Auto Retail Agenda: 21 June 2021
20 June 2021
- DAIMLER AGENCY MODEL CONFIRMED
- INCHCAPE RATED ‘BUY’ IN MARGIN GAINS
- CHESTERMAN: ‘I’M A COPYCAT’
- LOOKERS IN BELFAST RECRUITMENT DRIVE
- DVLA STRIKES CONTINUE
- MILLENNIALS ‘DON’T HATE CAR DEALERS’
- RENAULT REACHES ‘WORK FROM HOME’ AGREEMENT
- STOCKWATCH – Motorpoint surges 12.9% after planning to double sales within two and a half years to £2bn a year
- COMING UP – Vertu AGM
- INFLATION WORRIES; HOUSEHOLDS WORSE OFF
- £100k EARNER ‘60% STEALTH TAX’ WARNING
Daimler agency model confirmed
Daimler CEO Ola Kallenius has confirmed Mercedes-Benz will develop agency selling models in numerous European countries. The car maker will set the transaction price and pay retailers for each vehicle sold. The move is part of a larger plan to streamline and digitise sales and distribution.
“With the agency model, the car dealers become customer experience and delivery agents and thus can focus even more on ensuring a superior customer journey, from product exploration to handover,” said Mr Kallenius.
“While we have not communicated exactly which markets will be next, it is only natural that we continue with other countries in Europe, including some big markets. That will happen within the next few years.”
Last week, Auto Retail Agenda reported on Daimler plans to dispose of showrooms across Europe to reduce fixed costs. Earlier this year, Mercedes-Benz Retail Group reported growing losses of £35.8m.
Inchcape rated ‘buy’ in margin gains
Growing profit margin gains at Inchcape have led broker Jefferies to upgrade its estimates twice in the past six months. It rates the stock a ‘buy’ and targets a price of 890p. “We would expect any further supply tightening from semiconductor shortages to be offset by margin gains.”
Chesterman: ‘I’m a copycat’
Cazoo founder Alex Chesterman admits he is a ‘copycat’ – identifying successful ventures overseas and translating them to the UK. “Going in as a disrupter gets peoples’ backs up. I have always found that when you’re looking to do something different and transformational, the less knowledge, the better.”Cazoo has been valued at $7bn, compared to £250m for “traditional” retailers Lookers and Pendragon.
Lookers in Belfast recruitment drive
Lookers is seeking almost 30 staff to fill a range of positions in its Charles Hurst Belfast operations. Vacancies cover Honda Motorcycles, Jaguar Land Rover, Ferrari, BMW Motorrad and Peugeot. “After the past year,” said a spokesperson, “we are thrilled to be recruiting”.
DVLA strikes continue
The government has warned industrial action at the DVLA is ongoing which “will directly affect DVLA’s services”. Retailers are warned not to send paper applications as there will be delays, and are advised not to phone up to chase applications. The organisation is again urging motor traders to use online services so costumers will get their documents quicker.
WORLD NEWS
Millennials ‘don’t hate car dealers’
Millennials don’t hate cars, they hate car dealers, reports the New York Times. They are helping fuel growth in app- and web-based services – and in 2020, topped baby boomers for the first time as new car buyers, beating all other age groups. They are nearly twice as likely to shop and buy a car entirely online than other age groups.
Millennials – aged between 25 and 40 – are also enjoying growing financial clout, adds the newspaper.
Renault reaches ‘work from home’ agreement
20,000 Renault employees will be able to work from home three days a week under a new agreement signed with French trade unions. All roles will be included apart from front-line production. Stellantis has agreed similar arrangements with French workers.
STOCKWATCH
Closing prices on 18 June 2021 and weekly change
Motorpoint surges 12.9% after planning to double sales within two and a half years to £2bn a year; marketing spend to grow from “a few million pounds a year to £30m”
Auto Trader Group 631.4p (+10.4p / +1.6%)
Cambria 78.5p (-2.5p / -3.1%)
Caffyns 420.0p (n/c)
Halfords 402.0p (+7.0p / +1.7%)
Inchcape 786.0p (+16.5p / +2.1%)
Lookers 65.5p (-1.2p / -1.8%)
Marshall Motor Holdings 192.0p (+1.0p / +0.5%)
Motorpoint 313.0p (+38.0p / +12.9%)
Pendragon 18.5p (n/c)
Vertu 45.0p (-0.4p / -0.8%)
COMING UP
Tuesday, public sector borrowing
Wednesday, Vertu AGM
Thursday, Bank of England interest rate
Friday, GFK consumer confidence
MONEY MATTERS
Inflation worries; households worse off
Global equity markets fell last week as traders become increasingly worried rising inflation could see central banks start to cut stimulus measures. Economists have warned households face a £700 hit as inflation rises to its highest level in a decade this summer.
The Bank of England, which meets this week, expects inflation to be temporary, but financial markets are still bringing forward the first post-Covid interest rate hike to mid-2022.
£100k earner ‘60% stealth tax’ warning
336,000 Brits are paying income tax of 60% – the highest rate in Europe – through government stealth policies. Those earning between £100k and £125k are meant to pay 40% tax but this is the point the government withdraws the £12,570 tax-free personal allowance. Every £1 earned over £100k sees the allowance reduced by 50p – meaning each £1 of income effectively incurs 60p income tax.
Earnings over £125,140 are again taxed at 40% “as the distorting effect of the personal allowance clawback is lost”. NFU Mutual adviser Sean McCann warned more will be caught as wage growth soars but tax allowances stay frozen.
Tags:
Alex Chesterman, Cazoo, Daimler, DVLA, HMRC, Inchcape, inflation, Lookers, Mercedes Benz, Motorpoint, Pendragon, Renault, Vertu 
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