• FORD TO LAUNCH ONLINE SALES THIS MONTH
• RETAIL PROPERTY PORTFOLIOS ON THE MARKET
• `ALTERNATIVE TO CAR OWNERSHIP’ CLUB GROWS
• INCHCAPE LAUNCHES PERSONAL CONTRACT HIRE SCHEME
• NEW LOOK FORDSTORE OPENED
• EXPANSION DRIVES IMPERIAL CAR SUPERMARKET GROWTH
• CUSTOMER SERVICE KEY TO SUCCESS IN DIFFICULT 2017, SAY DIRECTORS
• STRENGTH OF MERCEDES-BENZ BRAND HELPS RETAILER IN DIFFICULT YEAR
• WORLD NEWS – Toyota diverts marketing budget to R&D, JLR puts more into EVs
• STOCKWATCH – Motorpoint the big loser
• LAUNCH DIARY – Vauxhall Corsa, Hyundai KONA, Vauxhall Combo Life, Aston Martin DBS Superleggera, Citroen Berlingo/Peugeot Partner
• MONEY MATTERS – House price growth stalls, bank loyalty doesn’t pay
• COMING UP – regional labour statistics
• OUR BLOG – property may be as safe as houses but who for?

Ford will join the growing number of brands offering online car buying this month when it starts a direct sales operation from its website.  The operation and systems have been set up by with the help of omni-channel auto retail specialist, Rockar.

Initially Ford is soft launching the project with a limited number of vehicles but the full range of cars with full customer configurability will come online later. Buyers will be able to arrange their trade-in through the Ford website when they choose their new car which will have a fixed monthly price.  Customers will then be offered the choice of having the car delivered or collecting it from a retailer, according to Ford Marketing director, Lisa Rankin.

Speaking exclusively to Auto Retail Agenda, Mrs. Rankin said: “The retailer will handle the last mile and there will be a handling fee. The online sales launch has been timed to coincide with the opening of Ford’s first direct sales outlet from within the Next shop in Manchester’s Arndale centre which is expected to open on 16 July.  The concession within Next, like the online sales business, has been set up by Rockar but is fully run by Ford as a direct sales business.  The showroom in Next will not be part of Trust Ford, the manufacturer’s own retail group.

“The aim for the Next site is to be an experiment for us. It is not a pre-cursor to wholesale change.  We have talked to the Ford Dealer Council about this and explained that it is a one-off to see how things go.  We have not set a deadline by when we will judge it, we aren’t even 100% sure how it is going to operate.  There are metrics that we will monitor such as footfall, leads, test drives and so forth.  We are under no illusion that it will be straightforward.”

Retail property portfolios on the market

A property portfolio which owns the Stafford, Shrewsbury and Blackburn Audi dealerships generating an annual rental income of almost £750,000 is on the market for £11.6 million.

The Swanjar Portfolio lets the centres to Volkswagen Group UK which then sub-lets them to Swansway, Lancaster and Thompson Motor Company respectively. Thompson was bought by Swansway in late 2016. VW makes an annual profit of £79,500 from the sub-lets.

Stafford Audi currently pays passing rent of £305,000 per annum, Blackburn £271,538 and Shrewsbury £197,996. All leases have five year rent reviews with the next being in December 2019.

A second portfolio of Huddersfield Mercedes and a vacant dealership in Cardiff (both Pendragon), BMW Maidenhead and Solihull Toyota (Sytner) is already under offer.

Huddersfield Mercedes currently pays a passing rent of £328,108 p.a., Cardiff £277,195 and Sytner pays £428,931 and £380,908 for the BMW and Toyota centres respectively.

The Sydragon portfolio has a marketed price of £23 million producing annual rental income of almost £1.4 million rental income p.a.

Westminster has become the tenth London borough to join the Zipcar Flex one-way trip car sharing service where members can choose a make and model from a nearby location and leave it at their destination.

