Auto Retail Agenda: 3 December 2018
02 December 2018
- PROPERTY TYCOON TO ENTER USED CAR SECTOR
- NFDA EV PILOT SCHEME NEARLY FULL
- BLACK FRIDAY PAYS OFF FOR RETAILERS
- CARFINANCE247 IN ST FAST TRACK 100
- FCA RETAILERS PROMISED 13 NEW MODELS BY 2021
- WORLD NEWS – Volvo rules out IPO to fund Polestar EV costs
- STOCKWATCH – drops for BCA, Motorpoint
- COMING UP – Auto Retail Profit Briefing
- LAUNCH DIARY – BMW 8-series coupe
- MONEY MATTERS – Banks extend corporate credit pre-Brexit
- OUR BLOG – Should EVs be treated differently?
Property tycoon to enter used car sector
Entrepreneur Alex Chesterman, founder of property platform Zoopla, has raised more than £30 million to finance an on-line used car venture set to be launched next summer.
Cazoo aims to retail, lease and finance cars online, deliver them to a buyer’s home within 48 hour and will offer a seven-day no charge return policy too.
Chesterman says the initial cash will go towards sourcing a Midlands base and buying ‘thousands’ of cars for stock.
Cazoo is backed by seed funding from the owner of the Daily Mail newspaper, Daily Mail and General Trust (DMGT), as well as Stride Capital, Octopus Ventures, Entree Capital.
Mr Chesterman said: “I’m delighted to announce this investment in my latest venture, Cazoo, and am very excited by the opportunity to transform the used car buying experience, which suffers from poor satisfaction and convenience and is failing to meet the needs of consumers. Buying a car should be no different to buying any other product online today.”
NFDA EV pilot scheme nearly full
Fewer than 10 slots remain for the pilot phase of the NFDA’s new Electric Vehicle Approved (EVA) scheme which will see retailers’ sales and aftersales operations assessed by the Energy Saving Trust.
If the audit of their standards is satisfactory the dealership will be awarded an EVA trust mark they can display in their premises and use in promotional material.
EVA is a set of standards developed by NFDA and endorsed by the Government’s Office for Low Emission Vehicles (OLEV) and the Energy Saving Trust (EST). The pilot will be used to establish the scheme and the NFDA will monitor the operation before the official launch to consumers in 2019.
An NFDA spokesman said: “Less than 10 slots are still available for EVA but we are waiting for approximately the same number of responses from members so these may get filled up pretty quickly.”
Black Friday pays off for retailers
Used car retailers embracing Black Friday saw a significant uplift as buyers responded to short term discounts with an 11% increase in sales against 2017.
Data from more than 500 franchised and independent dealers revealed a sharp spike in the days leading up to, and the event itself last weekend, said lead management company Dealerweb.
Dealerweb’s figures also showed a 12% increase in finance sales on used and 8% on new. GAP sales on used also rose 4%.
CarFinance247 in ST Fast Track 100
Family-run finance broker CarFinance247 has been listed at 48th in the Sunday Times Fast Track 100 ranking the fastest expanding private companies – excluding tech businesses – with at least 10 employees and showing a minimum operating profit of £500,00 in their latest accounts.
The website run by Reg and Louis Rix – third generation family members in the auto trade – has more than 6 million visits a year allowing users to browse some 125,000 cars from retailers and completes around £35 million of finance every month. Earlier this year it launched a direct lending arm which helped sales reach £48m in the year to June.
FCA retailers promised 13 new models by 2021
FCA plans to deliver 13 all-new or refreshed models to its retailers over the next two years as the parent company unveiled a strategy to spend £4.5 billion ramping up production of SUVs and EVs.
Volvo rules out IPO to fund Polestar EV costs
Volvo has said it will not need funding from a stock market float to pay development costs for EV and autonomous cars. Hakan Samuelsson, chief executive, made his comments two months after it postponed an IPO which could have valued it between £12.5 billion and £23bn, at the time blaming the tariff war.
