Auto Retail Agenda: 20 August 2018
19 August 2018
- Q2 FINANCE STRONG IN USED SECTOR
- VOLVO RESPONSE TIME ‘LESS THAN AN HOUR’
- BUYERS TRUST USED EV MORE THAN USED LAPTOP
- SWANSWAY SEES BRIGHT FUTURE FOR ALLOY SERVICE
- DRIVE VAUXHALL WINS CUSTOMER CARE AWARD
- NEW CAR ADVERTISING AIMED AT WRONG AGE GROUP
- WORLD NEWS – Tesla Model 3 could lose money
- STOCKWATCH – Big drop for Motorpoint
- LAUNCH DIARY – MG3, Skoda Fabia, Honda HR-V
- COMING UP – RMI dinner with Robert Peston
- MONEY MATTERS – inflation jump a blip, say analysts
- OUR BLOG – can retailers handle hot prospects?
Q2 finance demand strong in used sector
Used car finance volumes saw healthy double-digit growth in Q2, despite used retail sales keeping flat around the 2.1m mark over the same period.
Data from the Finance and Leasing Association (FLA) showed 4% year-on-year growth for June volumes, to 119,903 vehicles. This brought Q2 volumes to 383,302 vehicles, up 10% year-on-year. Value of used business was up 11% to £1.4m for June and 16% to £4.5m for the quarter.
Volumes for superminis fell 2.6%. SUVs and executive models were up around 11% and 4.0% respectively. In contrast to the new sector, diesel was up 3.2%. AFVs saw growth of 25%, with just under 27,000 changing hands.
Ian Plummer, director at Auto Trader, said the results were proof of the “resilience” of the used sector and the diesel sales meant fuel efficiency was still guiding buyers’ choices, particularly for bigger-sized cars.
Volvo lead response time down to one hour
Volvo says its retailers now respond to customer leads within one hour for 90% of the time. The result comes six months after it adopted the TrackBack CX data management system
A TrackBack spokesman said: “Whilst TrackBack help to identify areas for improving customer experiences, it’s the sharing of best practice amongst Volvo’s customer contact specialists that ultimately enable them to achieve the returns they are aiming for.
“It’s people, not processes, who sell cars. But you need to know as much as possible about your customers’ experiences as well as recognising what techniques provide the best results for customers before you can begin to improve results.”
Buyers trust used EV more than used laptop
Retailer Peter Vardy says buyers are more willing to buy a second hand electric vehicle than a used laptop or mobile. The dealerships survey of 1,000 customers found 76% would trust an EV compared to 63% for a refurbished laptop and 45% for a mobile.
Eco benefits and lower running costs were the main draw for the majority but high purchase costs and battery life concerns remain a barrier to some.
Claire Rogan, digital marketing manager at Peter Vardy, said: “The potential improvements that EVs can offer to both the consumer is quite monumental.”
Swansway sees bright future for alloy service
Car retailer Swansway said its investment in a recently opened diamond cut alloy wheel service could generate another £30,000 a month turnover for its bodyshop. The Cheshire based, family run multi-franchise business has spent about £180,000 on the machinery which currently lets them refurbish around 25 rims a day. At the moment about 80% of its business is from the trade.
Drive Vauxhall Hartlepool `best of the best’
North East retailer Drive Vauxhall Hartlepool has been awarded the car maker’s Customer Excellence Award for the efforts of its sales and service teams.
Peter Hope, Vauxhall’s director of strategy and customer quality, said: “Each year Vauxhall retailers compete to earn the coveted Customer Excellence Award, awarded to the `Best of the Best’. Drive Hartlepool have not only earned this distinction consistently but sits in first position for all Vauxhall’s objective measures for customer excellence.”
Hartlepool is one of 13 retail outlets in Drive Motor Retail which last year reported a more than doubling of pre-tax profits to £8.3 million on a turnover of £215m.
New car advertising aimed at wrong age group
New car buyers are much older than advertisers’ target audience, according to financial analysts at Bernstein Research.
The average age overall is 54, for Ford it is 56, Volkswagen 54, Toyota 63 and Fiat 49. In the used car sector 85% of those aged 17 to 24 buy second-hand and in the 35 to 54 year bracket about 75% opt for used.
Tesla’s Model 3 saloon will generate no more profit than a conventional BMW and could lose around £4,750 on every base model. Analysts at UBS say the powertrain for the £27,535 entry model costs £750 more than forecast.
It said the cell cost at £116/kWh is well above Tesla’s guidance of below £78/kWh ending 2018, adding: “With these economics, we expect the base Model 3 to lose about £4,700/car.”
Closing prices at Friday August 17 and weekly movement.
BCA 229.5p (-6.5p)
Cambria 56.0p (-0.5p)
Caffyns 425.0p (no change)
Inchcape 703.0p (no change)
Lookers 107.0 (+0.6p)
Marshall Motor Holdings 156.0p (-1.0p)
Motorpoint 225.0p (-15.0p)
Pendragon 26.5p (+0.1p)
Vertu 50.0p (no change)
Facelifted MG3, exterior and interior updates. Even year/80,000 mile warranty. From £9,495.
Facelifted Skoda Fabia. All-petrol line up, hatch and estate body styles and five trip levels. From £12,840.
Facelifted Honda HR-V. 1.5 petrol engine from launch, 1.6 diesel next year. Prices tbc.
RMI annual dinner, London. Political editor, Robert Peston, as guest speaker.
For more details email: firstname.lastname@example.org
Rising inflation figures could be a blip and soon fall again, says National Institute for Economic and Social Research.
It noted the inflation rise was driven largely by one-off factors such as a rise in prices of computers games, which are often volatile, and transport fares.
Consumer price inflation rose at an annual rate of 2.5 percent in July after holding at 2.4 percent in the previous three months, the first time since November it gained pace.
How do you handle hot prospects?
Three weeks ago, my wife’s car was stolen off the drive of our house. Don’t worry, I’m not after the sympathy vote (though, thanks for that); I’m just trying to explain why I’m suddenly a hot prospect, calling into dealerships with the insurance money in my back pocket.
So far the experiences have been mixed. Lots of sympathy, a couple of cups of coffee but no new (used) car. Perhaps that’s because the car we’re looking for is at the older end of franchised retail stock. But I suspect it’s more because the sales teams we’re talking to don’t have a process in place to handle customers like us.
Their first response is to try to sell us something from stock, even though it’s not what we’re looking for. Three-door? No thanks. Bigger model? No thanks. Priced high? No thanks again. When I suggest that what we want might be a part-exchange coming in over the next few weeks (and we’re prepared to wait), there’s a realisation they’re not going to sell a car that day and interest wanes.
The sales team take our details and “we’ll get back to you”. Only one has actually said: “I’ll keep an eye on what’s coming through the system and let you know”. Nobody has said: “I’ll find one for you.”
I’ve heard similar stories from friends and colleagues. Surely the trick of good selling is understanding the ‘wants and needs’ of the customer and then knowing when they’re in the market. I think we’ve been fairly clear about both.
The point here is not to criticise the dealerships we’ve visited; let’s wait and see what they find. But it makes me question whether the industry has the processes in place to handle walk-in prospects – or is everybody focused on selling that car, out there, on the forecourt, now? A more long term view might pay dividends.
Auto Retail Network