Jonathan Hampson, Zipcar UK general manager, said: “We are excited that Westminster City Council shares our ambition to build on what has been achieved and to further grow adoption of this important concept as an alternative to car ownership in the borough. One Zipcar represents 10 privately owned vehicles taken off the road in the London area over the past 12 months.”

Zipcar Flex costs 29p per minute and is capped at £12 per hour and already operates in Bristol, Oxford and Cambridge and another 50 cities across Europe and North America.

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Inchcape launches personal contract hire scheme

Inchcape Fleet Solutions has launched a personal contract hire scheme called LeaseMyCar allowing users to search its website www.leasemycar.net for deals from industry suppliers.

Matthew Rumble, managing director at IFS, said: “This product launch marks an important step in Inchcape Fleet Solutions’ strategy to widen our product portfolio to ensure sustainable growth. We have listened to the voice of our customers and developed this product to enable wider access to the benefits already enjoyed via business contract hire.”

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Ford managing director, Andy Barratt, and Martin Casha, chief operating office of Pendragon, cut the ribbon this week on a rebranded retail site which has been completely refurbished and has different zones for visitors as they move through it.

Evans Halshaw FordStore Preston, formerly known as Evans Halshaw Ford Preston, has more interactive showroom technology to engage potential buyers as well as the traditional display of models.  On arrival, visitors will be greeted by the `Hello’ zone, before moving into the `Discover Ford’ zone where they can access more information on the brand and cars with touchscreen technology. Alongside this, the dealership has added the Vignale Lounge. This has a dedicated relationship manager, a contemporary environment and is designed to support Ford’s upscale Vignale range and offer services as well as sales.

Will Bradshaw, Dealer Principal at Evans Halshaw FordStore Preston, said: “We are thrilled with the results of the refurbishment and look forward to welcoming customers through our doors.”

Opening new centres helped used sector specialists, Imperial Car Supermarket, report a profit before tax of £3.1 million last year against £700,000 in 2017 as directors added three sites last year. With two more added in March and April this year, at Grangemouth and Newport Pagnell, it takes their spread to 11 dealerships and there are plans to expand again during 2018.

Filing its 2017 report, the directors said: “The growth reflects a strong performance from the like-for-like sites and buoyed by the impact of fast starts at the newly acquired sites at Halesowen, Exeter and Ipswich.

“The directors continue to seek new opportunities for new sites to increase the geographic spread of the Imperial brand.”

Customer service key to success in difficult 2017, say directors

East Midlands based Sandicliffe has highlighted its strategy of putting more emphasis on customer service as it reported increased turnover and pre-tax profit last year despite what the board of directors describe as a challenging business climate.

The car and light commercial retail group – which has Ford, Nissan, Kia, Mazda and Skoda franchises – saw turnover grow two per cent and its PBT went up by £183,000 to £1.01 million.

In its end of year 2017 financial report, the company said: “The group tries to provide added value products and services to its customers, prompt response times in the supply of products and services and in the handling of customer queries.”

The strength of the Mercedes-Benz brand helped South West-based retailer City West Country Limited weather the storm of consumers reining in spending and the competitive market conditions.

The business said that pre-tax profits were down from £7.59 million in 2016 to £4.93m last year and return on sales fell to 1.7 per cent in 2017 against 2.7 in 2016.

Filing its annual accounts, the directors said: “The desirability of the Mercedes-Benz brand and the quality of the products offered significantly offset some of the wider sector challenges. The directors consider the financial performance of 2017 to be satisfactory in the light of the wider economic climate and the extremely competitive UK motor retailing marketplace and the general cautious outlook adopted by consumers.”

Toyota diverts marketing budget to R&D

Toyota is said to be slashing its marketing spend as it looks to cut costs and expenses there to fund more R&D.

Sources say despite its profits which run at around 9% the company is looking to follow the lead of tech firms such as Tesla and Google which use non-traditional, cheaper and more cost-effective means of advertising.

It has already cancelled contracts with its long-term Chinese advertising agency.

