Auto Retail Agenda: 28 June 2021
27 June 2021
- FORD RETAIL PROFIT TURNS TO LOSS
- MARSHALL, CAMBRIA, LUSCOMBE AND EBAY IN AUTO RETAIL LIVE
- HANDOVERS TO BECOME ‘WHITE GLOVE’ EVENTS
- SYTNER TARGETS DERBY EXPANSION
- MOTORPOINT SITE ACQUIRED FOR £6m
- CARMAX SALES ‘SKYROCKET’
- RETAILERS STRUGGLING TO HIRE
- STOCKWATCH – Marshall shares hit a five-year high last week after upping its profit guidance 20% in an unscheduled trading update
- COMING UP – Lookers results and AGM
- BOSSES FEAR FURLOUGH FLASHPOINT
- £9.2bn EBAY DEAL COMPLETES
Ford Retail profit turns to loss
Ford Retail, the manufacturer-owned auto retailer, saw a £5.64m profit become a £5.24m loss in the year ended 31 December 2020. Overall revenue fell from £1.71m to £1.4m.
The company blamed losses on Covid-19 closures, adding that successful fleet sales lessened the impact of the losses.
Vehicle sales fell 18% due to lockdown, with the parts business declining 19% in the year, and workshop sales falling 25%. Gross margins were down £25m but expenses declined £17m thanks to cost controls, capping the EBIT decrease to £6.7m from £12.8m. However, Ford Retail claimed £11.4m in furlough and other UK government support.
Ford Motor Company is represented on the board by a director “to ensure the likely effects of decisions in the long term are aligned with the parent company’s long term strategy”.
Interestingly, rather than concentrating on its traditional volume sales focus, the company stated Ford’s commitment to its UK customers “is to invest and grow its leading CV business and provide passenger vehicle customers with a more defined portfolio of sports utility vehicles and crossovers, exciting performance derivative and iconic imported models with aftersales support supplied by our strong dealer network”. Although the Fiesta was the UK’s best-selling vehicle in 2020, so far in 2021, it has been beaten by the Vauxhall Corsa.
Marshall, Cambria, Luscombe and eBay in next Auto Retail Live
Hear from executives at Marshall, Cambria, Luscombe and eBay Motors Group in the next Auto Retail Live at 2pm on Tuesday 6 July as we analyse how car buyers go from needing or wanting their next car to the final purchase. The live webinar coincides with the release of our latest report, ‘Winning and retaining customers in an always-on world’.
All attendees will be able to purchase the report for a discounted £265, rather than the full £395.
Find out more and sign up here: https://bit.ly/3gWU7Cw
Handovers to become ‘white glove’ events
The move online means vehicle handovers must evolve to become more of an event – as they may be retailers’ only opportunity to make an in-person impression to customers. One analyst suggests a ‘white glove’ approach, similar to purchasing big-ticket jewellery. “It just can’t be the way we deliver them now,” said corporate strategist Jorge Gutierrez.
Sytner targets Derby expansion
Sytner has applied to build a 27,000 sq ft CarShop used car outlet in Derby. The forecourt would hold more than 600 cars and feature a service centre for MOTs and repairs. The multi-million investment, on the site of a former Showcase Cinema, would create 50 jobs. There are currently 11 CarShop outlets in the UK.
Motorpoint site acquired for £6m
An unnamed investor has bought the 8.6 acre, 93,000 sq ft site currently home to Motorpoint Newport for £6m. Property specialist Bromwich Hardy concluded the deal; founding partner Tom Bromwich called the site a “first rate investment opportunity.
WORLD NEWS
CarMax sales ‘skyrocket’
Sales at the largest used car retailer in the US soared 138% to $7.7bn in Q1 and rose 43% compared to 2019. Revenue rose 92% and earnings per share grew from 3 cents to $2.63. CarMax also purchased 341k vehicles in the quarter, a 236% spike, as demand (and prices) for used cars climb. Its shares rose 6.7% on the results; rival Carvana fell 1.4%.
Retailers struggling to hire
Two in three US auto retailers are looking to hire – and 72% told a Cox Automotive survey finding and hiring the right employees is a challenge. Service technicians are the highest priority, followed by new vehicle sales associates, then used car associates.
Retailers are challenged by “people not returning to their positions or the workforce post-pandemic,” said Cox. However, “overall interest in working at dealerships is growing, and a growing number of employees in non-automotive jobs view their skill sets as transferable to the dealership”.
Many digital-first retailers reported in the survey that traditional automotive experience isn’t a key characteristic for potential employees; rather, they are seeking good communicators, tech-savvy people and those who are easily adaptable to a fast-changing work environment.
STOCKWATCH
Closing prices on 25 June 2021 and weekly change
Marshall shares hit a five-year high last week after upping its profit guidance 20% in an unscheduled trading update
Auto Trader Group 649.0p (+17.6p / +2.7%)
Cambria 78.5p (n/c)
Caffyns 420.0p (n/c)
Halfords 430.8p (+28.8p / +6.9%)
Inchcape 798.0p (+12.0p / +1.5%)
Lookers 69.8p (+4.3p / +6.3%)
Marshall Motor Holdings 195.5p (+1.0p / +1.8%)
Motorpoint 355.0p (+42.0p / +12.5%)
Pendragon 18.9p (+0.4p / +2.1%)
Vertu 47.0p (+2.0p / +4.3%)
COMING UP
Tuesday, Lookers finals
Tuesday, UK consumer credit
Wednesday, Lookers AGM
Wednesday, BRC Shop Price Index
Wednesday, UK GDP
MONEY MATTERS
Bosses fear furlough flashpoint
Around 2.3m people are working fewer hours than before the pandemic, raising fears of an “economic flashpoint” as furlough begins to unwind. The current 80% government furlough rate drops to 70% from Thursday, and employers must contribute 10%. Government payments fall to 60% in August and September, when the scheme ends.
Around 1.5m people are still on furlough, and some believe it is causing job shortages by keeping people out of the labour market. A Resolution Foundation economist said it was “critical that we focus on getting these workers back to work before the scheme ends completely”.
£9.2bn eBay deal completes
Norwegian job advertising firm Adevinta has completed a $9.2bn purchase of eBay Classifieds Group (whose brands include Gumtree). It is the biggest classified advertising deal ever. “This is a game-changing transaction for Adevinta, making us the world’s leading online classifieds group,” said CEO Rolv Erik Ryssdal.
A CMA investigation into the Adevinta eBay merger remains open.
Tags:
Why Subscribe?
As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:
- Get informed and boost your business potential
- More than 1,200 fellow executives have joined us since launch
- Independent, carefully crafted, unique content relevant to you and your business
- Develop a greater awareness of market trends and opportunities
- Access to a wide range of materials whenever, wherever and however you want it
- Significant discounts on ARN events, reports and other publications
