• LISTERS PROFIT DOWN, MOTORLINE UP
• LEVC TO PIGGYBACK ON VOLVO NETWORK
• BCA’S NEW RETAIL READY SALES
• CAZOO OPENS IN WALES
• CAR BUYERS DISMISS NEW COVID MEASURES
• ASE AUTOMOTIVE TAKES OVER US OPERATIONS
• GERMAN, INDIAN SLUMP CONTINUE
• STOCKWATCH – Pendragon falls 11% after announcing a “short delay” to its half-year results
• COMING UP – UK GDP, new FCA CEO starts
• STANDARD ABERDEEN UPS MOTORPOINT STAKE
• MONEY LAUNDERING FOILED

Listers profit down, Motorline up

Listers Group saw profit before tax fall from £13.4m to £7.9m in the year ended 31 March 2020. Covid had a “significant effect on profitability” as the retailer had no trade in the final week of March, its busiest trading month of the year. However, Listers’ directors anticipate continuing profitability in the coming year.

JLR, Toyota and Volkswagen were the group’s biggest contributors to profitability, and it took on two new franchises during the year: Isuzu and Porsche. Turnover remained broadly level at £1.2bn, compared to £1.23bn the previous year. A dividend of £7.5m, and an £8m dividend proposed during the previous year, were paid.

Motorline reported a 6% increase in turnover for the year ended 31 December 2019 to £249m, with profit before tax up from £597k to £1.5m.

The Kent-based retailer added Lexus Maidstone in November 2019. Projections in early 2019 exceeded budgets, but the impact of Covid during 2020 has been significant, with over 95% of staff placed on furlough. Since reopening, results have been “significantly better” than expected. Nevertheless, the group has mitigated against a possible recession with a series of cost-cutting and cash management initiatives.

 

 

LEVC to piggyback on Volvo network

Black cab and van manufacturer LEVC will put its relationship with Volvo to good use, through joint parent firm Geely, as it expands its dealer network, according to CEO Joerg Hoffmann.

Speaking exclusively to Auto Retail Agenda, Mr Hoffmann said he expects to have a network of 22 franchise points by the end of the year, up from 10 full retailers and seven authorised repairers now. The majority of these are with partner retailers that already have a Volvo franchise.

Mr Hoffmann said LEVC was working on an online sales platform that is expected to be up and running by the end of the year. Despite starting a new network from scratch and launching online sales, Mr Hoffmann was a defender of the franchised retail system.

“I don’t think the franchise agreement is a weaker one. It gives an exceptionally strong relationship with retailer partners,” he said.

Mr Hoffmann added that on top of the 22 retailers LEVC had struck and agreement with Rivus Fleet Solutions, formerly BT Fleet, to use its network of 28 service centres. He added that if sales were successful in 2021, LEVC would think about adding more retailers.

 

BCA’s new Retail Ready sales

BCA will launch a new Retail Ready online sales channel for trade buyers on 1 October. Vehicles are prepared cosmetically and mechanically to a new standard devised and delivered by BCA. COO Stuart Pearson says the channel will act as a virtual showroom extension, with retail-prepared vehicles ready to sell from the point of purchase.

In June 2019, BCA signed a partnership agreement to refurbish cars purchased by Cazoo; in July 2020, Cazoo purchased Imperial cars.

 

Cazoo opens in Wales

Cazoo has opened its first customer centre in Wales. The £1m development of the former Imperial Cars site in Cardiff is said to have created 15 jobs. Cazoo now has four customer centres with Cardiff joining Manchester, London and Bristol. The next redevelopment is planned for Imperial Cars Birmingham and by the end of 2020, it will have 16 sites, employing 200 people.

https://bit.ly/2GadND4

 

Car buyers dismiss new Covid measures

More than six in 10 new car buyers say the new Covid restrictions will have no impact on their decision to purchase a new vehicle. 3.7% say they will purchase quicker as a result: less than one in 10 of almost 3,100 people told Auto Trader they plan to delay their purchase. The marketplace has also produced a video discussing the impact of lockdowns on the auto industry.

 

 

WORLD NEWS

ASE Automotive takes over US operations

ASE Automotive Solutions has bought out its US joint venture partner to take full control of the operation. Kelly Durga becomes country director and will lead a strategy of strengthening and expanding its presence. Investment is planned for both the US team and its infrastructure.

“It is a great way for us to underline to customers we’re serious about supporting their operations worldwide,” said CEO Robert Jones. ASE is present in 66 countries and opened offices in Australia and Brazil in the past year.

 

German, Indian slump continue

August new car registrations were down 20% in Germany, accelerating a 5.4% year-on-year decline in July. Analysts are now predicting a 25% full-year decline. The country is starting to tighten restrictions after recording its highest Covid numbers since April. “New car purchases are being postponed where possible,” said EY analyst Peter Fuss.

The Indian luxury car market will decline more than 40% in 2020. Only around 11k luxury cars have been sold in the first eight months of 2020. The luxury car share of the Indian new car market, already just 1.2% in 2019, will decline further to less than 1% in 2020. Forecasts indicate it will take at least three year to recover.

https://bit.ly/36aY9ST

 

 

STOCKWATCH

Closing prices on 25 September 2020 and weekly change

Pendragon falls 11% after announcing a “short delay” to its half-year results

Auto Trader Group 553.4p (-17.0p / -3.0%)

Cambria 50.0p (n/c)

Caffyns 270.0p (n/c)

Halfords 184.6p (-5.4p / -2.8%)

Inchcape 428.6p (-16.0p / -3.6%)

Lookers Shares suspended at 21.0p

Marshall Motor Holdings 127.5p (n/c)

Motorpoint 271.0p (-4.0p / -1.4%)

Pendragon 7.3p (-0.88p / -11.3%)

Vertu 25.6p (-1.5p / -5.6%)

 

 

COMING UP

Tuesday, UK consumer credit

Wednesday, UK GDP

Wednesday, Nationwide house price index

Thursday, Nikhil Rathi joins FCA as chief executive

 

MONEY MATTERS

Standard Aberdeen ups Motorpoint stake

Standard Life Aberdeen has upped its stake in Motorpoint to 10%. It remains the Derby-based firm’s second-largest institutional investor, behind Immersion Capital which holds a 19.68% stake.

https://bit.ly/2HA0BIi

 

Money laundering foiled

£1.8m of vehicles have been seized by Ireland’s Criminal Assets Bureau from a used car retailer in Co. Tipperary. An international organised crime gang is understood to have been laundering mandate fraud committed in the UK through the dealer. More than 80 vehicles were seized, with a further 90 vehicles seized by West Midlands Police.

The gang stole money from UK businesses through “CEO impersonation and invoice redirect fraud” said RTE, then laundered the money by buying cars in the UK and transporting them to Ireland for sale.

https://bit.ly/2GikmDi