contract was €7 million, a figure well below some industry estimates at the time that suggested the payment was in the order of more than €30 million.
At 69, many would have considered it timely to retire, but Keane has never seemed the sort to while away hours with his feet up.
“Guys say to me, ‘Why are you still working? You’re nearly 84 years of age’ – I’ll be 84 in September. The reason is I love doing what I’m doing. I don’t know what else I would do. I can’t stand playing golf because I was lousy at it. I’ve no helicopters or anything like that. I just like it here and I love the staff we have.”
Unlike many of his counterparts, Keane avoided the property pitfall of the Celtic Tiger years. "The banks came to us and suggested property deals," he says. "They were trying to get us to invest in all sorts of schemes."
Was it property that tripped up many dealers when the financial crisis hit? “Yes, but not alone car dealers. Too many people in all sorts of businesses invested silly money in property deals. We lost a lot of money in bank shares but we kept our feet on the ground and our stock levels steady.”
It meant when the crisis hit, Keane was in a position to invest.
Keane has also considered taking on a franchise for a Chinese brand. "We have contacted a few of the firms there, but they are not ready for Europe yet and when you have the junk makers in Europe, like Renault and Fiat, protecting themselves you will never get the Chinese entering the market," says Keane. He says this protection comes through the backing they get at national and EU level.
Future plans
As to the wider industry he says: “Certainly I don’t think all the dealers will last. I know there are some at the moment who are crying that sales have fallen off again, down 10 per cent so far this year. It’s hard to know what the manufacturers are going to do. They decided to take the franchises away from local importers and I think they are now realising that it wasn’t the best thing to do.
“[The motor trade] is not simply about volume but unfortunately too many of them see it like that. It’s a small country and there are people creating a false market, registering cars at the end of the month. Too many firms are trying to put a litre into this pint jar and it’s going to spill over somewhere.”
Driven by the recent Volkswagen dieselgate scandal, European governments are moving against diesel engines and there are rumours of potential tax changes for diesel cars in the upcoming budget.
Scandal
Keane says the scandal hasn’t really affected sales at his VW dealerships, but is wary of any knee-jerk reaction by politicians.
He warns that any tax changes need to be well flagged to avoid a repeat of the fiasco in 2008. At that time a change to emissions-based tax led to a massive swing away from petrol. Resale values for petrol cars plummeted. In several instances, distributors and dealers were forced to export unsold stock at a loss, just as the financial crisis took hold.
One Dublin customer bought her first BMW from him in 1968 and proceeded to get a new one for her birthday every June
I arrived for the interview in one of the cars from Keane’s collection of classics, an eye-catching M1. After pulling up at the dealership, a customer came over to admire the car. He mentions that he has bought several cars from Frank Keane personally over the years, and is there to buy a Mini for his granddaughter.
Customer loyalty is a constant theme with Keane and he recalls how one Dublin customer bought her first BMW from him in 1968 and proceeded to get a new one for her birthday every June up until a few years ago. He’s still occasionally in touch with her.
The octogenarian gent is still clearly hands-on, but the next generation is already working in the business. With the touch of a true car salesman, as the interview ends, he hands me the keys to to his new BMW 540i for a test drive, accompanied by his son Brian, the next generation of the Keane motor family.
CV
Name: Frank Keane
Age: 83
Position: Chairman of Frank Keane Holdings – national importer for Mitsubishi cars and Fuso trucks, with a motoring dealer network for BMW, Mini and Volkswagen brands
Family: Married to Ursula with three children, Frank, Rachel and Brian
Something you might expect: Though he has long since hung up his racing overalls, Keane was a very talented racing driver in his day. In 1957, he started what would be a 14-year motor racing career that included victory in the Sexton Championship in 1963 driving a Lotus Formula Junior.
Something that might surprise: After BMW terminated his distributor contract, Keane's first car purchase was a new Porsche 911. He had always wanted a Porsche but thought it wouldn't be appropriate as the BMW importer. Up until three years ago, he regularly drove the car down to Portugal and back.
