Auto Retail Agenda: 27 November 2023
26 November 2023
- LOTUS CONSIDERS DROPPING AGENCY FOR FRANCHISE
- O’HANLON: 23% HIGHER VOLUME NEEDED TO OFFSET AGENCY
- JCT600 MOVES CREATIVE ACCOUNT
- FRAUDULENT SOUTHAMPTON TRADER JAILED FOR TWO YEARS
- FORD EASES EV RETAILER PROGRAMME – AGAIN
- US FRAUD RETAILERS SENTENCED
- STOCKWATCH: Saray ups Motorpoint stake from 10% to 18%
- COMING UP: UK consumer credit
- ISA RULES TO CHANGE
- CALLS TO OVERHAUL ‘LUDICROUS’ CHILD BENEFIT RULES
Lotus considers dropping agency for franchise
Lotus is understood to be planning a return to the franchised sales model after operating agency agreements for the past two years.
Several Auto Retail Agenda sources have said that while the switch has not been officially put in place, Lotus has been talking to retailers about the move.
The reasoning behind Lotus dropping agency in favour of a franchised network is unclear, with some sources saying the implementation of agency has led to disruption and increased already long delivery times.
When asked about the move back to franchised sales, a spokesman for Lotus declined to comment.
The performance brand’s expected switch back to a franchised model comes as BMW Group told its UK retailers that it would be delaying a move to the agency model by around a year. Mini was due to switch to agency in October 2024: this has now moved back to mid-2025.
BMW itself still plan to go agency in 2026.
* For a full rundown of the latest manufacturer network plans, see our brand-by-brand guide to agency here
O’Hanlon: 23% higher volume needed to offset agency
Retailers need to sell 23% more cars under an agency model to see equal profitability with the franchised system, according to John O’Hanlon, founder of Waylands.
O’Hanlon, speaking at last week’s Vehicle Remarketing Association conference about future challenges facing the industry, said: “We need to sell over 23% extra cars just to stand still under the agency model.”
Waylands operates MG and Kia under the franchised system, and Volvo and Polestar under agency agreements.
His comments were linked to the challenges facing retailers around electrification, which he said could seriously impact aftersales profitability.
O’Hanlon’s solution, alongside selling more cars, was to improve customer retention through the use of better digital assets, new staff roles, training and remembering that “omnichannel is just retail” now – even though only 2.5% of his sales were completed fully online.
JCT600 moves creative account
JCT600 has signed an account with digital agency CreativeRace to boost its marketing efforts. The retailer’s director of customer experience, Andy Bateman, said it wanted to find a partner “who could offer a consolidated and integrated approach to our marketing efforts,” along with reducing the number of agency partners and raising the quality of strategies and results.
Fraudulent Southampton trader jailed for two years
Jonathan Nolan, from Southampton, was last week sentenced to two years in prison for fraudulently selling cars and breaching a suspended sentence. In 2017, he sold five cars to a retailer despite not being the legal owner. In 2018, he sold the same Ford Fiesta to two separate retailers one day apart.
In 2016, he was convicted for failing to disclosed £60k in income during a previous bankruptcy.
WORLD NEWS
Ford eases EV retailer programme – again
Ford is once again easing requirements of its EV certification program for US retailers. Training costs will be halved, the number of EV chargers retainers must install will be reduced, and the deadline to install them will be delayed by six months.
Almost 400 retailers have dropped out of the program since initial enrolment figures were announced a year ago. A survey this month by Kerrigan Advisors found Ford was the least trustworthy brand amongst retailers, largely because respondents expect a decline in profitability due to Ford’s EV retail strategy.
US fraud retailers sentenced
Two conspirators in the Big Red Dealerships scheme to defraud auto lenders have been sentenced. One has received nearly two years, and the other, who fled to Mexico prior to sentencing, has received nearly three years. A variety of deceptions were used by the group between 2014 and 2019 to convince lenders to issue loans to consumers with poor or no credit.
STOCKWATCH
Closing prices on 24 November 2023 and weekly change
Saray Capital last week upped its stake in Motorpoint from 10.2% to 18.2%. The move came after the used car retailer announced a £3.7m six-month loss.
Auto Trader Group 700.6p (-6.2p / -0.8%)
Caffyns 550.0p (n/c)
Halfords 229.0p (-5.0p / -2.1%)
Inchcape 660.5p (-6.0p / -0.9%)
Motorpoint 77.4p (-1.6p / -2.0%)
Pendragon 32.0p (+0.15p / +0.4%)
Vertu 83.5p (-1.9p / -2.2%)
COMING UP
Wednesday, BRC shop price index
Wednesday, UK consumer credit
Wednesday, Nationwide house price index
Wednesday, Halfords half year
MONEY MATTERS
Isa rules to change
An ISA shake-up is underway which will allow savers to switch to higher-paying accounts if they become available, and open multiple Isas of the same type each year. Changes will also simplify Isas so there will be less risk of people accidentally breaking the rules.
Calls to overhaul ‘ludicrous’ child benefit rules
The lack of changes to the child benefit system in the autumn statement is a “missed opportunity to play fair”. If one parent in a family earns more than £50k, they start to lose their entitlement. When they earn more than £60k, they are entitled to nothing – whereas a family with a total income of £99,999 can keep the full benefit, which is described as “ludicrous”.
The threshold also hasn’t moved since 2013 and will remain frozen until 2028. 1 million families had to pay some or all child benefit back in in 2013; today, it’s 2 million, or more than 1 in 4 recipients.
Tags:
agency, child benefit, consumer credit, EV, Ford, ISA, JCT600, John O'Hanlon, Lotus, Motorpoint, Saray, Waylands 
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