24 March 2019

• SYTNER SETS 100% ABSORPTION TARGET
• DEBT CUT AHEAD OF BREXIT DOWNTURN
• AFTERSALES CONFERENCE FOCUSES ON PROFIT CONTRIBUTION
• BCA SIGNS NEW DEAL WITH HALLIWELL JONES
• VOLVO EXPECTS EV MARGIN IN FIVE YEARS
• STOCK BROKERS POSITIVE TO PSA-FCA LINK
• STOCKWATCH – Strong gains for Marshalls, drop for BCA
• LAUNCH DIARY – Mercedes-AMG GT R Pro, Hyundai Nexo, Kia Ceed crossover
• COMING UP – Nissan city store concept, Auto Retail Live briefing on maximizing used car profit, Vertu results
• MONEY MATTERS – Outlets growing faster than malls, interest rates held
• OUR BLOG – The long-term secret to winning at EV sales

Sytner sets 100% absorption target

Sytner, the UK’s largest dealer group by revenue, has set each of its new car franchises the target of hitting 100% absorption within two years.

Speaking to sister publication Auto Retail Bulletin, Sytner chief executive Darren Edwards, said: “It’s called Mission 100. Every dealer is to have a plan up and running this year with the aim of achieving this objective within two years, where practicably feasible. It is based on our current ramp numbers so will be achieved by increased technicians on various shift patterns.”

Mr Edwards said a few of the retailer’s 144 franchise points were already at 100% absorption but wanted all of the businesses to be at this level.

To read the full interview with Mr Edwards see the April issue of Auto Retail Bulletin. If you’re not already a subscriber, you can sign up for a free trial by contacting us here.

Debt cut ahead of Brexit downturn

The biggest car retailers are future-proofing themselves against any post-Brexit downturn and have reduced debt by more than a fifth over the past year, according to a new report from accountancy firm, UHY Hacker Young.

The top 100 groups have cut debt by 22%, from £12.5 billion to £9.7bn firm and significantly improved the financial strength of the sector ahead of the expected Brexit related slowdown.

Paul Daly, partner of UHY Hacker Young said the businesses have been steadily de-risking since the 2016 referendum expecting big-ticket purchases like cars to be among the first victims of any drop in consumer confidence. The collapse of diesel sales has accelerated these preparations.

He added dealerships have cut debt by reducing capital investment, selling off property assets (through sale and leasebacks) and focusing more on cash generation. In some cases, non-core overseas assets have also been sold.

Aftersales conference focuses on profit contribution

The growing importance of aftersales as a profit centre for retailers is being underlined with a one-day conference where key speakers will promote best practice and explore new opportunities.

The Auto Retail Network Aftersales and Parts Conference will explore the latest thinking, threats, opportunities and the necessary ‘re-engineering’ in the aftersales processes to deliver and maintain profitability.

Speakers include; Michael Hunt, aftersales director Marshall Motor Group; Carlos Ovilo, customer services director Ford GB and Mike Jones, chairman ASE.

The event is being held on Wednesday 15th May at the Jaguar Experience centre, Castle Bromwich.

To book your place click here. Remember; subscribers to Auto Retail Network print publications receive a one third discount on the ticket price.

BCA signs new deal with Halliwell Jones

BCA has signed a two-year deal with BMW and Mini retailer Halliwell Jones to remarket 3,500 vehicles annually through twice-weekly sales.

BCA sells Halliwell Jones vehicles every Monday and Wednesday at its Preston remarketing centre, with cars offered in-lane and via Live Online.  Halliwell Jones uses the BCA Dealer Pro system across the retail group so every incoming part exchange vehicle will be appraised and valued using BCA’s cloud-based service.

The system means non-retail p/x cars can be consigned to BCA for immediate remarketing while the dealer group functionality identifies cars which can be kept for retail sale.

Jim Houghton, sales director, Halliwell Jones, said: “BCA combines great service and innovative technology to support our used car programme. The team at BCA Preston understand our business and goes the extra mile to ensure we get great results. Working in a true partnership ensures we are focused on making the process as efficient as possible.”

Emma Westhead, BCA Business Development Director, added: “Halliwell Jones offers a first-class selection of desirable stock every week and all vehicles are pre-sale prepared and offered with a BCA Assured report, where eligible. The adoption of BCA Dealer Pro has helped Halliwell Jones to streamline the process and drive efficiency and create profit opportunities across the group.”

Halliwell Jones has retail centres in Chester, Southport, Warrington, North Wales and Wilmslow.

WORLD NEWS

Volvo expects EV margin parity in five years

Volvo expects its margins on electric cars to reach parity with petrol and diesel models by 2025 as components such as batteries become cheaper and profits from conventional cars drop.

https://reut.rs/2WgxE6g

Stock brokers positive to PSA-FCA link

Shares in Fiat Chrysler jumped this week on news that Peugeot has held out the potential offer of an alliance between the two. Robert Peugeot, president of the family holding company, FFP, said he is open to mergers or acquisitions and FCA would be a good fit. His remarks follow reports that PSA group CEO, Carlos Tavares, is also exploring possible tie-ups and that Fiat, General Motors and JLR could be ideal partners.

http://bit.ly/2YiufWr

STOCKWATCH

Closing prices at 22 March and weekly movement

Strong gains for Marshalls, drop for BCA

BCA 195.8p (-13.7p)

Cambria 62.0p (-0.5p)

Caffyns 399.0p (+4.0p)

Inchcape 578.0p (+7.5p)

Lookers   96.3p (-7.7p)

Marshall Motor Holdings 176.0p (+12.0p)

Motorpoint 187.0p (-8.0p)

Pendragon 27.5p (+0.9p)

Vertu 35.2p (+1.8p)

LAUNCH DIARY

Mercedes-AMG GT R Pro. 4.0 biturbo V8, 198 mph top speed. Deliveries start July. From £188,345.

Hyundai Nexo. Second gen hydrogen fuel cell electric car. Order directly from Hyundai. From £65,995 including Plug-In Car Grant.

Kia Ceed crossover. H2 2019 launch when name and prices will be revealed.

COMING UP

Thursday: Nissan opening city store concept in Paris to be rolled out to the UK.

Wednesday 3 April: AR Live Profit briefing on maximising your used car profit.  Our panel includes Guy Thomas, group head of product at BCA, Graeme Potts, CEO of Eden Motor Group and Alistair Jeff, head of partner program at CDK (Global). To register click here.

May 8: Vertu full year results.

MONEY MATTERS

Outlets growing faster than malls

Retail outlets where some car brands operate pop-up stores are growing faster than all shopping centres according to real estate advisors, CBRE.

Rhodri Davies, head of UK retail at CBRE, said: “When well-located with a high-quality leisure experience, outlet centres present a unique experience tailored to the modern consumer and should continue to perform in the new retail landscape.”

Interest rates on hold at 0.75%

The Bank of England’s Monetary Policy Committee voted unanimously to keep the base interest rate at 0.75% on Thursday as manufacturing and consumers wait to see how Brexit pans out.

John Swift

Editor

Auto Retail Agenda

Click here read this week’s blog; The long-term secret to winning at EV sales

Tags: Auto Protect, BCA, EV, halliwell Jones, Sytner