16 June 2019

• GROUP 1 CONSIDERS UK ONLINE SALES
• USED CAR VALUES SET TO STABILISE
• SNOWS INVESTS TO DOUBLE BODYSHOP OUTPUT
• HR OWEN ADDS SECOND EV BRAND
• VW LOOKS WEST TO COUNTER CHINESE EXPOSURE
• EV TAKE-UP SLOWER THAN FORECAST
• STOCKWATCH – Investors punish Pendragon, Lookers drops 10%
• LAUNCH DIARY – Bentley Flying Spur, BMW 3-series Touring
• COMING UP – BoE interest rate decision, BCA results, Auto Retail Live Profit Briefing
• MONEY MATTERS – Wage spread scheme appeals to staff, jobless figure lowest since 1975
• OUR BLOG – Pendragon presses reset

Group 1 considers UK online sales

Group 1 Automotive will monitor the AcceleRide end-to-end online sales programme it has launched in America before deciding whether to roll it out in the UK.

AcceleRide lets customers choose a vehicle, agree a trade-in value, arrange finance, add options or warranties and have it delivered without visiting a showroom.

The multi-franchise company’s UK portfolio includes the Beadles group, Barons and Chandlers, Think Ford and Advantage Cars.

Daryl Kenningham, Group 1’s president of US operations, said the company will look and learn from America and then decide on using the model here.

Speaking to Agenda, he said: “We are studying AcceleRide for our other markets. We continue to learn from it and will decide about expanding later. It’s difficult to say if it’s inevitable but it is clear that, so far, our customers have embraced the ease of doing business through AcceleRide.”

Used car values set to stabilise

Used car values are set to stabilise following a period of market correction which has seen petrol values fall more than diesel after reaching a peak 12 months ago.

Speaking exclusively to Auto Retail Agenda, Andrew Mee, head of forecast at Cap HPI, said: “We think the fall from last year’s peak has pretty much run its course and are not far off the point where prices will stabilise for both petrol and diesel. We won’t see the fluctuations up or down we’ve had over the past 18 months.”

Meanwhile, BCA’s latest Pulse market report has seen overall auction values in May rise slightly after “moving through some typical pricing realignment during April and May”.

Snows invests to double bodyshop output

Southern England-based Snows says a £1 million investment in a new centre should see it double its current output to 100 vehicles per week by the end of the year.

The multi-franchise group opened its new Accident Repair Centre in Southampton in March to bring all its work under one roof instead of operating from three centres it had before.

The centre has four spray booths, an aluminium bay, 60 work bays, a workshop and 28 staff of technicians, drivers and advisers.

HR Owen adds second EV brand

Supercar retailer HR Owen is adding another electric brand to its portfolio after taking on Croatian EV hypercar manufacturer, Rimac.

Already confirmed as a retailer for the Pininfarina electric supercar, the London-based group will be the sole UK distributor for the 250mph Rimac C-two model due next year.

Just 150 of the £1.7 million cars will be built and customers will be flown to the factory rather than dealing through showrooms.

WORLD NEWS

VW looks West to counter Chinese exposure

VW wants to balance its exposure to the Chinese market in a tie-up deal with Ford on sharing EV and autonomous vehicle technology.

The two are said to be close to a deal that would see Ford having VW’s MEB electric platform and both saving billions in R&D costs on future models.

Herbert Diess, VW chief executive, told 500 company managers the talks are nearly complete and is quoted as adding: “Today we are de facto a very Chinese-oriented company. For this, we need a counterweight in the U.S.”

https://reut.rs/2IKdTPm

EV take-up to be slower than forecast

EV take-up will not be as fast as car makers predict and they will need to incentivise sales even as they struggle with the development costs.

Mark Fields, former Ford CEO, said: “My view is that yes, electrification is going to grow over the years but not to the extent all the experts are telling you. Manufacturers are going to have to first restructure the margins of the business and on top of it you’re going to have to incentivise demand.”

He added that China will emerge as the world leader, saying: “China is setting the tempo and the pace for electrification around the world. The Chinese government has said, ‘We missed being the leader in internal combustion engines. Now is our opportunity to lead in a 21st-century propulsion system.’ They’ve crafted their industrial policy along those lines.”

https://bit.ly/31DeICj

STOCKWATCH

Closing prices at 14 June and weekly movement

Investors punish Pendragon, Lookers drops 10%

BCA 188.3p (-2.3p)

Cambria 60.0p (-2.5p)

Caffyns 385.0p (-25.0p)

Inchcape 617.0p (+1.5p)

Lookers 74.7p (-8.3p)

Marshall Motor Holdings 160.0p (-5.0p)

Motorpoint 220.0p (n/c)

Pendragon 17.9p (-5.5p)

Vertu 40.0 (n/c)

Auto Trader Group 561.4p (-32.8p)

LAUNCH DIARY

Bentley Flying Spur. Orders from autumn, deliveries early 2020. Prices TBC.

BMW 3-series Touring. Deliveries from 28 September, prices TBC.

COMING UP

Thursday: BoE interest rate decision and latest retail sales data.

26 June: BCA Marketplace final results

28 June: GFK consumer confidence data

9 July: Auto Retail Live Profit Briefing – Maximising aftersales profits

MONEY MATTERS

Wage spread scheme appeals to staff

Businesses can spread employees’ wages over a month instead of in one payday sum with a new fintech company.

Wagestream charges employers around £1 per employee per month for and then charges staff a fixed fee of £1.75 each time they make a withdrawal. It covers the payment to the worker and recovers the money from their next pay cheque.

https://bbc.in/2ZoWAdh

Jobless figure lowest since 1975

The unemployment rate is at its lowest since 1975 but the Bank of England says this reflects business choosing to hire staff rather than make long term investments.

Wages in Q1 grew faster than forecast and total earnings growth, including bonuses, rose by an annual 3.1%. The Bank of England said it expected wage growth of 3% by the end of the year but sees the strong labour market as a sign that firms are preferring to spend on hiring instead of on longer term programmes.

Official figures on Monday showed the economy shrank by 0.4% in April, its biggest monthly drop since 2016.

https://reut.rs/2XiGwwd

CLICK HERE TO READ OUR BLOG – Pendragon presses reset

John Swift

Editor

Auto Retail Agenda

Tags: Cap HPI, Group 1 Automotive, h r owen, Pendragon, Santander, Snows Motor Group