Auto Retail Agenda: 25 November 2019
24 November 2019
- FCA ISSUES FURTHER INSURANCE GUIDANCE
- EBAY, GUMTREE AND MOTORS.CO.UK COMBINE AS EBAY MOTORS GROUP
- WLTP HITS PETROL RVS
- VOLKSWAGEN CREATES CAR.SOFTWARE DIVISION
- WORLD NEWS – Renault ‘could pull out of markets’, Tesla Cybertruck receives 150,000 deposits
- STOCKWATCH – Cambria issues ‘stellar’ results
- LAUNCH DIARY – Aston Martin DBX, Ford Mustang Mach-E
- COMING UP – CBI retail, Motorpoint interims, Black Friday
- MONEY MATTERS – Shrinking GDP could see interest rate cut, Black Friday car deals
- BLOG – Is Black Friday the new September?
FCA issues further insurance guidance
The Financial Conduct Authority has issued what it terms ‘finalised guidance’ for those selling general insurance products.
The new FCA guidance, issued in the past week, followed a separate market study into how general insurance firms charged their customers motor and home insurance. This market study focused on the impact and customer outcomes from firms’ pricing practices.
The finalised FCA document provides further clarity on the regulator’s expectations of firms operating in the “GI and pure protection sector”. In particular, how businesses should consider the value the “product and distribution arrangements present to the customer”.
The regulator added: “This guidance is part of a broader FCA focus on product value. While this guidance is aimed at addressing customer detriments specific to distribution chains, we expect firms to consider product value to the end customer (using the meaning of ‘value’ as described in the guidance) when applying the underlying rules in relation to all sales types, both direct and intermediated.
“It follows that we expect manufacturers to consider product value to their end customer regardless of the type of distribution strategy they use.
“The absence of guidance specific to direct sales by manufacturers, does not preclude the FCA from considering enforcing against our current rules where poor practice leading to customer detriment is detected.”
eBay, Gumtree and Motors.co.uk combine as eBay Motors Group
Three notable online automotive classified advertising names are relaunching as a single group under one brand. The newly formed eBay Motors Group will see eBay Motors, Gumtree Motors and Motors.co.uk pool resources to offer retailers a single point of contact as of January 2020.
The new group has been formed nine months after Motors.co.uk was acquired by eBay Motors and retailers will now be able to go to one place to manage their adverts and for invoicing.
Currently eBay Motors and Gumtree users have rolling contracts while motors.co.uk have perpetual contracts. When the respective deals come to an end, they will all be encouraged to come under the same umbrella. While the overall cost will be slightly higher, the group has confirmed there will be initial deals on offer to encourage customers of one platform to upgrade their involvement.
Consumers will not see a difference from the outside as they won’t engage with the ebay Motors Group – the company believes that the three sites offer a sufficiently different experience and will be left unchanged from the user’s point of view.
Plans for the coming year include improving customer experience, with the group wanting to offer a better method of comparing one car with another.
WLTP hits petrol RVs
A spike in nearly-new petrol car volumes has hit used prices according to valuation specialist Cazana, which said the average value of sub-12-month, sub-12,000-mile petrol cars fell from 76% to 68% of original cost new between October 2018 and 2019, falling to a low of 62% in September.
“There are about 20% more cars in that marketplace [than a year ago] and the average new cost of those vehicles has gone up,” said director of insight, Rupert Pontin.
“WLTP has had an impact, because these cars had to be priced and sold before the derogation period ran out, and they’re disappearing into the used car market as pre-registered.”
Volkswagen creates Car.Software division
Volkswagen Group is splitting its in-car software organisation into a standalone business, called Car.Software. This will centralise Group activities for car software, digital ecosystem products and customer-centric functions at retailers. Initially employing 3,000 people, this will grow to 10,000 by 2025. Volkswagen aims to create its own software brand and grow in-house development from 10% to 60%. Over €7bn will be invested in the new business between now and 2025.
Renault ‘could pull out of markets’
Renault interim CEO Clotilde Delbos said the French form could withdraw from some products or markets as part of a mid-term review. “We will avoid it if we can… but we have to ask ourselves the question… can we just keep up the same strategy? I don’t think so.” The review will be complete in the next few months. Delbos, who has reportedly applied for the CEO job, also said she was sure the alliance with Nissan could be more efficient.
Tesla Cybertruck hits 150,000 orders
The Tesla Cybertruck, which was dramatically revealed in Los Angeles on Thursday, had received almost 150,000 deposits by Saturday, revealed CEO Elon Musk. The futuristic electric pickup is due in 2021; 42% have placed a £100 deposit on the dual motor version, with 41% picking the tri motor. Only 17% have chosen the cheapest single motor model. This was achieved “without any advertising or paid endorsements,” added Musk. Tesla’s share price fell 6% after the Cybertruck’s launch event, when two ‘bulletproof’ windows shattered after a metal ball was thrown at them.
Cambria issues ‘stellar’ results
Auto Trader Group 539.8p (+4.4p)
Cambria 67.0p (+7.5p)
Caffyns 375.0p (-20.0p)
Inchcape 642.5p (-11.5p)
Lookers 49.15p (-2.55p)
Marshall Motor Holdings 142.5p (+1.0p)
Motorpoint 260.0p (+10.0p)
Pendragon 9.85p (+0.09p)
Vertu 38.62p (-0.23p)
Aston Martin DBX, 181mph, £158,000 British-built luxury SUV, on sale now with deliveries from Q2 2020
Ford Mustang Mach-E, Mustang-inspired electric SUV with 337hp and 370-mile EV range; 465hp Mach-E GT also offered. Arrives late 2020
Wednesday, CBI retail, BRC shop price index
Thursday, Motorpoint interim results, Nationwide house price index
Friday, GFK consumer confidence, consumer credit, Black Friday
Shrinking GDP could see interest rate cut
Businesses reported falling output and orders in November, according to the IHS Markit / CIPS flash index of business activity. The steepest cutback since July 2016 means the organisation is forecasting UK GDP will shrink 0.2% in Q4 2019. This will add pressure on the Bank of England to cut interest rates in H1 2020.
Black Friday car deals
Peugeot is rolling out a series of Black Friday deals via a dedicated offers page. All customers will also get a £500 John Lewis gift card. Other OEMs are expected to reveal deals this week. Auto Trader has also launched a Black Friday deals page, highlighting the best deals on the 30,000 new cars advertised by retailers on the marketplace.