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JLR ups its EV investment

Jaguar Land Rover is increasing its EV investment by more than 25% over the next three years as it moves to electrify both brands.

Reports by Bloomberg say that JLR will invest £13.5 billion, up from the £10.7 billion spent in the previous three financial years.

By 2025, JLR will offer buyers internal combustion, hybrid or EV powertrains in all its models. It has previously said every new model launched from 2020 will have some degree of electrification.

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Closing prices at Friday June 29 and weekly movement.

BCA 220.0p (no change)

Cambria 63.0p (+1.1p)

Caffyns 425.0p (no change)

Inchcape 780.5p (+7.0p)

Lookers 109.0 (no change)

Marshall Motor Holdings 166.0p (+0.5p)

Motorpoint 232.0p (-21.4p)

Pendragon 24.8p (-1.4p)

Vertu 49.9p (-0.4p)

Vauxhall Corsa with Euro 6.2 compliant engines across a simplified model range, seven trim levels. From £11,250.

August: Hyundai KONA Electric SUV from £29,495 (not including the £4,500 Plug-In Car Grant). Available exclusively on Hyundai’s Click to Buy website.

September: Vauxhall Combo Life, five/seven seater, from £20,530.

Q3. Aston Martin DBS Superleggera. 725PS twin turbo V12, 211 mph supercar. From £225,000.

Autumn. Vauxhall Combo one tonne van as swb, lwb or crew van /Citroen Berlingo/Peugeot Partner. Prices tbc

Brakes go on house price growth 

UK house price growth has slowed to a five-year low, according to Nationwide. The rate of annual rise dropped to two per cent in June, the lowest since June 2013. The average house is now valued at £215,444.

Robert Gardner, Nationwide’s chief economist, said: “There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.”

One tenth of bank customers make one third of its profits

New figures from the FCA show that just ten per cent of a bank’s customers are generating between a third and a half of all its profits. The FCA’s latest update on its Strategic Review of Retail Banking Business Models suggests those who stay loyal to their bank despite having to pay high monthly fees or expensive overdraft charges, are losing more of their cash to it than those who keep switching to the newest offer.

July 17; ONS, regional labour market statistics in the UK.

Property is as safe as houses – but who for?

Eyebrows may be raised at our story this week about a couple of property portfolios which are on the market and maybe a ripe investment for anyone with a few million going spare.

You can’t beat bricks and mortar, so the conventional wisdom goes, and it is hard to argue otherwise.  I still recall one business man telling me that he had bought the building his company operated from and which now paid him rent. “Whatever else may or may not happen in the business, I’ve always got this asset.  The business pays me rent and it’s my pension fund.”  Alas it did him little good as he died young from cancer.

But the figures in the Swanjar operation are indeed eye-catching. Three centres are let to the VW group which then sub-lets them to a trio of Audi retailers which pay passing rents of £305,000, £271,538 and £197,996 respectively. VW pockets a handsome annual profit of £79,500 from the deal. Easier money than selling Golfs I suppose…

This is hardly a one-off situation and is fairly commonplace among many franchised sectors but even so, forking out an average of more than £25,000 to your manufacturer before you even turn on the lights on a Monday morning must be a little galling. Aren’t they all supposed to be in it together? It’s the cost of doing business maybe but if I’m a retailer selling a manufacturer’s cars and both parties benefit from more volume, the manufacturer taking money from me that I might otherwise spend on say, a sales exec seems a little hard to stomach.

But there is a wider issue of motor retail property and one which has long struck me as odd and a risk. These days a large, modern showroom and service facility are pretty bespoke buildings, certainly with all the vastly expensive CI that goes into them. Look at the `double M’ frontage of a combined JLR retailer. What happens if the car operation fails, how do you find an alternative use for that building? I don’t see them easily lending themselves to another purpose in which case someone has a very expensive property on their hands eating rather than earning money.

Perhaps it’s easier to be a tenant after all.

John Swift