1. shopping
2. retail

Oct p1_Oct p1 07/10/2014 15:54 Page 1
125
AUTO RETAIL
Bulletin
ISSUE NO.
OCTOBER 2014
BE BETTER INFORMED
AFTERSALES IN A
DIGITAL AGE
A comprehensive report
focusing on changes in the
UK aftersales market
See page 7 for details
IN THIS ISSUE
Retailers
Benfield
Billa
Caffyns
Cambria
CarMax
Group 1
HR Owen
Inchcape
Nationwide Accident
Pendragon
TrustFord
p14
p9
p8
p8
p9
p9
p8
p8
p8
p8
p22
Brands
Ford
Honda
Lexus
Seat
Subaru
Volkswagen
Volvo
p2
p2
p16
p2
p4
p4, p8
p3
Suppliers
ACEA
Anomaly42
Arval
ASE
Auto Trader
BCA
Carwow
CDK
CECRA
Deloitte
KeeResources
Mapfre
MSXi
NFDA
SMMT
Trend Tracker
Urban Science
p18
p3
p12
p10
p6
p3, p5
p5
p15
p18
p22
p17
p11
p19
p22
p22
p9
p14
AUTO RETAIL
NETWORK
w w w . a u t o - r e t a i l . c o m
SME FLEET SALES RISE PREDICTED
C
ar and van retailers look set to
benefit from a more optimistic
outlook in the company car
market.
Figures from the 2014 edition of the
respected Corporate Vehicle
Observatory Barometer, by leasing firm
Arval, show a marked increase in the
likelihood that smaller businesses will
grow their fleets in the next three years.
The growth rate for larger businesses
has eased.
With smaller businesses more
commonly buying or leasing direct from
car retailers and larger firms typically
using lease companies or going direct to
car makers, the swing from 9% looking
to increase fleets in 2013, to 17% in
2104 for SMEs is positive news for UK
franchised dealers.
Growth potential from larger fleets is
still positive, with a balance of 15%
predicting growth in the next three
years. This figure stood at 18% last year.
more on p12
CRAZY ECONOMICS IN AFTERSALES
T
here are underlying issues of
viability in the aftersales
market, but the digital age
brings with it new opportunities,
according to speakers at Auto Retail
Network’s conference on Aftersales in
the Digital Age.
Providing the morning session’s
keynote address, Mark Squires, chief
executive of Benfield Motor Group
spoke on the topic of building an
aftersales strategy. His thought
provoking presentation looked at the
dramatic changes that have already
impacted on profitability, insisting that
these were issues the industry needed to
discuss.
Among the issues he brought up was
‘crazy economics’, questioning the value
of offers such as free vehicle health
checks and service plans. “Of course we
have a duty of care,” he said, “but a free
vehicle health check is not free for the
dealer.”
more on p14
BCA TO LIST ON STOCK EXCHANGE
B
CA will float on the London
Stock Exchange later this year,
with the aim of raising in
excess of £200 million. The initial
public offer will comprise an issue of
new and existing shares.
The directors and current owner,
private equity firm Clayton Dubilier &
Rice, believe the flotation will help
position BCA for the next phase of its
development by providing an
appropriate long-term ownership
structure, which is intended to support
management’s growth plans.
The announcement comes off the
back of strong first-half results for 2014
showing continued revenue and growth.
Chief executive Jon Olsen said: “BCA
comes to the market with an excellent
track record of growth in revenues,
earnings and strong cashflow
generation.
more on p5
Oct p2_Oct p2 07/10/2014 15:54 Page 8
NEWS
FORD NETWORK COMMITS TO MEGA-STORES
F
ord says over half the
dealerships identified as
potential sites for its new
Ford Store concept have now
committed to the project
following an investors meeting to
view the pilot showroom in
London last month.
Ford of Britain managing
director, Mark Ovenden, speaking
exclusively to Auto Retail Bulletin,
said the company had identified 65
sites, mainly in major urban areas
that would be suitable for Ford
Stores, which he described as “the
ultimate Ford retail experience.”
He said: “We took the owners
and investors in our possible
would be handled “exactly the same
as all over Europe.”
There will be Vignale lounges in
all Ford Stores and, most likely, a
Vignale relationship manager in the
dealership who will be responsible
for customer contact. There will
also be a suite of service offers to
“make the Vignale experience
special.”
Mr Ovenden insisted there would
be no local compromises on either
Ford Store or Vignale standards.
“If there is a delay, it will be
where we know we have the right
partner in the right town but the
location is preventing what we
want. In those cases we will have to
work with the dealer to find the
right location. There will be no
Ford Store or Vignale Lite.”
HONDA IS FIRST WITH
ANDROID DASH
locations down to Edgware Road (a
Ford Retail site); we showed them
the concept and explained what it
was all about. We’re getting on for
about 30 dealers who have already
said ‘yes, I definitely want one’ and
have committed to have it
implemented by March of next year.
“We’ve got some others who, for
pragmatic reasons, probably can’t
do it quite so quickly. So I reckon
we’ve probably got 35 to 40 dealers
now who have said ‘I will do a Ford
Store with you’.”
Mr Ovenden said Ford Stores
would be the exclusive outlets for
the new Mustang and also for the
premium-specification Vignale
experience. Discussion about the
Vignale strategy is closed and he
emphasised that Vignale in the UK
Honda is the first carmaker to reveal a
dashboard infotainment system based on
Google’s Android operating system.
NEW LOOK FOR SEAT
The new Honda Connect system will be
standard equipment in Europe on Civic,
Civic Tourer and CR-V models from next
year. It will likely also be an option on the
new Jazz which is scheduled for the UK
market in summer 2015.
The Android operating system allows
touchscreen gestures such as pinch, zoom
and swipe and provides customers with the
same experience that they expect on their
smartphones and tablets. It also gives
access to Google Play apps, and drives
on-board systems such as navigation,
radio, rearview camera and vehicle display.
Honda is one of the founding members of
the Open Automotive Alliance which
launched earlier this year to bring the
Android platform to cars. Most of the
world’s carmakers and brands such as
Google, Delphi and Panasonic are now
members.
S
eat is asking its network to
invest in a new corporate
identity programme as the
brand seeks to bring its retail
experience up to speed with the
current model line-up.
The showroom upgrade is the first
refresh of showrooms and signage in
14 years.
The first new-look dealership has
opened at Caffyns, Tunbridge Wells
and franchise holders were given
details of the programme at recent
roadshow events. Seat UK has said it
will meet the costs of all signage and
half of all internal work, leaving
individual dealerships to pick up a
bill of around £40,000.
Neil Williamson, now two years
into his role as Seat UK director,
said response to the plan had been
enthusiastic and he hoped that it
could be implemented across the
network by 2016 when the product
range will expand with the launch of
an SUV.
Mr Williamson admitted there is
some frustration in the network at
the speed of introduction of new
models and said the focus in future
will be in “the more fun segments,
not the A4/A6 segment.”
He commented: “The dealers
have said they want it tomorrow and,
if we had our time again, we’d have
it a bit sooner.”
The brand currently has around
12 open points but, despite a recent
low NFDA rating, Mr Williamson
said he has a “long list of people”
wanting either more dealerships or to
get into the brand.
The Bulletin is circulated to members of the Auto Retail Network. For membership details, see page 24
EDITOR
EDITORIAL PANEL
SALES EXECUTIVE
Tristan Young
tristan@auto-retail.com
Tel: 01276 855556
Neil Philpott, PricewaterhouseCoopers
neil.j.philpott@uk.pwc.com
Caroline McBain
caroline@auto-retail.com
Guy Liddall, managing director, Motor Trade
Selection
guy.liddall@mtsservicesgroup.co.uk
ACCOUNTS MANAGER
David Chittenden, head of automotive, Colliers
International
david.chittenden@colliers.com
MEMBERSHIP DIRECTOR
DEPUTY EDITOR
Mark Simms
mark@auto-retail.com
CONTRIBUTING EDITORS
Steve Banner, Hugh Hunston,
Chris Oakham
2
Peter Stevens, partner, TWM Solicitors
peter.stevens@twmsolicitors.com
DATA ANALYSIS
OFFICE MANAGER
Nicola St Clair
Rosalind Marshall
ros@auto-retail.com
DESIGN AND PRODUCTION
DATA ADMINISTRATOR
Concept Creatives
design@conceptcreatives.co.uk
Frances Tatlow
frances@auto-retail.com
OCTOBER 2014
Photocopying these pages may break copyright law
Angie Wilderspin
angie@auto-retail.com
Francis Marshall
fmarshall@auto-retail.com
Tel: 01572 724687
Published by: Automotive Retail Ltd,
21 Midland Court,
Station Approach,
Oakham LE15 6RA
ISSN 1755-4292
Managing director: Rupert Saunders
Chairman: Fred Maguire
www.auto-retail.com
Oct p3_Oct p3 07/10/2014 15:54 Page 1
NEWS
MEASURE DATA TRENDS TO CUT FRAUD
I
nformation across a broad
spread of data sources
could be used to spot both
fraud in businesses plus
positive customer trends,
according to mature start-up
company Anomaly42.
