Auto Retail Agenda: 5 July 2021
04 July 2021
- AGENCY AGREEMENT PUSHBACK BEGINS
- SMMT DISMISSES RETAILER ROLE IN EV FUTURE
- VERTU MATERNITY PAY NOW ‘MATCHES M&S’
- RYBROOK WARRINGTON JAGUAR CLOSED
- CARSHOP EXPANDS WITH AUTOWORLD TAKEOVER
- HONDA ADOPTS AGENCY MODEL
- DEALER JAILED FOR 5 YEARS FOR CLOCKING
- STOCKWATCH – Caffyns up to 450p, a level last seen in late 2017
- DATAWATCH – Prediction: June sales remain 18% below normal
- COMING UP – Auto Retail Live – winning and retaining customers with Marshall, Luscombe, Cambria and eBay Motors
- BUSINESS LEADERS URGE RETURN TO OFFICE
- RETAILERS ARE FAILING WITH ONLINE AFTERSALES
Agency agreement pushback begins
Franchised retailers have begun pushing back against their manufacturer partners over the introduction of agency agreements.
The move has been triggered by the issuing of agency agreement consultation documents by Mercedes-Benz, Volkswagen Group and Volvo.
Auto Retail Agenda has been contacted by several retailers over fears the agreements will adversely impact their profitability of their business and their ability to offer the best experience to customers.
The NFDA has begun seeking legal advice in preparation for the issuing of agency contracts.
NFDA director Sue Robinson said: “We’re seeking legal guidance in general. We’re looking at agency agreements in pure terms as well as what is a hybrid agreement. We need to get to the definition of these before we can go to the manufacturers. We need to be clear legally before we do that.”
Retailers have told Auto Retail Agenda the Volkswagen Group document appeared to set out a “non-genuine” agency agreement where there was fixed pricing at a national level, yet retailers would be able to negotiate with customers by giving away their handling fee.
VW Group declined to comment on this possibility and said: “At this early stage any comment with respect to the shape or form of an agreement is speculative at this time.” However, in its response it limited the agency comment to VW, VW Commercial Vehicles, Audi, Seat, Skoda and Cupra and did not include VW’s other car brands Bentley, Lamborghini, Porsche and Bugatti.
Mercedes-Benz’s document is understood to set out a true agency agreement covering a realistic level of showroom costs.
Volvo’s document on agency agreements is believed to have included used cars, as well as new, before being rejected by the dealer council.
Meanwhile, Mark Raban, CEO of Lookers, speaking after the Lookers annual results, called for a standardisation with agency agreements: “Our brand partners seem to want to be taking their own approach. That’s going to give us a challenge in terms of our consistency and standardisation agenda.
“We’re absolutely engaged on discussions. We’re not opposed one way or another, but we think practically there needs to be a lot more thinking on both sides really, before we can move forward.”
* Read the full interview with Mark Raban in the July issue of Auto Retail Bulletin
SMMT dismisses retailer role in EV future
Retailers were omitted from a 12-point policy plan issued by the SMMT last week which aimed to secure a successful transition to electric vehicles for the UK.
Asked by Auto Retail Agenda why there was no mention of the role retailers would play in the EV future, SMMT chief executive Mike Hawes responded: “This is not an area that needs focus because retailers are already doing a great job.”
The comments drew disappointment from industry experts. The NFDA’s director Sue Robinson said: “You wouldn’t sell any EVs if weren’t for retailers.
“Automotive retailers are fundamental in delivering the government’s EV agenda. The NFDA represents over 85% of franchised vehicle retailers in Great Britain and Northern Ireland. NFDA members provide consumers with a tangible opportunity to communicate with product experts; discuss the benefits of switching to EVs; enjoy physical interaction with the new technology and try EVs for themselves, in the real world.”
Vertu maternity pay now ‘matches M&S’
Robert Forrester has announced that, going forward, Vertu’s enhanced maternity policy will pay 90% of average earnings for six months – which he said is the same as M&S. It is “part of our strategy for a better balance of men and women in the workforce”.
