• FAMILY RETAILERS "READY TO SELL" - ASE
  
• BOARDROOM BAN FOR PHOENIX FOUR
  
• PETCHEY LEADS MOTOR INDUSTRY PACK IN SUNDAY TIMES RICH LIST
  
• EXCHANGE AND MART CUTS AD PRICES FOR DEALERS
  
• VAN AND TRUCK REGISTRATIONS UP AGAIN IN APRIL
  
• USED SALES DRIVE REGENT TURNOVER UP 30%
  
• AUTO INDUSTRY MAKES TRACKS IN SUNDAY TIMES INTERNATIONAL FAST TRACK 100
  
• UK TOYOTA RETAILERS ACHIEVE “ICHIBAN”
  
• NISSAN RUN TO RAISE CASH FOR JAPAN DISASTER VICTIMS
  
• ROAD TEST ROUND-UP
  
• MONEY MATTERS
  
• COMING UP
  
• THIS WEEK

BREAKING NEWS

Family retailers "ready to sell" - ASE

The auto retail sector is likely to see further consolidation as a number of smaller businesses sell up during the summer months. According to auto industry management services provider ASE, owners are taking advantage of strong offers from larger groups in order to exit an increasingly tough sector.

ASE transaction manager, David Kendrick, says “a significant number” of family owned auto retail businesses are looking to leave the sector in the next few months. The news follows the sale of the Willoughby Group to Pentagon, which was brokered by ASE's Dealermatch service.

“There are quite a few due to come to completion in the next month, and a significant number as the year moves towards the September market," said Kendrick. “People are not giving their businesses away though. There are people willing to pay the market price."

Kendrick believes that current market conditions have played a part: “April has been particularly hard, what with there seeming to be more bank holidays than working days.”

According to Kendrick, retailers who sell up are at present in a strong position: “There is an impression that these are distressed businesses, but this is not the case. These are owners with other businesses, or who are looking to retire, or who are wanting to sell while the market is good.

“This is not bottom feeding,” he added.

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DEALERSHIP DIGEST

Boardroom ban for Phoenix Four

The Phoenix Four have been disqualified as directors for a combined 19 years, the Sunday Times has reported.

The four former directors of Phoenix Venture Holdings Limited and MG Rover agreed to a voluntary disqualification, which means the government will not undertake a formal legal process to prohibit them from holding directorships.

Peter Beale has been banned for six years. John Towers and Nick Stephenson have each been disqualified for five years, while John Edwards faces a three year ban.

The disqualifications by the Department of Business, Innovation and Skills, follow a "lengthy and complex investigation" into MG's collapse, and brings to a close the enforcement action being taken by The Insolvency Service on behalf of the Government.

Vince Cable, business secretary said: "Thousands of workers lost their jobs and businesses were owed more than £1 billion when Rover collapsed. The outcome of this case serves as an important reminder that unacceptable conduct by company directors can result in disqualification from office."

An independent report into the collapse of MG Rover - which took four years to prepare and cost the taxpayer £16m - uncovered damning examples of bad management and greed.

A spokesman for the Phoenix Four said: "The former directors point out that they have done nothing that justifies disqualification. Having had this process lumber on for more than six years, and since none of the four actually wants to be a director any more, they have agreed to a voluntary arrangement to avoid adding to the already enormous cost to the taxpayer and to themselves."

Petchey leads motor industry pack in Sunday Times Rich List

Jack Petchey is the highest place retail motor sector figure in 2011's Sunday Times Rich List.

Petchey, who has been making headlines elsewhere in the last few days as a result of speculation regarding a possible takeover bid for Lookers is the 151st richest person in Britain.

According to the list, promoted as the definite guide to wealth in Britain and Ireland, he has £500m. This is the same amount as in 2010, although estimates were calculated in January and would not include any on-paper gains from recent Lookers share price rises.

Following closely at 186 is Sir Arnold Clark and family who have £430m. Behind him in joint 200th place with £400m is Lord Edmiston, chairman of the IM Group. JCT 600 owners Jack Tordoff and family sit in joint 269th place with £290m. Euro Car Parts founder Sukhpal Singh Ahluwalia has £225m, and is at 313, while McLaren Automotive chairman Ron Dennis' £177m puts him at 389.

