17 February 2019

• ENDEAVOUR AUTOMOTIVE EXPANDS VOLVO FOOTPRINT
• PEUGEOT PUSHES RETAILERS INTO EV UPGRADE
• JLR LOOKS TO OLDER APPROVED USED
• BCA PREDICTS STRONG AUCTION ACTIVITY
• PORSCHE WARNS OF 10% TARIFF CHARGE
• WORLD NEWS – WLTP still hitting European sales
• STOCK WATCH – big gains for BCA, Inchcape
• COMING UP – BoE risk assessment, Auto Retail Live Facebook
• LAUNCH DIARY – Polestar2, 190mph Bentley SUV
• MONEY MATTERS – Retailers need to use tax allowances
• OUR BLOG – For social media, it’s the message not the medium that matters

Endeavour Automotive expands Volvo footprint

Acquisitive retail group Endeavour Automotive is understood to have bought three Volvo sites from neighbouring group Squire Furneaux for an undisclosed sum.

The purchase gives Endeavour two additional Volvo showrooms in Slough and Maidenhead plus an additional Volvo service centre in High Wycombe taking its total number of Volvo showrooms to eight.

All three sites are currently listed on both companies’ websites however a well placed source told Agenda the deal has been done. No one from Endeavour or Squire Furneaux was available for comment.

The takeover leaves Squire Furneaux with two Volvo franchises in Guildford and Leatherhead.

Meanwhile, Helston Garages has moved one of its five Volvo retailers into a new Scandi-style showroom. The Kastner Volvo site in Exeter was formerly Matford Land Rover and has a large glass walled lounge where customers can watch their car in the workshop. It has a bigger showroom, more room for Volvo Selekt approved used cars and better parking than the previous facility.

Peugeot pushes retailers into EV upgrade

Peugeot retailers have until the end of the year to invest in electric chargers or face losing the franchise. The national sales company estimates a maximum spend of £40,000 which can be financed through a loan from the manufacturer with a repayment holiday until the cars come fully on stream.

David Peel, Peugeot UK managing director, said: “Moving to a new EV world is not optional if you’re a Peugeot dealer; there is no future for any of our dealers who don’t want to participate in EVs.”

Dismissing talk of upgrades to substations costing upward of £90,000, he said: “We’re working with energy supplier Engie. For the 7kW chargers needed for our vehicles we estimate that for the majority of dealers the investment will a maximum of £40k. And we’ve recognised that we’re asking dealers to do this before they have cars available to generate an income to cover those costs, so for everyone using Engie as their supplier we will provide a funding line through our bank.”

Multi-franchise retailers are not obliged to fit Peugeot-specific chargers so long as they meet its standards.

JLR looks to older approved used

Jaguar Land Rover is targeting its network to increase the number of three- to five-year-old used cars sold through its approved used scheme in a bid to boost retailer profitability.

Speaking exclusively to Auto Retail Agenda, UK managing director, Rawdon Glover said: “One of our big opportunities from a profitability point of view is older used cars. We [currently] have a relatively low penetration of three to five-year-old cars.

“The deal for me was that I wanted to increase my penetration of three- to five-year-old cars by 10%. Are these changes significant enough for [the retailers] to take on that challenge in terms of with what we’re going to go after? We worked through that and [the retailers] went for that.

“I think that’s a win-win for both of us because they want to sell more of these cars and make more money. And actually, the older used cars have higher gross profits, which is good for them.”

Mr Glover added that he expected this to also result in a lift in service retention.

* To read the full interview with JLR’s Rawdon Glover, see the March issue of sister title Auto Retail Bulletin.

BCA predicts strong auction activity

BCA expects to see strong auction activity in the coming weeks as its latest Pulse Report shows rising volumes, sales and prices after the traditional Christmas slump.

Its headline January figure of £9,476 was up £178 year-on-year despite average age and mileage rising over the period, reflecting a richer mix of cars available at BCA these past 12 months and strong demand. Fleet and lease and dealer P/X values both increased by 9%, nearly-new by 16%.

A separate report by Cox Automotive forecasts a Q1 used market of 2.02 million, a drop of 0.6% from the 2.03 in the same period last year.

