Auto Retail Agenda: 15 February 2021

  14 February 2021

Auto Retail Agenda

 

 

PM to reveal plans for lockdown lift

Ministers are understood to be preparing a four-speed plan for restarting the economy. The speed of the lifting of restrictions will be based on latest virus data Downing Street will review early this week. It will see all shops, pubs and restaurants reopen anywhere between early May and August.

There will be nationwide tiers, which will be reviewed fortnightly. “The dates will move around according to what the pandemic’s doing,” said a No 10 source. PM Boris Johnson is expected to address the nation on 22 February.

Schoolchildren will return from 8 March, the PM will confirm this week: schools are being prioritised with a slower easing of measures elsewhere. Vaccine minister Nadhim Zahawi confirmed over the weekend the target of vaccinating the 15m most vulnerable adults has been met ahead of schedule.

It is unclear when showrooms will be able to reopen but there is speculation non-essential shops may be allowed to open by Easter on 4 April as “they have historically not affected the virus’s reproductive rate”.

The Conservative Covid Recovery Group is calling for an earlier return to full normality by the end of April once the nine priority groups have been vaccinated. It is on the basis “those groups represent 99% of Covid deaths and about 80% of hospitalisation”, said the group of backbench MPs.

https://bit.ly/3b06lpI

 

 

Mercedes-Benz Retail loses £35m

Mercedes-Benz Retail Group has posted a £35.8m loss for the year ended December 2019, up from a £21.2m loss in 2018. Turnover was broadly even at £1bn. The retailer blamed a £17.1m write off related to a re-evaluation of its properties, and a targeted 20% reduction in low-margin corporate business. Reduced customer demand and MBRG’s reduced commercial footprint has helped to “right size the organisation”.

Towards the end of 2019, Angela Shepherd was named CEO at the Tongwell, Milton Keynes-based group, becoming the most senior woman in UK auto retail. In January 2020, former business development manager Tim Scheler became CFO.

Late last year, Auto Retail Agenda reported that LSH Auto, the UK subsidiary of the world’s largest Mercedes-Benz retailer, reported losses of £18.2m for 2019 on turnover of £454m. LSH bought its UK retailers from MB Retail in 2016.

 

Auto Trader sets new car record

New car advert views on Auto Trader grew 69% in January, to 7.4 million. This resulted in a 98% increase in the number of new car leads sent to retailers. The trend has accelerated further in early February, with 116% more leads sent to retailers. “Our latest research shows that consumers are currently more confident in being able to afford their next car than they were pre-pandemic,” said commercial director Ian Plummer.

 

Closed German retailers call for aid

Incoming orders are “collapsing” said German dealer lobby group ZDK last week as the mid-December non-essential retail lockdown was extended until March 7th. The group is now calling for an extension into the second half of the year of state aid for companies affected by coronavirus. It is currently scheduled to expire at the end of June.

http://bit.ly/37e3jx1

 

Chip shortage costs 450k cars

The auto industry has already lost production of at least 450k in January and February due to the global semiconductor shortage. Analyst LMC is predicting a 10% Q1 production decline, with extended waiting times for customers, but expects lost production to be recovered in the second half of the year, so overall 2021 output will not be affected.

http://bit.ly/3jLKN46

 

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WORLD NEWS

Ford predicts retailer growth

Ford has told US retailers to expect 13 percent sales growth in 2021 to 1.7 million vehicles. It will be Ford’s highest retail share growth in seven years, aided by the new Bronco SUV and Mustang Mach-E EV. The company is working on an e-commerce platform called Ford Express Buy and predicts sales of 300k used vehicles through the Ford Blue Advantage Platform.

http://bit.ly/3dbkmUc

 

Short-term bosses ‘harm retailers’

A prominent Australian retailer has told the Senate Committee that career car company execs passing through Australia as they climb the corporate ladder can “destroy” dealerships with their short-term decisions. Magic Enterprises MD Richard Bennett has called for a franchise code of conduct to protect retailers from their actions.

http://bit.ly/2ZcFelO

 

 

STOCKWATCH

Closing prices on 12 February 2021 and weekly change

Lookers falls 11.9%, further away from analyst Numis’ target price of 55p

Auto Trader Group 592.4p (+15.4p / +2.6%)

Cambria 63.0p (n/c)

Caffyns 385.0p (n/c)

Halfords 267.5p (-25.0p / -8.9%)

Inchcape 689.5p (-9.5p / -1.3%)

Lookers 33.75p (-4.3p / -11.9%)

Marshall Motor Holdings 146.0p (+3.0p / +2.0%)

Motorpoint 290.0p (+2.0p / +0.6%)

Pendragon 15.00p (+0.76p / +5.1%)

Vertu 38.5p (+2.3p / +6.1%)

 

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COMING UP

Wednesday, CPI and RPI

Friday, retail sales

Friday, GFK Consumer Confidence

 

MONEY MATTERS

EU double-dip recession forecast; UK avoids one

The Euro zone is in a double-dip recession, according to a poll of economists. The EU’s delayed vaccine roll-out, new coronavirus variants, flat economic activity and rising unemployment “pose a serious threat to any expected recovery”. ECP president Christine Lagarde anticipates a recovery from mid-year.

As predicted in Auto Retail Agenda last week, a double-dip recession was averted in the UK thanks to 1% growth in Q4, a better than expected performance. Standout areas of growth included car sales, said the ONS’ Jonathan Athow. GDP for the year did still fall by 10%, he added, “more than twice as much as the previous largest annual fall on record”.

http://reut.rs/2ZcFzoG

 

Grant Thornton audit ‘negligent’

Patisserie Valerie liquidator FRP Advisory has accused auditor Grant Thornton of negligence in a £225m court claim, which left directors unaware the café chain had run out of cash. Grant Thornton will “rigorously defend” the claim and blames “widespread deception of the auditors”. The FRC is also investigating the Grant Thornton audit.

http://bit.ly/3pnZ1t8

 

 

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