Auto Retail Agenda: 24 April 2023
22 April 2023
- SSANGYONG SLASHES 2 YEARS, 50k MILES FROM WARRANTY
- STELLANTIS HANGS BACK ON AGENCY TO LEARN FROM RIVALS
- CBI SUSPENDED UNTIL JUNE; BMW PULLS OUT
- NAMA SCOOPS KING’S AWARD FOR ENTERPRISE
- SIGN UP FOR FREE AUTO RETAIL LIVE USED CAR WEBINAR
- JARDINE OWNER LITHIA Q1 PROFIT DOWN 33%
- LINCOLN TARGETS FEWER RETAILERS
- STOCKWATCH: Halfords rallies
- COMING UP: Auto Retail Live on used cars
- 5% INTEREST RATE PEAK FORECAST
- GEN X PENSION CRISIS
Ssangyong slashes 2 years, 50k miles from warranty
Ssangyong has slashed its previously market-leading new car warranty from seven years/150,000 miles to five years/100,000 miles, writes Auto Retail Network’s Jack Carfrae. The manufacturer told Auto Retail Network the change took effect from 1 January but, when asked, did not explain why.
It is understood retailers were told the move was attributed to the cost of repairing vehicles towards the end of their warranty. However, no vehicles sold with seven years of cover have yet reached that age, because the policy was introduced in October 2018, prior to which the manufacturer had a five-year scheme.
The seven-year warranty was reportedly a strong selling point for retailers and well-received among the manufacturer’s customer base. SsangYong franchised holders who spoke to Auto Retail Agenda said they were disappointed by the move.
It once again leaves Kia with the best standard new car warranty at seven years/100,000 miles, although Toyota’s three-year/60,000 policy can be extended for up to a decade for vehicles up to 10 years old, if customers have their vehicle serviced at a franchised retailer annually.
Suzuki launched a similar scheme to Toyota’s earlier this month. Known as the Service Activated Warranty, it kicks in after the initial new car warranty and covers vehicles up to seven years/100,000 miles, providing they are serviced on schedule at a franchised retailer.
Stellantis hangs back on agency to learn from rivals
Stellantis brands Alfa Romeo and DS are deliberately hanging back on agency agreements to learn from other brands that have changed their sales model first.
Speaking to Auto Retail Agenda, Julie David, the brands’ UK MD, said she was happy not being the first manufacturer to switch to the agency model and would follow closely what Mercedes-Benz and other brands were doing in this space.
She added the UK would also use information gathered from the Alfa Romeo and DS in the smaller Dutch market which is switching to agency from July. This move will give the UK six months of data and experience before UK retailers for the two brands move to agency in January 2024.
CBI suspended until June; BMW & JLR pull out
The scandal-hit CBI has suspended all policy and membership activity until an EGM in June. Dozens of British businesses have quit the organisation, including BMW. Nearly 60 more corporate members contacted by The Times said they plan to either terminate or pause their relationship with the CBI.
NAMA scoops King’s Award for Enterprise
NAMA’s used vehicle condition grading scheme has received the King’s Award for Enterprise. Launched in 2013, more than 10 million vehicles have been graded by the scheme – and 9 in 10 used vehicles sold through auction support it. Just 200 initiatives are presented to be considered for a King’s Award for Enterprise each year.
Sign up for FREE Auto Retail Live used car webinar
This Thursday’s Auto Retail Live webinar will focus on used cars in Q1. Hendy Group chief executive Paul Hendy, Auto Trader’s Marc Thornborough, Fresh Tracks’ Mike Hones and RealTime Communications’ John Law will discuss key topics including a Q2 forecast, why EV values are unstable, the most useful KPIs to track and what retailers can do to improve their used car performance.
As always, registered retailers are invited to ask questions during the live 45-minute session, which is free and begins at 2pm.
- Auto Retail Live used car KPIs: sign up now
WORLD NEWS
Jardine owner Lithia Q1 profit down 33%
Revenue at Lithia Motors grew 4% in Q1 to a record $6.97bn (£5.61bn) but profit fell 33% to $229.6m (£184.6m). Profit per new vehicle fell 20% to $4,924 (£3,959) and profit per used vehicle plunged 30% to $2,120 (£1,704). Growing expenses cut into profits, reported the Medford, Oregon retailer.
In March, Lithia entered the UK when it bought Jardine. This added more than $2bn to its annual revenue. Lithia became the no. 1 US new car retailer in 2022, surpassing AutoNation.
Now Lincoln targets fewer retailers
America’s Lincoln is the latest premium brand targeting fewer retailers. The move comes after three years of declining US sales. Lincoln had around 630 retailers at the start of the year – most dualled with owner Ford; it has around 145 standalone stores.
“We have too many dealers,” said president Dianne Craig. “If we’re going to be a successful luxury brand, we need brand-exclusive facilities. Most of the dealers we have are still dualled. We love them as our Ford partner, but we need to focus on having that brand-exclusive experience.”
STOCKWATCH
Closing prices on 21 April 2023 and weekly change
Halfords shares jump 17.4% as it forecasts mid-term jump in sales and profit
Auto Trader Group 630.2p (+10.2p / +1.6%)
Caffyns 550.0p (n/c)
Halfords 207.2p (+33.2p / +17.4%)
Inchcape 757.5p (-8.5p / -1.1%)
Lookers 87.2p (-1.3p / -1.4%)
Motorpoint 132.5p (-1.0p / -0.7%)
Pendragon 17.68p (+0.58p / +3.3%)
Vertu 57.0p (-4.5p / -7.5%)
COMING UP
Tuesday, UK unemployment
Wednesday, CPI
Friday, retail sales
Friday, GFK consumer confidence
April 27, Auto Retail Live: sign up now
May 3, Radius Law annual conference: sign up now
MONEY MATTERS
5% interest rate peak forecast
Markets are now predicting an interest rate peak of 5%, up from today’s 4.25% – which would be the highest level for almost 15 years. A flurry of economic data last week showed inflationary pressures are still evident, despite 11 straight rises in interest rates.
The latest CPI of 10.1% was higher than expected and has yet to fall back into single digits. The jobs market remains buoyant, with unemployment of 3.8% remaining at about early-1970s levels.
Gen X pension crisis
Generation X workers in their 50s have “fallen through the gaps of the government’s pension reforms” and are “barrelling towards penury in retirement,” the IFS has warned. Older workers have enjoyed defined benefit schemes and significant house price growth, while younger workers capitalise on the defined contribution ‘auto-enrolment’ policy – but Gen X workers have not had enough time to benefit from it.
More than three million workers are failing to save any money into a pension, added the IFS.
Tags:
agency, Alfa Romeo, Auto Retail Live, BMW, CBI, DS, Halfords., interest rates, Jardine, Lithia, NAMA, pensions, Ssangyong, Stellantis, used cars 
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