Auto Retail Agenda: 6 June 2022
04 June 2022
- CARZAM GOES BUST
- PENDRAGON FACES AGM PAY SHOWDOWN
- YEOMANS ACQUIRES NISSAN’S OLDEST UK RETAILER
- CAFFYNS TO HONOUR 1981 MGB FREE SERVICE
- FORD TO REWORK RETAILERS WITH “BRUTAL” STANDARDS
- MERCEDES-BENZ RESTRUCTURES US RETAILERS
- AUSTRALIA AGENCY ARBITRATION AGREEMENT
- STOCKWATCH: DAKSH GUPTA LEAVES MARSHALL
- COMING UP: SMMT MAY NEW CAR REGISTRATIONS
- RISHI SUNAK ‘HAS ROOM FOR VAT CUT’
- NEW ONLINE LOAN SCAM WARNING
Carzam goes bust
Carzam has folded 18 months after being founded by Peter Waddell and John Bailey. Administrators were appointed as it entered voluntary receivership last Tuesday. It comes six months after Carzam said it had raised £112m from a New York hedge fund believed to be Davidson Kempner. The money took the form of debt not equity.
It has been reported the founders had fallen out and were not prepared to invest further in Carzam.
In a reply to a LinkedIn post, Mr Waddell, who remains CEO of Big Motoring World, said “we tried it for the sale [sic] of car dealers as [Cazoo founder] Alex Chesterman said all car dealers were terrible”.
Mr Waddell is reportedly “in great spirits” and investors indicate there is a bigger story to come out.
Pendragon faces AGM pay showdown
Pendragon faces its third successive shareholder revolt over executive pay at its AGM on 21 June. Shareholder advisory group Glass Lewis says management rewards are “inappropriate” and is recommending investors reject Pendragon’s pay report. It also advised opposing the re-election of non-exec Mike Wright, who chairs the renumeration committee – but this was pre-empted when Mr Wright stepped down last week.
Hedin Group also last week upped its stake in Pendragon, from 26% to 27%. A £400m (28p a share) takeover offer from Hedin was rejected in March. Hedin has described Pendragon’s approach to payments and not reimbursing furlough as “out of tune”.
Pendragon founder Trevor Finn joined Hedin’s board in 2021.
Yeomans acquires Nissan’s oldest retailer
Yeomans chairman and MD James Smith has announced the acquisition of Barnard & Brough Nissan Haywards Heath – the brand’s longest servicing UK retailer – from SLM Group. UHY Hacker Young’s David Kendrick commented it “didn’t take long to get that one done”.
Caffyns to honour 1981 MGB free service
An “unblemished” 1981 MGB roadster with 1,019 miles on the clock is up for auction – and Caffyns has pledged to honour the unspent free first service voucher that forms part of the car’s service history. Worthing Audi will carry out the work when the new owner chooses to redeem the voucher.
WORLD NEWS
Ford to rework retailers with “brutal” standards
Ford CEO Jim Farley says it needs to rework its retailer network and slash ad spend in order to earn enough profit on EVs and take on Tesla. Future standards for dealers “are going to be brutal,” he warned. “They’re going to be very different than today”.
Mr Farley said future retailers won’t hold any inventory: vehicles will sell online and ship directly to the customer. “There will be a lot of winners and losers, and I believe, consolidation.”
Mercedes-Benz restructures US retailers
Mercedes-Benz has announced plans to restructure retailer operations. Its 383 US retailers will be split into three groups, called Air, Land and Sea, based on throughput. Air includes large, publically-traded retailers (accounting for 25% of sales volume). Land is regional multi-point retailers (40% of sales). Single-point retailers fall into the Sea group. Corporate field support will be realigned around the new groups, allowing the OEM to be more attentive to higher-volume retailers.
Some retailers have pushed back with one describing it as a “tremendous step backward” in retailer relations.
Australia agency arbitration agreement
Retailers and OEMs in Australia have agreed to insert a memorandum of understanding arbitration clause into dealer agreements to resolve any disputes. It is a “faster, more expedient, more cost-effective way of resolving really significant disputes,” said Australian Small Business and Family Enterprise Ombudsman Bruce Billson, and “a better option than going to court”.
STOCKWATCH
Closing prices on 1 June 2022 and weekly change
Auto Trader Group 586.8p (+10.0p / +1.7%)
Caffyns 602.5p (n/c)
Halfords 223.6p (+0.2p / +0.08%)
Inchcape 728.5p (-11.5p / -1.5%)
Lookers 72.6p (-0.4p / -0.5%)
Marshall Motor Holdings 397.0p (n/c)
Motorpoint 232.0p (+1.0p / +0.4%)
Pendragon 23.7p (+0.7p / +2.9%)
Vertu 59.1p (+0.7p / +1.1%)
COMING UP
Monday, SMMT May new car registrations
Tuesday, UK retail sales
Wednesday, Halifax house price index
Wednesday-Thursday, UK Garage and Bodyshop Event, NEC
14 June, Auto Retail Live: H2 Briefing, sign up here
MONEY MATTERS
Rishi Sunak ‘has room for VAT cut’
Economists estimate the Chancellor has room for up to £30bn of tax cuts in the autumn to help the cost of living crisis. Demands are growing for cuts to either VAT or income tax to help those on low incomes. One economist is forecasting a Q4 VAT cut from 20% to 17.5%.
New online loan scam warning
Lloyds Bank, Britain’s largest bank, has issued an urgent warning about a new scam targeting those struggling with the cost of living. Fraudsters contact those who have entered details into a scam online loan firm, demanding upfront ‘advance fee’ payments. Victims have lost an average of £231.
Tags:
agency model, Australia, Caffyns, Carzam, Cazoo, Chancellor, cost of living, Daksh Gupta, Ford, Hedin, Marshall, Mercedes Benz, Nissan, Pendragon, SMMT, VAT, Yeomans 
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