Auto Retail Agenda: 6 April 2020
05 April 2020
- FURLOUGH TO INCLUDE COMMISSION
- SECURITY WARNING FOR RETAILERS
- KEY WORKER GARAGE-FINDER LAUNCHED
- CUSTOMERS STILL WANT TO BUY
- CORONAVIRUS: AUTO INDUSTRY ROUND-UP
- US RETAILERS FURLOUGH, CUT SALARIES
- BIG DEMAND FOR NEW ONLINE SALES GUIDE
- COMING UP – Auto Retail Live, March reg figures, GDP
- INSOLVENCY RULES CHANGE CALL
- CAR FINANCE NOT PART OF FCA AID PROPOSALS
- CAR SECTOR NEEDS MONEY NOW SAYS SMMT
- BLOG: OEM support for retail
Commission now included in furlough scheme
Compulsory commission payments are now included in the Government’s Job Retention Scheme after further details of the ‘furlough’ initiative were released on Saturday, 4 April.
Retailers can claim for regular payments including wages, past overtime, fees and compulsory commission payments.
Discretionary commission is still excluded, but ASE chairman Mike Jones says that for most salespeople, commission is not discretionary, it’s part of a contractual pay plan for selling cars, finance plans and such like.
For employees working for 12 months or more whose pay varies, furlough claims are for average monthly earnings over the 2019-20 tax year. Those employed for less than 12 months claim for 80% of their earnings since they started. Those who started in February 2020 should work out a pro-rata for earnings so far and claim for 80%.
Security warning for retailers
The VRA has warned retailers about the risk of theft or vandalism of vehicles left largely unattended during the current lockdown.
Dealer forecourts could be particularly vulnerable as they were not designed to be left unattended for long periods of time. Retailers should check that their insurance policy includes cover for unattended vehicles (or that such cover has not been retrospectively suspended).
Cazana launches key worker garage finder
Cazana has developed a new tool for key workers to find nearby garages and service centres still open during the coronavirus crisis. The postcode-based key worker garage finder lists retailers by distance and includes telephone numbers and website addresses. Retailers who are open but are not listed can submit details and be added to the service.
Customers still want to buy but not now
Six in 10 customers do still intend to buy a new car but are waiting until later, according to Auto Trader research.Surprisingly, 14% still intend to buy now. Only 3% are no longer buying.
Coronavirus: auto industry round-up
Rapid RTC is reducing monthly service costs by 25% from April to June and increasing staff and service levels on its Chat eConcierge team… Simon Bailies Peugeot demonstrators have ben loaned to pharmacies… CarGurus is extending a 50% subscription discount (including Pistonheads) through May… JLR has lent a fleet of new Land Rover Defenders originally intended for the global media launch to the British Red Cross… IGA issues guidance on how local garages can appeal to local councils for business rate relief… Visits to OEM websites have plunged 62% since lockdown says Sophus3 but consumer sites are faring better.
WORLD NEWS
US retailers furlough, cut salaries
AutoNation, America’s biggest retailer network, is placing 7,000 employees on unpaid leave, freezing new hiring, postponing $50m of capex and cutting its Q2 advertising by 50%. Penske is postponing $150m of capex. Asbury (which last week terminated a $1bn deal for Park Place) is furloughing 2,300 and cutting CEO pay by 50%. Group 1 Automotive is furloughing 3,000 employees.
Big demand for new online sales guide
4,000 American retailers have signed up for Cox Automotive’s new Dealer Home Services package in just three days.
STOCKWATCH
Closing prices on 3 April 2020 and weekly change
Auto Trader issued 46.5m new shares at 400p each, raising £186m
Auto Trader Group 372.0p (-53.0p / -13.2%)
Cambria 37.0p (+3.0p / +8.4%)
Caffyns 280.0p (n/c)
Halfords 64.9p (-15.35p / -21.1%)
Inchcape 421.4p (-13.8p / -3.2%)
Lookers 15.6p (-2.9p / -17.0%)
Marshall Motor Holdings 87.5p (-7.5p / -8.2%)
Motorpoint 190.0p (-2.5p / -1.3%)
Pendragon 6.2p (+0.2p / +3.2%)
Vertu 18.5p (-12.4p / -23.4%)
COMING UP
Monday, March 2020 new car registrations
Tuesday, Halifax House Price Index
Thursday, UK GDP
Thursday, Auto Retail Live with Marshall Motors’s Daksh Gupta, HR legal expert Sandra Martins, Marketing Delivery’s Jeremy Evans and Calltracks’ Stuart Buckley. Sign-up here to watch and ask questions.
MONEY MATTERS
Insolvency rules change call
Insolvency rules should be overhauled to create a US-style Chapter 11 bankruptcy protection regime so companies can survive the coronavirus lockdown, claims insolvency specialist Mark Phillips.
Car finance not part of FCA aid proposals
Leniency for car finance payments is not part of new FCA emergency help proposals for customers. Measures include three-month payment holidays that won’t affect credit scores. Banks have also agreed to be lenient with struggling customers, but there currently has been no such commitment from the £110bn car finance sector. The Finance & Leasing Association is already reporting a rise in requests for help.
Car sector needs money now says SMMT
SMMT chief executive Mike Hawes warns UK automotive businesses have weeks rather than months of funding and “need cash immediately”. He told Reuters that temporarily suspending tax contributions on personnel and local council business rates should be options.
BLOG: OEM support for retail
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