• VAUXHALL TO CUT LCV RETAILER NETWORK
• AUTO TRADER ADDS AUCTION REMARKETING OFFER
• RESTRUCTURE A GOOD THING, SAYS VAUXHALL RETAILER
• LCV VALUES REMAIN NEAR RECORD LEVELS
• COUNCIL POLICIES CAN BOOST EV SALES – NISSAN RETAILER
• DEADLINE LOOMS FOR NFDA SURVEY
• MERCEDES BOOKS MONTH LONG POP-UP AT RETAIL COMPLEX
• Q3 WEBINAR FOR RETAILERS
• WORLD NEWS – Ill Marchionne replaced at FCA, Hyundai-Amazon link, Japanese brands get tariff boost
• STOCKWATCH – good week for BCA
• LAUNCH DIARY – Mazda 6, Kia Niro EV, Honda Civic saloon, Peugeot Rifter / Citroen Berlingo
• MONEY MATTERS – wage growth not as expected, says BoE
• COMING UP – Economic review, interest rate decision
• OUR BLOG – do pop-up stores say anything about the trade?

Vauxhall to cut LCV retailer network

Vauxhall is to establish an LCV business centre network for the start of next year which could halve the current network and follows the brand’s decision to cut its car franchise network by around a third earlier this year.  Vauxhall is taking the opportunity to `right-size’ its van network, which involves taking it from 98 LCV sites today to circa 50-75, according to Vauxhall fleet sales director James Taylor.

Speaking to Auto Retail Agenda, Mr Taylor said: “These are specialist sites, separate to what is happening with the mainstream dealer precontracting. Now is the time to effectively right-size our CV network and make sure we have got a network that’s fit for both the sales side for the new product,  in terms of training, specialising, demos and stock, but also from an aftersales perspective making sure there is the right customer proposition in place, in terms of out of  our servicing and alternative transport provision, to make sure we have got the right offering for fleet customers moving forward.”

He added Vauxhall is currently at the point of working through which representation points will go to which retailers, with the target of 1 January 2019 as the date the new network will be live: “We need to make sure there is enough throughput per site to invest in the specialist people required to provide the right level of service.”

Auto Trader adds auction remarketing offer

Auto Trader has expanded its business-to-business offer with a new auction service aimed at cutting the time taken for a car to move from a fleet operator to a retailer’s forecourt.

It claims it can halve the 34-day average to de-fleet a company car and get it onto a forecourt using a data driven, digital process.  As revealed in sister title Auto Retail Bulletin earlier this month, Auto Trader is already able to match de-fleeted company cars to recently sold vehicles and offer retailers a near direct replacement for their dealership and is currently piloting this new scheme with LeasePlan, ALD and Avis.

However, as a digital service provider, Auto Trader is not planning to offer physical storage facilities to cover the period between a car leaving a fleet and it is arriving on a retailer’s forecourt and would leave this aspect, and cost, up to the lease company. Karolina Edwards-Smajda, Auto Trader commercial products director, said: “Digital platforms will give that speed that physical journeys simply can’t provide.”

When quizzed if Auto Trader would buy a physical remarketing company such as BCA rather than build its own service, she added: “They are very physical, and we believe that we can introduce a lot of efficiencies in this inefficient market, this is the core reason.  The speed of turn is the key thing with these cars when the finance houses or leasing companies are remarketing.  The direction large lease companies are going to is to have some large compounds where they can hold these vehicles.”

Restructure a good thing, says Vauxhall retailer

A Vauxhall retailer said uncertainty about the brand’s future in the run up to its purchase by PSA and the termination of the entire dealer network hit the market hard but believes it will be a good thing in the years ahead.

Recording a pre-tax profit of £1.93 million last year against £1.6m in 2016 despite turnover dipping from £229m to £217.7m, Thurlow Nunn said in its annual report: “The lead up to and the acquisition of Vauxhall had a significant impact. The group trades around the Milton Keynes and Luton areas where the impact of uncertainty because of the change in ownership was considerable.

“The termination of all Vauxhall dealers on April 30 does not cause us any concern. We operate in key markets and a have a good and strong relationship with Vauxhall. On the contrary, we consider that from this restructuring opportunities will arise that will help the brand and the company going forward.”

LCV values remain near record levels

Average LCV values in June fell slightly from May with values slipping by just £39 (0.5%) to £7,463 but it remains the fourth highest on record at BCA and year-on-year values remain ahead by more than £1,000 (15.5%).  Both mileage and age reduced compared to a year ago. Fleet/lease and nearly-new values fell month-on-month but dealer part-exchange values improved by 3.5%.

Stuart Pearson, BCA COO UK Remarketing, said: “BCA continued to see very healthy levels of demand from professional LCV buyers in June despite the usual seasonal distractions.”

Council policies can boost EV sales, says Nissan retailer

Nissan retailer, Glyn Hopkin, says EV dealers can profit from local authorities’ need to demonstrate action in reducing pollution.

Chris Howells, electric vehicle business development manager for the Glyn Hopkin Nissan, St Albans, said: “The majority of councils across the UK have got a very real problem with high, or in some cases dangerously high carbon emission problems, so it’s in their interest to be seen to be doing something about it.”

In Q1 2017 there were 269 EVs in the town and 409 by Q1 this year. Two more charging stations have been recently installed at the railway station.

Deadline looms for NFDA survey

Retailers have until next Tuesday (31/7) to submit their return for the NFDA Dealer Attitude Survey which measures satisfaction with their franchise. In the most recent, last winter, Toyota was rated the best by its dealers and Alfa Romeo the worst. For current profit Mercedes, Kia and Toyota ranked as the best with Alfa Romeo, Jeep and Jaguar the worst.

