Auto Retail Agenda: 26 February 2024
25 February 2024
- EVs ‘BEING FORCED ON CUSTOMERS’ SAYS SIR JIM RATCLIFFE
- MERCEDES-BENZ WARNS OF WANING EV DEMAND
- CAR INDUSTRY WARNED ABOUT KEYLESS THEFT A DECADE AGO
- STELLANTIS BOSS RECEIVES 56% PAY RISE TO £31m
- RUSSIA NATIONALISES SEIZED RETAILER
- CARVANA NARROWS NET LOSS; REVENUE FALLS
- STOCKWATCH
- COMING UP: Aston Martin full year
- WHY RAISING THRESHOLDS BEAT TAX CUTS
- CHILD BENEFIT CHANGE MOOTED
EVs ‘being forced on customers’ says Sir Jim Ratcliffe
Sir Jim Ratcliffe says British and European governments are forcing electric vehicles “down the customer’s throat”. He says EVs still have major drawbacks and carmakers should not be forced to sell them exclusively.
Ineos, he added, has effectively been forced to launch an EV – revealed last week and called the Fusilier – and OEMs “can’t survive” without launching one.
He contrasted the European approach with America, which is saying “there probably isn’t one solution for all purposes.
“I think the consumer should have a choice. And it’s clear at the moment that consumers are speaking with their feet… they’re not buying electric cars.”
Mercedes-Benz warns of waning EV demand
Mercedes-Benz has paired back its outlook for EV sales as demand for electric cars cools. It now expects EVs to account for half of its sales in the second half of the decade, rather than 2025.
“I don’t think anyone had ever thought that the once-in-a-century transformation of the auto industry will be a straight line,” said CEO Ola Kallenius. “There will be peaks and troughs.”
Car industry warned about keyless theft a decade ago
The car industry was apparently warned “more than a decade ago that keyless technology on modern vehicles risked a surge in thefts”. Research found that owners could “expect to find their cars stolen in the future without any sign of entry”.
An article in 2012 written by a barrister warned keyless systems could be “successfully undermined” and unless OEMs improved the design, cars would be stolen without forced entry.
The Observer investigation found devices known as emulators were being used by thieves to mimic the electronic key; they targeted Hyundais and Kias. Smart equipment is also for sale online, costing up to £5k, allowing thieves to hack vehicles and programme a new key.
“The motoring industry has been negligent because they were warned when this new technology was beginning to emerge,” said lawyer Nick Freeman. “It’s a catastrophic situation where people cannot insure their cars or face ridiculously high premiums.”
The SMMT denied the industry has failed on security but said it has been in an “arms race” with criminals.
Stellantis boss receives 56% pay rise to £31m
Stellantis CEO Carlos Tavares has become one of the auto industry’s most highly-paid executives after receiving a 56% rise in renumeration to €36.5m (£31.2m) for 2023. Much of the pay rise came from bonuses related to long-term targets; his fixed salary of €2m (£1.7m) remains unchanged.
WORLD NEWS
Russia nationalises seized retailer
A Russian court last week ordered ownership of auto retailer Rolf, along with founder Sergei Petrov’s income, be handed over to the state – effectively nationalising the firm.
The lawsuit said the seizure was for “property obtained in violation of anti-corruption legislation”. Petrov, who lives in Austria, is accused of illegally moving money abroad, which he denies.Rolf was one of the first auto retailers to emerge after the collapse of the Soviet Union.
Carvana narrows net loss; revenue falls
Shares surged 33% in online used car retailer Carvana after it reported a narrower fourth quarter net loss. It said it has cut costs by $1.1bn (£870m) since early 2022 and prioritised profitability. Its loss of $114m (£89m) was down from $806m (£635m) in the year-ago quarter – although revenue fell 15% to $2.4bn (£1.89bn).
STOCKWATCH
Closing prices on 23 February 2024 and weekly change
Auto Trader Group 734.6p (+13.0p / +1.7%)
Caffyns 450.0p (n/c)
Halfords 201.2p (+14.3p / +7.3%)
Inchcape 657.5p (+1.0p / +0.1%)
Motorpoint 126.0p (+10.0p / +8.2%)
Pinewood Technologies Group 35.55p (+0.95p / +2.7%)
Vertu 66.9p (+2.1p / +3.1%)
COMING UP
Tuesday, BRC shop price index
Wednesday, Aston Martin full year
Thursday, Nationwide house price index
Thursday, UK consumer credit
MONEY MATTERS
Why raising thresholds beat tax cuts
Rather than cutting income tax rates, it is argued chancellor Jeremy Hunt should raise tax thresholds. Billions of pounds have been raised through fiscal drag, due to income tax thresholds not changing since 2021 and expected to remain frozen until 2028.
The OBR says more than seven million people will be paying a higher rate of tax in 2028 than they were in 2022, due to fiscal drag. Raising thresholds by 6.7% would leave someone earning between £53k-£100k over £840 a year better off. “The combination of frozen allowances at a time of high inflation has been toxic for workers,” said AJ Bell’s Laura Suter.
Child benefit change mooted
The chancellor is understood to be reviewing “perverse” child benefit rules that can lead to marginal tax rates of more than 100%. The current system penalises families with just one earner; the High Income Child Benefit Charge sees the benefit clawed back at the rate of 1% for every £100 over the threshold. It is lost entirely at £60k. In contrast, two parents earning £49,999 can keep the lot.
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