Auto Retail Agenda: 31 July 2023
28 July 2023
- SUZUKI RETAILERS IN 2023 RECORD PROFIT
- CARWOW REVEALS ULEZ RETAILER OPPORTUNITIES
- JCT600’s £1.45bn 2022 TURNOVER; WILLIAM MORGAN RECORD
- CARLYLE ACQUIRES EVOLUTION FUNDING
- LITHIA Q2 PROFIT SLIPS, REVENUE UP 12%
- CHINA NEW ENTRANT EVERGRANDE LOSSES MOUNT
- STOCKWATCH: Motorpoint confirms plans for 10% headcount reduction, saving £3m a year, in AGM trading update
- COMING UP: Cazoo H1 results, BoE interest rate decision
- BEN BERNANKE TO LEAD BoE FORECAST REVIEW
- FARAGE LAUNCHES WEBSITE TO TACKLE ‘DE-BANKING’
Suzuki retailers in 2023 record profit
Suzuki UK and Ireland director Dale Wyatt has revealed retailers recorded record net profits in the first half of 2023, with average return on sales improving to 2.6%.
The average solus Suzuki retailer has a 3.3% return on sales – and the upper quartile are enjoying a 5.4% return.
Average net profit is up 50% year-on-year.
Wyatt said retailers were on track to deliver his ‘3-2-1’ objective by the end of this year: 3% return on sales, 2% market share, number 1 in trust. “I take my hat off to the Suzuki dealer network… they are delivering on our ultimate goal which is to achieve profitable growth through customer centricity.”
* Read our interview with Dale Wyatt here: https://tinyurl.com/3rp6k96y
Carwow reveals ULEZ retailer opportunities
3 in 4 motorists don’t know if their car meets Clean Air Zone rules, a new poll by Carwow has revealed. It says this is “great news” for retailers who have a new opportunity to attract new customers and boost sales.
With 800k non-compliant cars in London, more motorists will be looking to sell their vehicles for lower-emission models.
Just 15% of Londoners have already upgraded, or considering upgrading, their non-compliant car – and only 10% who know their car isn’t compliant feel they are not in a position to change.
Surprisingly, 50% of motorists in London say they would like to buy an EV in the future.
Carwow adds that London isn’t alone with its expanded ULEZ; Bristol and Birmingham have “near-identical Clean Air Zones, while Glasgow has outright banned older cars from its centre”.
JCT600’s £1.45bn 2022 turnover; William Morgan record
JCT600 saw turnover increase 11% in 2022, to £1.45bn. It said although volumes declined (partly due to its withdrawal from the Vauxhall, Peugeot and Citroen franchises), a more premium model mix increased average sale price by more than 20%. Profit before tax fell slightly, from £45m to £43m, and its return on sales fell from 3.5% to 3.0%.
Northamptonshire’s William Morgan Group enjoyed a record year ended December 2022, with turnover up 15% to £245.7m and profit before tax up from £4.3m to £5.5m. Its gross profit margin improved to 18.2% thanks to better new car margins and increased sales to corporate customers. It secured all volume-related bonuses on BMW, Mini and BMW Motorrad sales.
Carlyle acquires Evolution Funding
Global investment firm Carlyle has acquired automotive finance platform Evolution Funding including its Click Dealer operation. The Chesterfield company employs 500 people and supports 4,000 retailers including Marshall, Sytner and Trust Ford, plus online retailers Cinch and Cazoo.
Evolution Funding’s technology connects retailers and auto finance providers with multiple lenders. Evolution acquired Click Dealer in 2021 and Motion Finance in May 2023. It has a total platform volume in excess of £2bn.
WORLD NEWS
Lithia Q2 profit slips, revenue up 12%
Lithia, the largest new vehicle auto retailer in the US, saw net income drop 11% to $301m (£234m) in Q2, as profit per new vehicle fell 22% to $4,635 (£3,608). Revenue, however, was up 12% to $8.1bn (£6.3bn). Lithia has added around 50 retailers in Q1, mainly through its acquisition of Jardine.
China new entrant Evergrande losses mount
Evergrande has reported a net loss of 84bn yuan (£9.1bn) for 2021 and 2022 combined – and warned of its ability to continue as a going concern. Total liabilities in its 2022 earnings statement amounted to 184bn yuan (£20bn). The Chinese EV maker plans to raise $500m to satisfy capital requirements for the production of its Hengchi 5 EV.
STOCKWATCH
Closing prices on 28 July 2023 and weekly change
Auto Trader Group 642.8p (-6.8p / -1.0%)
Caffyns 500.0p (n/c)
Halfords 222.4p (+5.8p / +2.6%)
Inchcape 819.0p (+51.0p / +6.4%)
Lookers 122.8p (+16.8p / +14.6%)
Motorpoint 106.5p (+8.5p / +8.3%)
Pendragon 17.18p (-0.6p / -3.4%)
Vertu 71.0p (+1.7p / +2.4%)
COMING UP
Monday, UK consumer credit
Tuesday, Cazoo Q2 and H1 results
Tuesday, BRC shop price index
Thursday, Bank of England interest rate decision
Friday, July new car registrations
MONEY MATTERS
Ben Bernanke to lead BoE forecast review
Former Fed chair Ben Bernanke is to lead a review of Bank of England forecasts. It comes amid criticism of its handling of the cost of living crisis, and failure to forecast the scale of last year’s surge in inflation. Governor Andrew Bailey has admitted there were “very big lessons” to learn.Bernanke will report back in spring 2024.
Farage launches website to tackle ‘de-banking’
Nigel Farage has launched a new website called accountclosed.org to “fight back against the big banks that have let us down”. Visitors can enter their email address and receive updates on the campaign which aims to “influence policymakers and regulatory bodies to implement fairer policies and stricter guidelines”.
Tags:
Bank of England, Carlyle, Carwow, Clean Air Zones, Evolution Funding, Farage, Jardine, JCT600, Lithia, Suzuki, ULEZ, William Morgan 
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