• EXCLUSIVE: HYUNDAI PLANS NETWORK RESTRUCTURE
• CLOSE BROTHERS’ £400m FCA FIGHTING FUND
• USED CAR DEALER CLOSES OWNING £430k
• NETWORKS REPORT NOW ON SALE
• MERCEDES DEFENDS GERMAN RETAILER SALE
• CARVANA ‘U-TURN FROM FINANCIAL ABYSS’
• STOCKWATCH
• COMING UP: UK GDP
• HMRC IN ‘SHAMBOLIC DEMISE’
• 4 IN 5 SAVINGS ACCOUNTS BEAT INFLATION

Exclusive: Hyundai plans network restructure

Hyundai will reduce its retail partners by almost a third but increase the number of franchise points to 173 over the next four years.

Speaking exclusively to Auto Retail Agenda, the brand’s business transformation director, Nick Tunnell, said the manufacturer planned to reduce the number of retail groups it deals with from 75 to 54 while increasing the number of sites from 165 to 173 by 2028.

Hyundai was already due to issue new franchise contracts from the start of April and has used the opportunity to carry out a full restructuring. Tunnell added the manufacturer would stick with the franchise model for the foreseeable future, rather than switch to agency, as retailers were the best people to sell cars and handle the varied paths customers require.

The OEM, which set new dealer standards over a year ago, has categorised the network into three groups. Group A are those that are already performing well and at the required standard; these will be kept with no need to change. Group B will be retained but may need improvements. And group C will not be renewed.

Tunnell said the aim of the change was to both improve customer experience of the brand as it transitions to BEVs and also to improve retailer profitability through greater efficiency. He said Hyundai was aiming to lift the network average return on sales from 1.1% in 2023 to 2.0%. He added the upper quartile was currently at 2.4%.

* Read the full interview with Tunnell in the April issue of Auto Retail Bulletin: subscribe here

 

Close Brothers’ £400m FCA fighting fund

FTSE 250 merchant bank Close Brothers has launched a £400m capital plan to strengthen its balance sheet amid the FCA review into car finance. Close Brothers has by far the most car finance exposure, with 22% of its gross loan book being car finance loans. Barclays, Lloyds and Santander are all well under 5%.

Analysts have estimated the probe could cost the banking industry up to £16bn.

https://tinyurl.com/yc6uu6xx

 

Used car dealer closes owning £430k

Bournemouth and Poole Car Sales has closed after eight years, owing 15 creditors £430,700. Around 40 to 50 cars remain parked up at the used car dealer.

https://tinyurl.com/4nd8nasc

 

Networks Report now on sale

The Networks Report 2024 is the only compete guide to the structure and sales performance of auto retail networks in the UK. The comprehensive report gives unparalleled insights into the structure and sales performance of automotive brand network and offers a goldmine of information tailored for car dealers, manufacturers and industry suppliers.

* Order your copy here: https://tinyurl.com/3bst8z5e

 

 

 

WORLD NEWS

Mercedes defends German retailer sale

Mercedes-Benz CEO Ola Kallenius has defended the planned sale of its 60 OEM-owned retailers in Germany. He argued the owned retailers would struggle to compete against the cost structures of large retail groups. “We may be big in Germany, but we are rather small on a global scale.

“Of the 6,500 dealerships worldwide, well over 90% have always been privately owned.” The German move simply follows what has already been implemented in many other countries, he said. There are estimates transferring all the German retailers into private hands could raise €2.5bn (£2.1bn).

https://tinyurl.com/5csa3z7a

 

Carvana ‘U-turn from financial abyss’

Carvana has avoided a looming financial abyss by changing its business strategy to slash costs, boost efficiency and scale back ambitions for growth. Last year, it reached its highest-ever gross profit per car sold, and recorded operating profit of $300m – despite selling 300k cars, compared to 425k in 2021. Its shares rallied 10% last week, although it remains the most shorted stock in the US auto retail sector.

https://tinyurl.com/47rrvrsu

 

 

STOCKWATCH

Closing prices on 22 March 2024 and weekly change

Auto Trader Group 762.4p (+7.4p / +0.9%)

Caffyns 450.0p (n/c)

Halfords 159.0p (+0.7p / +0.4%)

Inchcape 689.0p (+46.5p / +6.9%)

Motorpoint 130.0p (+0.5p / +0.3%)

Pinewood 38.6p (+0.8p / +2.0%)

Vertu 66.2p (-0.9p / -1.3%)

 

 

COMING UP

Thursday, UK GDP

Thursday, Nationwide house price index

Friday, Good Friday

27 April, NFDA Spring Ball

3 May, Radius Law Annual Conference

 

 

MONEY MATTERS

HMRC in ‘shambolic demise’

Customer service at HMRC is at an all-time low, MPs and trade bodies have warned. Experts blame a lack of resources and inability to deal with demand from taxpayers. A freeze on tax thresholds means HMRC is serving over 35 million taxpayers, 10 million more than the 1990s.

Callers are waiting an average of 25 minute to get through to an adviser; in 1994-95, 99% of calls were answered within 15 minutes. More than 1 in 10 letters are unanswered after 40 days.

Last week, HMRC was forced into a U-turn on plans to shut the self-assessment helpline for six months.

https://tinyurl.com/4f2wp9jt

 

4 in 5 savings accounts beat inflation

More than 1,300 savings accounts – 4 in 5 accounts on the market – are now beating inflation and delivering a real return on money. The CPI has fallen to 3.4%, compared to 10.4% a year ago. This time last year, there were no savings accounts that beat inflation.

https://tinyurl.com/4kdcjure