Auto Retail Agenda: 20 July 2020
19 July 2020
- Showroom facemasks law clarity
- New logo means showroom upgrade for Nissan dealers
- Toomey in profit as merger complete
- Arnold Clark used sales soar in Scotland
- BCA app gets Bid Now tool
- AutoNation loses another CEO
- Bilia Q2 earnings ‘significantly above expectations’
- STOCKWATCH – Caffyns unchanged
- COMING UP – Treasury Select Committee
- Used car price growth accelerating
- Social distancing increases fraud risk for retailers
- HMRC customs training grants extended
NFDA issues facemask law guidance for showrooms
Auto retail business should assume they are classed as shops when the new facemask law comes into force on Friday, according guidance from the NFDA.
Wearing a face mask in a retail environment in England becomes mandatory for customers on Friday (24 July). It has been mandatory in Scotland since 10 July. Guidance in Wales and Northern Ireland strongly advises face coverings but they are not mandatory.
As RMI members have argued car dealers are retail premises for the purposes of business rate relief and coronavirus grants, the NFDA advises members they should assume they are retail premises and require customers to wear a mask. There are exemptions (such as children under the age of 11), which the NFDA has outlined on its website.
New logo means showroom upgrade for Nissan dealers
Nissan is adopting a modernised version of its logo, with retailers expected to upgrade their showroom corporate identity.
The new logo has been revealed to coincide with the launch of Nissan’s new Ariya mid-size, full-electric, SUV which will go on sale in the UK next year.
Speaking exclusively to Auto Retail Agenda, Nissan’s vice president for marketing, Gareth Dunsmore said: “We are working on this now: for any new showroom being built from Q3 we’ll make sure we get the new branding on the dealership.”
Showing an understanding of the costs involved and the current pressures retailers are under, he added: “It wouldn’t be right to insist on changes for all showrooms at the current time. It will just be on new premises for the moment and it’s only branding, not changes to the size of the dealership at this time.”
Mr Dunsmore added that Nissan was working on an online sales system ready for the introduction of the Ariya next year. He said Nissan was piloting two online sales systems, one in the US and one in Spain which could be rolled out to the rest of Europe.
Toomey in profit as merger complete
Toomey Motor Group has reported a £265,000 profit (a 1.1% margin) for 2019, turning around a £331k 2018 loss. During the year, a group reconstruction saw many individual Toomey Ltd divisions transferred to Toomey Motor Group Ltd, with the remaining assets liquidated. Transfers were accounted for under the merger accounting method. This saw overall turnover grow 86.7% from £39m to £74m. The company is forecasting a “substantial increase in profitability” for the coming year.
The Essex-based group adds that although UK and EU car plants have been shut down, OEMs have inventory buffers of several months so new vehicle supply should not be significantly disrupted until autumn 2020.
Arnold Clark used sales soar in Scotland
July used car sales in Scotland have risen 20% since lockdown lifted, reports Arnold Clark. Demand is particularly high for smaller cars, and CEO Eddie Hawthorne says this may be due to an aversion to public transport or people using holiday money to buy a used car instead. Demand is particularly high in the £8k-£15k range.
Last week, Vertu’s Robert Forrester said new car demand in Scotland was up too.
BCA app gets Bid Now tool
The BCA Buyer app now allows customers to use the Bid Now fixed-time online auction platform. The update means customers can now use all of BCA’s online channels via the app – including real-time online auctions and Buy Now fixed-price sales. BCA says hundreds of cars are added to Bid Now daily and customers automatically receive an email if they are outbid.
AutoNation loses another CEO
Cheryl Miller has resigned as AutoNation CEO after less than a year. She is the second CEO to leave since 2019: Carl Liebert lasted four months. Miller will receive a severance package of more than $5.4m; she has worked at AutoNation for more than a decade, previously serving as CFO.
Chairman and CEO Mike Jackson’s contract to lead the company has been extended to April 2022 (with a $1.3m annual salary and 200% annual bonus target), after which he will retire – but could leave sooner if a new CEO is found. COO Jim Bender took over as president from Jackson in April.
AutoNation sold over 280k new vehicles in 2019.
Bilia Q2 earnings ‘significantly above expectations’
Bilia, one of Europe’s largest auto retailers, has reported Q2 operational earnings higher than 2019 and “significantly above market expectation”. Operating profit is up as well, to more than £25m. The group cites a thriving service business, cost controls and utilisation of Covid-19 support packages for the improvement.
Closing prices on 17 July 2020 and weekly change
Caffyns unchanged after reporting 5.4% decline in annual financial results
Auto Trader Group 536.0p (+22.4p / +4.2%)
Cambria 47.2p (-2.8p / -5.7%)
Caffyns 260.0p (n/c)
Halfords 156.4p (+18.2p / +12.3%)
Inchcape 458.2p (+4.2p / +0.9%)
Lookers Shares suspended at 21.0p
Marshall Motor Holdings 122.5p (+3.0p / +2.4%)
Monday, Bank of England chief economist gives evidence to Treasury Select Committee
Friday, retail sales
Friday, PMI flash index
Used car price growth accelerating
Used car price growth is accelerating, reports Auto Trader. Average prices were up 4.4% in early July compared to a year ago – and volume brands are leading the growth with an 8.2% increase. Premium brand prices grew 2.2%. Growth has now been sustained for 10 weeks since retailers reopened.
eBay Motors said cars are in short supply, with dealers averaging 51 cars in stock for June, 25% down on a year ago.
Social distancing increases fraud risk for retailers
Dealers should review part exchange assessment processes to ensure they are robust despite social distancing restrictions. Physical inspections and documentation reviews may take longer as a result, warns Cap HPI, but will reduce the risk of fraud. The company has seen evidence of social distancing rules loosening the care taken in vehicle appraisals.
HMRC customs training grants extended
HMRC has extended the deadline for applications to the Customs Training Grants fund to 31 January 2021. Grants cover training (up to £2,250 per employee), IT improvements and recruitment for companies involved in imports and exports, plus customs processes and declarations.
Macintyre Hudson warns there is £7m remaining in the fund and it is being allocated quickly: the scheme closes when funds are fully allocated.