Sir Peter Vardy and family are in joint 457th place with £150m. Tony Bramall and family's £144m means they hold the number 497 spot. Just behind in joint 504th place is Keith Bradshaw, co-owner of Listers of Coventry. He has £140m.

All have either maintained last year's levels, or have actually increased their wealth.

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Exchange and Mart cuts ad prices for dealers

Exchange and Mart has cut the cost of advertising vehicles on exchangeandmart.co.uk, and is now offering retailers 50 ads for the price of 40, which works out at 40p per car per week.

This follows Auto Trader’s decision to raise its prices, which led disgruntled dealers to form the Motor Traders Advertising Union (MTAU) in an attempt to negotiate better terms.

Debra Healy, Digital Director of Exchange and Mart commented: “With the market remaining sluggish, we are doing all we can to make life that bit easier. It can be difficult to manage cashflow during tougher times, but cutting online advertising could prove a false economy for the majority.

“Whilst used cars are currently spending longer on forecourts than dealers would like, by reducing our costs we aim to help improve dealers’ return on investment so marketing budgets go further.”

Van and truck registrations up again in April

Combined van and truck registrations were up 21.4% to 21,578 in April, according to the latest monthly figures from the SMMT.

Truck sales were up 40.1% to 3,497, while van sales were up 21.4% to 18,081. April’s figures represented the seventh monthly rise for trucks, and the fifteenth for vans.

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Used sales drive Regent turnover up 30%

A 35% increase in used car sales helped Regent Automotive’s turnover hit £55.8m in 2010, 30% up from 2009’s £42.9m.

The London and Hertfordshire-based Volvo retailer also saw new car sales, including retail, corporate and motability go up by 13%. Its international sales arm, incorporating diplomat, military and ex-pat sales, was up by 10%.

However, retail sales alone only went up by 2.5 %. Aftersales performed well with service hours up by six per cent over 2009 and parts sales up 16 %.

Automotive industry makes tracks in Sunday Times International Fast Track 100

Five auto sector companies are included in the Sunday Times International Fast Track 100, which identifies the UK's top 100 private firms that have at least doubled their non-UK sales over the last two years of accounts.

Impex Parts, which supplies parts to Ford retailers is at 98. Just ahead of them at 97 is transmission parts maker Challenge Power Transmission. At 77 is motor components maker AWC Industries. Classic car restorer JD Classics is second highest entry at 48, while tyre retailer Mr Tyre holds the highest spot at 25.

UK Toyota retailers achieve “Ichiban”

Border Toyota of St Boswells, Scottish Borders, Listers Toyota of Boston, Lincolnshire and Minories Toyota of Wearside, Sunderland all received Toyota's "Ichiban" European Customer Satisfaction Award during a ceremony followed by the Ichiban gala dinner held last week at the Reichstag in Berlin.

Approximately 2,600 European retailers were evaluated via continuous performance monitoring, which is included in the company's standards. 41 retailers achieved this recognition by Toyota in Europe.

"Ichiban" is a Japanese word borrowed from "Okyakusama Ichiban" which means "Customer First" with "Ichiban" meaning "first" or "number one."

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Nissan run to raise cash for Japan disaster victims.

Nissan has announced plans for a 10km run around its Sunderland plant in aid of the Red Cross Japan Tsunami Appeal.

All money raised from the 29 May run will go to the Red Cross appeal, adding to thousands raised by Nissan staff in the UK with support from family and friends, dealers, suppliers, customers and contacts.

The Nissan Run for Japan costs £10 to enter for all runners. Nissan will pass on 100% of the entry fee to the Red Cross appeal.

Entry forms are available to download at www.wallsendharriers.com/run-for-japan.html where there is also a link to an on-line entry system. Places in the race are limited to 500 and will be allocated on a first-come, first-served basis.
http://bit.ly/kCU9NY

ROAD TEST ROUND-UP

A weekly snapshot of the latest car reviews from the UK’s motoring pages.

