Auto Retail Agenda: 26 June 2023
24 June 2023
- AGENCY ‘YET TO BE FULLY TESTED’
- GROUP 1 RETURNS SKODA TO COLCHESTER
- VAN MOSSEL JACKSONS DEAL WORTH £13.5m
- AWARD-WINNING HEYCAR AD WINS AIDS RETAILER RETENTION
- SONIC IN Q2 USED CAR HIT
- J.D. POWER: NEW CAR QUALITY IS GETTING WORSE
- STOCKWATCH: Lookers up 33.8% after bid by Canada’s Alpha Auto
- COMING UP: Vertu AGM, UK GDP
- SURPRISE RISE IN RETAIL SALES
- MORTGAGE HOLDERS GET 12-MONTH GRACE PERIOD
Agency ‘yet to be fully tested’
OEMs who have moved to agency are yet to be fully tested on their skills at selling cars compared to traditional retailers. “The lessons learned are limited when supply is restricted,” said the ICDP’s Steve Young during a panel discussion at the Automotive News Europe Congress.
It has been easy for OEMs such as Mercedes-Benz so far due to the parts supply crisis leading to greater demand than supply. But the return of supply will be a crucial test, he said. “Have the manufacturers picked up the skills to understand and stimulate retail demand ot give the planned volumes?”
During the event, Toyota COO Matt Harrison indicated it is prepared to look at agency because “existing distribution margins and models are undoubtedly not sustainable… I am reluctant to say we are fans of agency… but [auto retail] is going to look very different in the future”.
Group 1 returns Skoda to Colchester
Group 1 Automotive has submitted plans to extend its current Volkswagen retailer in Colchester, to create a seven-car showroom for Skoda.
The planning submission comes three months after previous Skoda Colchester franchise holder Underwoods closed, blaming a decision by Skoda to “reduce the number of dealers in their network, with an increased focus towards online sales… the decision was not one of Underwoods’ making”.
Van Mossel Jacksons deal worth £13.5m
It has been revealed the Van Mossel acquisition of Jacksons Group was worth £13.5m. Collas Crill was lead counsel, supported by three teams of external counsel, in what is described as a “complex deal”. Van Mossel acquires Jackson’s trading entities but will lease the properties currently owned by the retailer. Lease negotiations are currently ongoing.
Award-winning Heycar ad wins aids retailer retention
A successful Heycar TV ad “was well-received by audiences, but also energised dealerships” – and led to a marked increase in retailer renewals despite a rise in fees. The campaign won the automotive category at The Drum Awards for Marketing 2023. It was developed on a tight budget, with rivals Cazoo and Cinch spending three times more than Heycar’s £10m media budget.
WORLD NEWS
Sonic in Q2 used car hit
Sonic Automotive, citing poor used vehicle availability and higher wholesale pricing, has suspended operations at eight EchoPark used car locations and a number of delivery/buy centres. It will take a significant Q2 charge of $60-$80m (£47-£63m). Analysts say the EchoPark budget used vehicle operation, launched in 2014, now won’t achieve profitability until Q3 2024.
J.D. Power: new car quality is getting worse
New vehicle quality hit the lowest level in more than three decades last year – and in 2023, it has worsened yet again. The latest J.D. Power US initial quality survey has recorded a record high number of vehicle problems, largely related to quality issues. “I don’t see this changing anytime soon,’ said J.D. Power senior director Frank Hanley.
STOCKWATCH
Closing prices on 23 June 2023 and weekly change
Lookers up 33.8% after bid by Canada’s Alpha Auto
Auto Trader Group 591.6p (-51.2p / -8.2%)
Caffyns 500.0p (+25.0p / +5.2%)
Halfords 212.0p (+15.5p / -2.1%)
Inchcape 755.5p (+28.0p / +3.6%)
Lookers 118.8p (+33.8p / +33.1%)
Motorpoint 100.5p (-4.0p / -3.9%)
Pendragon 17.88p (+1.88p / +11.0%)
Vertu 68.6p (+5.8p / +8.8%)
COMING UP
Tuesday, SMMT International Automotive Summit
Wednesday, Vertu AGM
Thursday, UK consumer credit
Friday, UK GDP
MONEY MATTERS
Surprise rise in retail sales
Retail sales grew 0.3% in May, says the ONS – far better than the 0.2% decline forecast by economists. A series of bank holidays and the King’s coronation boosted sales of outdoor goods, summer clothes, takeaways and fast food. However, food store sales fell as supermarkets raised prices. Food inflation is up nearly 20% in the year to April.
The GFK consumer confidence index is also at its strongest in 17 months and has now risen five months in a row.
Mortgage holders get 12-month grace period
Chancellor Jeremy Hunt has agreed with mortgage lenders that people should be given a 12-month break before repossession proceedings start. The break is similar to the one introduced during Covid and comes amid soaring interest rates.
Tags:
agency, Alpha Auto, Cazoo, Cinch, Group 1, Heycar, ICDP, Lookers, Mercedes Benz, Retail Sales, Skoda, Sonic, Underwoods, Van Mossel Jacksons, Vertu 
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