Anomaly42, which operates
primarily in the retail and finance
sectors, uses its software to
analyse multiple data streams and
find anomalies that aren’t easily
or quickly spotted by people.
“We deal with data in all sorts
of areas. For example databases,
emails and accounts systems,”
said Mark Jones, Anomaly42’s
chief data scientist.
“There has been a vast increase
in data creation in the past few
years. Regulation has driven an
increase in data points too.
“Anomaly42 is a culmination
USED CAR VALUES SOFTEN IN
SEPTEMBER
Used car values fell in September from the
record levels achieved over the summer
months as volume began to return to the
marketplace, according to BCA’s latest
Pulse report.
The average value fell by £572 (7.1%) to
£7,429, with performance against CAP
Clean falling slightly to 97.5%.
Model mix was a significant factor in the
drop in the headline figure, as there was a
notable percentage increase in the share of
dealer part-exchange cars sold over the
month, compared to higher value fleet and
lease cars.
However, year-on-year values remained
ahead by £422, equivalent to a 6.0% uplift,
with both average age and mileage falling
over the period.
Simon Henstock, BCA’s UK operations
director, said: “As expected, there was
some price pressure in September as a
result of rising volumes and a shift in the
balance between part-exchange cars and
fleet and lease vehicles. These factors
typically exert some pressure on average
values and conversion rates, although
demand remains strong and the best
quality cars continue to achieve often
exceptional prices.”
www.auto-retail.com
of the idea that enables
businesses to look at all these
disparate data sets to show
anomalies.”
The software platform can be
cloud-based or on the business’s
premises and harvests all sorts of
data.
“We use optical character
recognition software so that any
data is fully searchable and
linkable,” said Mr Jones. “We
can also bring in other data sets,
for example from Companies
House. We then apply rules to
the data to find patterns.
“These patterns could be
positive, such as buying trends in
certain conditions. Or it could be
negative trends, such as a
salesman who’s manipulating
unit stocking. Another possibility
is that the system could ‘see’ a
single phone number against
several addresses in a CRM
system. The system handles this
and supplies the details to the
right people at the right time.
“Lots of companies have a
fraud team, and auditor or a
finance director. Anomaly42
provides big button technology.”
Anomaly42’s system takes a
historic load of data to start, for
example the past 12 months’
accounts, CRM and email. It
then runs regular checks every
day or week depending on what
works for a company.
“We look a lot at online
retailing including competitor
analysis, and we can look at blogs
and forums too. For instance we
can spot people complaining
about things. That could be a car
with a fault.
“We like to provide help to
people and that could be about
positive or negative trends.
“We’ve existed for 10 years
but only as a stand alone
operation for the past two years.”
VOLVO PLANS NEW MODEL
SALES GROWTH
V
olvo’s strategy to
gain premium
franchise status
across its range will involve
an integrated model naming
approach as the brand’s UK
head of product and pricing
Iain Howat admitted: “We
want to put behind us a
period where we chopped
and changed, messed around
and were all over the place in
terms of range naming and
not aligning it with the rest
of the market.”
With the S60, V60 and
XC60 providing a recognisable
upper medium portfolio Volvo
will launch the new S90 large
saloon to replace S80, and a
V90 estate car. Plus Volvo will
launch a Cross Country
counterpart to complement
the upcoming new XC90 SUV.
The V90 and S90, using the
company’s variable format SPA
platform technology, will come
to market in quick succession
within 20 months.
Mr Howat also revealed the
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next-generation V40 will have
an all-wheel-drive, and frontwheel-drive XC40 equivalent,
which is already in concept
model form and based on a
new platform, funded by the
parent Chinese company Geely
Automobiles.
He said: “I believe that
within the next three years our
brand will be transformed and
premium perception will apply
from V40 upwards. We need
to be more robust and
consistent in defining our
nameplates and positioning.
To be honest one generation
of V40 a premium product
does not make.”
Mr Howat denied Volvo had
forced volume through fleet or
thrown money at the corporate
sector, which during the first
eight months of this year
accounted for 70% of sales, up
20% overall. He claimed the
registration rise was double
internal targets and fleet was
only 2% above its share last
year.
DECEMBER
3
OCTOBER
2014 2007
Oct p4_Oct p2 07/10/2014 15:55 Page 8
NEWS
SUBARU TO REAWAKEN NETWORK
By Tristan Young
S
ubaru it aiming to grow
its network to 100
retailers by the end of
2015, up from the current 60
franchises. By the end of this
year the IM-owned distributor
will add a further 18 retailers
but reach a total of just 70 as
some retailers lose the brand,
according to managing director
Paul Tunnicliffe.
The network growth is part of a
wider plan for Subaru to hit 5000
registrations in the next few years,
according to Mr Tunnicliffe.
“We’re on target for 2800 this
year and we hope to sell 3500
next year. But it dipped to 2000
in 2012. We want to get that back
north of 5000 eventually,” he
said.
“We’re 24% up this year thanks
to the improved exchange rate.
It’s now Yen180 to the Pound
WHY SUBARU DROPPED ETCo
“We ran the ‘Everything Taken Care of’ for
three years but it was over-burning,” said
Subaru’s UK managing director. “People
were coming in with any little thing to repair
such as a stone chip. Customers found it
difficult to understand and there were some
exclusions so we were upsetting
customers. The five-year warranty is much
easier to understand and because of our
reliability it costs a lot less than ETCo.”
and it was at 120. That kind of
change transforms a business.”
While the exchange rate was
working against the brand, Mr
Tunnicliffe said that some retailers
lost interest in Subaru, even
though they retained the
franchise.
“A lot of our dealers just went
to sleep for a few years. We’ve
been taking the time to get them
reconnected with the business.
“Some took on Kia or Hyundai
in that time. Now they are
coming back to us because of the
CI costs that those brands are
asking them to invest.
“We are targeting other ex-Kia
and ex-Hyundai dealers too – the
ones who were local retailers and
were asked to move to out-oftown glass boxes, but opted not
to. We’re also looking to those
that ran Proton or Daihatsu.”
Mr Tunnicliffe said he was still
after owner-operator businesses
and wasn’t not looking for groups
as they are “hungry investors.”
He said: “We don’t phone at
the end of the month and offer
£5000 off to register cars.
Everyone’s on the same terms.
“We look for the best local
operators; those that do county
shows and point to points and get
into the community.
“The network average return is
nearly 2%, and that’s going up.
We aim to keep costs low;
corporate cuff links costs are low
and we don’t have any plasma
screens. The focus is on the cars.
“The Forester, Legacy and XV
are the only incentivised cars. It’s
just basic for the rest. That keeps
the dealers focused.”
He added that Subaru was
asking retailers to sell on
engineering integrity and vehicle
capability, because price and
efficiency weren’t the brand’s
strongest points due to the
increased costs and weight of
four-wheel drive.
Mr Tunnicliffe pointed out that
Subaru is an SUV franchise with
the STI and BRZ as the cherry on
the cake, not defining the brand.
However, he pointed out:
“New pricing has reinvigorated
things. The XV is £2300 less than
last year due to the Yen, the BRZ
now starts at £22,495 and the
new WRX STI is £4000 less than
the old one – and it’s sold out for
the rest of the year. That’s all due
to currency changes.
