Auto Retail Agenda: 20 March 2023
19 March 2023
- NFDA SURVEY: AGENCY MODEL UNDER PRESSURE
- USED CAR PRICES ARE ON THE UP – AGAIN
- CAZOO ACCUSED OF ‘RUINING’ SUCCESSFUL BUSINESS
- DON’T MISS TUESDAY’S AUTO RETAIL LIVE BUSINESS BRIEFING
- CHINA FOREIGN OEM BACKLOG GROWS AT RETAILERS
- CANADIAN RETAIL GROUP EXPANDS TO US
- STOCKWATCH: Auto Trader only plc to make gains as major auto retail stocks fall again
- COMING UP: Auto Retail Live returns to studio on Tuesday; Pendragon full year 2022 results
- PENSIONS ‘GOLD RUSH’ TO AVOID INHERITANCE TAX
- FCA WARNS PAYMENT FIRMS
NFDA survey: Agency model under pressure
Agency agreements and significant network restructuring are expected to come under increased scrutiny in the latest NFDA Dealer Attitude Survey, due out on Monday, 20 March.
The full results will be revealed at 9am and are expected to show that on average relationships between retailers and manufacturers remain good.
However, the split between those OEMs undergoing restructuring and those offering stability is understood to have widened.
- Check back to the Auto Retail Agenda website at 9am to see the full results
Used car prices are on the up – again
Used car price growth has started to accelerate again, after 10 months of softening from April 2022’s all-time high of 32.9% growth. Auto Trader data shared exclusively with Auto Retail Agenda shows the average used car value is up 2.3% year-on-year and 0.7% month-on-month. The average used car price is now £17,720.
The acceleration “could not be a clearer barometer of the current condition of the market,” said director of data and insights Richard Walker, which “is going from strength to strength this year.
“Anyone predicting a fall in used car prices anytime soon will be sorely disappointed.”
Used car price growth would actually be better still – if it wasn’t being held back by EVs. Used prices are down 13.3% year-on-year – due to a huge overbalance of supply, which is up a staggering 261% year-on-year.
Some EVs have suffered significant softening of values as a result: one-year-old Tesla Model 3 prices have fallen £8k since September “and show no signs of slowing”.
However, contrary to some reports, stresses Auto Trader, customer interest in EVs is not collapsing, with demand up 47% year-on-year.
Cazoo accused of ‘ruining’ successful business
A Cazoo Westbury employee has accused bosses of “ruining” what was a successful and profitable operation in Westbury. Cazoo acquired Smart Fleet Solutions in February 2021; last week, it closed, with 150 staff made redundant. Smart Fleet Solutions specialised in reconditioning learner and Motability vehicles for resale; Cazoo switched the operation to repairing and preparing general used vehicles.
Don’t miss Tuesday’s Auto Retail Live business briefing
Inchcape Retail CEO George Ashford, Devonshire Motors MD Nathan Tomlinson, Auto Trader’s Marc Palmer and Fresh Tracks’ Mike Jones go live on Tuesday at 2pm from our Manchester studio to discuss the latest trends and trading in auto retail. Key discussion points will help you get the most out of H1 2023 – and the expert panel will also be available live to answer your questions.
- Sign up here: https://bit.ly/3YoGFJU
WORLD NEWS
China foreign OEM backlog grows at retailers
The average new car backlog of foreign mass-market brands in China has grown to a 65-day supply, reports the Chinese Automobile Dealers Association (CADA). It blames weak demand for ICE vehicles as China accelerates its transition to EVs. Even the luxury imported brand backlog is 51 days.
Strict new emissions rules for the world’s largest new car market come into force on 1 July. Many OEMs, including Volkswagen Group, are slashing prices to clear inventories of vehicles that don’t meet the standard.
Canadian retail group expands to US
Ottawa, Canada’s Ride Automotive Group has bought its first two US stores in California. EVP VJ Sehdev says the group wants to now grow even more. Several other Canadian retailers have recently expanded south of the border, including Alpha Auto Group.
STOCKWATCH
Closing prices on 17 March 2023 and weekly change: Auto Trader only plc to make gains as major auto retail stocks fall again
Auto Trader Group 587.0p (+11.4p / +1.9%)
Caffyns 500.0p (n/c)
Halfords 173.5p (-16.9p / -9.2%)
Inchcape 845.5p (41.0p / -4.3%)
Lookers 80.9p (-5.6p / -6.9%)
Motorpoint 132.0p (62.0p / -4.4%)
Pendragon 16.65p (-1.65p / -9.4%)
Vertu 60.5p (-1.5p / -2.4%)
COMING UP
Tuesday, Auto Retail Live: sign up now
Wednesday, Pendragon full year results
Wednesday, CPI and RPI
Thursday, Bank of England interest rate decision
Friday, retail sales
March 30, Cazoo full year 2022
May 3, Radius Law annual conference: sign up now
MONEY MATTERS
Pensions ‘gold rush’ to avoid inheritance tax
The scrapping of the £1,073,100 pension lifetime allowance could lead to wealthy savers upping their contributions to avoid inheritance tax. Pensions don’t contribute to estates for inheritance tax and can be passed on tax-free for those who die before the age of 75.
“Pensions were already extremely tax-efficient,” said an AJ Bell wealth manager, “but the scrapping of the lifetime allowance means they have become even more attractive.”
FCA warns payment firms
The FCA has threatened to shut down payment firms that do not have robust systems in place to safeguard customer money. Last week, it wrote to almost 300 chief executives, urging them to tighten up their processes. Large payment firms include Revolut and PayPal; smaller firms issue payment cards that customers can ‘charge’ with credit.
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