Auto Retail Agenda: 6 January 2020
05 January 2020
- Large profit hike for RRG & Norton owner
- New Chinese brand seeks retailers
- New CFO for MB Retail
- CarGurus launches trust index
- US car sales down, spending up
- Tesla deliveries up 50% in 2019
- STOCKWATCH – Auto Trader slips from all-time high
- LAUNCH DIARY – Lamborghini Huracan Evo RWD, Kia special editions
- COMING UP – 2019 new car registrations, Cambria AGM
- Credit card debt down for first time since 2013
- Cost of living outstrips wage rises
Large profit hike for RRG and Norton owner
Profits at Marubeni Auto Investment grew 20% in 2019 to £7.4m, latest figures show. Turnover grew 11% from 2018 figures to almost £600m. The company trades as two brands, RRG in Manchester and Norton Way in London. It carried out a director-level shake-up in spring 2019.
RRG profit before tax was up 20% to £5.6m, with a return on sales of 1.9%. It has 21 outlets, adding a brand new Skoda Bolton site with a £2.4m investment. Its return on sales is 1.9%. Norton Way profit fell slightly to £3.0m, and return on sales dropped to 1.2%. Turnover of the seven-site division was still up, to £261.3m.
Overall Marubeni return on sales grew in the year to 31 March 2019, to 1.5%. The firm represents eight brands (including 11 Toyota retailers plus between two and three Lexus, Honda, Mazda, Peugeot, Nissan, Kia and Skoda sites) and says its diverse manufacturer portfolio strategy helps it mitigate competitive risk.
New Chinese brand seeks retailers
Dorset-based importer Sokon Automotive is seeking retailers to sell vehicles from Chinese brand DFSK. The flagship vehicle is a seven-seat SUV called the Glory 580, which Autocar reports will cost from £23,369 – making it one of the cheapest seven-seaters in the UK. The Volvo XC60-sized model is powered by a 145bhp 1.5-litre turbo petrol engine, averaging 38.0mpg and emitting 222g/km.
Sokon Automotive will also sell three LCVs, one of them fully electric. Former Volkswagen UK fleet business manager Kevin Eastwood joined the company last year as aftersales manager. The company also appears to have purchased a 3,900 sq ft in Broadstone, near Poole. Its website says it is seeking to build “a small professional network of respected dealers across Britain”.
New CFO for M-B Retail
Mercedes-Benz Retail has appointed Tim Schoeler as CFO. The 33-year-old German was previously business development manager and head of control, and began his career at Daimler AG in revenue control and pricing. Earlier in December, Angela Shepherd became CEO of Mercedes-Benz Retail.
CarGurus launches trust index
Online marketplace CarGurus has launched a trust index which shows “how trust impact decision-making among UK car buyers”. The CarGurus Car Buyer Trust Index shows Mercedes-Benz is the UK’s most trusted car brand, followed by Audi, Ford, Toyota and Volvo. The least trusted car brand is Fiat, followed by Peugeot, Renault, Citroen and Skoda.
The report shows a stark gender difference in brand trust. Kia, for example, is the second most trusted brand for men – but only the 15th most trusted amongst women.
US car sales down, spending up
New car sales in North America declined 1% to around 17m in 2019 – but spending on vehicles hit a record high. $462bn (£353bn) was spent on new cars, the first time the figure has exceeded the $460bn mark. The average transaction price of new cars and trucks in America is $33,600, or £25,700.https://cnb.cx/35rhB9P
Tesla deliveries up 50% in 2019
Shares in Tesla rose 4% to a record high after it met its goal for deliveries in 2019. A total of 367k vehicles were delivered, an increase of 50% over 2018’s 245k figure. The US electric car company delivered 87k Model 3 in the final quarter alone. Deliveries from its new factory in China begin today (Monday 6 January).
Closing prices on 3 January 2020 and weekly change
Auto Trader slips after setting all-time high at the end of 2019
Auto Trader Group 584.6p (-23.0p)
Cambria 70.0p (+1.0p)
Caffyns 400.0p (n/c)
Inchcape 714.0p (-4.5p)
Lookers 55.8p (-1.2p)
Marshall Motor Holdings 154.5p (+4.0p)
Motorpoint 294.0p (-9.0p)
Pendragon 12.6p (+0.2p)
Vertu 37.0p (+1.5p)
Lamborghini Huracan Evo RWD, ‘cheaper’ rear-wheel drive model with 610hp and “30% more oversteer”, from £137k before tax (AWD model is £165k)
Citroen C5 Aircross, CO2 reductions across the range and introduction of cheaper, lower-power Puretech 130 auto which replaces existing Puretech 180 auto
Kia special editions, Picanto Zest from £12,650 and Stonic Maxx from £19,055, plus a lower-priced Niro 2 PHEV for £30,265
Monday, 2019 new car registrations, PMI services, Caffyns interim dividend
Tuesday, EU retail sales
Wednesday, German factory orders, Halifax House Price Index
Thursday, Cambria AGM
Credit card debt down for first time since 2013
More credit card debt was repaid than borrowed in November 2019 for the first time since July 2013. Consumer credit growth, which includes car finance as well as credit cards and overdrafts, slowed to 5.7%, compared to 10.9% three years ago. Tougher affordability standards and more cautious consumers are among the reasons cited for the slowdown since the peak of credit-fuelled spending in 2016.
Cost of living outstrips wage rises
Household bills have risen more than £1,400 over the past decade, outstripping the £884 increase in the average salary. Research in The Sunday Times shows a 93.1% increase in home insurance, a 43.7% increase in electricity and a 23.8% rise in council tax (to an average of £1,750). However, car insurance fell by 1.9%. The average two-year fixed-rate mortgage deal also dropped 68.2% to 2.1%, and the rate for a £10k personal loan fell 63.3% to 3.6%.