Auto Retail Agenda: 25 November 2024
24 November 2024
- COULD GOVERNMENT INTERVENE IN COMMISSION CRISIS?
- LITHIA AND BCA AGREE 5-YEAR REMARKETING CONTRACT
- JAGUAR BOSS BULLISH DESPITE BACKLASH (AND FARAGE)
- SYTNER MIDHURST PORSCHE PLANS APPROVED
- BLOG: WHY GREAT IDEAS NEED CHECKING
- FLANDERS PULLS SUCCESSFUL EV REBATES
- EU OEMS SUBSIDISE STRUGGLING CHINESE RETAILERS
- STOCKWATCH
- COMING UP
- CONSUMER CONFIDENCE RISES
- GERMANY AT RISK OF RECESSION DUE TO TRUMP TARIFFS
Could government intervene in commission crisis?
The surprise judgement of the Court of Appeal around Discretionary Commission Arrangements “needs to be overturned,” said a Sunday Times commentator – either in the Supreme Court or by parliament.
And chancellor Rachel Reeves, said Oliver Shah, has hinted the government may act in her Mansion house speech, saying it wanted to “reduce uncertainty by developing the right approach to redress”.
Some bankers have criticised the FCA, saying its vague approach left space for the Court of Appeal ruling. Others say the watchdog was “knocked sideways by the Court of Appeal, which used common law to reinterpret the rules”.
What’s more, the Court of Appeal judgement applies to all types of commissions, not just discretionary ones, which could have ramifications for any goods or services bought on credit through a broker. Grant Thornton has warned it could apply to insurance products, household appliances and even business loans.
“That type of contagion would be existential for financial services.”
Shareholders have taken fright as a result. “Our shareholders – particularly our American shareholders – are apoplectic,” said one bank boss.
Moody’s has put the redress bill faced by banks at £30bn, which approaches the £50bn PPI scandal. “Unlike with PPI, though, customers got a product — a car — that actually worked,” said Shah. “And they agreed to the overall loan price, even if the commission payment wasn’t disclosed.
“The car financing situation is madness.”
Lithia and BCA agree 5-year remarketing contract
BCA and Lithia have agreed a new exclusive five-year remarketing contract. BCA owner Constellation’s executive chairman Avril Palmer-Baunack said she was “delighted” Lithia’s exclusive remarketing deal will run until 2029 “and that they have trusted and invested in our partnership with their new consolidated UK group of companies and leadership”.
Lithia is described as the third-largest automotive group in the US and one of the largest in the UK, operating around 200 retailers under the Stratstone and Evans Halshaw brands.
“BCA delivers a range of innovative remarketing programmes that maximise digital engagement and generate the best possible buying power for our stock,” said Lithia UK CEO Neil Williamson.
“BCA’s logistics network, auction footprint and sales capability represent the most efficient volume remarketing model serving the UK used vehicle sector.”
Jaguar boss bullish despite backlash (and Farage)
More than 100 million people have posted, read, liked or shared social media messages about Jaguar – including Elon Musk and Nigel Farage. However, many of them are negative, following the Coventry firm’s radical rebrand unveiled on Tuesday.
“I predict Jaguar will now go bust,” said Farage. “And you know what? They deserve to.”
Jaguar MD Rawdon Glover admits he didn’t expect the backlash, nor to be “the number one and three trending topics on X on either side of the Atlantic”. But he welcomes it. “We wanted to start a debate – to get people thinking and talking about Jaguar in a different way.
“People love us for our history and our heritage, but that has not led to huge commercial success. The average age of the Jaguar client is quite old and getting older. We’ve got to access a completely different audience. That audience isn’t centred around people of the demographic of Mr Farage.”
Glover also said he was angry that some Jaguar executives have been singled out for blame for the “woke” rebrand. “Public personal attacks on individuals are not acceptable. I don’t want that.”
Sytner Midhurst Porsche plans approved
Mid Sussex District Council has approved plans from Sytner to build a Porsche Centre in Sayers Common, West Sussex. The Centre is expected to provide 70 full-time jobs.
BLOG: Why great ideas need checking
WORLD NEWS
Flanders pulls successful EV rebates
Auto retailers in Flanders, North Belgium, saw a rush last Friday as a rebate scheme on new and used EVs that was due to run until 2026 ended suddenly due to overwhelming demand. The rebate offered €3k off used EVs and €5k off new ones. Some retailers said the scheme helped them sell four times as many EVs.
EU OEMs subsidise struggling Chinese retailers
European OEMs are paying their Chinese retailers hundreds of millions of euros to stay solvent due to plunging demand. BMW, JLR and Mercedes-Benz all say they have subsidised their Chinese retail network, after a price war saw a series of collapses in the retail network.
STOCKWATCH
Closing prices on 22 November 2024 and weekly change
Auto Trader Group 830.0p (+35.0p / +4.3%)
Caffyns 450.0p (n/c)
Halfords 131.4p (-8.4p / -6.1%)
Motorpoint 120.0p (-8.5p / -6.8%)
Pinewood 340.0p (+13.0p / +3.8%)
Vertu 60.9p (-0.1p / -0.1%)
COMING UP
Tuesday, Halfords interims
Wednesday, Motorpoint interims
Wednesday, BRC shop price index
Friday, UK consumer credit
Wednesday 11 December, Driving Automotive 2024 Special Edition: New Brand Entrants
MONEY MATTERS
Consumer confidence rises
UK consumer confidence rose in November as a pre-budget fall in sentiment eased, reports GfK. The most optimism was recorded in consumers’ intentions to make big purchases before Black Friday and Christmas. However, overall household confidence still remains in negative territory, at -18.
Germany at risk of recession due to Trump tariffs
Germany has suffered some of the steepest growth downgrades of any advanced nation as economists warn of its vulnerability to the incoming Trump administration’s trade barriers. Germany’s own political turmoil is adding to the malaise. “Anxiety and nervousness among German businesspeople is very high,” said Matthias Kramer of the Federation of German Industries.
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