Auto Retail Agenda: 22 January 2024
21 January 2024
- LENDERS COULD FACE £10bn BILL OVER CAR FINANCING
- FRANCHISE OPPORTUNITIES AT NEW ENTRANT IMPORTER IA
- JCT600 BUYS LAND; LISTERS BUYS GUY SALMON JAGUAR
- STELLANTIS LAUNCHES EUROREPAR FOR INDEPENDENTS
- CHINA GOVERNMENT WARNING ON EV EXPANSION
- STELLANTIS WARNS OF EV ‘BLOODBATH’
- STOCKWATCH
- COMING UP: GfK consumer confidence
- HMRC TAX MESS ‘BIGGER THAN POST OFFICE’
- HOW TO TURN 26 DAYS OF ANNUAL LEAVE INTO 56
Lenders could face £10bn bill over car financing
Analysts suggest banks could face a £10bn compensation bill for unfair car finance deals. The FCA has announced an investigation into whether loans taken out before January 2021 were unfairly charged higher interest rates in return for higher ‘discretionary commission’ to car dealers.
Discretionary commission was banned in January 2021.
The FCA says discretionary commission applied to around 40% of car finance between 2013 and 2016.
Numis estimates banks, most notably Lloyds Banking Group, could face the £10bn compensation bill if “widespread misconduct” was found. It calculates Lloyds loaned £30bn in consumer car finance between 2014 and 2020 through its Black Horse division, and could face a £1.5bn compensation bill.
However, the bill would be lower for car finance mis-selling than for the £38.4bn PPI scandal, added Numis – following a Financial Ombudsman Service ruling into two banks, Barclays and Lloyds. It decided the borrowers should only be compensated for the extra interest they paid, not the entire cost of their finance.
Car buyers paid an average of £1,100 more interest on a typical four-year, £10k car finance deal when discretionary commission was used, says the FCA.
It is lenders who are on the hook, rather than retailers, because they are responsible for the actions of the retailer under Section 56 of the 1974 Consumer Credit Act. What’s more, it is lenders who would have devised the commission structure for the products.
Franchise opportunities at new entrant importer IA
Innovation Automotive, the importer of new entrant brands Seres and Skywell, is calling for franchised retailers to get in touch about UK opportunities as it steps up its UK roll-out. The UK-based EV importer, based in the Cotswolds, claims to be the first multi-brand, 100% EV automotive company in the UK.
* Be informed about China’s new brands, including Seres and Skywell, with the Auto Retail Network New Entrants Report
JCT600 buys land; Listers buys Guy Salmon Jaguar
JCT600 has acquire seven acres of land at the new Riverdale Park development in Doncaster. It plans to develop a new showroom and forecourt. The 112-acre site will be a mixed-development scheme comprising 600 new homes and 200,000 sq ft of employment space.
Meanwhile, property investor Colmore Capital has sold the 20,560 sq ft former Guy Salmon retailer on Birmingham Road, Coventry, to Listers Group. The deal was announced last week after being agreed in November 2023.
Stellantis launches Eurorepar for independents
The Stellantis Eurorepar EV and hybrid aftersales brand for independent repairers has now launched Europe-wide, including the UK, following a trial in the Netherlands. It promises motorists the best price for servicing an EV or hybrid. Every workshop mustinstall at least a 22kWh fast charger to be accredited.
WORLD NEWS
China government warning on EV expansion
The Chinese government aims to rein in expansion of its EV sector after the industry has been thrust into a trade war between Beijing and the west. Xin Guobin, vice-minister of industry and IT, said there was “insufficient” customer demand” and Beijing will take “forceful measures” to address “blind” construction of new EV projects.
The move follows the EU’s launch last September of an anti-dumping investigation into the Chinese EV industry. Beijing has since hit back with an investigation into French cognac sales to China.
Stellantis warns of EV ‘bloodbath’
Stellantis chief Carlos Tavares has warned OEMs cutting EV prices too fast risk a “bloodbath” in the industry. “If you go and cut pricing disregarding the reality of cost, it’s a race to the bottom,” he warned. “That is exactly what I am trying to avoid.”
The news came hours after Ford cut production of its electric F-150 Lightning pick-up due to weak sales.
STOCKWATCH
Closing prices on 19 January 2024 and weekly change
Auto Trader Group 712.8p (+8.2p / +1.1%)
Caffyns 485.0p (-15.0p / -3.0%)
Halfords 174.7p (-1.7p / -0.9%)
Inchcape 651.0p (-57.5p / -8.4%)
Motorpoint 95.0p (-4.6p / -4.7%)
Pendragon 34.3p (+1.1p / +3.2%)
Vertu 65.6p (-3.9p / -5.7%)
COMING UP
Tuesday, public sector net borrowing
Friday, GfK consumer confidence
30 January, Auto Retail Live used car landscape: sign up here
MONEY MATTERS
HMRC tax mess ‘bigger than Post Office’
HMRC is “wrongfully hounding thousands of people for tax they legitimately did not pay” and the controversial ‘Loan Charge’ tax mess “might be more devastating than the Post Office scandal”. Workers caught up in the scandal were typically self-employed contractors paid using tax-free loans from offshore trusts that did not need to be paid back. Employers were also not required to pay income tax and National Insurance.
How to turn 26 days of annual leave into 56
Combining weekends, bank holidays and annual leave can effectively turn 26 days of annual leave into 56 days. Workers who book off April 2nd-5th and 8th-12th during Easter, for example, can turn nine days off into a 17-day holiday. Four days off can be turned into a nine-day holiday by using the early May bank holiday on 6 May.
Tags:
China, discretionary commission, Eurorepar, EV, FCA, FOS, HMRC, Innovation Automotive, JCT600, listers, New Entrants, Post Office, Stellantis 
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