• DATA SHOWS BOOMING JUNE
• ‘ONE METRE PLUS’ TO HELP TEST DRIVES
• VAUXHALL CLOSED FOR PERRYS, ARNOLD CLARK, DONNELLY
• FORD’S BARRATT WARNS ON DEMAND
• TG HOLDCROFT, DRIVE MOTOR RETAIL IN PROFIT
• KEN CRAIG LEAVES STONEACRE
• CARMAX SALES, PROFITS DOWN IN Q1
• STOCKWATCH – Caffyns rallies
• COMING UP – Auto Trader results, Auto Retail Live
• EMERGENCY VAT CUT HINT
• LEARN ABOUT USED CAR SOURCING AND PRICING

Data shows booming June

The lifting of lockdown has heralded a long-awaited upturn in auto retail activity. Consumers are returning to showrooms and, as well as taking delivery of pre-ordered vehicles, have also resumed purchasing new cars and, in particular, used vehicles and CVs.

Auto Trader data shows that since showrooms reopened on 1 June, a record number of new car leads have been sent to retailers. Leads have almost doubled compared to 17 March, the week before lockdown.

Marketing Delivery data released exclusively to Auto Retail Agenda shows a 40% increase in enquiries for 1-15 June, compared to 2019. It is a “very tangible indication that there is life after lockdown” said MD Jeremy Evans.

Dealerweb has seen a 17% increase in used car sales compared to June 2019, in a sample of 800 franchised retailers. Used prestige vehicle sales are up 54% (but new prestige sales are down 58%).

The latest Indicata Market Watch study shows that the UK market had fully rebounded just 10 days after lockdown. Used car sales were actually up 3.4% year-on-year, despite Scottish and Welsh retailers still remaining closed.

 

 

‘One metre plus’ to help test drives

An announcement from the Prime Minister is expected on Tuesday about a change to the two metre social distancing rule. The ‘one metre plus’ rule would apply to all venues including retailers. It would take effect from 4 July.

One metre plus will work by allowing closer social distancing “with appropriate mitigations”. These include wearing face masks and, for retailers, the use of partitions to allow people to sit less than two metres apart.

This could facilitate accompanied test drives, which are currently impossible under the two metre rules.

Government officials have concluded one metre plus equates to two metre social distancing without protective measures.

https://bit.ly/3dnAHSd

 

Vauxhall closed for Perrys, Arnold Clark, Donnelly

Perrys Vauxhall of Leyland has closed after briefly reopening on 4 June following lockdown. It is understood staff have been offered jobs at other Perrys sites in Preston, Blackburn, Nelson and Burnley. A spokesperson said the closure was part of Vauxhall’s network reorganisation.

Arnold Clark is consulting with around 20 staff about the permanent closure of its Vauxhall retailer in Port Glasgow Road, Greenock. It is currently closed due to Covid-19 and CEO Eddie Hawthorne said there was a proposal in place for it not to reopen. Mr Hawthorn said Arnold Clark has been impacted by the effect of the coronavirus shutdown.

Northern Ireland’s Donnelly Group is making 17 redundancies out of a total of 24 staff after closing down its Omagh Vauxhall retailer.

 

Ford’s Barratt warns on demand

New car demand is currently “not at a level to sustain the level of capability in the industry,” Ford MD Andy Barratt has warned. “We had an early spike of customers but it has now flattened out.” He is calling for an industrial stimulus but insists one focused solely on electric vehicles “would not work”.

https://bit.ly/2YjJMqK

 

TG Holdcroft, Drive Motor Retail in profit

TG Holdcroft has reported profits of £4.24m (-14.2%) on turnover of £448.9m (+3.5m) in the year ending 31 December 2019. The group, which has 23 franchises, warns the coronavirus crisis will have a “materially negative impact” on 2020 results but it has sufficient liquidity to see through the challenges.

Drive Motor Retail reports turnover grew 17.9% in 2019 to £262.7m, with profits growing 16% to £2.0m. Although retail new car volumes were down on 2018, Drive’s performance is “considerably better than the national market share for the Vauxhall franchise”. Cost reductions and capital expenditure deferrals during coronavirus mean the group does not expect working capital to restrict future activities.

 

Ken Craig leaves Stoneacre

It is understood Stoneacre sales director Ken Craig has left the business. Since April 2020, Mr Craig had been part of Stoneacre’s eight-strong team of directors not taking a salary until profits return.

 

WORLD NEWS

CarMax sales, profits down in Q1

CarMax, North America’s largest used car retailer, saw used car sales fall 40% in Q1 to 31 May, with 135,028 vehicles sold. Gross profit fell 52% to $354m. However, the business is recovering with June 2020 sales within 10% of 2019 totals. Since March, its share price has more than doubled.

https://bit.ly/3fGOIMk

 

 

STOCKWATCH

Closing prices on 19 June 2020 and weekly change

Caffyns rallies

Auto Trader Group 545.8p (+15.8p / +2.8%)

Cambria 52.5p (+0.5p / +0.9%)

Caffyns 299.2p (+57.2p / +21.1%)

Halfords 168.6p (-8.2p / -4.7%)

Inchcape 497.8p (-4.2p / -0.8%)

Lookers 22.9p (+1.9p / +8.6%)

Marshall Motor Holdings 118.75p (-1.25p / -1.0%)

Motorpoint 257.0p (-2.0p / -0.7%)

Pendragon 10.42p (+0.48p / +4.7%)

Vertu 26.9p (+0.65p / +2.4%)

 

COMING UP

Monday, Welsh retailers reopen

Tuesday, SMMT Online Summit

Tuesday, PM social distancing announcement

Thursday, Auto Trader full year results

Thursday, Auto Retail Live

 

MONEY MATTERS

Emergency VAT cut hint

Chancellor Rishi Sunak is understood to have begun investigations into a “significant” emergency VAT cut, including zero-rating more products for a fixed period. An announcement may come during a planned speech in early July.

Other options possibly being considered include a three-month extension to the VAT deferral scheme, extending business rate relief and cutting employer’s national insurance.

In the Sunday Times, former chancellor Sajid Javid called for a cut in VAT from 20% to 17% for a year. It would cost £21bn but would help businesses “weather the storm and retain staff”.

https://bit.ly/3dnCdnn

 

Learn about used car sourcing and pricing

On Thursday, Auto Retail Live will look at the impact of Covid-19 on used car sourcing and pricing – and what’s in store for the coming months. Guests include Auto Trader’s Bex Clark, Cazana’s Rupert Pontin and Neil Smith from Imperial Car Supermarkets.

The session begins at 11.30am. Sign up now and submit your questions.

https://bit.ly/2B7BKIl