• NEW CAR SALES TO JUMP – BUT POST-LOCKDOWN BOOM ‘UNLIKELY’
• DS PILOTS NEW AFTERSALES NETWORK
• ‘MOST RETAILERS WERE PROFITABLE IN 2020’
• CAZOO ‘THE CARVANA OF EUROPE’
• NFDA TO ADVISE ON PEUGEOT RULING
• CARMAX ACQUIRES AUTO PUBLISHER EDMUNDS
• SPANISH NEW CAR SALES UP
• STOCKWATCH
• COMING UP – SMMT March new car registrations
• FINANCIAL OMBUDSMAN ‘NOT FIT FOR PURPOSE’
• FURLOUGH STILL NEEDED AFTER SEPTEMBER?

New car sales to jump – but post-lockdown boom ‘unlikely’

March 2021 new car registrations are set to be up 10% despite retailers remaining closed. The forecast for 280k sales is “testament to dealers rapidly embracing online sales and click-and-collect delivery of cars” reports The Times.

Even so, the market will be down by half from the March 2017 high point of 562k registrations. The paper blames anti-diesel sentiment from the decline with sales running at one-eighth of 2017 where nearly 1 in 2 car sales were diesel. Electrified cars are forecast to soon overtake diesel’s share of the market.

Such a strong performance during lockdown means some say expectations of a boom in sales when restrictions ease from 12 April is unlikely – because retailers have already been performing so strongly. Vertu’s Robert Forrester told Autocar the firm is “already operating at between 70% and 90% of normal sales”. There is still some pent-up demand “but nothing like the same uplift as we experienced after the first lockdown”.

Mr Forrester said auto retail has embraced technology but “that’s not to say everyone is now buying purely online. That’s still a very small market”. Of Vertu’s 3,000 weekly sales, only around 70 are pure online sales.

New Vauxhall MD Paul Willcox confirmed expectations of a blended approach in the future, with far more done online, but customers ultimately still wanting to deal with people and see, touch and test drive vehicles. “Our retailer network will continue to have a very valuable role in the future.”

https://bit.ly/3fEexjr

 

DS pilots new aftersales network

DS Automobiles is trialling a wider Stellantis aftersales network with the aim of reducing customer travel times for service and repair work.

The pilot scheme is running along the south coast of England and is expected to deliver its initial findings this month, according to DS UK managing director Jules Tilstone.

DS currently has a network of just 33 retailers split almost evenly between standalone stores and smaller salons which are typically part of a Citroen showroom. Speaking to Auto Retail Agenda, Mr Tilstone said he was aiming to decrease the travel time to buy a new DS so that 80% of the population would be within 40 minutes’ drive. This would be achieved by increasing the number of showrooms to the mid-40s in the next few years.

“We are piloting a remote service idea using Stellantis operations where we don’t have a DS store. That’s something that we’re looking at in terms of progressing the network and giving us a much better coverage,” said Mr Tilstone.

* Read the full interview in the April issue of Auto Retail Bulletin where Mr Tilstone discusses DS’s low NFDA score and how he intends to turn sales around.

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‘Most retailers were profitable in 2020’

Chartered accountants UHY Hacker Young says more than 97% of the automotive retailers it works with were profitable in 2020. This was achieved through a combination of reduced OEM pressure, “some impressive cost-saving measures, strong customer demand and government support”. Many retailers recorded all-time record performances between June and October 2020. This marked a significant turnaround from the year to May 2020 when the majority of retailers were loss-making.

The outcome was repeated in the US where many retailers recorded the most profitable year in their history. Research by NADA suggests 2020 “set a new bar for profits”. More than half of retailers say 2021 will be even more profitable than 2020.

https://bit.ly/3sMTmiO

 

Cazoo is ‘the Carvana of Europe’

In interviews last weekend, Cazoo founder Alex Chesterman branded the business “the Carvana of Europe” and admitted he was “largely copying” the $45bn US used car site. Mr Chesterman believes there is a £480bn used car opportunity in Europe, calling it one of the last major markets to be disrupted by the internet. He said Cazoo’s model indicates it will get a 1% share in Europe in four years’ time which will make the business the same size as Carvana is today.

https://bit.ly/31Mdi9F

 

NFDA to advise on Peugeot ruling

Peugeot cannot tie customer satisfaction scores to retailer payments, the Austrian Supreme Court recently ruled. The subsidising of vehicle prices at Peugeot-owned sales outlets has also been prevented. The NFDA says it is now working with colleagues at the AECDR to understand the implications of the ruling – and will update its legal briefing on the matter in due course.

https://bit.ly/3cXQMh5

 

 

WORLD NEWS

CarMax acquires auto publisher Edmunds

CarMax, the largest used car retailer in the US, has acquired automotive publisher and vehicle listings company Edmunds. CarMax previously held a $50m minority stake and the overall value of the deal is $404m. Edmunds will continue to operate independently from CarMax after the acquisition closes in June. The deal will speed up both company’s ability to deliver an “enhanced digital experience”.

https://bit.ly/2Q0GM0I

 

Spanish new car sales up

Spanish new car registrations rose 128% in March compared to a year ago, although they remained 30% down on 2019. Almost 86k new cars were sold, with Skoda rising 357%, Peugeot up 321%, Citroen up 260% and Opel up 252%. Year-to-date registrations in Spain are running 15% down on 2020.

https://bit.ly/2QZ4yuE

 

STOCKWATCH

Closing prices on 1 April 2021 and weekly change

Auto Trader Group 560.0p (-5.4p / -0.9%)

Cambria 73.5p (-1.5p / -2.0%)

Caffyns 350.0p (n/c)

Halfords 372.4p (+6.0p / +1.7%)

Inchcape 761.5p (+13.0p / +1.7%)

Lookers 54.0p (+1.8p / +3.3%)

Marshall Motor Holdings 173.0p (+8.0p / +4.7%)

Motorpoint 257.5p (+1.0p / +0.3%)

Pendragon 16.55p (-0.41p / -2.4%)

Vertu 39.4p (+0.2p / +0.5%)

 

 

COMING UP

Tuesday, SMMT new car registrations

Wednesday, RICS housing market survey

 

MONEY MATTERS

Financial Ombudsman ‘not fit for purpose’

Think-tank the Institute of Economic Affairs says the Financial Ombudsman Service is ‘unfit for purpose’ and in need of ‘major reform’. It is slow to act, exacerbated by PPI cases, and lacks transparency and accountability. The IEA also warned the FOS is “playing into the hands of claims management companies” and is in danger of “infantilising consumers”.

https://bit.ly/3miinjB

 

Furlough ‘still needed after September’

Research organisation the New Economics Foundation warns 850k jobs are at risk when the furlough scheme ends in September 2021. This is because economic activity will not fully have returned to pre-pandemic levels by then. The scheme should be extended, says the NEF, with training offered so workers can learn new skills. Five million people were still on furlough at the start of March 2021.

https://bit.ly/3mmqNpT