Auto Retail Agenda: 20 January 2025
19 January 2025
- CAR FINANCE UNCERTAINTY DETERRING INVESTORS
- JEMCA IN £4.7m 2024 LOSS
- MOTORWAY A TOP 100 TECH COMPANY
- AUTO TRADER HQ RELOCATING TO TECH HUB
- ACEA WANTS ‘URGENT ACTION’ ON CO2 TARGETS
- US RETAILER INVESTS $20m IN NEW-BUILDS
- STOCKWATCH
- COMING UP
- UK ECONOMY ‘NOT THAT BAD’
Car finance uncertainty deterring investors
City investors are concerned about investors being deterred by the UK’s approach to rules and regulation as a result of the ongoing car finance commission investigation. Some say it is becoming “difficult to operate” as a result.
JP Morgan’s Kuba Fast said the challenge is when companies have operated by the rule book but are now being penalised by rules being applied retrospectively. “It does not create a predictable business environment.”
US investor appetite is being dampened by concern that regulation-abiding firms could end up being forced to pay out billions of pounds in compensation many years later.
Andy Briggs, chief executive of pension and retirement fund provider Phoenix, toured large investors in the US last October. “Every single one asked me [about the implications of the car finance scandal] as the very first question, because they are trying to assess the scale of that risk premium of investing in the UK, because of ‘retrospection’.”
The supreme court hearing into last October’s DCA decision in the court of appeal starts on 1 April.
Jemca in £4.7m 2024 loss
Toyota and Lexus retailer Jemca has reported a £4.7m loss before tax for the year ended March 2024, despite turnover increasing from £314m to £345m. In 2023, it reported a £529k profit.
During 2024, cost of sales rose from £266m to £299m, and administrative expenses rose from £33.9m to £36.6m. Distribution costs were flat.
The directors said the financial position reflects “a very challenging trading environment… mainly due to the reduction in new car margin from the manufacturer and the UK used car realignment in the last quarter of 2023”. This resulted in a full year used car gross profit decrease of 23.4%.
The business was hit by a lack of EV supply in growing segments; while EVs made up 16.5% of 2023 sales, Toyota achieved only 0.5%, and Lexus 5.0%.
“The directors have specifically moved to a focus on value chain activities, looking to reduce the reliance on the new vehicle market.” The key area of focus will be on used cars, growing volumes through non-franchise and older used cars, plus introducing smart repair facilities, driving customer retention and maximising aftersales opportunities.
Motorway a top 100 Tech company
Motorway has placed 17th in the Sunday Times 100 Tech ranking 2025, with annual sales growth over the past three years of 141%. More than 7,500 retailers bid on vehicles on its marketplace, and more than 250k people have used it to sell a car. Annual revenue hit £60.9m in 2023.
Auto Trader HQ relocating to tech hub
Auto Trader is to relocate its HQ to No.3 Circle Square in Manchester city centre. The new “state-of-the-art” facility is part of Bruntwood SciTech’s £87m development, and will house over 900 Auto Trader employees, including 400 data scientists and engineers.
It will relocate in early 2026.
WORLD NEWS
European lobby group ACEA has called on EU leaders to urgently find a solution to the “disproportionate” costs of emissions compliance. In an open letter, president Ola Kallenius warned heavy penalties would divert finds from R&D and other investments.
“We need to revise our current penalty-driven regulations. Market conditions in 2025 are different than expected years ago.” His views reflect those of SMMT chief executive Mike Hawes, as reported in the current issue of Auto Retail Bulletin.
US retailer invests $20m in new-builds
Family-owned Jim Ellis Automotive Group has invested $200m in new-build and renovation projects since 2018. “It’s all just part of maintaining that reputation, representing the manufacturers as best we can… but it’s also about offering the best experience for our customers,” said CEO Wes Ellis.
Industry experts say the boom in US retailer construction is being driven by buy-sells, manufacturer requirements and business needs. In a survey, Kerrigan Advisors found nearly half of retailers expect real estate and manufacturer-imposed upgrades to negatively affect profits.
STOCKWATCH
Closing prices on 17 January 2025 and weekly change
Auto Trader Group 793.6p (+19.4p / +2.4%)
Caffyns 450.0p (n/c)
Halfords 127.0p (+3.2p / +2.5%)
Motorpoint 116.0p (-9.0p / -7.4%)
Pinewood 351.0p (+6.0p / +1.7%)
Vertu 55.0p (-0.2p / -0.3%)
COMING UP
Tuesday, UK unemployment
Friday, GFK consumer confidence
MONEY MATTERS
UK economy ‘not that bad’
Although the UK economy is far from strong, it is not an outlier compared to other major European economies such as France and Germany. Indeed, Germany is “startlingly weak” while both France and Italy are in breach of the EU’s demands that deficits must not get bigger than 3% of GDP.
The UK also has one of the lowest rates of unemployment.
Productivity is broadly in line with the G7, although weak business confidence has led to a big drop in the amount invested by firms in UK operations.
“Extremely high” electricity costs also count against the UK, although inflation has come back under control.
ISSN 3049-5725
Tags:
ACEA, Auto Trader, Car Finance, CO2, DCA, economy, jemca, Jim Ellis Automotive, Lexus, Motorway, SMMT, Toyota 
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