19 May 2019

• RETAILERS SITTING ON RECORD EV ORDERS
• EV UPTAKE TO HIT AFTERSALES PROFITS
• BCA SEES APRIL UPLIFT IN THREE SECTORS
• REVIEW SITES WORK SAYS MERCEDES RETAILER
• FCA IMPROVES CREDIT RATINGS
• PEUGEOT HINTS AT PRICE PARITY FOR EV AND ICE 208
• STOCKWATCH – Inchcape drops 5% as slide continues
• LAUNCH DIARY – Hyundai Tucson N Line SUV, BMW 7 Series, Nissan NV250
• COMING UP – Marshall Motor Holdings AGM, Halfords final results, Nationwide House Price Index, Lookers AGM
• MONEY MATTERS – Vodafone to switch on 5G, Raised no-deal Brexit threat hits Sterling
• OUR BLOG – How will retailers manage EV waiting times?

Retailers sitting on record orders for EVs

Retailers are preparing to handle record numbers of buyers who have paid deposits or registered expressions of interest as buyers queue up to take delivery of new EV models.
Volkswagen has already taken 15,000 registrations for the ID.3, more than half the pre-order volume, across Europe and for the first time in the UK market is allowing customers to secure an early place in the rhd order book with a deposit.

Although the company wouldn’t give figures saying they are ‘commercially sensitive’ Patrick McGillycuddy, head of sales, Volkswagen UK, told Agenda: “The ID.3 is a remarkably important car for both Volkswagen and our retailers. For the first time we have offered interested potential customers the chance to pre-order the car. For £750, it is possible to prioritise your place on the car’s ordering schedule when it becomes open for order. Preparation across the network is crucial.”
MG has more than 800 expressions of interest for its ZS EV due on sale on 1 September, the most it has ever had for a pre-launched model, Peugeot says it has had a “very positive” response to its forthcoming e-208 and Hyundai is sitting on a year-long order bank of around 2,000 for its Kona EV.

*See our blog for more on this.

EV uptake to hit aftersales profits

While record orders for EVs are being taken by manufacturers, widespread adoption of electric vehicles in the UK could see retailers’ aftersales profits drop 40% on servicing and 20% on parts.
The figures are a warning from Norway where full EVs already account for 50% of the new car market.

The message to UK retailers came from Petter Nordesjo, former managing director at BMW Sweden, talking of his experience of EV take-up across the whole of Scandinavia.
Mr Nordesjo has seen retailers take a big hit on aftersales profits, with fewer moving parts on vehicles meaning less mechanical wear and reduced servicing requirements.
He argues that this is something UK retailers need to begin planning for, with electrification potentially at a tipping point. While traditional petrol and diesel technology might continue improving to around 2020, Mr Nordesjo believes regulation will drive market change from 2021, and sales of electric vehicles will accelerate from 2025.
“This will come much faster than you think,” he said. “You need to be ready: embrace technology for efficiency to increase sales and reduce expenses and use economies of scale to reduce operating expenses.”
* Read a full report on this issue in Auto Retail Bulletin.

BCA sees April uplift across three sectors

Fleet and lease, dealer part-ex and nearly new vehicles defied the expected seasonal downturn in used car values last month at BCA which recorded rises from a year ago.

Fleet and lease values averaged £11,406, up £269 (2.4%) compared to a year ago. Average age was up at 39 months but average mileage fell to 39,000. Against April 2018 dealer part-ex values were up £150, a 3% uplift, at £5,150 despite average age and mileage falling and demand remains strong for nearly-new vehicles with values at £22,557, up by £3,387 or 17%.

Customer review sites work says Mercedes retailer

A Mercedes retailer awarded a Gold Standard rating by a customer review site says the feedback gives new buyers confidence and helps existing owners come back for aftersales work.

Mercedes-Benz South West, which has four sites across Somerset, Devon and Cornwall, got the top rating by customer review site, Feefo, for the second year running after scoring 4.6/5 and says it is achieving a loyalty score of 91% so far this year

WORLD NEWS

FCA improves credit ratings

Credit ratings agency, Moody, has become the third in recent months to upgrade its view on Fiat Chrysler Automobiles improving financial strength.

Moody has moved FCA to one level below investment grade, citing its lack of exposure to the Chinese market, reduced debt burden and improved profitability in North America.

Peugeot hints at price parity for EV and ICE 208

Peugeot is pitching its e-208 EV at near price parity with diesel and petrol versions in the French market. It is promoting a 48-month, 37,000 mile lease at £262 PCM for the e-208 against £236 PCM for petrol models and £253 for diesels. With fuel costs factored in Peugeot says the e-208 is cheaper to run. The battery pack will not be leased but has an eight year/100,000 mile warranty.

Peugeot UK says prices have not yet been set for RHD models.

STOCKWATCH

Closing prices at 17 May and weekly movement

Inchcape drops 5% as slide continues
BCA 189.0p (+0.5p)
Cambria 64.5p (-0.5p)
Caffyns 410.0p (n/c)
Inchcape 566.5p (-30.0p)
Lookers 88.0p (+0.9p)
Marshall Motor Holdings 165.0p (-1.5p)
Motorpoint 188.0p (+3.0p)
Pendragon 23.3p (n/c)
Vertu 38.0p (-1.0p)

LAUNCH DIARY

Hyundai Tucson N-line. SUV with 1.6 petrol or diesel hybrid. From £25,995

BMW 7 Series. PHEV version available. From £69,565
Nissan NV250 compact van. Euro6D-compliant, five year/100,000 mile warranty. On sale from September, prices TBC

COMING UP

Tuesday: Marshall Motor Holdings AGM, Halfords final results

May 31: Nationwide House Price Index

MONEY MATTERS

Vodafone to switch on 5G

Vodafone will switch on its 5G network for business and private use customers on July 3 in Birmingham, Bristol, Cardiff, Glasgow, Manchester, Liverpool and London initially with 12 more cities scheduled to go live by the end of 2019.

Raised no-deal Brexit threat hits sterling

Sterling ended this week at a four-month low against the dollar as market analysts say the collapse of cross-party talks between the Conservatives and Labour and the prospect of a new pro-Brexit Tory leader both raised the chance of leaving without a deal later this year. On Friday evening the pound was 0.52% lower against the dollar at $1.273.

Click here to read OUR BLOG – How will retailers manage EV waiting times?

John Swift

Editor

Auto Retail Agenda

Tags: after sales, BCA, Feefo, Mercedes Benz, Santander