“In terms of product, there’s a
new Outback on the way and the
Levorg estate is under discussion
for Europe. This will probably
come to the UK in the second
half of 2015 and add between
600-800 units.”
‘DATING SITE’ FOR CAR BUYERS
V
olkswagen of America
has launched a new
configuration website
at vw.com which it claims
revolutionises purchasing new
cars on the US market. It
gives both the manufacturer
and retailers a high level of
integration in the production
and sales processes.
Importantly for US car buyers,
they can now find exactly the car
they want via a ‘matchmaking’
4
OCTOBER 2014
function.
To date, while customers in
the US have been able to
configure their favourite VW
online, their final choice depends
on which models their dealer has
in stock – the 'best-match’
principle. The new configuration
engine lets customers make an
online selection from stock that's
actually on the dealer's
forecourt.
If the desired vehicle is not
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obtainable locally, the search is
extended to other dealers.
Customers can see online exactly
the car they’ve chosen before
visiting the retailer.
Build to order isn’t standard
practice in the US as it is for
many brands in the UK, but the
idea of being able to see the
actual car is certainly something
that has been identified as a key
element of the buying process
here.
www.auto-retail.com
Oct p5_Oct p3 07/10/2014 15:55 Page 1
NEWS
BCA TO LIST ON STOCK EXCHANGE
B
CA will float on the
London Stock Exchange
later this year, with the
aim of raising in excess of £200
million. The initial public offer
will comprise an issue of new
and existing shares.
The directors and current
owner, private equity firm Clayton
Dubilier & Rice, believe the
flotation will help position BCA
for the next phase of its
development by providing an
appropriate long-term ownership
structure, which is intended to
support management’s growth
plans.
The announcement comes off
the back of strong first-half results
for 2014 showing continued
revenue and growth. Chief
executive Jon Olsen said: “BCA
comes to the market with an
excellent track record of growth in
revenues, earnings and strong
cashflow generation.
“We have a proven business
model that allows us to help
buyers and vendors maximise
value, liquidity and choice in the
used vehicle market through their
preferred channel, be it physical or
digital.”
With more than 900,000
vehicles sold in 2013 through its
vehicle remarketing division, BCA
can lay claim to being the leading
used vehicle marketplace in
Europe, helping buyers and
vendors to maximise value,
liquidity and choice.
Further, BCA said it had
established itself as the partner of
choice in the European
professional used vehicle sales
market, having provided services
to more than 55,000 buyers and
more than 1,000 vendors in 2013.
This has included some of the
largest dealer groups, leasing
companies, manufacturers and
rental and vehicle buying
companies in Europe.
BCA, which was bought by
Clayton Dubilier & Rice in 2010,
also offers vehicle buying services
through its Webuyanycar online
brand, which purchased more
than 120,000 vehicles in 2012.
BCA acquired Webuyanycar in
August 2013, and the online
vehicle buyer has continued to
expand rapidly in the UK. It has
also expanded into the continental
European market, entering the
Netherlands this year.
In the three year period to 31
December 2013, the Group grew
revenues by 74% to £442.3
million (from £254.3 million for
the year ended 31 December
2011), with Adjusted EBITDA up
27% to £62.5 million (from £49.4
million for the year ended 31
December 2011).
CONSUMERS ARE STRUGGLING TO
GET THROUGH TO DEALERS
At Carwow, we’re constantly analysing data to help our
dealers keep a competitive advantage. From calls to
response rates, to the reviews of the dealers that buyers
leave: the data all points to the same conclusion – people
buying cars want a response, and they want it quickly.
Now, I’m sure most of you reading this will say this is
nothing new – we all know this. But to what depth do you
understand the critical need to have a call answered?
The data we collected was from more than 400 UK
franchised dealers in Q3 2014. During this period we
tracked 6,988 phone calls from Carwow users, of which
1,643 lead to a sale – a 24% conversion rate.
Of these calls, only 15% lasted longer than two minutes,
which means that the vast majority of potential customers
aren’t able to reach the salesperson they’ve been dealing
with. We analysed a sample of these 300 short calls, and
found that only 64% of consumers left their names and
numbers over the phone to be called back.
Of the users who didn’t reach the first dealer they tried to
call, almost half of them then rang a different dealer within
an hour of making the first call. Tellingly, only 12% of people
who did get through to the first dealer they called then
called another dealer. Missing that first call costs dealers a
lot of potential sales.
www.auto-retail.com
What we’d recommend, and would like to see, is either
calls being diverted to a personalised voicemail for each
salesperson or, even better, to a salesperson’s mobile. The
most successful dealers on Carwow divert to mobile
phones, and they find it gives consumers confidence that
their messages will be picked up.
What is worse is that a significant percentage of calls to a
dealership’s main phone line were just never answered. On
aggregate we see that 6% of calls aren’t answered.
Interestingly, there are clear differences between dealers
representing different brands. Generally, the more premium
the manufacturer the worse the trend.
The vast majority of these calls weren’t outside of working
hours either, and Saturdays and Sundays are the worst
days. What we’d like to see is voicemail activated after a
set number of rings – a solution we see very few
dealerships using.
Ultimately, if people can’t make contact with someone they
have already been dealing with then many will simply move
on to another dealer. Can you afford to miss those calls?
Author James Hind is the CEO of Carwow a
commercial partner in Auto Retail Bulletin. Find out
more at carwow.co.uk
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DECEMBER
5
OCTOBER
2014 2007
Oct p6_Oct p2 07/10/2014 15:55 Page 8
PEOPLE
PERRY OFFERS LESSONS FROM THE USA
by Mark Simms
“
Click and
buy fails
because the
car deal is too
complex
“
6
OCTOBER 2014
W
ith the multitude of web-based
and software tools that have come
to the market, the way car
retailing is done has changed enormously.
But as far as we’ve come to date, we have
even further to go in embracing the power
of these tools.
So says Chip Perry, the former president and
CEO of AutoTrader.com and Kelly Blue Book
in the United States, and now a non-executive
board member of Auto Trader in the UK.
Mr Perry brings with him a wealth of insight
from the US market. Because of its larger scale,
the US auto industry has tended to be a faster
adopter of new tools and new ideas. With his
experience, Mr Perry is ideally placed to inform
on what has and hasn’t worked, and to look at
the direction in which tools might develop.
Notably, Mr Perry has identified that trends
in the US are coming to UK increasingly
quickly, with less and less lag.
One set of tools Mr Perry identifies as being
critical are the intelligence tools being brought
to dealers. “Intelligence tools such as inventory
management software enable dealers to use the
power of real data to guide their decisions,” he
says. “They can see which cars on forecourts
move most quickly, and how factors such as
price shape the time on the forecourt.
“The tools also show them which models are
in greatest demand, and help them match their
inventory to meet market demand, and how to
change the price of the vehicle during its time
on the forecourt.”
He continues: “The tools also help dealers
manage what they pay for a car, because they
can closely study current retail asking prices
rather than rely simply on wholesale guide
books.”
Mr Perry asserts that in the US, 80-90% of
all new cars are now searchable online, and that
this meets the needs of a large segment of
consumers who want to see real-time inventory.
The third party websites thus meet the needs of
consumers who want to cross-search between
new and used cars.
He is clear that consumers want to see the
actual car and see where it is before they start
the buying process. They want to see the
inventory at the dealership before they visit the
dealer.
Consumers also want to see real prices for
vehicles, not just the sticker price. By
advertising a real asking price, Mr Perry says
retailers are giving a signal of their willingness
to compete.
And with this has come a trend toward
greater transparency. “Consumers are
information seekers,” says Mr Perry, “so this
trend is irreversible. In the US, dealer invoice
pricing has been visible since 1996, so
consumers can see how much the retailer paid
the manufacturer for the car.”
It might be expected that this would lead to
consumers haggling harder and profits falling,
but Mr Perry asserts that US dealership pre-tax
profit margins have remained largely
unchanged, with gross profit maintained at
around $2000 per car. The thinking is that if
consumers have an appreciation of real prices,
they will treat dealers more fairly.
At the same time, Mr Perry says, even with
this greater transparency, there is enough
‘noise’ in the data that the retailer can talk their
way around what the consumer thinks he
knows so that everyone comes away thinking
they got a good deal.
