• EC BLOCK EXEMPTION REVIEW PUBLISHED
• NEW TOYOTA 10-YEAR WARRANTY TO BOOST SERVICE RETENTION
• SIX IN 10 PENDRAGON ACCOUNTANTS IN REDUNDANCY FEAR
• AUDI’S BUXTON TO JOIN CARZAM
• VOLKSWAGEN TO BOOST GERMAN AUTO RETAIL
• SHOPPING MALLS SEEK AUTO RETAILERS
• STOCKWATCH – Lookers reports strong trading, announces return to normalised reporting of annual financial results
• COMING UP – SMMT new car registrations
• DATA CORNER – EU RV decline
• UK GROWTH FORECAST UPGRADED
• ‘CONVERT BOUNCE BACK LOANS INTO STAFF EQUITY TO SAVE FIRMS’

EC Block Exemption review published

New technologies and competitive data will be the main focus of any changes to Block Exemption, according to the European Commission which has published its findings into the current laws.

The review found that the competitive environment in motor vehicle markets has not significantly changed since the Commission last evaluated these markets in 2010, but that the sector is now under intense pressure to adapt in line with the green and digital transformation.

EC executive vice-president Margrethe Vestager, in charge of competition policy, said: “Our evaluation has shown that the Motor Vehicle Block Exemption Regulation has made it easier for businesses in the automotive sector to assess whether their agreements are in line with the EU rules on competition.

“At the same time, it showed that we need to take into account the emergence of new technologies and the increasing role of data in competitive dynamics in this industry. The Commission will therefore reflect on how to address these issues to ensure that the rules remain fit for a rapidly changing automotive industry.”

Commenting on the review, Sue Robinson, NFDA chief executive, said: “The NFDA will now be working closely with members and our regulatory working group to analyse the findings, and with the Alliance of European Car Dealers and Repairers for a full review.”

The current general Block Exemption Regulation expires in one year and the specific Motor Vehicle Block Exemption expires a year later, in May 2023. The UK is expected to adopt the new regulations. The EC gathered evidence for this review during October 2020 and January 2021.

 

New Toyota 10-year warranty to boost service retention

Toyota is to cut its standard warranty to from five years to three – but offer free one-year warranties with annual servicing for cars up to 10-years-old in a bid to improve customer retention and increase used car business, according to Auto Retail Agenda sources.

The new warranty is expected to be launched on 1 June.

Toyota currently operates a five-year, 100,000-miles warranty. Under the new plan, it is understood customers returning to the franchised network for annual servicing after the standard three-year warranty is up will be given an extra year’s warranty. The offer will apply until the car is 10 years old.

While longer warranties provide consumer confidence for new car buyers, they have traditionally been poor at keeping customers within the franchised network. The Toyota offer aims to counter this aspect.

 

Six in 10 Pendragon accountants in redundancy fear

Pendragon has put 250 of its 400 accountants in a redundancy consultation. Roles will be cut at retailers and centralised at its Nottingham HQ, creating 110 new jobs. “These measures will, unfortunately, result in changes to our workforce,” said a spokesperson. “However, we believe this new function will make an important contribution to our ability to meet the challenges of a changing market.”

https://bit.ly/2TxijSH

 

Audi’s Buxton to join Carzam

James Buxton, Audi’s head of fleet, is joining online-only used car retailer Carzam as chief commercial officer at the end of June. Mr Buxton has worked for Audi for the past five years, including as national used car manager, but started his automotive career with Sytner.

 

 

 

WORLD NEWS

Volkswagen to boost agency sales online

Volkswagen is planning a triple-digit million-Euro investment to help its German retailers upgrade showrooms, boost training and introduce an online sales platform that will initially focus on promoting VW’s ID models which are sold through an agency agreement in Germany before being expanded other new cars and retailers’ used car stock.

A VW spokesperson added: “The funds which have been approved are in addition to the coronavirus support already agreed with dealers by Volkswagen.”

https://bit.ly/3ux68Sx

 

Shopping malls seek auto retailers

US shopping mall owners are targeting auto retailers to fill space left by traditional shops and department stores. Prestige Auto Group is already constructing a 118,000 sq. ft retailer at West Edmonton Mall, Canada; Mayfield Toyota opens in September, occupying two floors of a former Sears department store. The site includes a 72-bay service centre, meaning it won’t breach franchise agreements barring sales-only locations.

https://bit.ly/34ygg30

 

 

STOCKWATCH

Closing prices on 28 May 2021 and weekly change

Lookers reports strong trading, announces return to normalised reporting of annual financial results

Auto Trader Group 561.6p (-1.2p / -0.2%)

Cambria 83.0p (n/c)

Caffyns 400.0p (n/c)

Halfords 381.4p (+1.0p / +0.2%)

Inchcape 782.5p (+7.0p / +0.8%)

Lookers 68.0p (+4.0p / +6.0%)

Marshall Motor Holdings 184.0p (+5.5p / +3.0%)

Motorpoint 268.0p (-13.0p / -4.7%)

Pendragon 18.5p (-0.1p / -0.5%)

Vertu 43.5p (-1.5p / -3.3%)

 

 

COMING UP

Tuesday, Birmingham Clean Air Zone goes live

Wednesday, BRC shop price index

Friday, SMMT new car registrations

 

DATA CORNER

EU RV decline

Retained values in France, Germany and Italy fell in May, despite rising 4.1% in the UK. Three-year-old cars are taking longer to sell in France and Italy – days in stock rose 3.2% in France, to 54.1 days. In the UK, three-year-old cars take 40.2 days to sell, 47.3% quicker than a year ago. The UK’s fastest-selling car is the Mercedes-Benz GLA, which takes 20.8 days to sell. Auto Trader said the average price of a GLA is up 5% year-on-year.

https://bit.ly/3fUKMcF

 

MONEY MATTERS

UK growth forecast upgraded

The OECD has upgraded its growth forecast for the UK in 2021 and 2022. Projections have been boosted significantly, from 5.1% to 7.2% in 2021 and from 4.7% to 5.5% in 2022. However, the UK will still suffer the most long-term economic damage of the seven major industrialised nations following the pandemic, because of Brexit. Output is forecast to be an average of 0.5% lower each year for the next four years.

https://bit.ly/3fyCHvh

 

‘Convert Bounce Back loans into staff equity to save firms’

Businesses who received a Bounce Back loan and are now struggling should be allowed to swap the loan into shares for employees and write off the debt, says the Federation of Small Businesses. £46.5bn has been paid out and the OBR predicts up to 40% of borrowers could default – there have already been warnings of a “wave” of insolvencies and “significant” pressure on banks’ capital positions.

https://bit.ly/3wMsCAI