German auto bosses to meet with White House for tariff talks
VW chief executive Herbert Diess, Daimler CEO Dieter Zetsche and BMW production chief Oliver Zipse are finalising plans for a White House meeting with US trade officials expected this week and called in the wake of President Trump’s threat to impose higher tariffs on EU imports to balance what he sees as unfair trade terms. America currently levies a 2.5% import tariff on cars assembled in the EU compared with 10% tariffs for U.S.-built cars entering the European trading zone.
Closing prices at November 30 and weekly movement
BCA 215.0p (-10.0p)
Cambria 52.5p (-0.5p)
Caffyns 405.0p (n/c)
Inchcape 581.5p (+6.5p)
Lookers 91.0p (-2.2p)
Marshall Motor Holdings 156.0p (no change)
Motorpoint 210.0p (-10.0p)
Pendragon 24.5p (+1.6p)
Vertu 37.0p (+0.6p)
Tuesday 11 December, 2pm. Auto Retail Live Profit Briefing. Speakers include Peter Vardy, managing director, Peter Vardy retail group, Stuart Miles CDK’s UK&I managing director and Lyn Howdon head of academy and learning at customer retention specialist Chrysalis Loyalty. To register click here
Wednesday 12 December: Free annual automotive law update webinar from Radius Law and The Motor Ombudsman. Topics include preparing for the January vehicle emission rules on showroom and printed materials and distance sales requirements. To register click here
BMW 8-series coupe. From £76,270.
VW e-up! Equipment upgrade and price cut to £19,61
Spring 2019 : Honda HR-V Sport. 1.5-litre VTEC turbo and sports suspension. Prices tbc
Banks extend corporate credit pre-Brexit
Banks are extending credit facilities to smaller businesses to give them the funds to tide them over any potential cash crunch next March, regardless of the Brexit vote. State-controlled Royal Bank of Scotland has already trebled its ‘growth fund’ for small businesses from £1 billion to £3bn and says it may need to inject more. It is offering supply chain finance and bigger working capital lines for everyday operations.
Confidence drop delays major purchase decisions
Plans for major purchases were the hardest hit as consumers falling confidence led them to delay buying. Consumer confidence dropped by three points in November according to new figures from GfK’s long-running Consumer Confidence Index. The index fell to -13 with all measures used to calculate the index seeing a decrease but the one seeing the deepest plunge was the major purchase index which fell by seven points to -3.
Should EVs be treated differently?
From a manufacturer’s bonus and targetting point of view, should plug-in cars be treated any differently to a conventionally powered car?
This week’s NFDA EV Dealer Attitude Survey implies that they are. And that raises the question; is that a good thing or a bad thing?
We know that manufacturers push different cars within their ranges to different levels depending on what the factory dictates and that, for the moment, they’re often keen to promote lower CO2 models to hit EU targets on emissions.
According to the NFDA, it will be down to the individual retailer as to how they view EV remuneration. Some may approach it from the point of view that different is bad, but for others different may be good. In this case, the survey will give a useful stick with which the retailers can hit poke their manufacturer.
What’s also interesting about the survey is that, apart from it taking place before the Government cut subsides for plug-in cars, it asked retailers ‘Are you satisfied with the current operation of the plug-in grant?’
Given the grant is operated in the same way for everyone, if all things were equal elsewhere this should have produced results that were also equal across the board. However, it didn’t. Hyundai retailers topped out with a score of 8.2 and Peugeot were last with 4.1.
What, in my mind, this shows is that perhaps this level-playingfield question should have been used to weight the rest of the questions because if Peugeot retailers are generally more unhappy than Hyundai retailers, then perhaps this had an influence on the answers to the other questions.
With the cutbacks to the plug-in grant in happening in October, the NFDA survey results this time round are somewhat redundant. Where the survey will really become interesting is when the next version is released which will be able to show the impact of the cuts.
Longer term, if and when we leave the EU, will cars sold in the UK count to European targets? And if they don’t, will manufacturers reduce retailer incentives on plug-in cars because they’d rather sell them in a different country?
It’s just one more thing to add to the ‘wait and see’ list for 2019.
Auto Retail Agenda