Porsche warns of 10% tariff charge

Porsche has written to customers warning them they may have to pay an extra 10% if tariffs are imposed after Brexit. Buyers are asked to sign a clause saying they are prepared to cover the cost of a potential tariff if there is a no-deal departure.

It said: “There is a possibility that a duty of up to 10% may be applied to cars imported into the UK by us after March 29. In light of this, we have chosen to inform customers whose cars are likely to arrive after Brexit occurs to warn them that they may be affected by this tariff – allowing them to be fully informed at the point of sale and, if they wish, to adjust their order accordingly.”

Porsche says that customers who placed deposits before January 17 are not affected.

https://bit.ly/2GsjeMA

WORLD NEWS

WLTP still hitting European sales

Porsche, Alfa Romeo, Nissan, Fiat and Audi saw the biggest falls in January’s Euro zone market that was down 5% while Volvo, and PSA Group’s brands DS and Dacia saw gains.

Bottlenecks from WLTP are still hitting some marques; Porsche in particular took a 50% hit from supply shortages. Other notable falls include Alfa Romeo (down 35%) with Nissan (25%) Fiat (20%) and Audi (17%).

https://bit.ly/2TUTtaQ

Twitter takes Google man for car marketing

Twitter has appointed Guy Schueller as director of automotive to help car makers with their marketing campaigns. He was formerly the automotive industry director for Google

https://bit.ly/2SAAiGv

STOCK WATCH

Closing prices at 15 February and weekly movement

BCA 213.0 (+11.5p)

Cambria 62.0p (n/c)

Caffyns 375.0p (n/c)

Inchcape 606.0 (+31.0p)

Lookers 104.0p (-1.0p)

Marshall Motor Holdings 162.5p (+0.5p)

Motorpoint 196.8p (-3.2p)

Pendragon 27.0p (+2.0p)

Vertu 39.0p (+0.4p)

COMING UP

February 26:  Bank of England’s Financial Policy Committee (FPC) assesses risks to stability of the financial system.

February 26. Auto Retail Live Profit Briefing: How to Drive More Sales Using Facebook. Practical tips and advice on Facebook and Instagram advertising. More details here.

February/March: Federation of Small Business’s Making Tax Digital regional seminars. Click here

LAUNCH DIARY

February 27. Polestar 2 EV. Prices tbc. Online reveal, watch here

Bentley Bentayga Speed. World’s fastest SUV with 190 mph maximum. Prices tbc.

MONEY MATTERS

Retailers need to use tax allowances

Retailers should be thinking about using tax allowances for essential spends such as new workshop equipment or IT systems under the Annual Investment Allowance which was raised for £1 million for the next two years starting 1 January and the costs of any building construction under the Structure and Buildings Allowance.

https://bit.ly/2Gop3us

OUR BLOG

Social media – it’s the message not the medium that matters

Next Tuesday Auto Retail holds another of its live Profit Briefings, looking at how to harness the mighty power of Facebook and Instagram to drive more sales.

No one needs telling just how important these platforms are for advertising, you wouldn’t be in business if you did, but I do think a lot of people need telling how to properly use them.

In December Facebook did a study into the UK car market and its findings were largely predictable; getting on for two-thirds of buyers find new vehicles online, smartphones and tablets are of growing importance and good social media content is vital with 82% finding it useful when deciding on a purchase and there is much more in similar vein.

No real surprises then but there are questions a natural cynic like me wants answering, the biggest being trust and how retailers should pitch their social media to build it.

I would never buy a product based on some third-party review or recommendation unless it was presented in a way I found credible. Just because Dave from Doncaster posts on Facebook that he had a fantastic experience buying a Fiesta from a dealer does not mean I will or would even tempt me to go there.

Not long ago I was on a dealer’s website and read a review purporting to be from a buyer who said they’d had `a god experience’ which would have impressed me no end had the spelling mistake not been repeated in two other supposedly independent customer reviews. As I said, credibility is the starting point to selling!

It is the message which matters, not the medium, and how dealers pitch theirs is something I imagine our speakers will cover.

This and other topics will be addressed by our Live Briefing so register here and tune in at 2pm on Tuesday 26th. Afterwards you can post your comments on social media…

John Swift

Editor

Auto Retail Network

Tags: BCA, Endeavour Automotive, JLR, Peugeot, Polestar, Santander, Volvo