Auto Retail Agenda: 16 September 2024
15 September 2024
- REPORT: VOLKSWAGEN TO CUT UK BUSINESS PARTNERS
- LSH 2023 LOSS MORE THAN DOUBLES TO £11m
- LABOUR TO BACKTRACK ON 2030 ICE BAN
- US STELLANTIS RETAILERS SLAM TAVARES IN OPEN LETTER
- CHINA CAR SALES FALL FOR 5TH MONTH RUNNING
- STOCKWATCH
- COMING UP
- WHAT THE NFDA WANTS FROM THE OCTOBER BUDGET
- PENSION SHARING ORDERS EXPLAINED
Report: Volkswagen to cut UK business partners
It has been reported that Volkswagen Group wants to reduce its UK business partnerships from 170 to fewer than 25.
The move is part of the embattled brand’s plan to slash costs by €10bn.
As part of the overhaul, Volkswagen is considering cutting its Northern Ireland retailers from more than a dozen to just two.
In a statement, Volkswagen Group UK did not deny the report. “As part of these changes, our network is also evolving and will ultimately comprise fewer locations, operated by a reduced number of investors,” a spokesman told the Irish News.
“This model is designed to ensure we can sustain an effective and financially-viable investor network, bringing high quality service for customers.
“Our decisions have been based on a number of factors, including investors’ ability to represent and invest in a wide range of Volkswagen Group brands.”
Northern Ireland “will take a significant hit” said one industry source. Letters are believed to have gone to some retailers in the north setting out the company’s position.
No retailer has yet commented on the plans to the Irish News.
According to the ARN Networks Report 2024, the Volkswagen brand has 49 sales partners in the UK; Audi has 25, Seat has 61 and Skoda has 63.
LSH 2023 loss more than doubles to £11m
LSH Auto, the world’s largest Mercedes-Benz retailer, has extended its unenviable loss-making run, by more than doubling its loss before tax in the year ended December 2023 from £4.9m to £11.0m.
Revenue also fell, from £327m to £255m, as would be expected under Mercedes’ move from franchised to agency sales.
The directors made no comment on the financial performance, but did highlight the agency move: “LSH Auto UK acts as an agent between the brand and the customer, in return for fee income.”
Many retailers Auto Retail Network has spoken to are deeply unhappy about the drop in profitability under agency.
In an interview with Auto Retail Bulletin back in May 2024, UK MD Vaughan Blackman admitted the UK retail business has never made a profit since it bought the Birmingham and Manchester market areas from Mercedes-Benz Retail in 2016. “For the midterm, we’re focused operationally on getting the auto side into the black… we’ve had a decent start for the year, but we still have more work to do.”
He said that adding the BYD franchise was about profitable diversification… “the future of automotive is EV, whether people like ot or not. But for us, it’s about expansion”.
Labour to backtrack on 2030 ICE ban
Labour is planning to back away from a total ban on new petrol and diesel cars in 2030. Instead, hybrid vehicles will remain on sale until 2035.
The Telegraph reports the softening of Labour’s manifesto pledge reflects growing reluctance among drivers to buy EVs – who instead are “far more willing to embrace hybrids”.
A Labour source insisted it was “always policy to allow the continued sale of some hybrids”. A government spokesman added that “the original phase-out date included the provision for some hybrid vehicle sales between 2030 and 2035. We will set out further details on this in due course”.
The SMMT’s Mike Hawes earlier said that OEMs were concerned the 2030 ban could mean “a complete end of anything that has a tailpipe”.
However, the planned consultation is expected to keep the ZEV Mandate which means the EV targets and OEM fines will remain in place.
It is understood the government’s plans were revealed last week at a gathering of car industry executives in Parliament. Ministers will consult on the changes “as soon as possible”.
WORLD NEWS
US Stellantis retailers slam Tavares in open letter
US Stellantis retailers have written a remarkable open letter to CEO Carlos Tavares accusing him of “short-term decision making” to boost profits in 2023 and boost his compensation. The US Stellantis National Dealer Council says it has been sounding the alarm “for over two years now…that the course you had set for Stellantis was going to be a disaster in the long run… and now that disaster has arrived”. Read the letter in full here
China car sales fall for 5th month running
New car sales in China fell 1.1% in August. It is the fifth straight month of decline – although sales of electric and plug-in hybrid models still rose, helped by subsidies. And August sales still totalled a heady 1.92 million vehicles, not far shy of the annual total for markets such as the UK and France.
STOCKWATCH
Closing prices on 13 September 2024 and weekly change
Auto Trader Group 872.0p (+14.8p / +1.7%)
Caffyns 450.0p (n/c)
Halfords 150.4p (+8.4p / +5.7%)
Motorpoint 153.5p (-6.5p / -4.1%)
Pinewood 344.0p (+0.5p / +0.1%)
Vertu 66.2p (-2.3p / -3.4%)
COMING UP
Monday, Auto Trader AGM
Wednesday, CPI and RPI
Thursday, Bank of England interest rate decision
MONEY MATTERS
What the NFDA wants from the October Budget
The NFDA has submitted its key priorities in a proposal submitted to Chancellor Rachel Reeves ahead of the October Budget. It highlights the need to accelerate electrification, improve the business rates framework and establish a clearer road taxation policy as part of the industry’s ongoing transition.
Retail EV adoption could be boosted by targeted price incentives, it argues, while retailers would benefit from fairer business rates and clearer taxation. There should also be no raise in fuel duty.
Pension sharing orders explained
A pension sharing order is a way to split a pension between a coupe upon divorce. It is made by a court, and can include both defined benefit and defined contribution pensions. They give divorcing couples a clean break – and are important, as a pension cold be one of the biggest assets someone has. For high-earning couples, it can be worth more than the family home.
ISSN 3049-5725
Tags:
2030, 2035, BYD, China, labour, LSH Auto, Mercedes Benz, New Entrants, NFDA, Stellantis, Volkswagen, ZEV Mandate 
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