Auto Retail Agenda: 23 September 2019
22 September 2019
- HONDA NFDA SUCCESS VALIDATES STRATEGY
- IMPERIAL CAR SUPERMARKETS PROFITS SLUMP
- GM CEO JOINS NADA SPEAKER LINE-UP
- LABOUR EV SCRAPPAGE SCHEME
- NEW JERSEY RETAILERS SUE TESLA
- GERMANY’S £48BN CLIMATE PLAN
- STOCKWATCH – Inchcape rally continues
- LAUNCH DIARY – Skoda Kamiq, Abarth 595 Pista
- COMING UP – Auto Retail Live, CBI industrial trends
- ‘SUDDEN FALL’ IN RETAIL SALES
- FCA BREXIT PRICE PROMISE
Honda NFDA success validates strategy
Honda’s strong performance in the latest NFDA Survey reflects the positive response from retailers to its two-year plan to cut the number of outlets to around 125 sites, head of car Phil Webb said exclusively to Auto Retail Agenda.
The old network was based on a 20-minute drive time, he explained. Analysis of Honda customers showed the reality to be around 35 minutes. “That’s a big difference. If you change that, you still look after the market, but it gives dealers a further opportunity for sales and aftersales, which will turn into profitability.”
Honda’s return on sales is about average, said Mr Webb, “but still not good enough for where Honda and our dealerships want it. We would like 2%”.
The plan exclusively revealed by Auto Retail Agenda was shown to 14 Honda investors in February 2019 – “people like Daksh Gupta and Robert Forrester” – and was received positively. “Within a week, they said, ‘if you do that, we’ll look to invest with you’. There is only one group that decided not to do that, and they no longer have the Honda franchise.”
Imperial Car Supermarkets profits slump
Used car dealer Imperial Car Supermarkets saw pre-tax profits almost halve to £1.6m (2017: £3.1m) in the year ended 31 March 2019.
Turnover, however, reached £201m for the year (2017: £142m) after the group acquired four extra trading sites. The group also opened two new outlet sits for retailing higher-mileage cars outside the Imperial Group brand, called Carsaz.
The group’s accounts reflected “industry-wide pressures on gross margins”, and return on sales was down from 2.2% in 2017 to 0.8% last year. Careful cost control has pegged admin expenses at 10% of turnover despite the additional trading sites.
The directors “continue to seek opportunities for new sites” and invest in existing sites, which they predict will deliver record levels of volume growth and profitability in the year ahead.
GM’s CEO joins NADA speaker line-up
Mary T Barra, chairman and CEO of General Motors, is to be a keynote speaker at the 2020 NADA Show, taking place over February 14 to 17, in Las Vegas. Ms Barra will outline the critical role auto retailers will play in an industry future that will include electric and self-driving vehicles.
Ms Barra joins a strong line up of NADA Show 2020 speakers that already includes former Prime Minister, David Cameron, and other senior industry leaders.
Auto Retail Network is partnering with profitability experts, ASE Global, to create a visit to NADA Show 2020 that will maximise your opportunity to learn and enjoy your time in Las Vegas.
To find out more about the ARN/ASE visit to NADA 2020, go to: http://bit.ly/2ZFZril
Labour to promise EV scrappage scheme
Labour will introduce a £2,000 electric car scrappage scheme if it comes to power. Petrol and diesel cars aged over 10 years will be traded in for new electric vehicles, shadow business secretary Rebecca Long Bailey will announce on Tuesday. The scheme will run for one year with a target of 400,000 cars.
New Jersey retailers suing Tesla
The New Jersey Coalition of Automotive Retailers is suing Tesla for breaking laws on consumer protection, franchising and dealer licensing, and flouting internet advertising laws. The filing includes an allegation of ‘bait and switch’ after Tesla promised a low-price $35,000 variant and then tried to put deposit-holders into more expensive variants.
Germany’s £48bn climate plan
Germany has agreed a £48bn climate plan to cut carbon emissions. Measures will include raising petrol and diesel prices from 2021, and incentives on new electric vehicles. VW CEO Herbert Diess welcomed the measures because “the car will lose its negative characteristics in the years ahead”.
Closing prices on 20 September 2019 and weekly movement
Inchcape rally continues
Auto Trader Group 520.4p (+1.2p)
BCA 235.6p (-6.4p)
Cambria 56.0p (-1.0p)
Caffyns 390.0p (+5.0p)
Inchcape 641.0p (+27.5p)
Lookers 52.9p (-5.75p)
Marshall Motor Holdings 145.5p (-2.0p)
Motorpoint 217.0p (+7.0p)
Pendragon 9.75p (-0.85p)
Vertu 33.15p (-1.75p)
Skoda Kamiq, small SUV positioned below Kodiaq and Karoq, priced from £17,700, deliveries from November
Mitsubishi Outlander PHEV, range updated with new trim structure and interior tweaks; priced from £35,455
Abarth 595 Pista, special performance edition priced from £19,135 or £189 a month on PCH (with £3,780 initial rental)
Tuesday, CBI industrial trends survey
‘Sudden fall’ in retail sales
A 0.2% fall in August retail sales has surprised economists, who expected them to be flat. The Office for National Statistics figures “reflect the broader gloom,” said Philipp Gutzwiller, Lloyds Bank head of retail.
FCA Brexit price promise
Fiat Chrysler Automobiles will guarantee prices of all Fiat, Abarth, Alfa Romeo and Jeep vehicles ordered before the 31 October 2019 Brexit deadline, even if they are delivered post-Brexit. The ‘Deal or No Deal’ offer follows concerns from customers that prices could change during the Brexit transition process, said FCA UK MD Arnaud Leclerc.