Mr Perry is also clear on why models such as
‘click and buy’ have always failed, and why they
are unlikely to succeed even when there are
improved tools and ever greater transparency.
“Click and buy fails because the car deal is
too complex,” he says. “There are elements of
price, trade-in values, monthly payments, car
specification and trim levels. A consumer will
come into a dealer based on a search for a
particular car, but not all people actually end up
buying the car they think they want to buy.”
While a segment of consumers will always
want to try and complete the whole deal
online, Mr Perry’s view is that most consumers
want to go into the dealership, look at the
vehicle, touch it, and negotiate face to face.
Indeed, he says research shows that while
90% of consumers search online, two thirds will
walk into the dealership. This has implications
not only for way dealers market themselves and
their vehicles, but also for the way in which
they are monitored and measured.
“Even today manufacturers are trying to
measure dealers’ performance using metrics
such as how they respond to email,” says Mr
Perry. “But email represents only 10% of deals.
You can’t just focus in that way on what’s easily
measurable, because in this industry that’s not
the main way consumers interact with the
dealers.”
On his role at Auto Trader, Mr Perry
concludes by saying the company must remain
balanced fairly between the consumers and
dealers, but that there is an opportunity to
improve the car buying process in the UK.
“I am extremely excited to join the board of
Auto Trader,” he says. “We have a strong
position among consumers, dealers and OEMs
in the UK, and I’m excited about the things
the company is doing to help its customers
accelerate the adoption of online tools and
software solutions.”
Author Mark Simms is deputy editor of
Auto Retail Bulletin.
Photocopying these pages may break copyright law
www.auto-retail.com
Oct p7_Layout 1 07/10/2014 15:55 Page 1
Aftersales in the Digital Age
Aftersales is a vital revenue stream for franchised
auto retailers and critical to the success or failure of
most businesses. Yet it is often overlooked as the rest
of the business ‘goes digital’.
This exclusive Auto Retail Network report sets out to correct
that imbalance. It’s a best practice guide to adapting your
aftersales department to the digital age.
The report tackles both sides of the rush to digital. The first is
the change in consumer behaviour and the way in which
customers now expect businesses to respond to their needs.
The second is the role of digital as an enabler – offering us
tools to do our business better.
Aftersales in the digital age looks outside the auto retail
industry and features case studies of some of the world’s
most successful online retailers.
The report features the results of Auto Retail Network
aftersales research carried out with senior executives from
the industry during June 2014. It also draws heavily on the
opinions of an executive panel of industry experts.
Core content includes:
Understanding the market & the sector
Working within European regulation
Planning cost-effective marketing
Using digital to boost retention
The potential of the connected car
Digital and the business model
Aftersales in the digital age will help senior
auto retail executives understand the changes
that the digital revolution is bringing – and
offer some practical, realistic answers to the
questions that arise.
PRICE:
ARN members £245 (plus p+p)
Non-members £345 (plus p+p)
To order your copy of Aftersales in the digital age:
go online to: www.auto-retail.com
or call: 01572 724687
Oct p8,9_Oct p4,5 07/10/2014 15:55 Page 8
FINANCIAL
SHARE DROP ON GROWTH RATE FEARS
“
Cambria
Automobiles
told
shareholders
that it expects
to be ahead of
current market
forecasts
S
tock markets love growth; indeed,
companies which fail to deliver yearon-year growth (however profitable
they may be on an underlying basis) are
generally marked down. So, signs of a
slowing growth rate – even from
unsustainably high levels – are bad news
for share prices.
That would appear to be the cause of
September’s ‘red ink’ across global auto retail
stocks as both the UK and US sectors took a
tumble. The industry continues to deliver
good sales, sub-three year old car parc is
growing and used car values are stable; but
investors are nervous and auto retail has always
been seen as a high risk stock.
The figures also need to be seen in the
context of falling values across the wider
market. Our benchmark of the FTSE 350
Retail index also fell by 4.7% in the month.
In a quiet month for solid news, Pendragon
appeared to be supported by a cash injection
from GMT Capital which bought around 1.7
million shares to take its stake over 5%. It was
unclear if there was a single large seller.
“
AUTO RETAIL STOCKWATCH: EUROPE & US
CURRENCY CLOSING
PRICE
CLOSING
PRICE
%
CHANGE
31/08/2014 30/09/2014
Source: Houlihan Lokey
EUROPEAN RETAILERS
Bilia AB
D’Ieteren
Inter Cars
Kesko
Mekonomen
Stern Groep
SEK
EUR
PLN
EUR
SEK
EUR
186.0
31.5
205.0
27.7
162.5
13.1
194.0
30.7
214.0
28.4
156.5
12.8
4.3%
-2.3%
4.4%
2.3%
-3.7%
-2.3%
US RETAILERS
Asbury Automotive
AutoNation
CarMax
Group 1 Automotive
Lithia Motors
Penske Automotive
Sonic Automotive
($)
($)
($)
($)
($)
($)
($)
69.7
54.3
52.4
80.2
87.4
48.0
24.7
64.4
50.3
46.5
72.7
75.7
40.6
24.5
-7.5%
-7.3%
-11.4%
-9.3%
-13.4%
-15.4%
-0.8%
-4.7%
FTSE 350 General Retailers
AUTO RETAIL STOCKWATCH: UK
CURRENCY CLOSING
PRICE
CLOSING
PRICE
31/08/2014
30/09/2014
%
CHANGE
Source: Houlihan Lokey
UK RETAILERS
Caffyns
Cambria Automobiles
Inchcape
Lookers
Pendragon
Vertu Motors
(£)
(£)
(£)
(£)
(£)
(£)
575.0
51.5
673.0
140.3
31.0
57.5
555.0
51.3
644.0
134.0
33.0
56.0
-3.5%
-0.5%
-4.3%
-4.5%
6.5%
-2.6%
UK SERVICE COMPANIES
AA
Halfords Group
Nationwide Accident
Redde
(£)
(£)
(£)
(£)
281.5
480.6
67.0
59.8
322.5
474.5
85.0
74.0
14.6%
-1.3%
26.9%
23.8%
FTSE 350 General Retailers
8
OCTOBER 2014
News of the departure from Inchcape of
Andre Lacroix as chief executive came right at
the end of the month and too late to affect
our Stockwatch table. Speculation in the
industry is that the multi-national group will,
once again, look outside the industry for a
replacement though Joe Doyle (who resigned
from HR Owen earlier in the month) would
be available.
In a trading statement ahead of results for
the year ended 31 August 2014, Cambria
Automobiles told shareholders that it expects
to be ahead of current market forecasts and
trading in the first 11 months of the 2013/14
financial year has been substantially ahead of
the corresponding period in 2012/13.
Meanwhile, Caffyns announced that it had
exchanged contracts with Perth Securities for
the sale of an unwanted listed building and
land adjacent to its Land Rover dealership in
Lewes for £858,000.
UK SERVICE SECTOR
Maiden interim results for the AA to the end
of July, following the accelerated IPO in June,
showed that group
revenues increased by
%CHANGE
12 MONTH
1.6% to £491.7m
RELATIVE
HIGH LOW
TO INDEX
(2013: £484.1m) while
underlying earnings
were up, increased by
9.0%
222.0
136.8
3.9% to £211.8m,
2.4%
37.7
29.5
driven by roadside
9.1%
222.0
161.7
assistance.
7.0%
33.3
21.6
The group said
1.0%
221.0
148.8
underlying margins
2.4%
16.6
12.2
improved to 43.1%,
supported by
-2.9%
72.0
45.4
operational cost
-2.6%
61.2
46.8
efficiencies and that it
-6.7%
53.7
42.9
-4.6%
87.3
60.3
had recently won the
-8.7%
96.4
54.2
contract to provide
-10.7%
51.2
38.2
roadside assistance to
3.9%
27.8
21.3
Volkswagen Group in
the UK. It has also
retained business from
Lloyds TSB Autolease.
%CHANGE
12 MONTH
Shares in Redde
RELATIVE
HIGH LOW
TO INDEX
responded well to last
month’s strong halfyear results while
1.2%
650.0
430.0
Nationwide Accident
4.2%
58.0
38.0
also announced a
0.4%
695.5
556.5
successful half-year of
0.2%
150.0
115.3
growth.
