Auto Retail Agenda: 11 May 2020
10 May 2020
- RETAILERS AWAIT CLARITY ON SHOWROOM REOPENING
- FORD MD WARNS OF ‘SANITISED SALES’
- PWC PREDICTS V-SHAPE RECOVERY
- CAFFYN FAMILY GIFT SHARES
- CORONAVIRUS: AUTO INDUSTRY ROUNDUP
- RETAILERS REOPEN IN LA
- GM REJECTS HOLDEN CLOSURE CLAIM
- STOCKWATCH – Halfords rallies on £2bn government cycling drive
- COMING UP – Q1 GDP, Auto Retail Live: reopening the dealership
- FLEXIBLE FURLOUGH SIGNALLED
- EU RETAILERS LOSE €1.8BN IN LOCKDOWN
- BLOG: What should the short-term sales stimulus be?
Retailers await clarity on showroom reopening
Retailers have been left in the dark about exactly when they can reopen showrooms following Prime Minister Boris Johnson’s statement for a route out of lockdown on Sunday evening.
The PM said he will give more details in Parliament today (Monday 11 May).
Calling it a “change of emphasis” that is active from this week, Mr Johnson said those who can work from home should continue to do so – “but you should go to work if you can’t work from home”.
Mr Johnson added workers should, if possible, commute by car, which could lead to a spike in service work from employees whose cars have been left unattended for the past few months.
The second phase will come on June 1 “at the earliest”, when shops will be allowed a phased reopening. Step 3, from July 1, is a phased reopening for the hospitality industry.
One senior auto retail executive has already told Auto Retail Agenda they are not sure if showrooms are part of stage one or two, although they expect to find out full details on Monday.
Auto Retail Live is hosting a special broadcast on Tuesday, 12 May to help explain the upcoming plans. On the webinar will be Vertu’s Robert Forrester, employment lawyer Sandra Martins, Catherine Faiers from Auto Trader and Jeremy Evans from Marketing Delivery. Sign-up to watch and ask the panel questions here.
Ford MD warns of ‘sanitised sales’
Hygiene and social distancing measures risk turning showroom sales into a “sanitised, mechanical process” warns Ford MD Andy Barratt. Retailers have “got to work out how to get the emotion, and that may be selling the sizzle through video”. An acceleration of digitisation is underway and retailers now need to understand how to “build rapport, trust and loyalty” with the new tools.
PwC predicts V-shape recovery
Experts at PwC expect the automotive sector to perform a V-shaped recovery, even if there’s a bumpy recovery from Covid-19. A new report from the firm predicts: “We may see a temporary recovery in sales as lockdown conditions are relaxed – a consequence of pent up consumer demand, the expiry of PCP contracts, and potential payment holidays for dealers and car buyers – but it’s likely to take 18 to 24 months before the market makes a full return.”
Caffyn family gift shares
Simon Caffyn has been gifted 25,000 shares in the company from his mother, Ann Caffyn. The deal leaves Mrs Caffyn with a 1.23% stake in the firm; CEO Simon Caffyn’s share grows to 2.85%.
Coronavirus: auto industry roundup
Groupe PSA retailers have been told to leave a three-hour gap between test drives to allow for deep cleaning… The NFDA has produced a list of suppliers for cleaning, PPE and point of sale social distancing material for retailers, to prepare for when business returns… Buyacar says the average price of a car reserved for future delivery has risen to a record £16k during the first week of May – from a low of £11,366 in April… A free add-on for the Dealerweb Showroom lead management tool launches this week. It controls appointments by time and salesperson availability, halting appointments when time slots are full and allowing users to choose the next available time slot instead… MHA Macintyre Hudson has produced an 18-page return to trading guide for dealers… NAMA has produced guidance for opening motor auctions during Covid-19 restrictions… An eBay Motors Group survey found 30-day no-cost returns to be the biggest boost to consumers purchasing remotely during lockdown, followed by guaranteed ‘safe or solo’ test drives… In another survey, eBay found 3 in 4 active car searchers plan to buy within three months of lockdown ending… The car will “remain the mainstay for many families” said Transport Secretary Grant Shapps in a government daily briefing.
WORLD NEWS
Retailers reopen in LA
Retailers are reopening in Los Angeles County and the rest of California. Officials have issued a five-page list of health and safety protocols including solo test drives and banning customers from using employee bathrooms.
GM rejects Holden closure claim
GM has rejected claims by an Australian law firm for greater retailer compensation under the Holden Transition Support Program. Retailers for the closed car brand are being paid $1,500 per car, which GM claims is four times what the average retailer made from new vehicle sales. Law firm HWL Ebsworth wants $6,110 per car.
STOCKWATCH
Closing prices on 7 May 2020 and weekly change
Halfords rallies on £2bn government cycling drive
Auto Trader Group 479.8p (+20.6p / +4.4%)
Cambria 46.0p (+9.0p / +24.3%)
Caffyns 280.0p (n/c)
Halfords 151.4p (+49.4p / +48.4%)
Inchcape 491.6p (-2.4p / -0.4%)
Lookers 24.65p (+0.9p / +3.7%)
Marshall Motor Holdings 98.0p (-7.0p / -6.6%)
Motorpoint 190.0p (n/c)
Pendragon 7.6p (-0.58p / -7.0%)
Vertu 25.7p (+2.8p / +12.2%)
COMING UP
Tuesday 11.30am, Auto Retail Live: reopening the dealershipWednesday, March and Q1 GDP
Wednesday, retail sales
MONEY MATTERS
Flexible furlough signalled
Ministers have signalled to business leaders that the furlough scheme may be phased out gradually during the summer rather than suddenly ending in June. This would allow workers to return part-time. Plans could be announced by the Chancellor as soon as Tuesday, reports the FT.
EU retailers lose €1.8bn in lockdown
Autovista has calculated European car retailers lost €1.8bn from the start of lockdown to the end of April alone. German retailers were hit hardest with a £561m loss; French retailers lost £225m and UK retailers lost £178m. The calculation comprised weaker RVs, rising days in stock and ageing stock losses.
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