• AUTO RETAILERS ‘ON BRINK OF £16bn DCA CRISIS’
• FCA BLAMED FOR DCA CRISIS
• JETTEN LEAVES SEAT; COLLIER LEAVES JACKSONS
• MARSHALL 2024 PROFIT DOWN
• OLDEST MERCEDES-BENZ RETAILER CLOSES
• CAFFYNS SELLS PROPERTY TO LIDL
• CHINESE BRANDS PLUNGE IN EUROPE
• AUTONATION SELLS 8 RETAILERS FOR $156m
• STOCKWATCH: Motorpoint down nearly 20%
• COMING UP: September new car registrations
• ENTREPRENEUR’S RELIEF REMAINS – FOR NOW

Auto retailers ‘on brink of £16bn DCA crisis’

The shock DCA court ruling “threatens to drive up costs for motorists and – in a worst-case scenario – bring the UK’s £100bn motor sector to a shuddering halt”.

The Finance and Leasing Association’s Adrian Dally admitted to the Telegraph that disruption is rife. “We’re all immediately having to restructure to comply with this in order to keep cars being bought and finance flowing.”

Comparisons with the PPI scandal continue, with some experts saying banks could face a bill of up to £16bn.

Lloyds Bank is to halve its £2bn share buyback plan and could face a £3.2bn compensation bill. Santander may now face a £1.4bn bill (up from £1.1bn), Barclays a £400m bill, Secure Bank has issued a profit warning and Metro Bank has paused lending.

The court ruling implies that any fees paid to brokers are unlawful, regardless of the outcomes for customers. This covers not just commission, but other things such as loan arrangement fees.

“The bottom line is that last Thursday, every motor finance agreement was lawful, but by Friday afternoon, every motor finance agreement was unlawful,” said Dally.

“That’s a really extraordinary place to be.

“Usually when you have a significant change in regulatory requirements, it is considered by the regulator, there is a public consultation, the final rules are refined and then businesses are given six months to comply. All that has been condensed into a nanosecond.”

Royal Bank of Canada analyst Benjamin Toms said that if the court ruling holds, it could result in banks pulling out of the motor finance sector altogether – which could result in customers paying more to finance their vehicles.

The FLA held an urgent meeting with Treasury officials and the FCA last Tuesday. FCA chief executive Nikhil Rathi later said in a speech the regulator is working “at pace” to find a solution and could “offer further guidance soon”.

https://tinyurl.com/mr43jmh5

 

FCA blamed for DCA crisis

Sir Howard Davies, former chair of the FCA’s predecessor, the FSA, has blamed the FCA for the DCA crisis, saying a lack of clarity in its rulebook was to blame.

“I’m disappointed there has not been enough regulatory clarity on the rulebook that has meant the court has been able to step in with its own interpretation.

“My general experience is that if the regulator is very clear about the expectations on firms, the courts are usually very reluctant to substitute their judgement for that of the regulator within a statutory context.

“The courts normally back off.”

In response, the FCA said the court decision “did not relate to our rules, but the longstanding legal principle of fiduciary duty”.

https://tinyurl.com/sf7m8pmh

 

Jetten leaves Seat; Collier leaves Jacksons

James Jetten, head of direct sales at Seat and Cupra, is leaving the brand after 11 years. He was previously long-term head of network development, and a well-known face to retailers. He said on LinkedIn that he departs at the end of the month, and plans to take some time out.

Auto Retail Agenda has also learnt Paul Collier has left Channel Island giant Jacksons. Last year, Jacksons was acquired by Van Mossel in a £13.5m deal.

 

Marshall 2024 profit down

Marshal Motor Group saw profit before tax plunge from £13.6m to £2.9m in the year ended March 2024. Turnover grew slightly to £1.44bn. The company remains in a net asset position of £79m.

In its strategic report, the retailer referenced current information from the FCA not indicating any penalties or consumer redress against intermediaries and retailers due to DCA. “As a result, no provision or contingent liability has been recognised.”

 

Oldest Mercedes-Benz retailer closes

Stratstone’s Mercedes-Benz Bradford retailer has closed. The 70-year-old business was the German brand’s first in the North of England, and understood to be its oldest retailer in the UK. Notable moments from its history include its workshop being opened in the 1960s by legendary Mercedes-Benz racing manager Alfred Neubauer.

https://tinyurl.com/3yyenk6s

 

Caffyns sells property to Lidl

Caffyns has agreed to dispose of its freehold premises at Brooks Road, Lewes, to Lidl for £4.65m. Its Lotus Sussex business had been operated there since 2021, and will continue to do so until relocation in October 2025. Caffyns’ pension fund, which is in deficit, will receive £2.4m of the consideration.

https://tinyurl.com/34ysxp9y

 

 

WORLD NEWS

Chinese brands plunge in Europe

Chinese EV brands lost ground in Europe for the third month running, indicating that higher tariffs are hurting sales. Chinese brands took an 8.5% EV share in September, down from 9.6% in 2023. MG owner SAIC, which has the highest tariffs, led the drop with a 28% slide.

The Chinese government is also believed to be pressuring automakers to pause expansion in the EU due to the escalating trade conflict. Dongfeng has already halted plans to produce cars in Italy.

https://tinyurl.com/2uu54k5n

 

AutoNation sells 8 retailers for $156m

AutoNation sold eight retailers in Q3 as part of a move to exit underperforming stores. Five of the stores were Ford retailers. CEO Mike Manley added the group is still interested in acquisitions “that give us the opportunity to generate high returns on the capital we deploy.

AutoNation is “already beginning to see the prices drop” for retailers, he added.

https://tinyurl.com/44z5dvam

 

 

STOCKWATCH

Closing prices on 1 November 2024 and weekly change

Motorpoint falls nearly 20% after recent rally

Auto Trader Group 844.2p (-36.2p / -4.1%)

Caffyns 450.0p (n/c)

Halfords 167.0p (+3.2p / +1.9%)

Motorpoint 142.5p (-31.5p / -19.9%)

Pinewood 332.5p (-5.5p / +1.6%)

Vertu 67.8p (+0.2p / +0.2%)

 

 

COMING UP

Tuesday, October new car registrations

Tuesday, BRC sales monitor

Thursday, Auto Trader interims

Friday, UK GDP

 

 

MONEY MATTERS

Entrepreneur’s relief remains – for now

Business asset disposal relief (BADR), formerly known as entrepreneur’s relief, has survived Labour’s first budget but experts anticipate it will fall away completely in the coming years. Today, it represents a maximum capital gains saving of £100k, which will fall to £60k in two years.

The looming fall-off means “Britain will become an increasingly unattractive place to both start and exit a company,” said The Entrepreneurs Network founder Philip Salter.

https://tinyurl.com/3a82zre8

 

 

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