Sue Robinson, NFDA director, said: “The record response rate of the latest issue of the survey show it is a vital tool to monitor the health of the relationship between manufacturers and their dealer network.

The results will be published in early September.

Mercedes books month long pop-up at retail complex

Mercedes has booked a month’s pop-up store at St David’s in Cardiff, a £675 million shopping centre which has the equivalent of 30 football pitches’ floorspace.

It has taken a 2,419 sq ft unit until August 16 with the store being designed with retail brand consultancy, Green Room.

MG Motors took a similar stand at the centre last year.

Auto Retail Live Q3 webinar

Our quarterly broadcast being aired to your PC or tablet on August 7 will cover WLTP, the outlook for the second half of the year and offer tips to help you meet your Q3 targets.

Our guests are Andy Bruce, CEO of Lookers, Dale Wyatt, Director of Automobile at Suzuki and Naomi Hahn, Audience and Brand Director at Auto Trader.

We hope you can join us and if you have any questions just call the office on 01572 724687.

WORLD NEWS

British-born Mike Manley replaces Sergio Marchionne with immediate effect at Fiat Chrysler Automobiles after the Italian suffered complications from surgery.

Manley, 54, will push ahead with the corporate policy of increasing the SUV range and investing £8 billion in electric and hybrid cars. It plans to launch nine new products, enter three new segments including large SUVs, and offer four battery electric versions by 2022.

He has run the Jeep brand since June 2009 after the company emerged from bankruptcy. Jeep’s annual sales have since gone from about 300,000 to 1.4 million worldwide last year. It recently forecast that by 2022 it will have one in every 12 SUV sales.

Hyundai will set up a showroom on Amazon to help buyers book test drives, check dealer stock and compare pricing and reviews.

The showroom will operate through Amazon Vehicles, a platform it launched in 2016. Amazon has deepened its partnerships with manufacturers this year and aims to embed its voice aide Alexa into cars.

https://reut.rs/2uPs0vM

Japanese brands should benefit from a 10% tariff cut and increase European sales after signing a trade pact with the EU as both move to protect their industries amid fears of a US/China trade war.

Toyota, Nissan, Honda, Suzuki and Mazda expected to be the main beneficiaries.

https://bit.ly/2L3CTEZ

STOCKWATCH

Closing prices at Friday July 20 and weekly movement.

BCA 242.0p (+11.0p)

Cambria 59.0p (-1.0p)

Caffyns 425.0p (no change)

Inchcape 799.0p (+4.0)

Lookers 106.0 (-1.0)

Marshall Motor Holdings 161.0p (no change)

Motorpoint 242.0p (+6.0p)

Pendragon 24.4p (+0.3p)

Vertu 51.0p (+0.8p)

LAUNCH DIARY

July: Mazda 6 saloon and Tourer, from £23,195

Peugeot Rifter / Citroen Berlingo. Five or seven seater from £19,650 / £18,850 respectively

August: Honda Civic saloon from £19,395.

September: Kia Niro EV. 280 mile range cross-over. Prices tbc.

MONEY MATTERS

Lower than expected wage growth could keep interest rates on hold, Bank of England deputy governor Jon Cunliffe has said.

He said although the economy seems to be growing in line with BoE forecasts wages appear to be rising by about 2.5-3%, not the predicted 3%, adding: “We need a little more confirmation at each stage that the supply side is evolving as we have forecast.”

https://reut.rs/2O5e1uJ

COMING UP

July 26: Economic Review, Office of in-depth analysis of key economic issues.

August 2: Bank of England Monetary Policy Committee meet to set interest rate.

August 7: Auto Retail Live Q3 briefing.

OUR BLOG

Pop-up stores – do they tell us anything about the trade?

This month alone we’ve seen Ford, RRG Mazda and Mercedes paying for floor space in big retail centres to put their cars in front of shoppers walking between Next and Nandos.

You can dismiss it, as many do, as saying it’s nothing new and that’s true. Maybe it is just repackaging a product in a different way but is there a stage where you stop and think `hold on, is something happening here?’.  Something is and it’s manufacturers responding to one of the things consumers put most value on – convenience.

For the car retailer this has profound implications and the most obvious but expensive one is where their showroom is sited.

Why trek to a dealer where there is nothing but, well, cars when it is so much easier and time-efficient to combine visiting the dealership/workshop with shopping or eating or watching a film at the nearby retail complex.

It is surely no accident that JLR/BMW/MINI dealers, Williams Motor Group, is investing some £40 million on new premises in the fast evolving TraffordCity, next to the Trafford Centre which is a shopping/leisure destination spot. They are not the only ones piggybacking the magnet of a huge retail development.

In the case of Mercedes, it’s latest pop-up is at a single venue which has 39% of Cardiff’s entire retail floorspace…

RRG Mazda arranged virtual reality tests of its cars (surely another area ripe for online growth and exploitation) but it must be telling that they were done at a shopping centre. What does that say about the relative merits of a showroom versus a footfall-heavy location?

Without thinking very hard I can count probably ten franchised dealerships within a 20 mile radius of where I live which are either (a) old and land-locked in a rough edge of town and a pain to get to or (b) stand-alone operations in the middle of nowhere. Hardly convenient.

All I’m saying is that convenience is becoming a bigger factor in how we shop and spend.

How about this for convenience? The other day Hyundai announced it’s working with Amazon on a virtual showroom. Hyundai UK tells me it is a US-only operation for now but hey, when did Amazon ever think small?

John Swift

Editor
Auto Retail Agenda