Auto Retail Agenda: 28 March 2022
26 March 2022
- BMW ‘REIMAGINES’ RETAILERS WITH RETAIL NEXT CONCEPT
- UKRAINE WAR TO WORSEN SEMICONDUCTOR SHORTAGE
- SPECIALIST CARS BMW IN BEST-EVER PROFIT
- RETAILERS FACE BATTLE TO RETAIN USED CAR CUSTOMERS
- US RETAILERS IN EV RAPID CHARGER PRICE SHOCK
- BEIJING AUTO SHOW DELAYED DUE TO COVID
- STOCKWATCH: Lookers rises 13.2% after last week’s 11.2% increase; Pendragon up 23.2%
- COMING UP: GDP and unemployment rate
- BIGGEST DROP IN LIVING STANDARDS SINCE 1956
- HMRC RECRUITING 2,000 EXTRA STAFF TO CHASE TAX
BMW ‘reimagines’ retailers with Retail Next concept
BMW will require retailers to feature fewer cars in their showrooms, and each model will have a display with premium lounge-like seating and unique lighting, as part of its new global Retail Next concept.
It debuts in the US in July and aims to make retailers feel more experiential and less transactional. “It’s about recognising that the buying process has changed,” said North America sales boss Shaun Bugbee. One retailer said showrooms will have the feel of an “eclectic hotel lobby”.
BMW National Dealer Forum chairman David Sloane said the “boutique-like” design will transform retailers into a “conversational space”. He added manufacturers are seeking more input from retailers into “what makes sense and what doesn’t”.
He did, however, express concerns about BMW ditching private sales advisor cubicles as part of the new concept. “We’re in the sales business. It’s a stretch to think that a salesperson will sit at a table with an iPad and sell a car.”
BMW last updated its retailer standards a decade ago; the Future Retail concept emphasised open space, glass and natural light.
To address cost concerns, Bugbee added that retailers who have updated their showrooms to BMW’s current standards are given a pass for 15 years. “It’s important that we recognise the existing investment, which will be honoured.”
A spokesperson for BMW Group UK told Auto Retail Agenda: “BMW Retail NEXT is in the development stage for the UK market.
“We will consult with our retail partners in the coming months and establish a rollout timeframe with them.”
Ukraine war to worsen semiconductor shortage
Ukraine produces half the world’s neon gas, which is used in semiconductor production – and the war is predicted to “hammer car production” due to factory closures. The complexity of producing neon gas means it’s not easy to change suppliers either: it could take two years to ramp up alternatives.
Audi has already written to retailers warning production at some locations is being stopped for days or weeks and they should prepare for “significantly longer delivery times”. Even cars that remain in production are only available in limited engine variants.
Volkswagen has announced it is delaying the sales launch of the ID.5 for a month due to parts supply disruptions: this has hampered its ability to produce sufficient demonstrators for retailers.
Specialist Cars BMW in best-ever profit
Specialist Cars Stevenage had the most profitable year in its history for the year ended December 2021 with profit before tax up from £1.49m to £1.98m. Turnover grew form £88.9m to £112.1m. The BMW and Mini retailer said retail and local business sales increased 28% and profitability was up by over 80%. Used car margins were also up 50%. Cash reserves grew £1.6m to £15.1m.
Retailers face battle to retain used car customers
Plunging used car stock means retailers face a battle to retain customers, reveals the annual Auto Retail Network Franchising Report. Only four of the top 38 car brands – Volvo, MG, Polestar and Cupra – have seen an increase in their 1-3 year old used car parc since 2017. Servicing business will also be impacted.
The worst-hit brands are those with the largest used car stock: Audi, Mercedes-Benz and BMW, although Suzuki and DS used car stock have also been hammered.
To find out more, subscribe to the full report here
WORLD NEWS
US retailers in EV rapid charger price shock
Auto brands are mandating retailers install powerful rapid chargers for electric cars in the US – which dealers say is proving complicated, expensive and time-consuming. Utility companies have to upgrade power supplies, which leads to delays and a significant increase in costs.
One retailer said they were pressing ahead with installing rapid chargers despite no guarantee of qualifying for local EV charger incentives to avoid missing out on allocations of future Hyundai electric cars.
Beijing Auto Show delayed due to Covid
The Beijing Auto Show, due to start on 21 April, is expected to postponed until June due to surging Covid cases. Audi, BMW and Mercedes-Benz are expected to use the show to reveal important electric concept and production cars; Chinese startup Li Auto also plans to reveal its second car, the L9 SUV, at the event.
STOCKWATCH
Closing prices on 25 March 2022 and weekly change
Lookers rises 13.2% after last week’s 11.2% increase; Pendragon up 23.2%
Auto Trader Group 644.8p (-39.6p / -5.9%)
Caffyns 550.0p (n/c)
Halfords 258.2p (-9.0p / -3.4%)
Inchcape 691.5p (-25.0p / -3.5%)
Lookers 97.5p (+12.1p / +13.2%)
Marshall Motor Holdings 396.0p (n/c)
Motorpoint 288.5p (-11.5p / -3.9%)
Pendragon 27.4p (+5.7p / +23.2%)
Vertu 64.0p (+2.4p / +3.8%)
COMING UP
Wednesday, BRC Shop Price Index
Thursday, unemployment rate
Thursday, GDP
MONEY MATTERS
Biggest drop in living standards since 1956
Soaring inflation means the UK faces its biggest drop in living standards on record. Soaring energy prices could push inflation to a 40-year high of 8.7% in Q4 2022. Living standards (disposable household incomes when adjusted for inflation) are expected to drop by 2.2% this year, says the OBR – the largest fall since 1956.
HMRC recruiting 2,000 extra staff to chase tax
The current total UK tax debt of £39bn is more double the amount at the start of 2020. The Public Accounts Committee is urging HMRC to do more to recover taxes unpaid during the pandemic. It criticised HMRC for not having a clear plan to recover unpaid taxes; in response, HMRC revealed it is recruiting 2,000 extra staff to support collection efforts.
Tags:
Beijing, BMW, Covid, EVs, future retail, GDP, HMRC, Lookers, Pendragon, semiconductor shortage, Specialist Cars, Ukraine, unemployment, used cars 
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