Auto Retail Agenda: 2 November 2020

  01 November 2020

Auto Retail Agenda



Auto industry slams lockdown decision

Robert Forrester, Daksh Gupta, Mike Hawes and Sue Robinson have all criticised the lockdown measures to be introduced on Thursday 5 November, which sees auto retailer showrooms forced to close.

Mr Forrester warned that some businesses will be in the balance on the decision. “I suspect this disruption will not end on 2 December, so big decisions need to be made.” He stressed retailers will remain open for home delivers and click and collect.

Mr Gupta questioned why garden centres can remain open when car showrooms, with more space and fewer visitors, cannot: “This is an £82bn industry that employs over 800,000 people!”

Mr Hawes stressed that automotive manufacturing “must have its showrooms open. It is proven safe and secure, a very different environment to other retail premises”. Wider job losses must be prevented, he added.

NFDA chief executive Sue Robinson said there is “no evidence” that keeping showrooms open would increase transmission of the virus. “Our dealerships have not caused Covid-19 to spread over the past five months – and nor are they causing it to spread today.

“The German government, while imposing a lockdown, has decided to keep vehicle dealerships open [see below]. We would like the British government to show the same good judgement.”

The IMDA also reminds retailers that while distance selling remains open, it will be classified as a distance sale and a 14-day no-quibble return must be offered, or retailers risk “customers potentially cancelling and handing vehicles back up to 12 months later”.



Lloyd profit falls 24%

Lloyd Motor Group saw profit before tax fall 24% from £10.9m to £8.2m in the year ended 31 December 2019. Turnover was broadly level at £558m compared to £562m in 2018. The directors said they were “reasonably satisfied” with the gross profit margin of 1.0% during challenging trading conditions.

They also forecast an improving level of profitability during 2020 “subject to the overall market and economic trading conditions improving over 2019”.

In other news, Lloyd Motor Group’s Kia franchise has gained Business Development Specialist status with the appointment of a dedicated executive, Emma Wilkinson. Lloyd Kia Carlisle, the group’s first Kia franchise, opened in September 2019 and becomes one of 30 Kia BSDs across the 188-strong retailer network. The retailer will serve businesses in the north of England, the borders and south west Scotland.


IGA shortlisted for Covid Champion Award

The Independent Garage Association has been shortlisted for the Learning and Performance Institute’s new Covid Champion Award. This recognises organisations that have helped others during the pandemic. “As a trade body, this is what we are here for – to support our sector in times of need,” said IGA CEO Stuart James. AstraZeneca, Kellogg’s and Lidl GB are among the other shortlisted organisations. The winner will be announced on 18 February 2021.


Auto Retail Live webinar to discuss lockdown

The implications of the latest lockdown restrictions on retailers will be discussed in the upcoming Auto Retail Live Q4 Briefing on 10 November. Pendragon CEO Bill Berman, Sytner Group CEO Darren Edwards and Auto Trader COO Catherine Faiers will offer their insights and also be available online to answer retailers’ questions about dealing with a changing landscape. Register now to be sure you will be able to take part.




French retailer lockdown blow

French auto retailers are closed to walk-in customers as part of lockdown measures that last until 1 December. Pre-ordered vehicles can be collected only if appointments have been made in advance, although new vehicle deliveries are permitted. Service departments can remain open.The French measures are stricter than those in Germany, Spain and Italy, where retailer showrooms can remain open.


Group 1’s Hesterberg: Covid is ‘best thing’

The coronavirus pandemic has been “the best thing that could happen to the entire industry,” Group 1 Automotive CEO Earl Hesterberg told CNBC. “The auto distribution network had been stuffed with too many vehicles for almost a decade. What you’re seeing now is the system has been cleaned out and it’s now a demand-pulled system.”


UK retailers lead EU consolidation

Retailer numbers across Europe have fallen 16% over the past decade to 52,000, says Autovista chief economist Dr Christof Engelskirchen. Consolidation across Europe is vital, he said – and British auto retailers are in a leading position here.

In 2008, the top 50 auto retailers in the UK sold 27% of the nation’s cars. In 2018, this grew to 42%. On average, UK retailer sell 600 cars a year; the European average is 331 cars a year.“New car sales operations were already the last profitable activity for dealers, far behind aftermarket and used car sales,” said Dr Engelskirchen. “Margin pressure will continue in this area. “An agency model for dealers, adopting a consultative approach to selling, is a likely future activity in the new car sector.

Read the full analysis here:




Closing prices on 30 October 2020 and weekly change

Pendragon dips after last week’s 45% rally

Auto Trader Group 579.0p (-12.0p / -2.0%)

Cambria 56.25p (+4.25p / +7.8%)

Caffyns 270.0p (n/c)

Halfords 240.5p (+2.0p / +0.8%)

Inchcape 495.8p (-9.2p / -1.8%)

Lookers Shares suspended at 21.0p

Marshall Motor Holdings 131.5p (+4.0p / +3.0%)

Motorpoint 280.0p (-8.0p / -2.8%)

Pendragon 13.0p (-2.96p / -20.4%)

Vertu 29.4p (-4.3p / -13.6%)




Monday, Scotland five-level Covid alert system introduced

Monday, FCA to announce further information on 6-month mortgage holiday extension

Wednesday, UK services PMI

Thursday, Lockdown two begins

Thursday, Auto Trader half-year results

Thursday, SMMT October new car registrations



80% Furlough extended for November

The Coronavirus Job Retention Scheme – known as furlough – has been extended for November. The government will pay 80% of wages; employers pay NICs and pension contributions. It is available to employees on payroll on 30 October, provided they were included on a previous PAYE submission. It can be used even if employers have not previously used the furlough scheme. The Job Support Scheme is delayed until the furlough scheme ends.

The government says it will set out additional guidance shortly.


Brexit used car VAT surprise for Northern Ireland

Northern Ireland dealers who buy used car stock in mainland Great Britain will not benefit from margin schemes after 1 January 2021, meaning VAT will have to be applied. “This will be a major disincentive to buy used stock in GB” said MHA Macintyre Hudson VAT director Glyn Edwards. Prices will instantly rise 20% compared to stock purchased within Northern Ireland or cross border from the south. “It is a consequence of Brexit which no one has flagged before.”



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