11.1%
2.1%
39.8
66.5
27.3
51.5
19.3%
3.4%
31.6%
28.5%
326.3
511.5
90.5
N/A
229.8
370.5
60.5
N/A
-4.7%
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EUROPEAN
RETAILERS
For once, continental
European auto retailers
proved more stable
than their UK or US
counterparts as the
www.auto-retail.com
FINANCIAL
markets continued to show some signs of a slow
recovery. The introduction of scrappage in Russia is also
affecting groups which trade in used cars across the
border.
Swedish-based group, Bilia, took advantage of a jump
in new car sales in August to upgrade its sales forecast
for the year. Analysts said outlook for the balance of
2014 is good with stable consumer confidence, low
interest rates and declining used car inventories are likely
to support new car registrations going forward.
The group will report Q3 results this week.
US RETAILERS
US retailers suffered the same fate as their UK
counterparts as share values fell sharply across the board;
this despite light vehicle sales in September coming in
9% ahead of the same period last year.
Once again the issue would appear to be worries
about slowing growth rate. The September results were
slightly below forecasts and the seasonally adjusted
annual sales rate hit 16.4 million, also just below
analysts’ forecasts in the 16.5 million range but well
above September last year.
Typical was the reaction to CarMax, the largest used
car retailer in the market, which reported an 11% rise in
Q2 revenue to $3.6 billion as easier availability of credit
boosted sales. Net income rose 10% compared with a
year earlier to $154.5 million, or 70 cents per share.
However, this was below expectations and there were
also concerns about falling sub-prime penetration and
high per-vehicle expenses.
Fallout from upheavals in Brazil continue to affect
Group 1, despite the company continuing to expand
with the acquisition of the Munday Chevrolet and
Mazda businesses in Houston. The group is viewed as
‘positive’ on a long term basis but short term estimates
have been cut.
BEYOND ECONOMIC
REPAIR
by Chris Oakham
A recent test drive of a hybrid car awoke the engineer in me and
I found myself marvelling at the ingenuity of the designers.
That afternoon, I visited an independent garage where a
technician was changing the coil pack on a P-reg Peugeot 106.
The problem had been simple to diagnose, the fix equally
simple, and the happy owner drove away having parted with
£110. I then started thinking about what would happen 18
years hence when the hybrid developed a fault.
At the end of 2013, the average age of the UK car parc was 7.7
years – having increased from a low this century of 6.69 years in
2004. While this increase has a lot to do with the 25% fall in
new car sales between 2003 and 2011, cars are lasting longer
and 20-year-old cars are a fairly common sight on our roads.
According to the Department for Transport, there were 3.5
million licensed cars over 13 years old in 2013 compared to 2.5
million a decade ago. Proof, if it were needed, of the longevity of
modern motor cars. Proof too that when things do go wrong,
the cost of repairs aren’t always excessive, and generally don’t
cost more than the car is worth. But will this continue to be the
case?
In 2013, the most expensive jobs carried out by professional
providers were on gearboxes, clutches, transmission and drivetrain – on average over three-and-half times the cost of a
routine service. Fortunately for motorists, however, such jobs
were relatively few in number compared to servicing, tyres and
brakes (see graph below).
COST PER RETAIL JOB AND NUMBER OF
JOBS (2013) – PROFESSIONAL PROVIDERS
Nationwide Accident, the UK’s largest bodyshop and repair
operator, reported a substantial improvement in the
underlying trading results in the half-year to June 30, 2014.
The group said underlying profit before tax was up 86% to
£2.5m (2013: £1.4m) and underlying earnings per share up
91% to 4.4p.
Other
Battery/
alternator
Servicing
Number of jobs index
Source: Trend Tracker
Cost per job index
Brakes
Tyres
Engine/
cambelt/
cool/fuel
Exhaust
Susp’n/
steering/
wheel brg
Elecrical (incl.
engine
management)
PROFIT RECOVERY AT NATIONWIDE
ACCIDENT
Gearbox/
clutch/
trans/drive
Stockwatch benchmarks listed auto retail companies
against the FTSE 350 General Retailers index
The fact that drive-train jobs represent 10% of the number of
routine services is, of course, self-limiting because the high cost
means owners of older cars scrap them when repairs far
exceed the car’s worth. In the same way, insurance companies
write off cars when accident damage is ‘beyond economic
repair’.
The group has expanded with the acquisition of Exway, in
July 2013, Howard Basford in February 2014 and, last
month, Derek Gladwin in the East of England. The
acquisition of Gladwins is anticipated to be earnings
enhancing in the first full year following the acquisition.
So what happens when our present crop of highly complex cars
are 20 years old? I have no doubt that vehicle technicians are
more than capable of keeping up with the technology. And the
build quality of cars improves every year pushing back the
possibility of failures.
During the six months, group revenue of £90.0m (2013:
£79.1m) included £7.1m relating to Howard Basford and
approximately £3.0m from Exway. Insurance revenue, which
comprises 73% of the group’s activities, grew by 12% and
fleet revenue grew by 22%, which was almost entirely
organic.
However, when things do go wrong in the future, prohibitive
repair costs could be a factor leading to a decline in the number
of older cars on our roads, which some people would say is a
feature rather than a bug.
The company has plans to extend its presence in the higher
margin retail market.
www.auto-retail.com
So as I drove home that day, I wondered if that truly amazing
hybrid would make it to 18-years-old like the Peugeot.
Somehow, I doubt it.
Author Chris Oakham is a director of Trend Tracker
(www.trendtracker.co.uk)
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DECEMBER
9
OCTOBER
2014 2007
Oct p10,11_Oct p8,9 07/10/2014 15:56 Page 8
ANALYSIS
MID-YEAR SUFFERS PROFITABILITY JITTERS
by Mike Jones
“
T
he average UK motor
Anecdotally
KEY PERFORMANCE INDICATORS (NATIONAL AVERAGE)
retailer made a marginal
Rolling 12
Rolling 12
we know of a
Bench-mark
Key ratio
months June ‘14 months June ‘13
profit during July of
number of
SALES
£3,800. While this is better than
dealers who
making a loss, it is significant in
Used: New Sales
1.5:1 Minimum
0.91:1
0.87:1
performed
that it represents a step
Vehicle Sales Expenses
significant self backward from the prior year
61.68%
50% Maximum
63.2%
as % Gross
profitability, with the average
registration
dealership making £6,400 in July
Sales Per Salesman
exercises in
197
150
198
2013.
(Annualised)
June
This is beginning to become a
Used Vehicle Stock Turn
recurring theme, with profits being
45 days
56.4
54.73
In Days
lower than their prior year
comparatives in three of the seven
Used Car Profit Return on
80.8%
100%
82.0%
months making up the year-toStock (Annualised)
date.
AFTERSALES
It should be noted they were
80% Minimum
Overhead Absorbtion
56.4%
56.6%
small, mid-quarter months and
performance has been significantly
Overall Workshop Efficiency
82.0%
80.8%
100%
ahead once target bonuses are
75.8%
75% Minimum
Gross Profit on Labour Sales
75.9%
brought into the equation,
Service Expenses as % of
however it does show that retailers
40% Maximum
56.6%
57.3%
Gross
are selling significant volumes of
cars at decreasing margins as they
Hours Per Retail Job Card
1.65
2.5 Hours
1.65
strive toward hitting the
PARTS
manufacturer targets.
22.2%
21% - 23%
22.3%
Parts Gross Profit on Sales
While profits were lower,
turnover has continued to rise,
Parts Expenses as % Gross
44.7%
40% Maximum
44.7%
with average dealership sales up
Parts Stock Turn
7.84
8 times
8.15
11% in the month compared to
3%
1.35%
1.51%
Net Profit as % of Total Sales
July 2013. While this bodes well
for the achievement of quarter
three targets, and a significant
amount of vehicle sales bonus as a
positive momentum we were reporting
result, it does reinforce our belief about
earlier in the year appears to have abated.
dealers merely shifting metal to hit targets.
