02 July 2022

Jaguar Land Rover confirms agency move

Jaguar Land Rover has confirmed it will move to an agency model by 2024.

Speaking to Auto Retail Agenda, Rawdon Glover, MD of Jaguar Land Rover UK, said: “Jaguar Land Rover UK will transition to a ‘direct to customer’ agency model by 2024. This will improve customer experience and optimise on- and offline touch points in line with our digital transformation, and elevate our iconic brands to the levels of modern luxury determined by our Reimagine strategy.”

Auto Retail Agenda understands the retail network was told at a recent investors meeting held online. Agency contracts have yet to be issued and the current franchised agreements remain in place.

However, the company told the network it would be cutting retailers’ margin on new cars by one point from the start of 2023 to cover the costs of moving to an agency agreement – a year ahead of the switch away from franchised agreements.

At the meeting, JLR not only discussed the agency model for new cars, but also sounded retailers out about the possibility of including used cars. However, this is understood to have been more about judging retailer reaction than included in the main plan for new cars.

One source said: “Clearly that’s the way they’re going for new cars and they’re looking at used cars, but I think that was to gauge reaction – which wouldn’t be good if they went that way.”

The cut in margin was not taken well by the network either, with one retailer saying they left the meeting feeling “demoralised”. Retailers who spoke to Auto Retail Agenda said the margin cut would be used by JLR to fund customer-facing staffing at the manufacturer rather than to cover the increased stocking cost the manufacturer would face when it switches to an agency sales model.

While retailers report profits from Land Rover sales, particularly the new Defender and new Range Rover, were good, they were also worried by the lack of future product plans there were under the Arch Concept for Jaguar.

 

Cost of living crisis to shield used car values

Low used car demand has continued, due to reduced discretionary spending caused by the cost of living crisis, the National Associations of Motor Auctions (NAMA) reported last week. However, values are not currently being affected due to supply constraints.

Going forward, NAMA members “remain optimistic”.

 

Vertu stake bought by Janus Henderson

Jersey-based Janus Henderson has taken a 5.05% stake in Vertu. The deal completed last Thursday. It already features Vertu in its capital growth-focused UK portfolio for investors, the Henderson Opportunities Trust plc.

 

Inchcape completes Bentleys Toyota Warrington deal

Inchcape UK has completed the purchase of Toyota and Citroen Warrington from Bentleys Motor Group. The 70 employees began trading under the Inchcape banner last Friday. “It’s a pleasure to be welcoming new colleagues,” said retail operations director David Graham.

 

Peugeot UK’s new sales director

Auto Retail Agenda has learnt Steven Wass has become sales director at Peugeot UK, taking over from Simon Bisp. He was previously marketing director.

 

WORLD NEWS

NADA blasts FTC proposals: ‘Unwarranted’

NADA CEO Mike Stanton has called a series of proposed Federal Trade Commission (FTC) regulations on retailer advertising and F&I as “completely unwarranted, redundant and ineffectual”. He said the rules would raise prices and lead to inefficiency and complexity.

The FTC wants retailers to produce a true ‘Offering Price’ for each specific vehicle, and proposes banning F&I coverage and physical vehicle add-ins “that provide no benefit”. There are also rules around how lease prices are advertised. “The commission is taking comprehensive action to prohibit junk fees, bait-and-switch advertising and other practices that hit consumers,” it said in a statement.

https://bit.ly/3NA5ywR

 

GM bars retailers reporting sales before delivery

GM has updated its sales policy to stop retailers reporting a vehicle as sold before it arrives at the store. The move is in response to supply challenges and scarce inventory: reporting a vehicle as sold triggers the start of financing payments, warranties and trials of online services.

Retailers largely support the initiative. “They’re trying to save the dealers from themselves,” said a Minnesota Chevrolet dealer.

https://bit.ly/3ahtV4R

 

 

STOCKWATCH

Closing prices on 1 July 2022 and weekly change

Auto Trader Group 542.2p (-7.8p / -1.4%)

Caffyns 550.0p (n/c)

Halfords 146.0p (+1.8p / +1.2%)

Inchcape 691.0p (-16.0p / -2.2%)

Lookers 74.8p (+2.8p / +3.8%)

Marshall Motor Holdings 397.0p (n/c)

Motorpoint 194.5p (-0.5p / -0.2%)

Pendragon 21.7p (-0.7p / -3.1%)

Vertu 54.6p (-1.2p / -2.1%)

 

COMING UP

Tuesday, SMMT June new car registrations

Thursday, Halifax house price index

 

 

 

MONEY MATTERS

UK ‘heading for October chill’

Experts are predicting a chill will fall on the UK economy in the autumn – with October seen as the crunch month, when the energy price cap increases from £2k to £3k. Consumer confidence has already reached a record low and this could be amplified when energy bills go up.

https://bit.ly/3bOUG0Q

 

£42k is ‘cost of living crunchpoint’

Households with an income below £42k are taking the biggest hit of the current cost of living crisis. Such middle-income households need to find £150 a month extra compared to the start of the year to offset inflation and tax increases and maintain their standard of living – pushing many people’s finances into the red for the first time.

https://bit.ly/3afE3eE