When Donald Mackenzie and his partners bought Holmes Williams & Purvey and then snapped up Ray Brothers and Pearman-Watlington's car and bike division, they were suspected of trying to build a monopoly in the car business. Mr.

Mackenzie talks to Deidre Stark about the real reasons for the purchases -- and how the group is trying to improve its reputation for after-sale service.

Bermuda's car king yesterday tried to debunk widespread beliefs that HWP Group has a stranglehold on the Island's automotive sector.

And while most car owners are all too familiar with wrestling for months in nightmare efforts to get simple parts for vehicles, HWP Group chairman Donald Mackenzie believes he's winning the battle to turn that around.

Mr. Mackenzie staunchly dismissed claims in an interview yesterday that 80 percent of car sales on the Island were made by his company -- formerly known as Holmes Williams & Purvey -- since it snapped up several smaller operations.

As if such a market share was something to be ashamed of, Mr. Mackenzie emphatically denied his company had won such a large piece of the car-sales cake, instead estimating he sold only about 50 percent of new cars.

In supplying parts and service, he said the company had only 20 percent of the market in its grip.

With his technology background, he freely admits he is no expert on cars, but sees his role as a business expert who must deal with many of the same issues no matter what he is selling.

He entered the industry in the mid-1990s after identifying HWP as a company with a lot of potential for growth and profits.

The year Mr. Mackenzie took over as chairman, in 1996, HWP bought Ray Brothers' auto franchises and service garages, then a year later it took over the automobile division of Pearman Watlington & Co. Ltd.

Just the first takeover was widely heralded as giving HWP a 75 percent share of car sales in Bermuda, and even before engulfing Ray Brothers, HWP's estimated annual sales were put at $30 million in some reports.

Last year former HWP executive John Bento left the company to open a new car dealership called Star Motors.

At the time he said the move was motivated by the desire to give those in the market for a car a choice after HWP's aggressive takeover bid.

"I don't subscribe to monopolies,'' Mr. Bento said. "People deserve a choice, and that is why I did this. To create a monopoly in the industry would be regressive.'' But yesterday Mr. Mackenzie rejected terms like monopoly or monolith as applying to HWP.

"We're far from that. The automotive market is competitive and we fight for every sale we have,'' he said. "We're not out to get the majority of the market share or to dominate.

"We've done things this way to get sufficient size to be able to reinvest into the business.'' And he said this would ultimately improve service.

"Over the past three years we've spent between $4 and $5 million on reinvesting into parts and service and training to the point where in the past three years we've effectively suspended dividends from the company.

"There's certainly been a lot of media attention and public speculation that we bought Ray Brothers and Pearman Watlingtons just to snatch up market share, but it's not about that. It's about getting scale. We're probably the size of a medium-sized dealer in America or the UK.'' Mr. Mackenzie admits readily that there have been many complaints about the parts and service branch of the company in recent years.

And it was a dilemma for the company -- which employs 200 workers --to spend money on revamping parts and service operations since that branch of the business was losing money when he took the reins as managing director.

"It's a bit like the chicken and the egg. You have to ask yourself whether you want to invest in a part of your business that's losing money. But really that's the only way you can actually turn that around.

"Since I became involved with the company, we have certainly expanded the business and the primary reason we did the expansion was to enable us to basically reinvest in the after-sales business -- parts and service.'' Bermuda's low population and stringent limits on car ownership meant there was only a small market of buyers, so the real opportunity for dealers to make money was in parts and service branches.

"Once you've sold a vehicle, if you can provide good service then you've got a lifetime customer because they can potentially bring their car in for servicing and parts for their whole driving life,'' he explained.

With this in mind HWP is trying to turn the three dealerships' service sections into one.

HWP chief speaks "We're about 80 percent of the way of getting this done here. By the end of this year we will have taken the parts and service operations from the three dealerships into one larger, theoretically more efficient operations.'' Mr. Mackenzie joined HWP after the previous board of directors voted on bringing in some young blood in 1995.

"They wanted to bring in some younger people to manage the company who would effectively ensure the success of the second 50 years of the company's existence.

"The previous principals had all been involved for probably 40-years-plus, and felt very strongly that the new senior management team needed to be shareholders to ensure they're focused on the success of the company.'' So Mr. Mackenzie bought into HWP with business partners Richard Zuill and Greg Vasic -- his partners in a local technology company which was merged into CCS Group.

Since then HWP's president and CEO Jonathan Brewin has bought out Mr. Zuill's share and the trio have become the only shareholders.

Car king: HWP Group chairman Donald Mackenzie in the company's spare parts department