Auto Retail Agenda: 27 April 2020
26 April 2020
- TRADE PLATE TEST DRIVE CLARITY SOUGHT
- EDEN SHUTTERED ‘TO PROTECT EMPLOYMENT’
- MID-MAY RETURN TO WORK?
- HOW TO PREPARE YOUR SHOWROOM FOR SOCIAL DISTANCING
- CORONAVIRUS: auto industry round-up
- AUTONATION, PENSKE RETURN LOANS
- GERMANS AVOID CAR SHOWROOMS
- COMING UP – FCA payment deferral measures
- MORE HELP FOR SMALL BUSINESSES
- JOIN A VIRTUAL ROUNDTABLE ON CORONAVIRUS ECONOMICS
Trade plate test drive clarity sought
The NFDA is lobbying the DVLA for clarification on using trade plates during unaccompanied test drives of unregistered new or untaxed used cars. Current DVLA guidance makes no mention of whether a dealer representative should be in attendance during the test drive. However, most retailers generally assume that it is, and dealer insurance often insists on it.
As operations resume, it is expected retailers will be required to operate two-metre social distancing rules – which is impossible in test drives. Upon pointing this out to the DVLA, the NFDA was initially advised by its policy department that physical dealer representation was still required during the test drive.
The DVLA has since told the NFDA a policy review is underway. The organisation will issue advice once the DVLA responds.
Eden shuttered ‘to protect employment’
Eden Motor Group’s first decision during the coronavirus crisis was to close operations, explained CEO Graeme Potts during last week’s Auto Retail Live event. “We need to be as lean as possible so we can survive.”
As staff have been furloughed, senior executives including Mr Potts are fielding incoming enquiries, which is an “unexpected benefit: we can see the strengths and weaknesses of our internal processes”.
Originally, Eden maintained five service operations which were open two days a week for key workers. After three weeks, Mr Potts decided the £75k a month cost of this could not be justified. “I need to protect the employment of 830 people so, on financial grounds, we closed completely.”
“We need to make sure Eden can survive for as long as possible without revenue.”
Mid-May return to work?
Scientific advisers have told the government lockdown restrictions can be lifted from mid-May, reports the Telegraph. Car dealers are expected to be included in the first phase of the gradual exit, alongside other retailers and garden centres, because social distancing can be maintained more easily.
How to prepare your showroom for social distancing
The German Federation for Motor Trades and Repairs has published a guide to hygiene rules and guidelines for car retailers, which the NFDA has translated. Advice includes one-way entrance and exits, floor markings at reception areas, disposing of pens after use, closing children’s play areas and no customer vending machines or magazines.
Coronavirus: auto industry round-up
Wingrove Motor Company has provided its Cramlington distribution facility to the NHS to help manufacture PPE and will produce 7,500 gowns a week… Aston Martin is working with retailers to extend new car warranties and relax service interval requirements… FCA has introduced a video conferencing system for retailers and customers called Car@Home… Marketing Delivery has launched a new Real-time Click Alert bolt-on that instantly notifies retailers when a customer clicks a specific advert; it is currently a free add-on to its Car Alerts system… Volvo has launched a Stay Home Store online sales concept which includes pre-negotiated prices and lease rates; the offer is initially on three models in each country, which includes the UK… Admiral is giving £25 refunds to car insurance customers due to an expected fall in claims.
AutoNation, Penske return loans
AutoNation and Penske are returning loans from the US Paycheck Protection Program after new guidance was issued by the Small Business Administration. The Treasury department indicated publically-traded firms would struggle to prove the really needed the coronavirus relief funds, which are forgivable if at least 75% is used for payroll expenses. Larger firms have been awarded millions through the scheme but many small businesses in America are reportedly struggling to access the $350bn fund, causing public outcry.
Germans avoid car showrooms
As reported last week, car retailers in Germany have reopened. However, many are reporting minimal footfall. The German Association of Independent Auto Dealers (BVfK) conceded numbers are well down, saying “it’s very difficult, but we are optimistic”. One Berlin dealer reported no customers visiting the showroom. “People are distancing. We don’t expect much business this year.”
Closing prices on 24 April 2020 and weekly change
BlackRock increases Auto Trader stake to 9.74%
Auto Trader Group 450.0p (+11.3p / +2.5%)
Cambria 35.0p (-1.5p / -4.1%)
Caffyns 280.0p (n/c)
Halfords 93.4p (+2.6p / +2.8%)
Inchcape 487.6p (-16.9p / -3.3%)
Lookers 21.25p (-0.05p / -0.2%)
Marshall Motor Holdings 97.5p (-5.0p / -4.8%)
Motorpoint 183.0p (-13.5p / -6.8%)
Monday, FCA 3-month PCP and PCH payment deferral measures go live
Monday, EU consumer confidence
Tuesday, 5 May, automotive retailers virtual roundtable
Thursday, 7 May, Auto Retail Live – Finding a way forward. Sign-up here.
More help for small businesses
Small businesses may be able to access up to £25k in government-backed loans under new plans reported by the Times. Government-backed small business overdrafts may also be introduced. There are reports of a new 100% government-backed coronavirus small business interruption loans scheme, including a relaxation of the Consumer Credit Act. Lenders say the rules are unworkable in the context of pandemic loans.
Join a virtual roundtable on coronavirus economics
PwC is holding a virtual round table discussion on Tuesday, 5 May at 11am focused on the auto retail sector. An analysis of the UK economic impact and possible recovery profile will be presented. Guests will also be invited, under Chatham House rules, to share their experiences and ask questions. Email email@example.com to register interest.