Auto Retail Agenda: 10 February 2020
09 February 2020
- HONDA TO FOCUS ON ‘PROFITABLE RETAILING’
- VW RETAILER LOSES HIGH COURT BATTLE
- WJ KING BACK IN PROFIT
- MARSHALL FIRST WITH NEW AUDI RETAIL CONCEPT
- PENDRAGON SHAREHOLDER DISCUSSES MERGER
- CHINESE DEALERS SEEK HELP FOR CORONAVIRUS
- STOCKWATCH – Pendragon rise since November low continues
- LAUNCH DIARY – Volkswagen Golf 8, Bentley Flying Spur
- COMING UP – SMMT used car sales, Future of F&I conference
- COMPANY CAR ‘RENAISSANCE’ DUE TO TAX BREAK
- GOVERNMENT FUNDING CALL TO HELP EV-TECHS PRESSURE
- BLOG: Audi City Wimbledon – digital, remastered
Honda to focus on ‘profitable retailing’
Honda has shrunk its fleet sales activity following the departure of corporate boss Mark Samuel, head of cars Phil Webb told Auto Retail Agenda.
“We no longer split corporate and retail, we have an overall sales team, and fleet responsibility now falls to me,” he said.
The corporate sales team has been organically halved because “we’re not interested in big, expensive fleet deals. Corporate is not the market we’re going to be in going forward”.
Any fleet activity will instead be based around its Platinum Programme. “We’ve relaunched this over the last three months. Half a dozen dealers are looking at the bigger corporate picture, and the rest will be working with the field team to look at local opportunities.”
The firm focus is on retail, with 25k annual sales “not changing. Our strapline is ‘to sell a profitable retail car’ and this will be reiterated at our annual meeting with investors on 11 February.”
Honda also plans to continue allowing retailers to set their own sales targets.
Mr Webb said the success of this approach is proven by continued interest in the Honda franchise. “Marshall recently took on another two. Vertu constantly wants more. The Brayleys Group took over Thames Group, and wants more. New investors also still want to talk to us.”
The planned reduction in the Honda network continues. “We are down to 144, from 159. Every dealer that needs to have a conversation has been spoken to. In the next 18 months, we’ll reduce further, to around 118. It may be 110, it may be 120 – we’re happy to have those conversations, so long as area responsibility is right and the dealers’ overheads are met.”
VW retailer loses High Court battle
O’Leary’s of Lissarda has lost a High Court appeal over the termination of its Volkswagen franchise in 2013.
Volkswagen Group Ireland (VGI) gave notice of termination for contracts in 2011, following a “catastrophic” fall in sales from 186k in 2007 to 79k by 2012. Two years’ notice was given. The High Court had earlier found breach of a requirement to give “detailed, objective and transparent” reasons, and awarded damages – but because of the two-year notice, those damages were nominal.
VGI’s appeal over a High Court decision to make no order for costs, meaning each side had to pay their own, will be decided later.
WJ King back in profit
Kent-based WJ King has reported a return to profit for the year ended 30 April 2019. A £1.6m loss in 2018 became a £395k profit for 2019, despite what the directors described as difficult trading conditions. Turnover was up by almost 6.5% to £121m and administrative expenses were cut by almost £1m.
The directors continue to actively seek additional sites and will use profits to expand.
Marshall first with new Audi showroom concept
Marshall has opened the first Audi City site in the UK. One of just five worldwide Audi City outlets, the new development is equipped with VR headsets, 3D configuration screens and HD tablets. Audi intends the concept to be a digital-first alternative to more traditional Audi Centres. Audi UK director Andrew Doyle said it was not just another site but “an entirely new design concept”.
Pendragon shareholder discusses merger
Stern Groep and Hedin Automotive, Pendragon’s second-largest shareholder, have begun discussions about merging their automotive divisions.
In a statement, Netherlands-based Stern said the two had a complementary geographical focus and brands, and merging would see a new Amsterdam-listed group “very well positioned to play a leading role in the expected consolidation of automotive retailers in Europe”.
Chinese dealers seek help for coronavirus
The China Automobile Dealers Association has written an open letter to the Chinese Banking and Insurance Regulatory Commission asking for extended loans to dealers and greater availability of credit lines to help retailers “facing extreme liquidity pressure”. The coronavirus has seen footfall in retailers slow dramatically and auto sales and aftersales “show a cliff-like decline”.
Closing prices on 7 February 2020 and weekly change
Pendragon rise, from November low, continues
Auto Trader Group 578.2p (+16.2p)
Cambria 70.0p (+1.5p)
Caffyns 400.0p (n/c)
Halfords 164.3p (+0.6p)
Inchcape 647.5p (-9.5p)
Lookers 55.6p (+0.4p)
Marshall Motor Holdings 157.5p (+1.0p)
Motorpoint 308.0p (-7.0p)
Pendragon 12.68p (+0.4p)
Vertu 35.9p (-0.5p)
Volkswagen Golf 8, prices announced with launch range priced from £23,875. Comprises 1.5 TSI 130 and 150, 2.0 TDI 115 and 150, in Life and Style trims
Mitsubishi Mirage, heavy facelift for budget city car, priced from £10,550 and offered in Verve, Design and First Edition guise
Bentley Flying Spur, new version of Continental GT’s four-door sister car, 6.0-litre W12 engine, deliveries now underway from £168,300
Tuesday, retail sales figures
Tuesday, Daimler AG annual press conference
Tuesday, AA trading statement
Wednesday, SMMT used car sales
2 April, The Future of F&I in Auto Retail
Company car ‘renaissance’ due to tax break
Sales of pure electric cars to fleets are forecast to receive a boost from 6 April when a year-long 0% benefit-in-kind rate goes live. Rates for plug-in hybrids are also cut. Savings are dramatic: a £90k Mercedes-Benz S450 L AMG Line driver will pay £1,100 a month while a £90k Tesla Model S driver pays zero.
Simon Carr, chief commercial officer at BMW-owned leasing firm Alphabet GB, said it could signal “a renaissance for the company car”.
Government funding call to help EV technician pressure
Only 5% of the automotive retail sector is qualified to work on electric cars and last week’s revised 2035 ban on new petrol and diesel sales underlines the challenge faced by the industry, said IMI CEO Steve Nash. The group is lobbying for support from government and is eager to see additional funding for technician training in the March 2020 Budget.