25 November 2018

 

• CAMBRIA QUESTIONS HONDA, NISSAN AND VAUXHALL VALUE
• PENDRAGON FINE COULD SET SECTOR-DAMAGING PRECEDENT
• IM CONSIDERS INTRODUCING NEW BRAND
• SUZUKI TO FORM BUSINESS SPECIALIST NETWORK
• OMBUDSMAN SAVES RETAILERS £2.6M
• WORLD NEWS – German court rules against VW in emissions case
• STOCKWATCH – ups for BCA, Inchcape
• COMING UP – value of e-commerce, Auto Retail Live Profit Briefing, auto retail law webinar
• LAUNCH DIARY – Range Rover Evoque, Audi A1 Sportback, Suzuki Vitara, Ford Focus Active SUV
• MONEY MATTERS – buyers think PCH auto finance is hallucinogenic drug, more LGBT needed at board level
• OUR BLOG – Does a retailer’s advert have to show where a similar car can be bought cheaper?

 

Cambria questions Honda, Nissan and Vauxhall value

Question marks have been raised over some of Cambria’s franchises after it said ideally it wants a minimum of three locations per manufacturer.

Financial director James Mullins told Auto Retail Agenda that as part of its primary brand partnership strategy, at least three are needed for a strong brand relationship.

It has only one Honda dealership, one Nissan and two with Vauxhall and its strategy implies scaling these up or down. Cambria has already closed loss-making operations, shutting Alfa Romeo and Jeep in Chelmsford and replaced Fiat in Warrington with its first Peugeot franchise.

This week Cambria revealed a 2.2% drop in revenues and a 20% drop in pre-tax profit as it added McLaren, Bentley and Lamborghini.

Pendragon fine could set sector-damaging precedent

Retailers who pay fines for minor misdemeanours could open themselves up to much stiffer penalties in future and set dangerous precedents for the industry.

The warning comes from Jonathan Butler, head of automotive at legal firm Geldards, in the wake of Pendragon’s £134,000 fine and order to pay £9,360 costs last week for failing to disclose in an online advert that a vehicle described as having had one previous owner had in fact belonged to Enterprise Leasing Company, breaching ASA rules – and even though the complainant did not buy the car.

The scale of the fine was said partly to be because Pendragon had not altered its business practices after being fined £6,000 for a previous offence in 2016.

Mr Butler said: “The ASA is a low level adjudication panel whose decisions are not legally binding. And its decision is wrong. There is no evidence that identifying whether a used vehicle is private or ex-business ever features in a customer’s purchasing decision.”

He argued that simply rolling over and paying a small fine could set dangerous legal precedents for what might end up being deemed material information – ultimately including telling the customer where they could buy the same vehicle cheaper.

 

IM considers introducing new brand

Subaru and Isuzu importer International Motors has signed a memorandum of understanding to retail new Chinese brand Borgward from late next year. IM said it was too early to confirm if the new brand would be distributed through its existing Subaru and Isuzu networks or an entirely new network.

Production of RHD version of the petrol engined BX5 and BX7 models should start early 2019 with a UK launch pencilled in towards the end of the year. An EV version will be added as soon as possible.

Suzuki to form business specialist network

Suzuki is to name around 30 retailers next year who will form its first ever network of business specialists with the aim of targeting more fleet orders from SMEs. The network should be in place during Q2 and is being overseen by Graeme Jenkins, head of fleet. Standards are being finalised and retailers will either share expertise with other franchises or be supported by in-house business development managers, roles previously out-sourced to an external agency.

Dale Wyatt, head of automobile, said: “Anyone can apply, provided they meet the requirements set out by Suzuki GB. We’re focused on quality, not the number of dealers, and we’re still deciding the standards.”

https://bit.ly/2P1xUBU

Ombudsman saves retailers £2.6m

The Motor Ombudsman saved businesses from around £2.6 million in customer claims in the first eight months of the year and more are now being urged to join its scheme.

Between January-August TMO’s ADR service handled more than 35,000 contacts from consumers, raised nearly 2,500 cases for adjudication and protected its accredited businesses from the equivalent of £2.6 million in claims.

 

WORLD NEWS

German court orders price-new repayment for VW

A regional German court has ruled VW must reimburse a Golf owner the full original price (£26,500) of his vehicle bought in 2012. The Augsburg civil court ruled VW had acted immorally by deliberately installing emissions-cheating software to increase sales and profits.

https://reut.rs/2DH7TWC

 

A third of model versions still not WLTP-cleared

More than a third of model versions remain non-homologated under WLTP fuelling the biggest October European market drop since 2014 with 1.12 million vehicles registered, a 7% fall. VW Group reclaimed the top spot from PSA but it, as well as Renault-Nissan and FCA, continued to lose market share.

