Auto Retail Agenda: 15 October 2018

  14 October 2018


VW Group hit by WLTP crisis

A lack of WLTP approved engines has left Volkswagen Group retailers unable to take orders for the majority of its range.  An internal Volkswagen document seen by Auto Retail Agenda shows that as of the end of last month Volkswagen Cars only had 18% of its engines, equating to less than 30% of the usual model mix, approved for WLTP regulations.

The VW Group, Europe-wide, ordering issues stem from a lack of WLTP approved models rather than a lack of production.  VW’s production for September, October and November is understood to be ahead of where it was last year. However, technical data to allow WLTP approval and then a MVRIS code to enable the car to be registered in the UK are still playing catch-up.

Some retailers have reported that 2019 model-year cars have been arriving at dealerships without a MVRIS code so they can’t be registered. One said: “The situation makes retail challenging, but for fleet it’s catastrophic. Customers have really got to want a car because we can’t give any kind of delivery date.”

Dr. Christian Dahlheim, head of group sales, said: “So far this year, the Volkswagen Group has reported record deliveries. Following the very strong summer months, we expected lower deliveries in September, both in the overall market and for the Volkswagen Group, as a result of the WLTP changeover. That applies in particular to Europe and will continue into October.  We expect November and December to be stronger months in this region.  The WLTP changeover at all brands will be virtually complete by the end of the year.”


Anger at plug-in grant cut

The industry reacted angrily to this week’s decision to cut the PHEV incentive and lower that supporting the purchase of pure EVs.

Rob Lindley, managing director at Mitsubishi Motors in the UK whose Outlander PHEV took 28% of the entire sector sales last month and 78% of the retail orders, said: “The decision to suddenly end grant support for some of the greenest vehicles on the road is extremely disappointing. It is completely at odds with the government’s stated objective of making the UK a world leader in green mobility in the future.”

Mike Hawes, SMMT chief executive, said: “We understand the pressure on the public purse but it’s astounding that just three months after publishing its ambitious vision for a zero emissions future, government has slashed the very incentive that offers our best chance of getting there.”

The government’s decision came just days before its Green GB Week Electric Vehicle Roadshow starts its tour of several cities from Monday.



Pre-regs cost Renault Retail £6m

Holding too many pre-registered cars cost the Renault Retail Group around £6 million last year, according to its latest accounts.

The wholly Renault owned group said that while stock of used cars remained stable at around 20,000 “heavy valuation drops on nearly new product and stock mix held of zero mileage vehicles heavily impacted margins overall with an overall negative impact of close to £6 million in the year”.


Eden sees profits fall 63%

South East based Eden Automotive has reported pre-tax profit fall of 63% for 2017, in its latest accounts.

Turnover for the Vauxhall-heavy group was flat at around £213 million in 2017 but year-on-year new car sales were down from 6,471 in 2016 to 5,137 and pre-tax profits ened at £1.5m in 2017 against £4.3m the year before, the directors acknowledged the disruption from the PSA takeover of Vauxhall.

In June 2018, Eden completed the purchase of 15% of its stock owned by Vauxhall Motors for £2.25m.


Site upgrades see FG Barnes profits halve

Surrey-based FG Barnes has kept turnover stable at £81 million during 2017 with gross margin at 13% but pre-tax profit fell to £265,000 from £599,999 in 2016. Costs included investment in its Maidstone site and opening a new facility for its Seat and MG operations in Canterbury.


Social media impact a ‘super session’ at NADA 2019

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Chinese retailers look for tax break

Under-pressure Chinese retailers have asked the Government to halve the 10% purchase tax on cars as the market looks set to fall for the first time in decades. Sale have dropped this year and September saw the biggest fall (12% to 2.4 million) since 2011. China’s car market has grown every year since the early 1990s.




Closing prices at October 12 and weekly movement

BCA 193.8p (-13.2p)

Cambria 53.0p (no change)

Caffyns 425p (no change)

Inchcape 612.0p (-17.5p)

Lookers 99.8p (+0.2p)

Marshall Motor Holdings 132.5p (-8.5p)

Motorpoint 200.0p (-9.0p)

Pendragon 26.2p (-0.4p)

Vertu 38.8p (-2.9p)



October 29. Chancellor Philip Hammond presents his Autumn Budget



All-new Jeep Wrangler SUV. From £44,495

Citroen Berlingo Van, International Van of the Year 2019. From £15,825.




Banks prepare for no-deal Brexit

Lenders are being asked to provide six-hourly balance sheet checks to the Bank of England in the days after the 29 March deadline if there is a no-deal Brexit, to avoid a damaging cut in credit supply.


Business rates cut call

Slowing retail sales last month has led industry leaders to repeat their call for government help by lowering business rates.

Helen Dickinson OBE, chief executive, British Retail Consortium, said: “The Government has said it wants to ‘back business’ and retailers are waiting to see if this is just talk or if there will be meaningful action, like a freeze in business rates in the Budget.”



Is Government policy the Road to Zero or the Road to Nowhere?

Last month Theresa May opened the Zero Emission Vehicle Summit in Birmingham with a pledge of £106 million for the development of EV cars, vans, batteries and the recharging infrastructure.

This month the Government scraps the plug-in car grant.

The way I see it two things happened this week, both of them bad. On the one hand the Government sent the message loud and clear that it isn’t really prepared to help people on their journey from petrol/diesel into electric. On the other it sowed confusion and mistrust and if you are investing in a car, either as a buyer or manufacturer or retailer, the one thing you want is confidence that you are spending your money wisely.

Some argue that the grant was unfair anyway. My view is that while PHEVs are not perfect they are a very effective halfway house solution for people who want a full EV but are not yet ready to take a chance on the technology or cost or recharging infrastructure.

Now these cars are going to look expensive against a standard diesel model. The best selling Mitsubishi Outlander PHEV, for example, could cost some £7,000 more than an oil-burner and the financial case for it becomes harder to make. No wonder the industry has reacted with anger and confusion and feels a sense of betrayal.

The SMMT says that when the Danish government did something similar, sales of pure EVs plunged by almost 75% and have still not recovered. Is that what will happen here?

No government is so awash with cash that it can afford to indefinitely subsidise something like the purchase of a car, we all understand that, but it is galling that one day ours basks in the glow of positive PR from saying all the virtuous things about green cars and the next day it turns its back on them.

Those with a sense of irony will shake their heads in amazement that the government announcement was made just days before its Green GB Week Electric Vehicle Roadshow begins its tour of several cities from this Monday. One wonders what message the retailers called upon to support it as it sets up in their areas will be able to give now?

The government calls its long term green transport policy the Road to Zero. Shouldn’t that be more accurately called the Road to Nowhere…

John Swift


Auto Retail Network



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