Auto Retail Agenda: 27 February 2023
25 February 2023
- ‘HEATED’ GROUP 1 GRAYS ATHLETIC FC FIGHT CONTINUES
- GRANGE MOTORS GETS GREEN BELT GREEN LIGHT
- FIRE BREAKS OUT AT CAZOO SITE EARMARKED TO CLOSE
- STELLANTIS CEO TAVARES’ PAY FALLS 14%
- CARVANA LOSSES WIDEN TO $806m IN Q4
- MERCEDES-BENZ CONFIRMS AGENCY FOR GERMANY IN 2023
- US RETAILERS DEMAND MORE MONEY FOR WARRANTY WORK
- STOCKWATCH
- COMING UP: 23-plate day
- CONSUMER CONFIDENCE REBOUNDS
- CHANCELLOR ‘MUST SCRAP DISASTROUS CORPORATION TAX RISE’
‘Heated’ Group 1 Grays Athletic FC fight continues
Plans to build a new Group 1 Automotive storage and preparation plan in Aveley, Essex, on the site of the now-defunct Thurrock FC, continue to be opposed – despite supporter-owned Grays Athletic FC being gifted the site’s disused football ground and stadium for redevelopment and community use (including a new 3G pitch).
Group 1 put forward plans, which would create 30 new jobs, two years ago; two bids have already been rejected by Thurrock Council and a third was thrown out before even being considered. A fourth application, with two-time FA Trophy winners Grays Athletic (founded 1890) as joint applicants, is now on the table, with Thurrock Council due to meet soon.
Two local councillors last week publically spoke out about the plans, citing traffic, HGV movements and a loss of green belt, although one admitted “I am not exactly an impartial commentator”.
The debate has extended to social media, with Grays fans clashing with Aveley residents. The football club has been searching for a new home and stadium for 13 years.
Grange Motors gets green belt green light
Essex’s Grange Motors, part of Cambria, has given permission to build a multi-franchise new base, along with 50 new homes, close ot the M25 on green belt – despite opposition from some Brentwood planning committee members.
With the new development, Grange Group’s Aston Martin, Jaguar, Bentley and Lamborghini retailers will be consolidated onto one site. It will also add a Land Rover retailer, which will see full-time employees grow from 46 to 170.
Fire breaks out at Cazoo site earmarked to close
At least four cars were destroyed during a fire at Cazoo’s Long Bennington vehicle preparation site near Grantham. Several others were damaged.
Cazoo is currently consulting on the closure of the Long Bennington site, putting 300 jobs at risk. It also aims to close 15 of its customer centres across the UK.
Stellantis CEO Tavares’ pay falls 14%
Carlos Tavares, Stellantis CEO, saw his pay fall 14% in 2022 – to €14.9m (£13.2m). In 2021, he received a retention bonus, worth around €2m (and his €17.4m compensation drew an angry response and calls to cap executive salaries from French trade unions). Over 90% of his pay came from variable components.
Last week, Stellantis reported profits that beat forecasts. Its operating margin rose to 13% and it announced a share buyback of as much as €1.5bn.
WORLD NEWS
Carvana losses widen to $806m in Q4
Carvana recorded a larger than expected Q4 loss of $806m (£675m), bringing total 2022 losses to $1.6bn (£1.34bn). It sold 412k vehicles, down almost 13k on 2021, and the first time in its 10-year history that annual retail sales fell.
In response, the used car retailer said it would further pull back on growth plans, instead prioritising cost-cutting and reducing its inventory.Carvana’s share price fell 98% in 2022.
Mercedes-Benz confirms agency for Germany in 2023
Mercedes-Benz is planning a transition to agency in Germany later this year. “You can turn yourself from a wholesale into a retailer,” said CEO Ola Kallenius last week. “It changes your whole attitude in how you run the business.”
Finance chief Harald Wilhelm said it provided a foundation for increasing average selling prices. “It’s already gone beyond expectations in markets where we’ve already switched.”
US retailers demand more money for warranty work
A growing number of US state legislators are introducing amendments to franchise laws, mandating much higher payments to retailers for warranty work. The aim is to narrow the gap between factory-pay and customer-pay repairs.
OEMs are fighting back, though. “The dealers have come here and asked you to write them a blank cheque,” said lobbyist Jep Seman of the Alliance for Automotive Innovation, which represents automakers in the US.
STOCKWATCH
Closing prices on 24 February 2023 and weekly change
Auto Trader Group 596.4p (-3.8p / -0.6%)
Caffyns 500.0p (n/c)
Halfords 204.8p (-11.4p / -5.4%)
Inchcape 915.0p (-19.5p / -2.1%)
Lookers 90.2p (-1.0p / -1.1%)
Motorpoint 143.0p (-2.0p / -1.3%)
Pendragon 18.95p (-0.55p / -2.8%)
Vertu 60.6p (-0.3p / -0.4%)
COMING UP
Wednesday, 23-suffix registration plate
Wednesday, Aston Martin FY
Wednesday, UK consumer credit
Wednesday, BRC shop price index
Wednesday, Nationwide house price index
MONEY MATTERS
Consumer confidence rebounds
There has been a surprise rebound in UK consumer confidence, according to the long-running GFK index, after the economy narrowly avoid a recession and inflation continued to fall. The biggest jumps in the GFK’s five measures were for perceptions of the wider economy and personal finances for the next year.
However, confidence remains significantly lower than in February 2020 before the first pandemic lockdown.
Chancellor ‘must scrap terrible corporation tax rise’
A growing number of businesses are attacking chancellor Jeremy Hunt’s plans to raise corporation tax from 19% to 25%. BT finance boss Simon Lowth said it would see the UK move in a “drastically anti-investment direction… some of our international competitors are starting to outpace us”. AstraZeneca boss Pascal Soriot called the UK’s tax rates “discouraging”.
The UK was the ninth lowest corporation tax payer among the 38 members of the OECD block; it’s about to become the ninth highest. If corporation tax hits 25%, the UK’s tax burden compared to GDP will be the highest in 75 years, says the FSB.
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