Auto Retail Agenda: 19 July 2021
18 July 2021
- FORRESTER CALLS USED PRICES ‘STAGGERING’, ‘NEVER SEEN IN 20YRS’
- 1 IN 2 MANAGERS THINK RESTRICTIONS LIFTING TOO EARLY
- JUST 1 IN 10 WANT TO BUY PURELY ONLINE
- HELSTON GROUP CONTINUES DIVIDENDS IN PANDEMIC
- NFDA AFTERSALES WORKING GROUP AT BRITISH MOTOR SHOW
- FORD RETAILERS MAY FINISH BUILDING CARS DUE TO CHIP SHORTAGE
- BRIGHTDROP RETAILERS NOT GM-EXCLUSIVE
- STOCKWATCH – Cambria delisting meeting delayed
- COMING UP – NFDA strategic EV forum – Auto Retail Network will be there!
- CHANCELLOR TO DELAY BUDGET AGAIN?
- RISING INFECTIONS MAY DELAY ECONOMIC RECOVERY
Forrester calls used prices ‘staggering’, ‘never seen in 20yrs’
Robert Forrester bought a Ford Fiesta for his daughter a year ago. In the past seven weeks, its value has jumped £1,200. “It’s quite staggering, isn’t it,” said the Vertu CEO. He calls the rise in values something “I’ve not seen before in 20 years”.
Official data from the ONS last week showed that secondhand car prices rise 5.6% in June. They were cited as one of the reasons annual inflation has risen to 2.5%, the highest level in nearly three years. It is above the 2.2% expected by analysists and the Bank of England target of 2%. This is now stoking a debate about whether Britain faces an inflationary spiral.
Auto Trader data backs this up. Average used car prices rise a record 9.7% in the second week of June compared to a year ago – the 57th successive week of price rises. The online marketplace says used cars are also selling faster.
BBC economics editor Faisal Islam visited Nuneaton Cars. He was told buyers were attempting to gazump each other by offering higher prices for cars already marked as sold. The company also invested to facilitate nationwide delivery during the pandemic, further broadening its reach (and potential for gazumping).
The phenomenon is the same in the US: used car prices grew a record 10.5% in June, with year-on-year inflation hitting 45%.
Used cars are now said to be providing an excellent case study in why, “when demand rebounds quickly and supply suffers bottlenecks, it leads to inflation”.
1 in 2 managers think restrictions lifting too early
Businesses are concerned today’s lifting of coronavirus restrictions is happening too early. 1 in 2 managers polled by the Chartered Management Institute think things are moving too quickly (39% say the pace is correct; 8% say it is too slow).
Government work from home guidance ends, but only 13% of managers are asking all staff to return. 15% say no staff working remotely will return; while the rest favour an approach that keeps many at home in hybrid working.
3 in 4 employers are also planning to keep anti-Covid measures in place.
Just 1 in 10 want to buy purely online
A big YouGov survey has found that nearly half of car buyers prefer to buy their future car from a retailer. A further 12% say they would be happy to buy online and pick up their car from a retailer. In Britain, only 11% would prefer to buy directly online – the highest market was China, on 20%.
Helston Group continues dividends in pandemic
30-strong South West retailer Helston Group reports turnover fell 23% from £643m to £511m in the year ended 31 December 2020, but the drop in profit before tax was capped at £2.1m to £10.7m. The group paid dividends of £2.3m during the year, an identical figure to 2019.
NFDA Aftersales Working Group at British Motor Show
The NFDA is finally relaunching its aftersales working group at the British Motor Show trade day on 19 August. Trident Honda Richard Roberts will chair the day. There will be a new topic-led agenda focusing on the effect of EVs on aftersales, said Sue Robinson. Attendees also get entry to the British Motor Show – where the NFDA will be exhibiting, along with EVA and Drive My Career.
WORLD NEWS
Ford retailers may finish building cars due to chip shortage
Ford is considering shipping partially built vehicles to retailers for them to complete assembly once the chips become available. Dealers were told of the plans last week, which involve training service technicians on how to install the chips. Only retailers agreeing to the initiative will be shipped partly-built vehicles. Ford said in April it had 22k partially built vehicles but has not disclosed how the number has grown since then.
BrightDrop retailers not GM-exclusive
BrightDrop, GM’s electric vehicle delivery brand, will open its first retailers later in 2021. Some stores may be outside the existing retailer network, an executive admitted – marking a shift from GM’s traditional commercial strategy of focusing on existing GM retailers. FedEx is BrightDrop’s first customer, taking the EV600 van, and “hundreds of other customers” are in discussions.
STOCKWATCH
Closing prices on 16 July 2021 and weekly change
Cambria delisting meeting delayed
Auto Trader Group 660.8p (+20.2p / +3.1%)
Cambria 78.0p (+1.0p / +1.2%)
Caffyns 450.0p (n/c)
Halfords 361.0p (17.8p / -4.8%)
Inchcape 802.0p (-4.0p / -0.4%)
Lookers 63.3p (-4.0p / -3.2%)
Marshall Motor Holdings 220.0p (-6.0p / -2.6%)
Motorpoint 365.1p (+3.1p / +0.8%)
Pendragon 17.05p (-2.15p / -11.8%)
Vertu 41.2p (-2.6p / -6.1%)
COMING UP
Wednesday, public sector net borrowing
Thursday, NFDA strategic EV forum – Auto Retail Network will be there!
Friday, GFK consumer confidence
Friday, retail sales
MONEY MATTERS
Chancellor to delay budget again?
The Chancellor is considering delaying the budget until 2022 so the Treasury has time to consider the impact of the third wave and ending of furlough. The Chancellor may instead hold a three-year spending review, but delay tax measures until the spring. It would be the third year in a row the autumn budget were delayed.
Rising infections may delay economic recovery
The ‘Freedom Day’ economic boost may be held back by public caution over rising infections, forecasters have warned. This will prevent the economy from making a complete return to pre-virus levels,” particularly if infections surge further, said Barclays chief UK economist Fabrice Montagne. “Rising case numbers can damage consumer confidence and discourage social consumption,” cautioned Oxford Economics economist Andrew Goodwin.
Tags:
Auto Trader, BrightDrop, Budget, Cambria, Chancellor, Covid, Ford, GM, Helston Group, NFDA, Nuneaton Cars, Robert Forrester, Vertu, YouGov 
Why Subscribe?
As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:
- Get informed and boost your business potential
- More than 1,200 fellow executives have joined us since launch
- Independent, carefully crafted, unique content relevant to you and your business
- Develop a greater awareness of market trends and opportunities
- Access to a wide range of materials whenever, wherever and however you want it
- Significant discounts on ARN events, reports and other publications