Rybrook Warrington Jaguar closed
Rybrook’s Warrington Jaguar outlet has closed, with customers signposted to its Hatfields Jaguar retailer 20 miles away in Liverpool, and staff transferred elsewhere in the group. Rybrook Warrington Volvo is unaffected. In a letter to customers, Rybrook said the franchise closure had been agreed with Jaguar Land Rover Ltd after discussions.
CarShop expands with Autoworld takeover
Sytner’s CarShop will open its 13th site in the UK after buying the 4.6 acre Autoworld site in Willenhall, West Midlands. It will be the first CarShop retailer in the area. All 19 former Autoworld staff will be employed and 22 new jobs will be created. The forecourt will hold up to 400 cars and the new site will open in September.
WORLD NEWS
Honda Australia adopts agency model
90 Honda Centres will form a revamped Australian network with each retailer selling vehicles for the same price across the entire Honda Centre network under a new agency agreement. It will be promoted as the ‘Honda Price Promise’. The product line-up has been streamlined and Honda says the operating model is “simpler and more flexible” for retailers.
Ownership of the network has been consolidated to 47 owners. Marketing and stock management will be centralised.
Dealer jailed for 5 years, fined $4m for clocking
A US car dealer has been jailed for five years and ordered to pay $4m in restitution for clocking cars. It is believed Shmuel Gali and his brother misrepresented the mileage on around 690 cars between 2006 and 2011. The average odometer rollback was around 69,000 miles.
Mileages were altered by individuals using a handled electronic device, lowering odometers to the requested mileage. The NHSTA estimates around 500k used cars are sold every year in the US with false odometer readings.
STOCKWATCH
Closing prices on 2 July 2021 and weekly change
Caffyns up to 450p, a level last seen in late 2017
Auto Trader Group 642.8p (-6.2p / -0.9%)
Cambria 78.0p (-0.5p / -0.6%)
Caffyns 450.0p (+30.0p / +6.8%)
Halfords 434.8p (+4.0p / +0.9%)
Inchcape 789.0p (-9.0p / -1.1%)
Lookers 69.5p (-0.3p / -0.4%)
Marshall Motor Holdings 203.0p (+7.5p / +3.7%)
Motorpoint 365.0p (+10.0p / +2.7%)
Pendragon 18.5p (-0.4p / -2.1%)
Vertu 44.3p (-2.7p / -5.9%)
DATAWATCH
Prediction: June sales remain 18% below normal
Auto Retail Agenda sources suggest June 2021 new car registrations will be around 186k. This compares to 145k in 2020 – and 223k in 2019, meaning the market remains around 18% below a ‘normal’ year. Official figures are due out at 9am today (Monday, 5 July).
COMING UP
Tuesday, Auto Retail Live: winning and retaining customers with Marshall’s Philip Deacon, Luscome’s Sam Luscombe, Cambria’s Ian Godbold and eBay Motors’ Phill Jones. Sign up hereThursday, RICS housing market survey
Friday, GDP
MONEY MATTERS
Business leaders urge return to office
Lobby group London First has organised a letter to the PM signed by more than 50 business leaders urging business leaders to encourage people to return to the office. Working from home “should no longer be the default”. The letter also asks for clarity on what the end of lockdown restrictions will mean in practice before 19 July.
It is understood this week the PM will reveal plans to ditch Covid-19 rules including mandatory mask wearing and the requirement to scan QR codes when entering venues. Businesses will also no longer be required to collect customers’ contact tracing details. “We’re going to have to learn to live with Covid now” said housing and communities secretary Robert Jenrick.
Retailers are failing with online insurances
Barely 1 in 5 retailers are attempting to sell warranties and other insurance products digitally according to iVendi research. This is despite 1 in 3 customers opting to purchase when offered. “It seems like a simple but effective step,” to include them within digital propositions said CEO James Tew, “and the technology means that this can be done literally in seconds”.
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