Felipe Munoz, global analyst at market researcher JATO, said: “We expected another drop in October, as the homologation process is taking its time. However, it is concerning to see that some of the industry’s key players are still quite behind in the process.” In early October 43% of the versions available on the market had not been homologated, with the percentage only falling to 37% one month later.”

 

STOCKWATCH

Closing prices at November 23 and weekly movement

BCA 225.0p (+11.0p)

Cambria 53.0p (no change)

Caffyns 405.0p (n/c)

Inchcape 575.0p (+17.5p)

Lookers 93.2p (-0.3p)

Marshall Motor Holdings 156.0p (no change)

Motorpoint 220.0p (+1.0p)

Pendragon 22.9p (-1.7p)

Vertu 36.4p (-1.6p)

COMING UP

Friday: Estimates of the value of e-commerce to UK businesses. (ONS)

December:

Tuesday 11. Auto Retail Live Profit Briefing. Speakers include Peter Vardy, managing director, Peter Vardy retail group, Stuart Miles CDK’s UK&I managing director and Lyn Howdon head of academy and learning at customer retention specialist Chrysalis Loyalty. To register click here

Wednesday 12: Free annual automotive law update webinar from Radius Law and The Motor Ombudsman. Topics include preparing for the January vehicle emission rules on showroom and printed materials and distance sales requirements. To register click here

 

LAUNCH DIARY

New Range Rover Evoque. From £31,600.

Audi A1 Sportback, smallest car in the range. From £18,450.

Updated Suzuki Vitara. From £16,999.

January 2019: Ford Focus Active SUV. From £21,900.

Seat Tarraco seven seater SUV. Prices tbc.

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MONEY MATTERS

Buyers confused by auto finance terminology

Buyers are in the dark over the most basic car finance terminology with almost a quarter thinking PCH is a hallucinogenic drug.

The study of 2,500 drivers by Admiral Car Finance revealed that only a third knew what HP is, just a quarter could explain `balloon payment’ and as for PCH, apart from the quarter thinking it an illegal drug, almost half thought it means `private car hire’.

The Financial Conduct Authority (FCA) is due to report on practice by motor finance retailers by the end of the year and give its conclusions on whether buyers have enough information to make informed decisions.

More LGBT representation at board level needed

The LGBT sector needs more representation at board level, one of the world’s top openly bisexual executives has said. Dame Inga Beale, former chief executive of specialist insurer Lloyd’s of London, said the LGBT community should follow the examples set by the 30% Club which has lobbied for to get more women on the boards of major companies but admitted it might be difficult for people to openly declare their status.

https://reut.rs/2DIYu0z

OUR BLOG

Do adverts have to show where a car can be bought cheaper?

Is a retailer legally bound to include in its advert for a vehicle where a customer can buy an equivalent one cheaper? It could be, if you logically extend the train of thought that led District Judge Helen Cousins at Teeside Magistrates Court to impose a fine of £134,000 and costs of £9,360 on Pendragon, the parent company of Evans Halshaw.

Its offence was to have included in the description of a car advertised for sale that it had one previous owner but was misleading in that said former owner was Enterprise Leasing Company and this particular detail was glossed over.

Judge Cousins said: “In my view an average consumer would be misled by such a description if applied to an ex-hire company vehicle without further clarification. I therefore find that the identity of the one registered keeper as a car rental business is information the average consumer needs.”

It should be noted that the potential buyer, having discovered the full facts, walked away from the deal and was refunded the £200 deposit already paid. So, no financial injury then.

The fine was made so hefty partly on the basis that Evans Halshaw had been prosecuted by Middlesbrough Council in 2016 for the same practice and in that instance Pendragon was found guilty of two offences, fined £4,000 with a victim surcharge of £120 and costs of £2,248.

I think that having had somewhat more than a rap across the knuckles for that, Evans Halshaw could have been more careful about how it worded its adverts. As consumers we have the right to know the full history and condition of something we are buying second hand.

But it was interesting to note that the size of the latest fine was also levied partly on the reasoning that if a motorist can be fined one or two weeks’ income for a minor speeding offence, a company can be fined on the same basis with their profits.

Given the state of the trade at the moment that might mean the court giving dealers some money back!

But I digress. How much detail does a retailer have to include when advertising a vehicle and does that, as has been suggested by Jonathan Butler, head of automotive at legal firm Geldards, extend to saying where a similar car can be bought cheaper?

You would think that’s madness but that is to disregard the power of lawyers.

How can a company have to pay the thick end of £1145,000 in a case where no consumer lost anything, no one had to have a major row or drag the case through the courts to get a refund? I think Evans Halshaw has been silly and should have learnt a lesson the first time but equally I think they can feel hard done to.

Still, there is a salutary lesson there for many in the auto retail trade and this case should give cause for reassessment of how adverts are worded.

And on that note, may I commend you to the free web briefing being held on Wednesday, December 12 by Radius Law and The Motor Ombudsman where, among other topics, car advertising will be discussed.

 

John Swift

Editor

Auto Retail Agenda

 

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