Auto Retail Agenda: 13 July 2020
12 July 2020
- Lotus retailer network ‘to be 75% new’
- Vertu reports surge in Scottish demand
- Marshalls adds Aylesbury VW
- Indoor masks to become mandatory
- Coronavirus Job Retention Bonus explained
- Subprime loan clampdown
- Audi working with retailers on drive-in events
- STOCKWATCH – Halfords pulls 2021 guidance
- COMING UP – Motorpoint, Caffyns final results
- Average wages fall
- Bell & Colvill in £1.5m HSBC loan
Lotus retailer network ‘to be 75% new’
Lotus “needs a lot more dealers” and is actively seeking a “world class” network of UK retailers, CEO Phil Popham exclusively told Auto Retail Agenda. “We want to double the size of the dealer network.”
Mr Popham revealed he expects the future network of retailers to be 75% new compared to today, through a combination of expansion and replacement of current retailers with new ones. Some retailers, he explained, are unwilling or unable to commit to the necessary level of investment.
“We are a premium brand whose customers expect great service, especially in aftersales,” said Mr Popham. “We want our retailers to be distinctive – we do not prescribe identikit showrooms but we are prescriptive in terms of processes, systems and people. The dealers we are taking on now fully understand this.” Dealer groups, he revealed, are proactively contacting Lotus.
Mr Popham, who is overseeing a “fully funded” 10-year strategy called Vision 80, says the firm is now planning the future service model for the electrified cars that will follow next year’s new sports car – which he says will be the final pure internal combustion engine Lotus.
“With electrification, the whole model is different, and we’re currently working out what services retailers will need to offer, and what equipment they’ll have to invest in.” Many owners of the upcoming £2 million Evija electric hypercar, however, are expected to send their car back to the Hethel HQ for servicing, rather than their retailer – “even those from other countries”.
Vertu reports surge in Scottish demand
“Strong pent-up demand” is driving a surge in sales of new and used vehicles at Vertu’s Scottish retailers, says CEO Robert Forrester. Its Glasgow central Nissan dealer was the highest-performing used car operation of all in early July.
Scotland is following the same pattern at England, said Mr Forrester, with “really robust demand”. A growth in ‘walk-ins’ in England is expected to follow in Scotland as consumers gain confidence.
Mr Forrester is planning a tour of Vertu’s Scottish operations.
Marshalls adds Aylesbury VW
Marshall Motors has acquired Volkswagen Aylesbury from Jardine Motors. It strengthens Marshall’s position as the UK’s largest Volkswagen retailer with 15 car and six CV retailers. The deal is part of Marshall’s December 2019 purchase of Jardine’s Volkswagen businesses: it was delayed due to property aspects and the coronavirus lockdown.
Indoor masks to become mandatory
Wearing face masks in shops, retailers and other indoor settings is expected to become mandatory within the next few weeks say government sources. The PM has already said rules will become “stricter” with evidence mounting that face coverings slow the spread of coronavirus. Scotland has already made masks compulsory in shops.
Coronavirus Job Retention Bonus explained
Dealers will receive £1,000 for each employee who returns to work from furlough and is paid at least £520 per month between November and the end of January 2021. The bonus will be paid in February 2021.
There are also initiatives for new job creation, explained MacIntyre Hudson’s Nigel Morris: a Kickstart Scheme for 16-24 year olds offering support worth £6,500 per employee, £1,000 more support for traineeships, and payments of up to £2,000 for employers creating apprenticeships. Mr Morris called the chancellor’s ‘PlanForJobs’ update “a very comprehensive package of direct and indirect support”.
Subprime loan clampdown
US retailers are clamping down on loans to riskier customers due to creditworthiness data sets being upended by the coronavirus crisis. Subprime customers are struggling to get loans and the unemployed are being rejected out of hand. “Sorting through the confusion… could take years for lenders.”
Audi working with retailers on drive-in events
Audi is running drive-in events in 12 German cities to promote the new A3. Customers apply for tickets via local retailers. Venues can accommodate up to 1,000 cars and the first rows are reserved for Audi A3s. Dealers have responded positively but Audi’s head of marketing said traditional sales techniques will still continue as “the human touch and personal experience are crucial to grow a premium brand and build long-term relationships”.
Closing prices on 10 July 2020 and weekly change
Halfords pulls 2021 guidance as full year results announced
Auto Trader Group 513.6p (-8.6p / -1.6%)
Cambria 50.0p (-1.1p / -2.1%)
Caffyns 260.0p (+18.0p / +7.1%)
Halfords 138.2p (-35.2p / -22.5%)
Inchcape 454.0p (-10.8p / -2.3%)
Lookers Shares suspended at 21.0p
Marshall Motor Holdings 119.5p (+0.5p / +0.4%)
Motorpoint 245.0p (-5.0p / -2.0%)
Pendragon 8.99p (-0.81p / -8.6%)
Vertu 22.6p (-1.5p / -6.4%)
Tuesday, Motorpoint final results
Wednesday, FCA update on next steps of support for motor finance customers
Thursday, unemployment rate
Friday, Caffyns final results
Average wages fall
Average wages have fallen in the UK for the first time in six years due to pay cuts because of the CJRS furlough scheme. Figures this week are expected to reveal a 0.5% cut in wages. Economists also warned the unemployment rate is expected to rise 4.5% – with fears the true rate is much higher: when the furlough scheme ends, as many as 20% of worker could be laid off.
Bell & Colvill in £1.5m HSBC loan
A £1.5m loan package from HSBC helped Bell & Colvill acquire and revamp its new 15,000 sq ft Guildford McLaren franchise. Around £500k was spent on refurbishment of the Slyfield site, which opens soon. Finance director Brendan McWilliams said the loan has also helped the firm increase its servicing and parts department capacity.