Auto Retail Agenda: 10 May 2021
09 May 2021
- CUPRA IN AGENCY MODEL MOVE
- TIME-TO-SELL BACK TO PRE-COVID LEVELS
- NFDA TO GRILL GOVERNMENT OVER PLUG-IN CAR GRANT
- FORMER AUTO RETAILER MISSING
- FIND OUT HOW TO MAKE UP FOR MARCH
- LEADING US USED CAR RETAILERS REVEALED
- CARVANA IN RECONDITIONING BOOST
- STOCKWATCH – Cambria half-year revenue falls, profit up
- COMING UP – Vertu finals
- FTSE SURGES TO POST-PANDEMIC HIGH
- NEW CBI BOSS WANTS BREXITEERS BACK
- BLOG: What does it take for a new brand to succeed?
Cupra in agency model move
Cupra, Seat’s premium performance brand, is understood to be planning to shift from a franchise model for its UK network to an agency agreement this summer.
Sources within the Cupra network have described the move as “inevitable” but were concerned about the legality of the move as Cupra is still, in practice, a sub-brand to the Seat franchise and operates from Seat showrooms.
When quizzed by Auto Retail Agenda, a spokesman for Cupra refused to deny the move and said: “We are constantly exploring new opportunities to retail our vehicles”.
One retailer voiced concerns that Cupra’s move to an agency agreement would not properly address the fair distribution of investment costs because it was relying on Seat showrooms, facilities and staff.
Seat and Cupra owner Volkswagen Group already uses agency agreements for its fleet sales within several of its brands and, in some European countries, sells the VW ID electric cars under an agency model. However, while just over a year ago Volkswagen said it would do the same in the UK, it later backtracked.
Cupra would not be the first brand to use an agency model rather than franchise in the UK for retail sales, as Volvo’s premium brand Polestar operates in this way.
Many industry experts have predicted the widespread roll-out of new sales models that give the national sales company great control over pricing and customer contact – something they see as vital for online sales.
* See this week’s blog about Cupra, Polestar, Hyundai’s new premium brand Genesis and Citroen spin-off brand DS.
Time-to-sell back to pre-Covid levels
Retailers are now selling cars seven days faster than at the start of the year, with average days to sell now back to pre-Covid levels, figures from eBay Motors Group have revealed. Diesel vehicles sell fastest, followed by petrol: hybrids and EVs take at least nine days longer to sell.
However, the recovery remains “delicate, with the shortage of wholesale stock an ongoing concern across the sector” said the firm’s Dermot Kelleher. Figures from Auto Trader last week also revealed 1 in 4 retailers are now adjusting used car prices upwards because of supply and demand dynamics.
NFDA to grill government over Plug-in Car Grant
The NFDA has arranged a 30-minute feedback session with the Office for Zero Emission Vehicles (OZEV) over the DfT’s reduction to the Plug-in Car Grant. Retailers are invited to the session, which will discuss the reasoning behind the change. NFDA members are invited to the meeting which will be held via Microsoft Teams on Thursday at 10am.
Former auto retailer missing
Terry Glendenning, who built Calterdon BMW in Inverness and sold it to Arnold Clark in 2014, is missing following a fire at his home. Investigators believe 82-year-old Mr Glendenning was within the building when the fire broke out but, due to structural damage, investigators have not yet been able to access the building. Calterdon, now trading as Harry Fairbairn BMW, was named after its founders – Calum, Terry and Donald.
Find out how to make up for March
Perrys MD Darren Ardron, Kia UK president and CEO Paul Philpott and Auto Trader CEO Nathan Coe will examine how retailers can optimise sales to make up for March closures in the second Auto Retail Live briefing of 2021. The 30-minute session will focus on retail new and used car sales, and retailers are encouraged to sign up and share their views on how showroom reopening has gone.
Sign up here: https://bit.ly/2Q3KMyb
Leading US used car retailers revealed
CarMax remains the top US retailer for used car sales (with 832k unit sales) but online startup Carvana – which is said to have inspired Alex Chesterman to create Cazoo – has climbed from fourth to second place (with 244k units). Carvana, which was formed in 2012, has accomplished in eight years “what has historically taken decades” said CEO Ernie Garcia.
AutoNation was third in the annual figures from 2020, and Penske dropped from second to fourth. Lithia Motors was fifth, ahead of Sonic, Group 1, Hendrick, Asbury and Larry H. Miller.
Carvana in reconditioning boost
Carvana has added staff to its reconditioning facilities, helping improve turnaround in Q1 by 26% compared to Q4 2020. Improvements have continued with April and May 2021 up 51% compared to Q4 2020. Inventory, however, is still down 27% in Q1 2021 compared to Q4.
The company opened its 12th reconditioning centre in Q1, giving it a capacity of more than 680k vehicles. Another will open in 2021 and eight more in 2022, giving it capacity to recondition 1.25 million vehicles. Carvana’s long-term goal is to sell more than 2 million vehicles a year; in Q1 2021, it retailed 92k, up 76% on 2020.
Closing prices on 7 May 2021 and weekly change
Cambria half-year revenue to the end of February fell from £303.1m to £254.7m – but pretax profit rose from £6.1m to £9.7m, despite showrooms being closed for 82 days
Auto Trader Group 575.0p (+4.8p / +0.8%)
Cambria 81.5p (+2.5p / +3.1%)
Caffyns 400.0p (n/c)
Halfords 390.4p (+13.4p / +3.4%)
Inchcape 809.0p (+27.5p / +3.4%)
Lookers 69.2p (+3.2p / +4.7%)
Marshall Motor Holdings 170.0p (-3.0p / -1.7%)
Motorpoint 285.0p (+20.5p / +9.1%)
Pendragon 18.75p (+0.65p / +3.5%)
Vertu 44.4p (-1.0p / -2.2%)
Tuesday, retail sales
Tuesday, Queen’s Speech
Wednesday, Vertu finals
FTSE surges to post-pandemic high
The FTSE 100 broke through the 7,100-barrier last week for the first time since February 24 2020 (when the emergence of coronavirus sent markets plunging). The FTSE 250 also closed at a record high. Britain’s successful vaccine rollout has led to signs the economy is recovering at a much faster pace than previously forecast. As predicted in Auto Retail Agenda, the Bank of England last week raised its UK growth forecast to 7.25%, up from 5%.
New CBI boss wants Brexiteers back
New CBI boss Tony Danker says the organisation “violently agrees” with Boris Johnson’s plans for post-Brexit growth and the relationship with the government is now “very good – we feel we’re all on the same side”. Mr Danker is now appealing for members who quit over its anti-Brexit stance under previous leader Dame Carolyn Fairbairn to rejoin the business lobby group.
Full interview: https://bit.ly/3ewr9YT