“We now want to seize the opportunity of the Duty and the move to a clear outcomes-based approach to streamline our rulebook, lowering costs for businesses and supporting the competitiveness and growth of the economy.”

https://tinyurl.com/3j8945nt

Cazoo: ‘aggressive expansion’ a factor in failure

Cazoo administrators Teneo say Cazoo’s failure was driven by factors including “aggressive expansion strategies, a competitive market, high consumer acquisition costs and unfavourable economic conditions”.

Despite a successful NYSE listing, it lost £329m in 2021, a trebling of its £103m 2020 loss. “This resulted in the share price reducing c. 50% in the first 12 months and c.99% within two years of listing”.

Teneo refereed to Cazoo’s 2024 pivot to a third-party marketplace (the ‘3P Pivot’) which saw a wind-down of non-core assets and activities. This included a sale of all vehicle stock plus several bulk sales, which not only fully repaid all stocking loans, but yielded a surplus of £30m. A M&A process for other assets was accelerated, and a redundancy programme commenced, reducing the business headcount by c.700 during Q1 2024.

Teneo was engaged in February 2024 to offer companies the opportunity to acquire the 3P business. A total of 64 parties were contacted – 16 trade buyers and 48 financial investors. 23 parties submitted an interest and were provided with further details under an NDA.

On 8 May, when it became clear a solvent solution was not viable, the directors filed a Notice of Intention to appoint administrators.

In a lengthy report following a meeting of Cazoo’s creditors, it was revealed there are currently more than 10,000 unsecured creditors with total claims of £259m.

 

Lithia ups stake in Pinewood

Lithia has upped its stake to more than 25% in UK DMS firm Pinewood Technologies. It has purchased nearly 5 million shares, worth around $23m, in the months since its initial minority investment. “We value the partnership with Pinewood and see opportunities to continue creating synergies across our customer ecosystem,” said Lithia spokesperson Jardon Jaramillo.

Lithia closed a deal to buy Pendragon’s retail network and fleet management company in January 2024. This also gave it the initial stake in Pinewood Technologies.

Lithia has pledged to add 7,500 UK retailers to the DMS alongside the existing 2,500 users. It also plans to take the DMS to the US.

https://tinyurl.com/ysffyuc4

 

Motorcycle retailers dissatisfied, NMDA survey reveals

UK motorcycle retailers are dissatisfied. The spring 2024 edition of the National Motorcycle Dealers Association Dealer Attitude Survey has seen all questions score lower than the previous spring 2023 edition. The average overall manufacturer rating was 5.0, a notable 1.3-point fall. Satisfaction with profit has plunged to an average of just 2.1.

In the OEM rankings, Honda claim top spot, with a score of 7.44 – a significant improvement from its previous 7^th-place ranking. Honda was the only brand to see an increase in overall satisfaction, and just pipped BMW in second. Previous top scorer Triumph experienced a 35% decline from 9.5 to 6.2, placing it fourth.

The full results will be revealed today (Monday 5 August).

https://tinyurl.com/bdzeny6c

 

 

WORLD NEWS

Lithia Q2 record revenue but profit down 28%

Lithia’s Q2 profit before tax fell 28% to $216.6m in Q2 despite revenue rising 14% to a record $9.2bn. It was the first full quarter of earnings since Lithia purchased Pendragon. Q2 profit suffered because of the CDK Global outage, decreasing vehicle margins and higher capital spending tied to OEM-required construction.

Shares rose 7.2% on the news.

https://tinyurl.com/2uhus429

 

Kenya shuns premium brands with zero June sales

BMW and Range Rover recorded zero new car sales in Kenya during June as Kenyan motorists focus on cheaper imported secondhand vehicles. British multibrand distributor Inchcape has sold only two new Range Rovers in Kenya so far in 2024, plus five BMWs and 10 Land Rovers. Overall YTD new car sales are down 12.6% to 4,982 vehicles; in contrast, Kenya imports around 6,000-8,000 used cars per month.

Used car imports are limited to vehicles aged eight years or less.

https://tinyurl.com/57h6ey89

 

 

 

STOCKWATCH

Closing prices on 2 August 2024 and weekly change

Auto Trader Group 791.6p (-2.6p / -0.3%)

Caffyns 460.0p (n/c)

Halfords 144.0p (-10.0p / -6.7%)

Inchcape 833.0p (-22.0p / -2.6%)

Motorpoint 142.0p (+0.5p / +0.3%)

Pinewood 340.5p (-11.5p / -3.3%)

Vertu 70.3p (-2.8p / -3.9%)

 

 

COMING UP

Monday, SMMT July 2024 new car registrations

Wednesday, Halifax house price index

 

 

MONEY MATTERS

PwC urges chancellor to consider EV pay-per-mile

PwC says chancellor Rachel Reeves should tax EVs based on how far they drive to address a looming £9bn black hole from the loss of fuel duty. A pay-per-mile tax on EVs could be done automatically through geolocation trackers, or through self-reporting like in Iceland, where EV and PHEV drivers pay 5.4p per mile. (They have to submit a photo of their odometer each month.)

The Resolution Foundation has estimated petrol drivers currently pay 19p per mile, while EV drivers pay 7p per mile.

https://tinyurl.com/2s35ery9

 

Tesla to join UK energy market?

Elon Musk has hired a UK head of operations, Roxanne Inskip-Kaye, as part of plans to launch a domestic energy provider. The household supply business, called Tesla Electric, will be targeted at owners of its Powerwall home battery. The ‘virtual power plant’ is a network of home batteries that can be used to balance out inconsistent green energy such as wind and solar.

https://tinyurl.com/22wj4sp8

 

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