Johnsons reports lower manufacturer targets

Retail group Johnsons Cars has reported a reduction in certain manufacturers’ volume targets.

Filing its 2017 accounts, the group said that from the start of this year: “Manufacturer volume targets have been met naturally with a much lower level of transacted registrations needed in a couple of franchises to hit Q1 targets.”

It added that weaker sterling had affecting national sales companies importing vehicles: “A lower pound after the referendum has reduced importing manufacturers’ ability to support the new car sales with customer and dealer incentives.”

The Midlands-based group saw turnover rise 12% from £321 million in 2016 to £360m last year, with profit before tax at £1.5m. This was helped by a strong fleet performance and the acquisition of both the James A. Lawrie Skoda business in Liverpool and Chambers of Sutton, which brought the Ford brand into the group for the first time and added Hyundai and Mazda.

The group is to continue its policy of expansion.

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BMW says no to ‘target relief’

BMW is not planning to repeat last year’s ‘target relief’ measure, despite complaints from franchise holders that pressure from the manufacturer is forcing pre-registrations and impacting profitability.

A spokesman for BMW told Auto Retail Agenda there were no plans to offer target relief this year.

BMW was the biggest faller in last summer’s NFDA Dealer Attitude Survey, which was attributed to unrealistic targets. The manufacturer eased its targets in the wake of the results, which was welcomed by retailers. 

Hartwell seeks acquisitions

Mid-market group Hartwell is eyeing the acquisition of “profitable” businesses as an expansion strategy.

In its 2017 annual report and financial statement, the directors said: “There is a clear development strategy in place which will provide for measured expansion via the acquisition of profitable dealerships representing brands and locations that would strengthen the group’s existing portfolio.”

Turnover dropped from £285.5 million in 2016 to £272.5m last year. Operating profit fell from £4.6m to £3.2m.

The group currently operates 25 franchised dealerships across 11 sites with Citroen, Dacia, Fiat, Ford, MG, Peugeot, Renault and Seat.

Profits up at Drive Motor Retail

Drive Motor Retail more than doubled profits in 2017, despite a slight fall in turnover.

Trading as Drive Vauxhall, the group saw pre-tax profits at £8.3 million against £3.8m in 2016, a rise of 117%, even though turnover dropped to £215m from £222m.

Falls in new retail and fleet sales were compensated by increased sales of parts and body shop hours.

AFRs rise for small diesels

HMRC has announced a one pence per mile increase in advisory fuel rates for diesel cars under 1.6 litres, due to take effect from 1 June.

Company car drivers issued with such vehicles now have an AFR of 10ppm, up from the previous 9ppm. All other rates for petrol and diesel vehicles remain the same.

Full details of AFRs can be found at the Gov.uk website.

Maserati sees advantage in lower numbers

Maserati is championing exclusivity over premium German rivals as it launches its first ever TV campaign in the UK.

The firm’s general manager, Mike Briscoe, told Marketing Week: “The likes of Audi, BMW and Mercedes are probably selling in excess of two million cars a year globally. A brand like Porsche is selling something like 250,000 cars a year globally versus Maserati which last year sold just over 50,000 cars.

“Maserati is far more exclusive a brand and therefore that appeals to this sense of individuality and distinctiveness, which I think also leads into the desire for more personalisation as well.”

Volvo seeks marketing manager to push digital

Volvo is advertising for a senior manager for “digital consumer experience communication” to promote the electronic features of its products.

The advert states: “The way consumers digitally interact with their car and the services it provides is one of the most exciting and challenging communication areas for Volvo Cars in the coming years. To a large extent, Volvo Cars’ ability to thrive as a premium car maker will depend on its ability to compete in this rapidly developing area.”

http://bit.ly/2ISn0jE

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WORLD NEWS

FCA shares fall on new emissions charge

Fiat Chrysler Automobiles’ shares fell when a lawsuit was filed claiming it knew about alleged irregularities in diesel emissions as far back as 2010, not 2014 as cited in the original case.

The manufacturer faces possible civil damages, along with a separate criminal probe.

It also announced a recall of 5.3 million vehicles in North America over cruise control issues.

https://reut.rs/2IAHEER

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Credit card spending drops

Consumers reined in discretionary spending last month, according to Visa, with recreation, electrical appliances and furniture being the hardest hit sectors as confidence remains low.

It said inflation-adjusted spending on its credit and debit cards in April dropped year-on-year by 2%, the same as March and one of the worst for five years. Around one third of UK consumer spending is conducted via Visa.

UK could sell 10% RBS stake this week

The UK government could sell a 10% stake in the Royal Bank of Scotland this week. Banking sources are said to have hinted at the proposed sale, though RBS’s closing share price on Friday – 290 pence – is close to half the 502 pence paid by the government when it acquired 71% of the business during the financial crisis.

https://reut.rs/2JbOv7e

No deal Brexit increasingly unlikely

The possibility of a ‘no deal’ Brexit, whereby the prime minister could walk out of EU negotiations, is said to be increasingly unlikely, according to government sources. Whitehall officials are “privately conceding” that preparations for a “cliff edge” Brexit in March are insufficient, according to the FT.

https://on.ft.com/2JavOky

COMING UP

Thursday 31 May – ONS report on internet use by adults aged 16 years and over.

26 June – SMMT International Automotive Summit 2018, London.

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