Retailers have reported a rebound in sales during the first week of showrooms being open in England after being shut since the last week of March.Several retailers who spoke to Auto Retail Agenda reported a positive week with pent up demand seeing sales do better than cautious expectations.

The reported trend was backed by Auto Trader which reported record visits in the past week, with two million visits a day to its site representing a week-on-week increase of more than a third.

Data and insight director Richard Walker said buyers were sending an increasing amount of leads to retailers. “We used to talk about buyers… just turning up at forecourts, but now that’s not possible.”

Last Monday, online and telephone enquiries were up 88% year-on-year, he said.

Meanwhile, the Scottish government has confirmed all auto retailers north of the border can open for click and collect handovers. Showrooms, however, remain closed. The next review is due on 18 June when the Government could move to Phase 2 of its pandemic plan, allowing up to 800 sq. m of showroom space to reopen. Retail areas larger than this will only reopen in Phase 3.

 

1 in 4 retail jobs under threat

In a worst case scenario, 150,000 auto retail jobs could be lost in the coming months as the furlough scheme unwinds. Even in the best case, it’s tens of thousands of job losses, one retail group chief executive told the FT.

Sector-wide consolidation and cost-cutting is therefore expected to be accelerated due to the pandemic. Some retailers spoke of pressure from the looming deadline for a good Brexit transition deal too.

Although business has reportedly been brisk since reopening last week, executives are worried it is pent up demand “that will fizzle out”. Although some staff have returned, it is believed more than a third of the industry is still furloughed.

A clearer sense of the market will only come in September or October, believe executives. “The economy is going to go through tough times,” one told the FT. “We live and breathe consumer confidence.”

The NFDA’s Sue Robinson countered that dealers are resilient and will still exist in the future, “despite the doomsayers”. She pointed out the number of dealer sites has only fallen from 4,792 in 2009 to 4,487 last year.

https://on.ft.com/375e8jM

 

How to bring customers back successfully

Showrooms are back open at last. So how can you help get your customers to start buying cars again? What are the new pinch-points in this world of Covid-19, and how can you overcome them? Join us this Thursday to hear Paul Hendy, Rapid RTC’s Pontus Riska and Calltracks’ Stuart Buckley discuss how to overcome these unprecedented challenges.

https://bit.ly/2Y9nzKT 

 

More retailers close

Family-run Ford retailer Tremont Garage in Llandrindod Wells will close on 31 August due to the coronavirus pandemic and Ford’s decision to cut half its retailer network, as exclusively revealed by Auto Retail Agenda in early February.

The business employs 20 staff and MD Richard Knill said closure was “the only sensible business decision”.
FCA retailer Northgate Garage Group in Canterbury has already closed, with 21 redundancies. The business was established in 1968. Owner Peter Hinkins is retiring and has no natural successor to carry on, so placed the company into administration. “During lockdown, it’s very difficult to manage a way out,” he said.

 

BCA Buyer app extras

Sales catalogues in the BCA Buyer app are now easier to navigate and a new MyBCA page has been added to monitor tracked vehicles and purchase lists. Customers have used the app to make a third of all BCA online purchases since auctions were suspended on 25 March. The app is a free download in the App Store and Google Play Store.

 

 

WORLD NEWS

Germany reopens but sales down 50%

Despite showrooms being open throughout May, new car sales fell 50%. Reopening “had almost no positive effect on demand” said one analyst. “The state of the passenger car market remains dramatically bad.”

Year to date, German registrations are 35% down, the lowest since the country was reunified in 1990. A stimulus package announced last week has also been criticised by carmakers for focusing only on electric cars and hybrids. It is estimated there are €15bn of unsold new cars in the German retail network.

https://bit.ly/3dE9nQI

 

Carvana to surpass CarMax?

Online US used car retailer Carvana has increased its online inventory 110% over the past year (to 21k vehicles), new figures show. Rival CarMax has dropped 36% to 32k vehicles UK startup Cazoo currently lists 2k cars). Analysts are predicting Carvana will soon take over the title of the largest online car dealer in the US, helped by a bullish marketing campaign to “change the way people buy cars”.

https://bit.ly/3f2ZkVD

 

 

STOCKWATCH

Closing prices on 5 June 2020 and weekly change

Lookers rallies again

Auto Trader Group 551.0p (-7.2p / -1.2%)

Cambria 50.55p (-1.95p / -3.7%)

Caffyns 300.0p (+25.0p / +9.0%)

Halfords 185.6p (+2.4p / +1.3%)

Inchcape 530.0p (+29.5p / +5.8%)

Lookers 29.28p (+4.18p / +16.6%)

Marshall Motor Holdings 125.0p (+12.5p / +11.1%)

Motorpoint 272.0p (+21.0p / +8.3%)

Pendragon 8.7p (+0.49p / +5.9%)

Vertu 29.4p (-0.85p / -2.8%)

 

 

COMING UP

Tuesday, Radius Law Distance Sales Webinar:

Radius Law is running an online course this Tuesday https://bit.ly/2AOOsvr

Thursday: Auto Retail Live: Bringing customers back successfully https://bit.ly/2Y9nzKT

Friday, UK GDP

 

MONEY MATTERS

Wells Fargo stops independent loans

Wells Fargo, one of the biggest new and used car lenders in the US, is ceasing loans to independent auto retailers. The bank said it followed a review of business practices due to Covid-19 economic uncertainty. An insider added it was due to concerns about the credit quality of loans made by independents. Auto loans had previously been growing, up 19% in Q1 2020 to $6.5bn.

https://cnb.cx/3h1DAem

 

BLOG: Cancelled holidays means higher demand for cars