Looking in more detail at the statistics we
Indeed, while we have seen some months
see that aftersales contribution is increasing,
fall behind profitability levels earned in 2013 however it is being slightly exceeded by the
as noted above, this has not been the case
rate of increase in overheads. Given the level
for turnover. This has been on a relentless
of facility investment currently taking place
increase since December 2012 and, with
we expect overheads to continue to rise. We
many dealers producing record delivery
are also seeing dealers starting to take on
numbers in September, shows no sign of
additional admin and accounts staff to
stopping.
process increased volumes of transactions
Although it has fallen back slightly from
further pushing up back page expenses.
the June high, net profit as a percentage of
Service department volumes are increasing
overall sales has remained over 1.5% and
with the volumes of hours sold on the rise.
average profit per site has stabilised at
This is clearly being positively impacted by
£225,000. It will be interesting to monitor
the increase in the vehicle parc and the
these ratios as we move through the next
volume of internal work. While labour
months.
efficiency has only risen to 82% on a national
We will gain an indication from August,
average basis we are starting to see
however it will only be once the September
technicians being poached by competitors
statistics are compiled (and the bonuses
for the first time since the recession. This
recognised) that we will see whether dealers
will inevitably produce wage inflation.
are generating additional profit from all the
One matter which is being continually
additional turnover.
raised as we visit dealerships is the virtues of
Overhead absorption has been static at
service plans. At ASE we are strong
56% for the past three months and the
advocates of service plans as the businesses
OCTOBER 2014
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www.auto-retail.com
Source: ASE plc
“
10
Oct p10,11_Oct p8,9 07/10/2014 15:56 Page 9
ANALYSIS
which we visit who have the highest level of new and
used car customer retention, have a very high service
plan penetration. We are, however, currently seeing a
large differential in the sales process among
dealerships and brands.
The top performers are achieving high levels of
penetration without having to discount their retail
labour rate. This is achievable with the right sales
process. Convenience and certainty over costs is
enough to convince customers to sign up.
Unfortunately we see too many businesses going for
the discounted sale which is going to eat into gross
profit margins, particularly if we see significant wage
inflation.
In line with our expectations we have seen a rise in
used car average stand-in-values in June, which are
now back above £9,000, a 7% increase on the
comparative value in July 2013.
The increase in value appears to be down to general
price increases in the used car marketplace allied to
retailers holding newer vehicles in stock.
Anecdotally we know of a number of dealers who
performed significant self registration exercises in
June, which could see the dealers in significant
difficulty as we close the year.
Used car gross profits have not kept up with the
increase in prices and have remained static. We are
therefore seeing gross profit margins at their lowest
level for two years and on a downward trend. From
investigations we have performed with a number of
concerned dealers in the past quarter the reason for
this is that they are putting the same amount across
the vehicle and achieving a consistent level of gross
profit. The problem is that the asset is now worth
significantly more. This is accentuated among the
luxury car dealers where we frequently see used car
return on investment at 30% to 40% as a result of low
comparative margins and slow stock turn.
August typically is the largest loss making month of
the year for the average UK motor dealer being a mid
quarter month which is affected by a significant
volume of holidays. We do not expect 2014 to be any
different and are forecasting losses to be greater than
those made in 2013.
This will, however, all be caught up in September
once the quarterly bonuses are introduced.
Profitability looks to be remaining strong for the
remainder of the year as the market is forced by the
brands to achieve their desired registration targets or
market shares. The most profitable dealers will be the
ones who can successfully find end-customers for
those vehicles.
Author Mike Jones is chairman of profitability specialist
ASE plc (www.ase-global.com)
WHY YOU SHOULD KEEP YOUR FOCUS ON GAP
With competition in the GAP insurance market currently
under the scrutiny of the FCA, it’s important not to lose
sight of the positives.
Firstly, let’s keep in perspective that the FCA acknowledged
within their market study report there isn’t anything
fundamentally wrong with GAP insurance as a product and
that it does provide valuable cover for consumers. In
addition, they also turned up very little evidence to suggest
there were any issues with the sales processes employed
by retailers in relation to GAP.
No doubt, you’ll also be able to recount many cases when
one of your own customers has unfortunately had to call on
their GAP insurance following a write-off – I bet they were
very happy with their purchase decision weren’t they?
To further illustrate the point, the Financial Ombudsman
Service (FOS) recently released their latest complaints data
and complaints relating to GAP that reach the FOS are,
relatively speaking, few and far between. In the past full
year, there were 247 new GAP complaints referred to the
FOS compared to 309 the year before. To put that into
perspective, in the past full year FOS received 477 new
personal accident insurance complaints, 551 relating to
mobile phone insurance, 7,190 for motor insurance and,
perhaps not surprisingly, close to 400,000 in relation to PPI.
While ideally there would be even fewer GAP complaints
reaching the FOS, it is encouraging to see such a relatively
www.auto-retail.com
low number. It should give retailers confidence that GAP
insurance products continue to meet an important
customer need and the processes involved in selling it are
robust and working properly to deliver the right consumer
outcomes.
The FOS quarterly report also revealed the continuing trend
in the reduction of the number of GAP complaints being
upheld in the favour of the consumer. For the period
between April and June this year, just 16% of FOS
complaint cases relating to GAP were upheld in the
consumer’s favour. In the past full year that figure was 25%,
the year before that it was 28% and the year before that
44%.
This trend indicates GAP providers do, on the whole, have
good complaints management processes that, in the
majority of cases, lead to the correct decisions being made.
It’s important this is recognised as a positive for GAP
insurance. If you compare the 16% uphold rate for GAP in
the most recent quarter with, for example, motor insurance
where it was double that at 32%, you can feel confident
that GAP is a good product with good levels of customer
satisfaction.
Author David Parrondo is deputy managing
director at MAPFRE ABRAXAS, a partner in
Auto Retail Bulletin. You can contact them on
0845 6838795 or by email: contactus@mapfre.co.uk
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DECEMBER
11
OCTOBER
2014 2007
Oct p12,13 _Oct p4,5 07/10/2014 15:56 Page 8
FLEET
SME COMPANY CAR RISE PREDICTED
“
What is
clear is that
the role of the
traditional
fleet manager
is changing,
becoming
broader and
more
complex
C
ar and van retailers look set to
benefit from a more optimistic
outlook in the company car
market.
Figures from the 2014 edition of the
respected Corporate Vehicle Observatory
Barometer, by leasing firm Arval, show a
marked increase in the likelihood that
smaller businesses will grow their fleets in
the next three years. The growth rate for
larger businesses has eased.
With smaller businesses more commonly
buying or leasing direct from car retailers
and larger firms typically using lease
companies or going direct to car makers,
the swing from 9% looking to increase fleets
in 2013, to 17% in 2104 for SMEs is
positive news for UK franchised dealers.
Growth potential from larger fleets is still
positive, with a balance of 15% predicting
growth in the next three years. This figure
stood at 18% last year.
“
MOBILITY
Retailers also need to be aware that the role
of the mobility manager (rather than simply
fleet or car manager) is becoming a more
popular one in the UK.
The CVO Barometer suggests that for a
number of larger companies (100+
employees) the modern fleet manager has
much wider scope than just company
vehicles.
For around a third of larger companies,
there is a function that manages travel as
well as the vehicle fleet. This could
encompass things like train travel, flights
and taxis alongside the normal
responsibilities of a fleet manager. This
trend is even stronger in other European
countries surveyed than it is in the UK.
Mike Waters, Senior Insight &
Consultancy Manager at Arval explained:
“Traditionally the model within most large
companies has been to employ a specialist
fleet manager to manage all aspects of the
vehicle fleet while outsourcing non-vehicle
travel to specialist providers. This may still
be the case but it may also be that the fleet
manager has taken responsibility for these
supply arrangements. What is clear is that
the role of the traditional fleet manager is
changing, becoming broader and more
complex.”
Balance = Fleet growth will increase - Fleet growth will decrease.
Base: companies with corporate vehicles = 100%
FLEET GROWTH POTENTIALIN NEXT THREE YEARS.
% WHICH THINK THAT THE TOTAL NUMBER OF VEHICLES OF THEIR COMPANY FLEET
WILL...
