Auto Retail Agenda: 8 February 2021
07 February 2021
- TESLA TEST DRIVES CONTINUE IN LOCKDOWN
- WORKPLACE COVID TESTS EXPANDED
- DOUGLAS PARK IS BMW RETAILER OF THE YEAR
- NEW KIA RETAILER STANDARDS EXPECTED IN Q3
- EVENTS COMPANY LAUNCHES CITNOW RIVAL
- US USED CAR BOOM FORECAST
- AUSTRALIA’S AUTOCARE IN ADMINISTRATION
- STOCKWATCH – Vertu trading update stated pre-tax profits expected to exceed forecasts of £18m
- COMING UP – Auto Retail Live with Inchcape UK CEO James Brearley, JLR UK MD Rawdon Glover and Auto Trader commercial director Ian Plummer
- UK TO AVOID DOUBLE DIP RECESSION
- NEW AUDIT WATCHDOG DELAYED UNTIL 2023
Tesla test drives continue in lockdown
Franchised retailers have hit out at Tesla for continuing to offer test drives during lockdown 3.0 when the industry has been advised they are non-essential and should not be carried out.
Until Wednesday of last week, Tesla was promoting test drive “walk-ins” on its website but was advising customers to “schedule in advance”.
However, this notice was updated after Auto Retail Agenda contacted Tesla to ask why it was breaking test-drive guidance. It now reads: “Touchless test drives must be scheduled in advance.”
Commenting on the change, a Tesla spokesman said the website was “out of date and hadn’t been updated with the stores closed this time around – it mentioned walk-ins, etc – just an oversight, not a change of policy”.
While government guidance and legislation for England does not specifically ban test drives, it does mandate the closure of non-essential retail including car showrooms, allowing only online sales with delivery or click and collect.
Current guidance to retailers from the NFDA’s lawyers on test drive states: “The NFDA would recommend that dealers do not offer test drives during the lockdown as these imply a sales process that extends beyond a virtual sale (followed by delivery or click and collect), and may present certain challenges primarily regarding social distancing.”
Retailers that contacted Auto Retail Agenda described Tesla’s test drive position as “immoral” and likely to “put the whole industry at risk of a longer lockdown”.
When asked why Tesla was still carrying out test drives, a spokesman said: “Touchless test drives are facilitated for those with mobility needs who deem it essential now. Once a test drive is booked online, a member of the team proactively reaches out to discuss their need and timelines. Virtual consultations are offered to everyone to cover any questions and postpone test drives for those with longer timelines.
“All our stores are closed, a click and collect touchless test drive from a car parking space is the only option available. All ‘paperwork’ is online, cars are unlocked remotely with the key inside and there are tutorial videos in the car to watch before departing. The car is returned and locked remotely with the key inside and a follow up is done over the phone or through Virtual Consultation. At no time is access is provided to the stores, nor is there direct contact with an individual. All cars are sanitised between drives.”
However, Tesla added: “There are no test drives in Scotland or Northern Ireland.”
Meanwhile, responding to retailer feedback, CarGurus has dropped its filter that allowed car buyers to search for cars that were available to test drive.
Workplace Covid tests expanded
Businesses with more than 50 employees can now access Covid ‘rapid’ lateral flow tests which give results in less than 30 minutes. Previously, only businesses with more than 250 employees qualified.
Health secretary Matt Hancock is urging both businesses and employees to take up the offer and says firms should be regularly testing staff.
A government website allows companies whose employees cannot work from home to register for coronavirus tests for their employees.
Ministers are also discussing plans to vaccinate millions of people under 50 years old at work in a ‘jabs at work’ plan. Roving vaccination teams would go to places of work to speed up the vaccination of around 30 million younger adults.
Douglas Park is BMW Retailer of the Year
Douglas Park in Hamilton has been named BMW Retailer of the Year 2020. The retailer also picked up Regional Group Retailer of the Year, the Aftersales award, and the firm’s David McBennett took the Head of Brand prize. It is a BMW Retailer of the Year double for Douglas Park, which last took the prize 19 years ago.
JKC is Owner Driver Retailer of the Year, Sytner Coventry is PLC Retailer of the Year, and Sytner Group also took the marketing award. Rybrook Wolverhampton won the financial services award.
