Auto Retail Agenda: 16 May 2022
14 May 2022
- EDDIE HAWTHORN REVEALS ARNOLD CLARK DIGITAL PERFORMANCE
- PENDRAGON WARNS OF LOOMING RECESSION
- ONS TO USE AUTO TRADER DATA FOR INFLATION STATS
- MARSHALL AUDI BECKENHAM ‘SUPER-DEALER’
- ONLINE DISRUPTERS ‘HUMBLED’
- RUSSIAN CAR SALES IN RECORD PLUNGE
- STOCKWATCH: Vertu reports record profitability for the year ended February 2022
- COMING UP: Inchcape AGM, CPI and RPI inflation figures, Auto Retail Live
- UK ‘MISERY INDEX’ RISING
- MOTORISTS CUTTING BACK ON JOURNEYS TO SAVE
Eddie Hawthorn reveals Arnold Clark digital performance
Arnold Clark sold one car for every 164 visitors to its website in 2021, according to CEO Eddie Hawthorn.
Mr Hawthorn, speaking at the NFDA Driving Digital conference, said the group had 50 million visitors to its website in 2021, the majority of which were via mobile. Arnold Clark sold 305,000 vehicles last year.
The figures are significantly better than Cazoo, which last week revealed it took 563 website visitors to sell a car.
Spelling about Arnold Clark’s digital strategy, Mr Hawthorn said the group had an annual budget for its digital operation of £8m and employed a team of 120 to develop the website and apps, both for customers and internally for employees.
Revealing an impressive list of digital achievements, he added that he classed a digital sale as one where a customer went online at any point during the buying journey, and that 90% of sales were digital. He also revealed that at the start of the pandemic the group did not have the capability to sell a car online.
In the last nine months of 2021 [the capability started in April 2021], the group saw 147,000 customers build a deal for their next car, including their trade-in. And a further 38,000 have done so in 2022.
Arnold Clark has had 440,000 downloads of its app and 43% of users sign in every month.
* Read the full report from the NFDA Digital Dealer conference in next month’s Auto Retail Bulletin – subscribe now.
Pendragon warns of looming recession
Pendragon’s chief marketing officer has warned of a “multitude of headwinds” coming at the auto retail sector for the second half of 2022.
Speaking at the NFDA’s Driving Digital conference, Pendragon’s CMO Kim Costello said she expected a recession in the second half of the year: “We’re entering what may be the most challenging market since the first lockdown.”
She added: “Basic economics tells us we’re staring down the barrel of a recession.”
Ms Costello said that retailers could help their situation by making sure they had “first party” data for their customers to make sure they can communicate directly with consumers while maintaining compliance with data protection laws.
She added that retailers with both a showroom and a website were in a better position than the disruptors such as Cazoo and Cinch which forced people to only buy online.
* Full report on the NFDA’s Digital Dealer conference in Auto Retail Bulletin – subscribe now.
ONS to use Auto Trader data for inflation figures
The Office for National Statistics has partnered with Auto Trader to use its market pricing data for inflation figures, including the CPI. Experimental estimates will start in June and be included in headline inflation measures from 2023. The aim is to more accurately represent the rise in used car prices, which have been one of the main drivers of inflation over the past year.
Marshall Audi Beckenham ‘super-dealer’
Marshall Audi Bromley, Sydenham and Beckenham have all merged into a three-floor ‘super-dealer’ in Beckenham. It boasts a nine-car showroom and 17-bay workshop – the largest in the London market area.
Called Audi South East London, the site has had a “soft launch” according to Auto Retail Network’s sources, and represents a £7.2m investment.
WORLD NEWS
Online disrupters ‘humbled’
Online used car retailers are “facing a reckoning” after riding high on consumer and investor interest during the Covid-19 pandemic. Stock prices are now falling as losses grow. “Until January, I don’t think any of these companies were expecting the industry to get as touch as it did, as quick as it did,” said an analyst from investment bank William Blair.
Carvana last week announced plans to lay off 2,500 or 12% of its workforce, and executives will forego salaries for the rest of the year. There was a backlash from staff who said they’d received no notice. It blamed high inflation and interest rates, dwindling consumer and investor confidence and supply chain disruption for a $506m quarterly loss.
Meanwhile, Paul Hennessy, CEO of online used car retailer Vroom, has stepped down with immediate effect. COO Tom Shortt replaces him and intends to “realign” the business. Plans include cutting sales targets and growing gross profit per vehicle. There will also be job cuts after the company announced a net quarterly loss of $310m.
Russian car sales in record plunge
Russian car sales fell 79% in April, the most severe plunge on record. 32,706 new cars were registered. A shortage of cars, rising prices and prohibitive car loan rates have all hobbled the domestic industry. Demand is unlikely to recover, making the car industry the industrial sector most affected by the invasion of Ukraine.
STOCKWATCH
Closing prices on 13 May 2022 and weekly change
Vertu reports record profitability for the year ended February 2022 with profit before tax of £80.7m, up from last year’s £24.6m.
Auto Trader Group 559.8p (-19.6p / -3.4%)
Caffyns 550.0p (n/c)
Halfords 227.8p (+6.4p / +2.8%)
Inchcape 712.5p (+6.5p / +0.8%)
Lookers 72.2p (-4.5p / -6.0%)
Marshall Motor Holdings 394.0p (n/c)
Motorpoint 238.5p (-6.5p / -2.6%)
Pendragon 26.7p (+3.7p / +14.8%)
Vertu 51.8p (+2.8p / +5.5%)
COMING UP
Monday, BoE governor gives evidence to Treasury select committee on likelihood of a recession
Tuesday, Auto Retail Live Sustainable Retailing – register now
Tuesday, UK unemployment
Wednesday, CPI and RPI inflation figures
Thursday, Inchcape AGM
Friday, retail sales
Friday, GFK Consumer Confidence
MONEY MATTERS
UK ‘misery index’ rising
A ‘misery index’ – inflation plus unemployment – has started to rise, stoking fears of a recession before the end of the year. The Bank of England expects around 600,000 job losses as it raises interest rates from 1% to 2.5% by mid-2023.
Some, however, cite the Schumpeter theory and argue an inflation-cooling recession could be healthy, by closing down struggling ‘zombie’ businesses with new, creative ones taking their place.
Motorists cutting back on journeys to save
Fuel sales are falling as motorists cut back on journeys to save money. Fuel retailer Ascona Group says sales are down 6-8% over the past six weeks. Every mile driven now costs 18.5p for petrol and 20p for diesel.
Tags:
Arnold Clark, Auto Trader, Bank of England, Carvana, economy, Eddie Hawthorn, Inchcape, Marshall, ONS, Pendragon, recession, Russia, Vertu, Vroom 
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