Decrease
Increase
Balance
2014
Balance
2013
Balance
2012
Balance
2011
+ 17%
+ 9%
+ 17%
+ 12%
+ 6%
+ 4%
+ 4%
+ 4%
+ 15%
+ 18%
+ 10%
+ 14%
+ 12%
+ 10%
+ 7%
+ 14%
% OF COMPANIES WITH A FUNCTION THAT COVERS BOTH CORPORATE FLEETS
AND TRAVEL
36%
27%
12
OCTOBER 2014
41%
39%
UK
Europe
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SMEs
The new report shows that when it
comes to managing company
vehicles, small businesses continue
to lag behind larger companies
which could be costing them
money at a time when they can ill
afford it.
Across a number of key areas,
larger companies are much more
active on management techniques.
Less than 10% of companies with
fewer than 100 employees are
buying cars for low fleet CO2,
reporting on environmental
performance, communicating with
drivers to reduce costs or reporting
for accounting purposes. Fewer
than 5% are reporting on vehicle
reliability, utilising expert
consultancy, or using pool cars and no UK SME reported
implementing eco driver training.
Only 1% of small companies have
tackled grey fleet usage, an area
that not only has the potential to
lower cost but also poses a
significant duty of care risk.
In contrast, more than a quarter
of larger companies optimise and
report on vehicle CO2,
communicate with drivers to
encourage cost saving and report
www.auto-retail.com
Oct p12,13 _Oct p4,5 07/10/2014 15:56 Page 9
for accounting purposes. While these
larger companies can still do more to PERCEIVED EVOLUTION OF AVERAGE DURATION.
% WHICH THINK THAT DURATION OF USAGE IN THE COMPANY HAS…
better manage their fleets, many
demonstrate sound practices that
smaller companies could benefit
from.
“Smaller businesses could clearly
2013 2014
2013 2014
2013 2014
2013 2014
benefit from accessing the very same
external resources that help larger
Passenger Cars
fleets to optimise performance.
Increased
Many large fleets work in partnership
with a leasing or fleet management
Decreased
2013 2014
2013 2014
2013 2014
2013 2014
provider and reap the benefits of
access to this specialist resource.
Fleet size does not preclude any
Light Commercial
company from working with fleet
Vehicles
policy and management experts,”
said Mr Waters.
“It is understandable that a small business will have
CONTRACT HIRE
less in-house resource to allocate to the running of
The majority of UK fleet professionals expect vehicle
the vehicle fleet, but in neglecting their fleet policy
resale values to fall this year while at the same time
they may be exposing themselves to a higher degree
the take-up of contract hire is expected to grow.
of risk and additional costs.
Increased certainty and a reduction in fleet risk
“While not all of the policies that larger companies
exposure are the key drivers for this.
have in place are practical for their smaller
The majority of the fleet professionals surveyed
equivalents, by taking a pragmatic approach, there are
expect vehicle resale values to fall this year and fleet
definitely initiatives that they can quickly implement
professionals in the UK are generally more pessimistic
which would make a significant difference.
in their outlook than their counterparts in other
“Poor fleet practises cost small businesses money,
European countries.
expose them to risk and potentially damage their
This view comes as no surprise with economic
reputation. In the current economic climate, they
conditions remaining difficult but also reinforces the
can’t afford to get things wrong.”
case for fleets to turn to contract hire.
Removing a company’s exposure to the risk of
VANS
selling vehicles on the second hand market, it replaces
New research shows the length of time that
companies are running their light commercial vehicles this exposure with a fixed monthly cost for their
vehicles.
for is increasing.
Indeed, the research shows fleet professionals at
This trend is most prominent among the largest
larger companies intend to develop the use of
businesses where companies seeing an increase in
contract hire at a stronger rate than other finance
duration far outweigh those seeing a decrease.
options, a move that is likely to have been influenced
Mr Waters explained: “It is not unusual for
by current economic conditions.
companies to run their vans for longer than cars.
Mr Waters added: “These are clearly things that
Because they are predominantly a business tool and
provide benefit to companies at any time, but often
not part of a salary package, essentially van drivers
take on even greater significance during an economic
have very little if any say over the vehicles that they
downturn when as the research shows, cost pressures
drive.
are at their peak and organisations crave stability.
“It is important to remember that while extending
“The risk of the second hand vehicle market is a
the period of the contract may look like an attractive
major reason why organisations opt for operational
option because it is perceived to be cheaper, it may
not be in the longer term. Running costs can escalate leasing packages rather purchasing vehicles
themselves. In recent years the used vehicle market
as a vehicle gets older which is why it is important to
has been volatile and we have seen significant
consult with fleet management experts on the
fluctuations in used vehicle values.
optimum time for replacement.
“In our experience, the main concerns surrounding “For companies of all sizes, contract hire is a smart
longer contracts relate to the condition of the vehicle option to take because of the stability and certainty
that it provides.”
as it is more likely to pick up damage, the company
perception that using dated or damaged vehicles
Extracted from the 2014 Corporate Vehicle
creates, an increase in vehicle downtime and
Observatory Barometer, from Arval. More information
maintenance costs and the potential increase in end
at www.arval.co.uk
of contract charges.”
www.auto-retail.com
Photocopying these pages may break copyright law
DECEMBER
13
OCTOBER
2014 2007
‘Don’t know’ and ‘Remained the same’ not displayed. Base: companies
with Light Commercial Vehicles or Passenger Cars / Excluding second.
FLEET
Oct p14,15 _Oct p4,5 07/10/2014 15:56 Page 8
AFTERSALES
AFTERSALES IN THE DIGITAL AGE
“
If we're
not careful,
we'll end up
offering
businessclass services
for Ryan Air
prices
T
here are underlying issues of viability
in the aftersales market, but the digital
age brings with it new opportunities.
Importantly, we mustn’t let price become the
battleground.
These were among the points discussed at
Auto Retail Network’s conference on Aftersales
in the Digital Age, held in partnership with
Total and EMaC.
Providing the morning session’s keynote
address, Mark Squires, chief executive of
Benfield Motor Group spoke on the topic of
building an aftersales strategy. His thought
provoking presentation looked at the dramatic
changes that have already impacted on
profitability, insisting that these were issues the
industry needed to discuss.
“
CRAZY ECONOMICS
Among the issues he brought up was ‘crazy
economics’, questioning the value of offers such
as free vehicle health checks and service plans.
“Of course we have a duty of care,” he said,
“but a free vehicle health check is not free for
the dealer.”
With a typical health check taking 20 minutes
or more, Mr Squires said the free vehicle health
check actually represents a 15-20% drag on
efficiency and is costing real money. “Is it an
intelligent use of time?” he asked. “There is
potential, but there are also lots of issues. What
is the net marginal yield?”
He went on to describe service plans as a
potentially expensive tactic for customer
retention. “It’s often offered on new cars –
either free or at discounted prices – so it’s not
surprising there’s good uptake, but what are we
actually trying to achieve?”
Arguing that new car buyers and loyal
customers would probably have their cars
serviced at the franchised dealer anyway, Mr
Squires said: “It’s certainly difficult to make a
case for service plans based on retention alone.”
Further, he questioned who controls the
pricing. “We have unwittingly deferred decisions
to the people coming off the line, or the
manufacturers have taken control of pricing,” he
said, questioning whether either of these was in
the best interests of the dealership. “Are the
manufacturers ready for that responsibility, and
do they understand the impact?”
His discussion on ‘crazy economics’ went on
to look at issues such as service interval
confusion, how price match guarantees simply
meant giving away margin, and the ‘courtesy car
conundrum’.
He concluded: “If we’re not careful, we’ll end
up offering business-class services for Ryan Air
prices. We can’t accept price as the battleground
for aftersales. What we need is more innovation,
particularly in digital, to highlight quality and
promote differentiation.”
14
OCTOBER 2014
GEN Y
Mr Squires was followed at the podium by Paul
Dillamore of Urban Science, who began a
session on ‘the changing marketplace’ by
looking at demographics and customer
expectation. Among the issues he noted were
the changing habits and perceptions among Gen
Y car buyers, and that women often feel
misunderstood by car manufacturers.
He also looked at the impact on aftersales of
websites such as WhoCanFixMyCar.com, which
now claims nearly 50,000 users and 96%
recommendation rates.
