Auto Retail Agenda: 29 November 2021
28 November 2021
- MYSTERY SURROUNDS MARSHALL CONSTELLATION ‘REQUEST’
- CARZAM RAISES £112m FOR ‘AGGRESSIVE BUYING’
- NFDA TALKS AGENCY AGREEMENTS WITH AUSTRALIA
- MOTORPOINT INVESTS IN TECH TO CAPTURE CAZOO GLAMOUR
- CAR FIRM SHIPPING PRICE FIXING HEARING DUE TODAY
- MARK RABAN AND DAVID PEEL TO TALK 2022
- 3 IN 4 US RETAILERS TO MAKE ACQUISITIONS IN 2022
- USED EVS STAGNATE IN FRANCE
- STOCKWATCH – Motorpoint down despite positive H1 update
- COMING UP: KPMG Executive Survey
- CREDIT CARD SHAKE-UP
- EXPLAINED: WAGE RISES, INFLATION AND THE PHILLIPS CURVE
Mystery surrounds Marshall Constellation ‘request’
UPDATED STORY HERE: £323 million offer for Marshall from BCA parent firm
Marshall Motor Holdings has confirmed its largest shareholder, Marshall of Cambridge, is considering the sale of its entire 64.4% shareholding in the PLC – and has received a request from Constellation Automotive Group that should a sale commence, it be given the opportunity to participate.
Constellation brands include BCA, Cinch and Webuyanycar.com.
The announcement was made without the prior consent of Constellation, stated Marshall, and “there can be no certainty that any formal offer for MMH will be forthcoming”.
Constellation has until 5pm on 24 December to either announce a firm intention to make an offer, or state it does not intend to make one.
The board of Marshall has not taken any action to contact any potential offerors but released the statement just before 5pm last Friday after being contacted by The Takeover Panel (an independent body established in 1968 to administer the City Code on Takeovers and Mergers) regarding speculation about the company.
Speaking of the news, Auto Retail Network advisor Mike Jones speculated whether it could be “vertical consolidation with BCA’s parent, an opportunity for further retailer consolidation, or a new player from overseas to come?”.
Auto Retail Agenda approached both a Constellation spokesperson and Marshall CEO Daksh Gupta for comment; Constellation declined and Mr Gupta said he was unable to comment for regulatory reasons. “A further announcement will be made as and when appropriate,” said Marshall in the RNS statement.
Carzam raises £112m for ‘aggressive buying’
An unnamed New York fund has invested £112m in used car retailer Carzam towards “aggressively buying” used cars. CEO Kirk O’Callaghan said Carzam’s industry expertise set it apart from rivals. “We know exactly what we need to do to drive the business forward… this funding gives us the firepower.”
Carzam aims to acquire, prepare, sell and deliver vehicles within 50 days, which O’Callaghan said is a faster turnaround than rivals. The business is on track to sell more than 13,500 cars and turn over £150m in its first year.
NFDA talks agency agreements with Australia
NFDA chief executive Sue Robinson last week met with Australian Automotive Dealer Association executives to discuss agency agreements. The discussion focused on their current strategy and “proved extremely helpful… an ongoing sharing of views will be valuable”.
AADA CEO James Voortman last month criticised Mercedes-Benz Australia’s approach to agency agreements: It “forced its dealers to sign oppressive new agreements at short notice, with the threat they could lose their businesses and without paying any compensation”.
Australian retailers have filed a $650m (£350m) lawsuit against the company for its planned switch to a fixed-price agency model.
Auto Retail Agenda has approached the NFDA for further comment.
Motorpoint invests in tech to capture Cazoo glamour
Motorpoint has revealed it recruited a consultant to conduct a third-party audit of its tech and, as a result, it has developed a future road map. It has recruited “a significant number” of new technology roles and a new role of chief digital officer.
“We have invested in data science tools and talent and this now supports buying and pricing decisions, and targeted customer communications,” said the retailer.
Analysts say the heavy investment in tech is an attempt to “gain some of the investment glamour of Cinch and Cazoo,” whose market values dwarf Motorpoint.
Last week, Motorpoint reported record revenues and profits for the six months to September and has predicted profit before tax of £26m for the year; Cazoo lost £102m in the first half of 2021.
Car firm shipping price fixing hearing due today
A hearing will today (Monday 29 November) decide if a £150m claim against shipping companies for price fixing car delivery charges can be heard. It is claimed cars from BMW, Ford, Mercedes-Benz, Nissan, Toyota, Vauxhall, Volkswagen and others bought between 2006 and 2015 were affected – around 17 million cars.
Motorists and companies who bought or leased new cars “are automatically included in the class and would be eligible for compensation,” says law firm Scott & Scott; the claim value is for up to £60 per car.
Mark Raban and David Peel to talk 2022
Lookers CEO Mark Raban, Pentagon MD David Peel and Keyloop CCO Stuart Mills will discuss what 2022 has in store for retailers in the final Auto Retail Live webinar of the year. Discussion points include the industry-wide supply issues, demand for technicians, electrification and soaring energy costs. Naturally, we’ll touch on agency agreements too.
Sign up for free now to join the webinar on 14 December – and pose your own questions to the panellists.
WORLD NEWS
3 in 4 US retailers to make acquisitions in 2022
The “hot buy-sell market” in the US is expected to continue in 2022 with more than three-quarters of retailers saying they plan to buy at least one dealership next year. The Kerrigan Dealer Survey predicts 2022’s transaction totals will exceed 2021’s. Just 3% of retailers expect to sell a store.
Used EVs stagnate in France
Struggling demand for used electric cars means EVs are “stagnating” at less than 1% of the market – in contrast to new EV sales of 10-12%. This is impacting depreciation: between 12 and 36 months, electric car values fall rapidly to end up lower than a petrol vehicle.
STOCKWATCH
Closing prices on 26 November 2021 and weekly change
Motorpoint down despite positive H1 update
Auto Trader Group 729.8p (-5.0p / -0.7%)
Caffyns 500.0p (n/c)
Cambria 82.5p (n/c)
Halfords 321.0p (-19.0p / -5.7%)
Inchcape 831.5p (-25.5p / -3.0%)
Lookers 56.4p (-4.3p / -7.3%)
Marshall Motor Holdings 274.0p (-10.0p / -3.5%)
Motorpoint 345.0p (-4.0p / -1.1%)
Pendragon 18.65p (-0.65p / -3.4%)
Vertu 59.0p (-5.8p / -9.3%)
COMING UP
Monday, UK consumer credit
Tuesday, KPMG Annual Global Automotive Executive Survey
Wednesday, BRC Shop Price Index
14 December, Auto Retail Live Outlook for 2022
MONEY MATTERS
Credit card shake-up
From January 2022, Amazon will stop accepting Visa credit cards, citing excessive fees. Experts say it is part of a shift away from the Mastercard/Visa duopoly and towards direct payments that cut out intermediaries. Retailers now spend more than £1bn to accept card payments.
Explained: wage rises, inflation and the Phillips curve
Record job vacancies are leading some analysts to signal the return of the “Phillips curve” – where the tighter the labour market becomes, the more it pushes up wages, and therefore inflation. The UK is predicted to transition from a disinflatory age “back towards the more closed and inflationary economic models of the past
“Anecdotally,” writes Jeremy Warner, “workers will sometimes quit mid-shift, such is the opportunity of higher pay elsewhere.”
Tags:
BCA, Carzam, Constellation, Daksh Gupta, David Peel, EVs, KPMG, Mark Raban, Marshall, Mastercard, Motorpoint, NFDA, Phillips curve, Visa 
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