Auto Retail Agenda: 1 November 2021
30 October 2021
- ORA CAT: £25k CHINESE EV COMING TO UK RETAILERS
- MAGNESIUM CRISIS TO HIT CAR PRODUCTION ‘SOON’
- TELEIOS EXITS PENDRAGON
- ‘GREENWASH’ WARNING FOR BUSINESSES
- CAZOO EXPANSION CONCERN
- GM TO BUILD EV CHARGING NETWORK WITH RETAILERS
- PENSKE SETS NEW QUARTERLY RECORD
- HONDA HITS OUT AT AGENCY CRITICS
- STOCKWATCH
- COMING UP: BANK OF ENGLAND INTEREST RATE DECISION
- COMPLAINTS MOUNT AT FINANCIAL OMBUDSMAN
- INTEREST RATES ‘ON KNIFE-EDGE’
ORA Cat: £25k Chinese EV coming to UK retailers
Ordering will open for the Chinese ORA Cat electric car in December 2021 with prices starting from around £25,000. Ora is a new brand from the giant Great Wall; it is also concurrently launching a new premium brand, Wey, in Germany. Deliveries of the ORA Cat will begin in March 2022 – by which time, a retail network of around 30 dealers will be in place.
“We don’t have massive amounts of information yet,” a spokesman told Auto Retail Agenda, “but we are also looking at setting up branded spaces in shopping centres – similar to what Tesla and a few other OEMs do.”
He said the company is already talking to prospective retailers and has recently been showing a production-spec Cat in the UK.
The Cat EV will cost from around £25,000 and will offer 48kWh or 63kWh battery options: the larger one will have a range of 261 miles. The compact-sized five-door will offer a 5-year warranty and 8-year battery warranty.
Great Wall has lofty ambitions for Europe and chairman Wei Jianjuan has said once it reaches 50k sales, it will consider building a car factory here.
Magnesium crisis to hit car production ‘soon’
China has halted production of magnesium due to concerns over excessive energy use, which experts say could soon hit car production. China is responsible for 87% of the world’s magnesium production (and virtually all of Europe’s magnesium), vital in making both aluminium and high-strength steel. European stocks of magnesium are predicted to run out by the end of November.
Car production, already hit by the semiconductor shortage, could “grind to a halt within weeks” as a result. “Such a scenario is not yet included in our estimates,” BofA Securities analysts said last week. “The issue has just emerged and no carmaker has yet warned about it.”
Europe’s ACEA has issued an urgent call for action against the imminent risk of EU-wide production shutdowns. The association wants the European Commission and national governments to “urgently work towards immediate actions with their Chinese counterparts”.
The issue, if not resolved, “threatens thousands of business across Europe, their entire supply chains and the millions of jobs that rely on them”.
Teleios exits Pendragon
Teleios, once Pendragon’s largest shareholder, exited the retailer last week with the sale of its remaining 8.97% stake. Teleios Capital held an 18% shareholding as recently as May 2021.
Anders Hedin is the key beneficiary, increasing its Pendragon stake from 15.1% to 23.2%, becoming the retailer’s largest shareholder. In January 2021, former Pendragon CEO Trevor Finn was appointed non-executive director of Hedin Group.
‘Greenwash’ warning for businesses
As COP26 gets underway in Glasgow, PwC has warned companies are at risk of ‘greenwash’ style manipulation of greenhouse gas emission declarations if modelling is not overhauled. Direct ‘scope 1’ and indirect ‘scope 2’ emissions are often accurate but downstream ‘scope 3’ emissions are harder to predict. PwC is calling for a global regulatory framework to improve the accuracy of corporate CO2 emissions.
Cazoo expansion concern
Residents of a village north of Grantham have expressed concern about the expansion of Cazoo’s vehicle preparation centre at Roseland Business Park near Long Bennington. They say the former Smart Fleet Solutions site will expand from 20k vehicles to 70k vehicles a year, with Cazoo lorries travelling through the village “seven days a week, very late into the evening and early in the morning”. Councillors gave expansion the go-ahead last week in a unanimous decision.
WORLD NEWS
GM to build EV charging network with retailers
From early next year, GM will distribute each retailer in the US and Canada up to 10 electric car chargers as part of a plan to create a network of 40k EV chargers in the next four years. The chargers will be branded Ultium, GM’s own battery brand. Chargers are not restricted to dealer sites, either: each retailer is required to find suitable locations in the community, such as shopping centres and offices.
GM’s US retail footprint extends to within 10 miles of nearly 90% of the US population.
Penske sets new quarterly record
Penske has hit a new quarterly income record with Q3 revenue up 8.8% to $6.5bn (£4.75bn). Net income was up 44% to $356m (£260m). During the quarter, the retailer opened another CarShop site in the UK; with another opening in October and one in Scottsdale, Arizona, Penske has 22 CarShop locations – its target is 40 by the end of 2023.
The retailer bought back 2 million shares for $179m; despite its revenue record, shares closed down 2.5%.
Honda hits out at agency critics
Reports of significant price rises as a result of Honda Australia’s adoption of an agency-style business model are “simply not true”, the firm has said in a punchy statement. The fact some are saying it is “a good question and one you should really ask them to explain, as the facts to not support the assertation.
“Restructuring a business is not easy. To assess its success or otherwise after just three moths… is premature at best. Despite the naysayers, the Honda team… is energised for the future and ready to offer customers a simple, straightforward and enjoyable purchase and ownership experience”.
Last week, Auto Retail Agenda reported on how Australian retailers are taking Mercedes-Benz to court over efforts to roll out an agency model – with critics pointing to Honda’s new fixed prices leading to price rises.
STOCKWATCH
Closing prices on 29 October 2021 and weekly change
Auto Trader Group 605.6p (+3.8p / +0.6%)
Caffyns 500.0p (n/c)
Cambria 82.5p (n/c)
Halfords 266.4p (-9.8p / -3.6%)
Inchcape 826.0p (+18.0p / +2.2%)
Lookers 64.0p (-0.6p / -0.9%)
Marshall Motor Holdings 292.0p (+10.0p / +3.4%)
Motorpoint 358.0p (+7.0p / +1.9%)
Pendragon 18.35p (-0.03p / -0.1%)
Vertu 61.4p (-0.4p / -0.6%)
COMING UP
Thursday, Interest rate decision
Thursday, October new car registrations
Friday, Halifax house price index
Tuesday 9 November, Auto Retail Live Q4 briefing: sign up here
MONEY MATTERS
Complaints mount at financial ombudsman
The Financial Ombudsman Service is facing “significant operational challenges” due to an influx of new cases and has warned it may end the year with a major backlog. Over 110,000 customers have been waiting more than three months and almost 17,000 have waited at least a year for complaints to be resolved.Waiting times are supposed to last a maximum of 90 days.
Interest rates ‘on knife-edge’
Markets are betting the Bank of England will become the world’s first big central bank to raise interest rates when the MPC meets on Thursday. However, some economists insist markets are overreacting by pricing in a rise to 0.25%. It is expected rates will hit 1% by mid-2022, the highest since 2009 – and, if market forecasts are accurate, Britain will have experienced five rate rises by the end of next year.
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