AGENDA SCORING SYSTEM: Doesn’t like it, says it’s okay, likes it, loves it

Volkswagen Golf Cabriolet

Back after a nine-year absence from VW’s line up, it will reach UK retailers in September. VW hasn’t set prices but a mid-range version is expected to cost £21,000.
Autocar likes it. It’s lighter and more efficient than VW’s other drop-top, the Eos, and has a bigger boot. Inside, it’s as swanky as a regular Golf and hushed when the roof is up. http://bit.ly/mLXpcF
What Car? likes it, too. Maybe it's not as practical or rigid as the hatchback Golf but it’s still hugely desirable, classy and well rounded. http://bit.ly/kxaJ5q
MSN Cars also likes it. It’s no sports car – its suspension is too soft for that – but it drives remarkably well. And while its cabin is underwhelming, it’s subtle and easy to live with. http://on-msn.com/liyv3Y

Group Test

Top-drawer cars no longer need to be big and to prove this Auto Express pits Audi’s new A1 against a key supermini-sized rival, the Citroen DS3. When the two met previously in petrol guide Auto Express preferred the Citroen. But here the power for both is diesel.
And the Audi wins – just. It mayn’t be as much fun to drive but it feels more mature and costs less to run. http://bit.ly/kyquRa

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MONEY MATTERS

Personal insolvency falls in England and Wales

Fewer people have been declared insolvent this year in England and Wales. Despite the Christmas spending peak, which adds to the numbers tipped over the brink financially during the early months of the year, the Insolvency Service says the number fell for England and Wales by 1.7% to just over 30,000 for Jan-Mar this year.

This was the fourth quarterly fall on the trot and represented a decline of 15.5% compared to a year ago. Record numbers were declared insolvent last year. The Insolvency Service says because of rising living costs and reduced income, four of five consumers are spending less.

Even so, the figures give no hint of how many others are struggling, and the Service expects numbers to rise later this year.

COMING UP

On Tuesday, Pendragon holds its annual meeting. With uncertain prospects market-wide for new car sales, Pendragon will look to its core strengths in used-car sales, servicing and repairs.

On Wednesday, the Bank of England Monetary Policy Committee will publish its quarterly inflation report. This attempts to project the likely effect of inflation going forward and it seen as a key influencer in interest rate decision making.

On Wednesday, Vertu Motors will announce its full-year financial results to the end of February 2011. The group – the UK’s eighth largest car retailer - is highly rated by analysts.

On Thursday, Inchcape releases first-quarter results. Annual profits beat City forecasts but the group is cautious for 2011 given declining markets.

On Thursday, Jardine Matheson Holdings, parent of Jardine Motors, will hold its annual meeting.

On Tuesday, 17 May the Association of Car Fleet Operators (ACFO) will hold its conference and annual meeting at the Heritage Motor Centre and Museum, Gaydon.

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THIS WEEK

Nice money; if you can get it

Whichever way you look at it, it’s been a good week for Jack Petchey. The veteran auto retailer investor owns around 66.22 million shares in Lookers and they’ve risen by 7.5p over the past ten days. So, that’s a neat paper profit of almost £5m.

Why did the shares rise? Not because Mr Petchey and his consortium partners, Moor Park Capital and Brett Palos, have made a bid for the company. All they have done so far is made an approach to the Lookers board asking for information relating to a “possible offer”.

Given the background of the parties involved – they are all real estate speculators – we can safely assume that the information requested is detail about Lookers’ property portfolio. In the last set of company accounts, it was valued at £181m. Meanwhile, the current market capitalisation of the whole company (the cost to buy all the shares) is around £260m

The speculation is that the consortium would want to split the property away from the operational side of the business and, presumably, then resell the operational bit back to a third party. In other words, a classic asset strip. For certain, Mr Petchey and Mr Palos don’t want to actually run car dealerships – though, to be fair, Jack Petchey did sell cars in the early stages of his career.

But the suspicion remains that this is not a serious bid for the business; just an attempt to shake the company up and get the share price on the move. Mr Petchey has history in this regard having previously stirred up trouble at HR Owen, among others, and he is a known ‘active’ investor.

To be fair, if I’d put that much money into a company (I wish), I’d be wanting to see a substantial return on it too. But the City takes a dim view of people who stir up bid rumours without foundation. Hence the ‘put up or shut up’ deadline of 8 June.

We wait the next moves with eager anticipation. Some market analysts have already decided the bid has no future and Lookers shares have started to drop back. If you managed to sell at the top: good move.

Have a good week, both in and out of the showroom. If you’ve got any gossip for us, e-mail: rupert@auto-retail.com

Rupert Saunders

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