Auto Retail Agenda: 12 October 2020
11 October 2020
- AUTO RETAILERS IN POSITIVE COVID-19 TESTS
- EU IMPORT TARIFFS ‘INEVITABLE’?
- ARTHURS HAS A HEART
- GRANT SHAPPS VISITS GRANGE
- CAR DEALER BANNED BY INSOLVENCY SERVICE
- SONIC AUTOMOTIVE CEO ARRESTED
- MAZDA AUSTRALIA PARTNERS WITH RETAILERS ON SERVICE PACK
- STOCKWATCH – Vertu up 13.5% after reporting £4.7m H1 profit
- COMING UP – unemployment figures
- FORD BREXIT VAT CHALLENGE DELAYED?
- ASE CLARIFIES CHANCELLOR’S NEW SUPPORT
Auto retailers in positive Covid-19 tests
Eight staff at Evans Halshaw Vauxhall Wakefield have tested positive for Covid-19 and are now self-isolating. Public Health England is now working with the retailer, which remains open, and MD Gary Armstrong said the business had been fully inspected by the local authority. Anyone considered to be a contact will be alerted by NHS Track and Trace.
Renault Retail Group Cardiff has also reported two positive Covid-19 tests and 13 staff are now self-isolating. The retailer remains open and underwent a full deep-clean and sterilisation following the first positive test on 6 October.
EU import tariffs ‘inevitable’?
ASE experts say the Brexit-induced prospect of a 10% tariff on cars moving in and out of the UK from the EU is “inevitable”. Retailers purchasing from UK distribution arms will notice this through an upward pressure on price.
The tariff only affects cars imported from the EU, which may create market shifts: for example, cars imported from South Korea carry zero tariff.
“Some dealers buy stock directly from manufacturers or distributors in Europe and they will need to understand the impact of the UK’s exit from the EU Single Market and Customs Union on the cost and practicalities of importing prestige sports cars, mainly from Italy.”
However, some retailers Auto Retail Agenda spoke to believed a last minute deal would be agreed before a tariff was imposed.
Arthurs has a heart
Wales’ Arthurs Motor Group will make a donation to the British Heart Foundation for every car sold during October. The retailer has already installed defibrillator devices at each of its three sites.
Grant Shapps visits Grange
Car dealer banned by Insolvency Service
Luc Peeters, also known as Stuart Fallan, has been disqualified from acting as a director for nine years. He was director of 123 Motors in Bishops Stortford, which was established in 2015 and entered voluntary liquidation in 2018.
123 Motors enabled customers to purchase cars through external finance companies. However, from 2016, Peeters began entering into illegitimate side agreements with the same customers, who were able to return the car to 123 Motors after 12 months. These would be sold to other buyers and the original customer would have no liability to the finance companies.
However, the side agreements were arranged without the consent of finance companies. One company terminated its agreement with 123 Motors in 2018 and demanded £2.3m in compensation. Another demanded £42k.
“A nine-year disqualification is a significant ban and recognises the severity of Luc Peeters’ actions,” said Martin Gitner, deputy head of investigations for the Insolvency Service. “This should serve as a stark warning to other directors of the risks they take when they do not uphold company and insolvency law.”
Sonic Automotive CEO arrested
Sonic Automotive CEO David Smith spent a night in a North Carolina jail last week after being arrested for assault. Among the charges were assault by strangulation and assault on a female. Mr Smith was released after placing a $30,000 bond and is due back in court on 20 October.
The board of directors said in a statement it is “steadfast in its support” of Mr Smith. “David has informed the board that he is innocent of these charges and expects to be fully exonerated.” Sonic Automotive is North America’s sixth largest new car retailer.
Mazda Australia partners with retailers on service pack
Mazda Australia has worked with its dealer partners to create a tailored service pack for the new BT-50 double-cab pickup. Called Mazda Service Select, it gives front-running scheduled servicing affordability over three, five and seven years, despite the vehicle requiring scheduled servicing every 9,300 miles.
Closing prices on 9 October 2020 and weekly change
Vertu up 13.5% after reporting £4.7m H1 profit
Auto Trader Group 569.4p (-5.6p / -0.9%)
Cambria 50.5p (+2.5p / +5.0%)
Caffyns 270.0p (n/c)
Halfords 241.5p (+4.5p / +1.8%)
Inchcape 481.2p (+27.6p / +5.9%)
Lookers Shares suspended at 21.0p
Marshall Motor Holdings 120.0p (-5.0p / -4.0%)
Motorpoint 303.0p (n/c)
Pendragon 9.35p (+1.45p / +16.8%)
Vertu 29.9p (+3.8p / +13.5%)
Tuesday, UK retail sales
Tuesday, unemployment figures
Tuesday, FCA Annual Regulation Conference
Ford Brexit VAT challenge delayed?
Auto Retail Agenda understands there will be a six month delay to Ford’s planned amendments to invoicing processes for vehicles imported to the UK.
Ford retailers can currently reclaim VAT on imported vehicles when it leaves the assembly line, as they are ‘importers of record’. This is advantageous for retailer cash flow, as they can reclaim the VAT from HMRC before paying that VAT to Ford.
From 1 January, retailers will only be able to claim VAT once the vehicle is imported into the UK. ASE says this may be up to several weeks, which could put strain upon retailers who have not worked this into their cashflow planning.
ASE adds the VAT issue is unique to Ford retailers who may have a cash flow reversal of £750k per site.
ASE clarifies Chancellor’s new support
The Job Support Scheme will be extended by six months from 1 November for businesses forced to shut by law due to Covid-19 restrictions. It meets two-thirds of the wage costs for employees who can’t work, up to £2,100 per employee per month. Business grants for closed businesses have also been increased by up to £3,000 paid every fortnight.
ASE tax director Michelle Malone said the new lockdown measures will be announced today (Monday 12 October) and are expected to be focused on the hospitality industry and “leave sectors such as the motor trade untouched. It is unlikely that motor retailers will be in the position to benefit from this new scheme”.