Auto Retail Agenda: 13 April 2020
13 April 2020
- MARSHALL’S BOSS URGES THE SPIRIT OF LOCKDOWN
- HARWOODS REPORTS ROS DROP TO 0.6%
- VAUXHALL MD: CAR BUYING TO CHANGE FOREVER
- IMI TO CLARIFY QUALIFICATIONS FOR 2020 LEARNERS
- CORONAVIRUS: AUTO INDUSTRY ROUND-UP
- LARGEST US USED CAR RETAILER FURLOUGHS 15,000
- MICHIGAN RETAILERS DECLARED ‘CRITICAL WORKERS’
- COMING UP – HMRC to issue further guidance on making furlough claims
- FRC PUSHING FOR TOUGHER ‘GOING CONCERN’ AUDITS
- CORONAVIRUS LARGE BUSINESS EMERGENCY LOANS ‘TO DOUBLE’
- OLEV CLARIFIES ‘PRICE’ FOR ELECTRIC CAR GRANTS
- BLOG: The delivery dilemma
Marshall’s boss urges the spirit of lockdown
Marshall Motors CEO Daksh Gupta has said the business is “selling but not delivering” in line with the spirit of government lockdown guidance.
Non-essential servicing work has also ceased. He told Auto Retail Live that was the consensus from most fellow retailers – who speak on twice-weekly calls with the NFDA – despite the wording of the guidance allowing others (such as the BVRLA) to make another judgement.
Marshall’s enquiries are 90% down but it is still selling around 40 cars a day. Mr Gupta said the usual used-to-new ratio of 1.7-to-1 has leapt to 8.7 used cars to every 1 new. He suggested this shows how important the showroom experience still is to new car buyers.
Catch up here with the latest Auto Retail Live featuring Daksh Gupta, HR legal expert Sandra Martins, Marketing Delivery’s Jeremy Evans and Calltracks’ Stuart Buckley.
Harwoods ROS drops to 0.6%
Harwoods has reported a 58.6% fall in profit before tax for the year ending 31 December 2019. A £7.0m 2018 profit, including a £2.1m profit from the sale of a premises, fell to £2.9m in 2019. Return on sales declined from 1.4% to 0.6%.
Turnover fell 6% to £599m. This was blamed on a decline in registrations. Net cash balances fell from £3.3m to £194k. The group did acquire Crawley Audi from Inchcape in July, and added the McLaren franchise to its Bramshaw site. 2020’s strategy continues to be “securing and developing first-class sites”.
Vauxhall MD: coronavirus will change car buying forever
Vauxhall MD Stephen Norman believes a new telephone direct sales system developed in response to coronavirus will continue even after the epidemic clears. “Retailing will never go back to the way it was.” He expects customers to continue researching online, phoning the company for personal guidance from a human being, then transact with a retailer “in the usual way”.
Retailers will remain relevant but the cost base of “gin palaces” will be threatened. They are “already on overtime”.
IMI to clarify qualifications for 2020 learners
Coronavirus: auto industry round-up
Peter Vardy’s new ‘Aftersales SAS team’ has begun mobile servicing and its first call was for work on a doctor’s car at their surgery… Seat has handled over 200 calls to its Live Showcase service since relocating it to employees’ driveways… The DVLA has extended the usual 7-day timescale for de-registrations to 14 days… Halfords Autocentres launches zero-contact measures including only one customer a time in the reception area, plastic wraps on steering wheels and gearlevers, and allowing at least five minutes’ ventilation time before moving cars… Chorley MG has donated one of its vans to a local pub for delivering food to isolated residents… NADA chairman Rhett Ricart says customers’ positive response to online sales during coronavirus could see 90% of US new car retailers roll out full e-commerce capability by the end of the year… MG Motor and DriveElectric provide a fleet of ZS EV to Haringey Council… Vertu took 1,848 phone calls on 6 April alone, including 1,314 key worker service bookings and 214 internet sales enquiries.
WORLD NEWS
Largest US used car retailer furloughs 15,000
CarMax, the largest used car retailer in the US, will furlough around 15,500 employees from 18 April. Its 217 nationwide stores are either closed or operating on a limited basis and “consumer demand has progressively deteriorated”. CEO Bill Nash will forego 50% of his salary, reported to be £1m in the 2019 fiscal year, excluding bonuses.
Michigan retailers declared ‘critical workers’
Michigan car retailers can now sell vehicles online after dealer employees were named critical workers. Sales and leases can now be conducted remotely and electronically. Showrooms will remain closed but employees can work there to facilitate sales, and deliver vehicles to customers. Michigan had been one of only four states to ball all car sales.
STOCKWATCH
Closing prices on 9 April 2020 and weekly change
Auto Trader Group 414.0p (+42.0p / +11.2%)
Cambria 38.0p (+1.0p / +2.7%)
Caffyns 280.0p (n/c)
Halfords 91.1p (+26.2p / +40.3%)
Inchcape 499.2p (+77.8p / +18.4%)
Lookers 20.1p (+4.5p / +28.8%)
Marshall Motor Holdings 86.0p (-1.5p / -1.7%)
Motorpoint 207.0p (+17.0p / +8.9%)
Pendragon 7.12p (+0.92p / +14.8%)
Vertu 22.0p (+3.5p / +18.9%)
COMING UP
This week, HMRC to issue further guidance on making furlough claims
Thursday, UK retail sales
Friday, EU consumer price index
20 April, furlough claims portal goes live
MONEY MATTERS
FRC pushing for tougher ‘going concern’ audits
The Financial Reporting Council wants auditors to be tougher in judging whether companies can continue trading for the next 12 months as a going concern. Several large accounting firms have already put additional reviews in place before sign-offs. It could result in more qualified audits, risking a breach of lending agreements. The FRC is asking lenders and investors to “react sensibly” to qualified audits.
Coronavirus large business emergency loans ‘to double’
Interest-free loans to businesses with turnover of more than £250m will be doubled from £25m to £50m under new proposals to be signed off by chancellor Rishi Sunak. The £500m upper turnover limit will also be removed from the Coronavirus Large Business Interruption Loan Scheme (CLBILS). A formal announcement is expected this week.
OLEV clarifies ‘price’ for electric car grants
OLEV has clarified the definition of ‘price’ for Plug-in Car Grants. Vehicle RRP must be below £50k, including VAT (even when reclaimable by businesses), mandatory extras such as delivery charges, the battery cost and any non-standard options affecting the powertrain. Discounts are excluded, as is the first registration fee, the cost of the first licence, plus warranty, insurance and service packs.
BLOG: The delivery dilemma
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