Auto Retail Agenda: 31 October 2022
29 October 2022
- JLR RETAILERS ‘DEMAND NO-SELL-ON CLAUSE’
- CAZOO HITS 100k SALES SINCE DECEMBER 2019
- EVS TO FACE ROAD TAX ‘WITHIN 3 YEARS’
- TAGGARTS NAME TO DISAPPEAR AFTER 127 YEARS
- LITHIA ON TRACK TO BE US #1
- EUROPE IN 2035 NEW ICE CAR BAN
- STOCKWATCH
- COMING UP: Interest rate decision
- TAXPAYERS URGED TO CONSIDER MARGINAL RATES
- BORROWING COSTS PRESSURE INDEBTED FIRMS
JLR retailers ‘demand no-sell-on clause’
Some JLR retailers are refusing to deliver new vehicles unless customers sign a document stipulating they cannot sell their vehicles outside the retailer network within the first six months, it has been claimed.
Customers told Auto Express the demand “had come from Land Rover head office” with one retailer claiming they faced a fine of £28-£30k if the vehicle they had sold was listed on the general market within six months.
In a statement issued to Auto Retail Agenda, JLR said “we take this type of feedback very seriously… our retail partners work hard to ensure all customers are treated fairly and with honesty, we therefore ask them to exercise due diligence to be sure they are transacting with buyers who intend to use the car and not with resellers.
“It is not in our instruction or guidance that any agreements are made with customers relating to the onward sale of their vehicle, nor do we endorse it.”
Cazoo hits 100k sales since December 2019
Cazoo delivered its 100,000th used car last week and rewarded the customer with a full refund. The company claims it has become one of the UK’s largest used car retailers with CEO Alex Chesterman saying “consumers love what we are doing as evidenced by the overwhelmingly positive reviews we receive each day”. Cazoo is targeting a 5% share of the UK used car market.
The company last week announced quarterly gross profit per unit of £488 (a 3.0% gross margin), compared to £801 last year. Vehicles sold was up 82% and UK revenue up 103%.
EVs to face road tax ‘within 3 years’
Chancellor Jeremy Hunt is reportedly considering VED road tax for electric vehicle owners “in less than three years” as part of plans for the Autumn Statement, due on 17 November. A Whitehall source says road tax for EVs is “now inevitable” with the Treasury considering what it should be.
One option is for EV owners to begin paying VED from the 2025/26 financial year.
Taggarts name to disappear after 127 years
Taggarts retailers in Scotland will be rebranded Lookers, 20 years after the PLC acquired the retail group. Lookers CEO Duncan McPhee said the change was to “strengthen and simplify our strong brand identity across the UK”. Taggarts was established in 1896; Lookers was founded in 1903.
Motorpoint Edinburgh also officially opened last week, creating 30 jobs.
WORLD NEWS
Lithia on track to be US #1
Lithia is set to displace AutoNation as the top auto retailer in the US – ending AutoNation’s more than two-decade streak as number 1. During the first nine months of 2022, Lithia sold 203k new vehicles, up 3.8%. AutoNation sold 169k, a drop of 17%.
Europe in 2035 new ICE car ban
Sales of new petrol and diesel cars in Europe will effectively be banned from 2035 in a deal reached by the EU. The zero emissions target will accelerate the switch to electric vehicles. CO2 emissions of new cars sold from 2030 must also fall by 55% over 2021 – far higher than the existing 37.5% target.
Conventional petrol and diesel cars will also be banned in the UK from 2030, with an effective EV switch mandated from 2035.
STOCKWATCH
Closing prices on 28 October 2022 and weekly change
Auto Trader Group 520.4p (+34.2p / +6.7%)
Caffyns 525.0p (n/c)
Halfords 171.3p (+11.9p / +7.1%)
Inchcape 739.0p (+31.0p / +4.2%)
Lookers 78.4p (-0.5p / -0.6%)
Motorpoint 146.5p (+4.5p / +3.1%)
Pendragon 27.2p (+0.8p / +2.9%)
Vertu 45.05p (+2.95p / +6.7%)
COMING UP
Monday, UK consumer credit
Wednesday, US Fed interest rate decision
Thursday, Bank of England interest rate decision
15 November, Auto Retail Live: Future of aftersales
MONEY MATTERS
Taxpayers urged to consider marginal rates
Quirks in the UK tax system mean some people are facing marginal tax rates of 68% or more, says research firm Tax Policy Associates. Effective rates of tax determine take-home pay, but marginal rates impact how a pay rise will benefit employees, it has warned – with the £50,000 child benefit and £100k personal allowance thresholds proving particularly costly to some.
Borrowing costs pressure indebted firms
Pressure is being heaped on companies in need of finance to expand – or simply survive – due to rising interest rates and inflation. Those who need to refinance will be most at risk due to the step-up in funding costs. Zombie firms may soon face a reckoning; 1 in 5 small businesses who applied for finance in Q3 failed to find an offer at an interest rate below 11%, according to the FSB.
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