New Kia retailer standards expected in Q3
Auto Retail Agenda has learnt Kia retailers will receive details of new dealer standards related to the company’s global rebrand and new logo in Q3 this year. The roll-out will begin in 2022. Kia UK says it will support the network throughout the transition period, “be that from brand guidelines, training, national and regional dealer events and more”.
Events company launches Citnow rival
Automotive events specialist Rhino has launched a video streaming service to rival Citnow. Rhino claims its system, called Kwikcast, is the first to offer live in-call video streaming which allows retailers to call a mobile phone and switch to video without the customer needing to download any additional software.
US used car boom forecast
Used vehicle sales are set to be “extraordinarily strong” for at least Q2 2021, US retailers and analysts are forecasting. Covid-19 vaccinations, government stimulus cheques and constrained new vehicle inventory are combining with pent up demand to create a sales surge – which is likely to lead to higher prices. Some retailers are already stockpiling ahead of the spring selling season. “When they come off lease, we’re buying almost everything we can,” said COO of Feldman Automotive Group Dave Katarski.
Australia’s Autocare in administration
Australian retailer and vehicle moving company Autocare has entered voluntary administration, placing 600 jobs at risk. The 59-year-old company operates throughout the country and blamed ‘volatile market conditions’ including a sustained decline in new car sales since 2017.
Closing prices on 5 February 2021 and weekly change
Vertu trading update stated pre-tax profits expected to exceed forecasts of £18m
Auto Trader Group 577.0p (+13.0p / +2.2%)
Cambria 63.0p (+2.5p / +4.0%)
Caffyns 385.0p (n/c)
Halfords 292.5p (+20.0p / +7.0%)
Inchcape 699.0p (+34.0p / +4.9%)
Lookers 38.05p (-1.45p / -3.7%)
Marshall Motor Holdings 143.0p (+11.0p / +8.0%)
Motorpoint 288.0p (-10.0p / -3.4%)
Pendragon 14.24p (+0.3p / +2.1%)
Vertu 36.2p (+4.6p / +13.5%)
Tuesday, UK retail sales
All week, National Apprentice Week
Tuesday, Auto Retail Live with Inchcape UK CEO James Brearley, JLR UK MD Rawdon Glover and Auto Trader commercial director Ian Plummer. Sign up here
UK to avoid double dip recession
Economists are predicting the UK will avoid a double dip recession with modest growth forecast for Q4 2020. Official figures this week will also reveal the pandemic has cost the economy a record-breaking £250bn in lost output.
A 10% slide is forecast for 2020 overall which will be the worst economic hit in more than 300 years.
Q1 2021 is forecast to slide 4% but the economy will then recover rapidly, reaching its pre-pandemic peak by early 2022, predicts the Bank of England, aided by the rapid rollout of Covid-19 vaccines.
Investment bank Jeffries is also seeing signs of a hiring boom, with job listings rising to 80% of pre-Covid levels, compared to 60% just two weeks ago. The firm’s economist said the data “gives me more confidence the UK is going to outperform and GDP is going to surprise on the upside”.
Backing this up is the latest forecast from ASE: once the 2021 lockdown lifts, the firm predicts “a boom in trading”. Its latest data reveals the average retailer lost £3k in December 2019, up from the £1,700 loss of December 2019 but “a great result given the lockdown”. Used cars were a particular highlight, with an ROI of over 100% when showrooms were open – described by ASE as a “stunning performance”.
A recession is forecast for the eurozone, however, due to a 0.7% fall in the three months to December.
New audit watchdog delayed until 2023
The Financial Reporting Council will not be replaced by the Audit, Reporting and Governance Authority (ARGA) until 2023, despite the existing regulator being branded a “ramshackle house” for presiding over low quality audits and accounting scandals. The delay in placing the reforms before Parliament, which is expected in 2022, has been caused by Covid-19. When launched, the new audit watchdog will have new powers to clamp down on auditors and directors.
City AM reports details of the new reforms could be published this week – with directors, rather than boards, being held personally responsible for financial reporting. New business secretary Kwasi Kwarteng has indicated audit reform is a priority for the department.