Also talking on the subject of the changing
marketplace, Simon Crace, client services
director at MB Advertising highlighted costeffective strategies for aftersales marketing.
Importantly, he noted that 55% of emails are
today opened on a mobile device, and that 98%
of texts are viewed within five seconds.
This throws up challenges to traditional
advertising, but also opportunities for innovative
approaches.
CUSTOMER LOVE
A lively panel session with Mike Jones of ASE,
John McGuire, chairman of Phoenix Car
Company and Simon Oldfield, managing
director of the Customer Services Group of
Mercedes-Benz UK, continued the debate into
the changing marketplace, before Duncan Watts,
property and e-commerce industry head at
Google took the floor.
Speaking on the subject of ‘how others love
their customers’ he highlighted how the ‘human
touch’ is the biggest differentiator for
companies. “What we have found from Google
surveys is that the companies who succeed are
ones who do the basics well and who find ways
to ‘put the magic in.’
“People will forget what you said. People will
forget what you did. But they will never forget
how you made them feel.”
Looking at new digital marketing tools, Mr
Watts argued that it wasn’t enough simply to
keep pace with change. “To grow,” he asserted,
“your business must exceed the pace of change.”
Explaining how you do this, Mr Watts
discussed the Google principle of ‘10x thinking’.
“You take a problem, disregard all current ideas
to address the problem, and you come up with
something else. You’re not making something
incrementally different: instead you are
fundamentally changing something for good.”
AFTERSALES REPORT
Auto Retail Network’s own research on
aftersales in the digital age, presented by
managing director Rupert Saunders highlighted
that while six out of 10 senior auto retail
executives believe digital technology will either
‘significantly’ or ‘totally’ affect their aftersales
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www.auto-retail.com
Oct p14,15 _Oct p4,5 07/10/2014 16:07 Page 9
AFTERSALES
business, to date few franchised auto retailers have made he
step change necessary to become truly digital and omnichannel at a car sales level, let alone an aftersales level.
Radical new business models are notably absent,
especially in the workshop. “Most of the ideas have been
around for a long time,” said Mr Saunders. “Isn’t it time
we started to look at something more radical?”
Importantly, the report notes that a whole new
generation of customers who have grown up in the digital
age are almost upon us. The challenge is to adapt to a
world in which customers are in charge and digital is a way
of doing business.
CUSTOMER OWNERSHIP
Mike Norridge, international product marketing manager
at ADP Dealer Services examined ‘Tools you can use to
make it happen’. He not only highlighted a number of
software tools and services, but left us with a highly
thought-provoking question: “Who owns the customer?”
A panel discussion followed, with David Hawkins,
founder and director of Loyalty Logistics, Alex Rose,
marketing director of WhoCanFixMyCar.com, and Scott
Sinclair, industry manager at Google.
Focusing on customer loyalty, the panel argued that it
was important to reward customers, and to allow them to
earn benefits. A key point raised was that it was vital to
create ‘barriers to exit’, so that customers were less likely to
look elsewhere for services.
An important point raised by Mr Rose on the subject of
aftersales was that price is not the biggest issue.
Highlighting the habits of visitors to
WhoCanFixMyCar.com, he said: “People generally have a
ballpark window of price that they think is about right.
They will generally rule out anything that looks too cheap.
Then it’s about customer feedback.”
This led on to a discussion among the panel of the
importance of capturing customer feedback. “If it’s good,
you can use it in your marketing,” said Mr Rose. “If it’s
bad, you can do something about it and show that you’re
taking action.”
The panel also focused on increasingly smart shoppers
who are making more informed decisions. It was noted
that as many as 17 different touch points are usual,
including phone calls, email, texts, websites, social media
and many others that the dealer may never know about.
Once you know how customers are using these touch
points, you can get smarter about how you engage with
your customers.
LOYALTY LADDER
The event was concluded with the day’s second keynote
address, looking at why customer care programmes fail
without authentic leaders. Julia Muir, lecturer on customer
loyalty and relationship marketing at Loughborough
University discussed the importance of the ‘loyalty ladder’.
She outlined how the customer journey starts at the
bottom of the ladder as a suspect. Moving up the ladder,
the next stage is a prospect, and then a customer as the sale
is made. But Mrs Muir argued that the journey should not
stop there.
“The relationship has to be developed, so that the
customer moves up the ladder to become a client, enjoying
perks and rewards,” she said. “But the ultimate goal is to
move the customer to the top of the ladder as an advocate,
where there is a real emotional involvement.”
www.auto-retail.com
DECIPHERING BIG DATA
We recently sponsored and spoke at Auto Retail Network’s
'Big Data is a Big Deal' event. Harnessing the power of this
data is essential to every modern company everywhere in
the world and for automotive retail businesses, their
approach to, and management of big data could be the
difference between success and failure.
While the importance of gathering and understanding
customer data is nothing new, the internet, mobile phones,
connected cars and online retailing offer countless new data
sources and channels for doing business. Despite the
rapidly growing importance of big data to business success,
few automotive retail managers really understand this fairly
abstract concept, so fail to harness its potential.
In simple terms big data is just a collection of information –
in our world, this is primarily about cars and customers. The
scale of this data is almost unlimited, hence its description –
big data. However, the myriad information sources are only
useful, and crucially profitable, if it is closely managed and
totally integrated across all dealership functions and then
across all sites in a group. This management and integration
of data is where most automotive retailers fall down, failing
to capitalise on free, business- and relationship-boosting,
information that can transform efficiency and boost profits if
handled in the right way.
Right now, every dealership should be gathering this hugely
valuable data about their customers. By understanding
everything from the publications they read and their driving
profile to lifestyle choices and servicing preferences, dealers
can enrich the picture an integrated dealership has of is
current and potential customer base.
Big data is here now and its importance to automotive retail,
aftersales, customer retention and lead generation will only
continue to grow in importance. Dealers can no longer rely
solely on the size of a customer database or the reach of
PR or paid-for marketing. Once initial contact has been
made – in any form – the customer relationship should
never end. This approach ensures that the data gathered
simply grows as customers continue to interact with the
dealership (remotely or onsite).
While the evolving world of customer relations and
management of their data is a moveable feast, one certainty
is that the relationship is definitely becoming more
fragmented, touch points are fewer and interaction is less
personal. I’d suggest that instead of resisting this inevitable
shift, dealers and dealer groups should embrace the
opportunity. They should identify every opportunity to gather
valuable data, record it intelligently, integrate the information
across every dealership function and build their world
around big data to secure and grow their businesses.
Author Neil Packham is UK vice president and
managing director for CDK Global a partner in Auto
Retail Bulletin. Find out more at www.cdkglobal.co.uk
Photocopying these pages may break copyright law
DECEMBER
15
OCTOBER
2014 2007
Oct p16,17_Oct p16,17 07/10/2014 15:56 Page 8
BRAND INSIGHT
NETWORK GUIDE: LEXUS
by Hugh Hunston
L
exus, marking 25 years in the
NETWORK INFORMATION: LEXUS
UK market this month, is
aiming to double its loyal
• Sales last year: 9014
retailer network’s current average
• Predicted sales this year: Over 11,000
return on earnings to what brand
• New car sales network size 2014/2015: 46
director Richard Balshaw described as
• Open points, in numbers and locations: 0
normal premium brand profitability
• Authorised repairer network size: 53
levels of at least 2% within two years
from what he admitted are frankly
• Overhead absorption figure: c.54%
insufficient levels.
• Network profitability: c.0.9%
Mr Balshaw said restoration of
• Minimum new car showroom size: (city/rural) 6/4
adequate profitability and morale across
• Online customer response time criteria: One working day
the 46 Lexus centres marked the
continuation down the brand’s recovery
“Awareness and consideration remain big tasks
path after the challenging post-2008 Lehman
Brothers collapse which saw UK Lexus volume go for us so we will invest 25% more on media this
year and again next year to match sales growth
into rapid decline from a 2007 peak of 15,000 to
moving back over the 10,000-unit threshold to
6,000 sales during 2010.
11,300 cars this year.”
Despite coming eighth in the recent NFDA
Although Lexus does not plan to change what
poll on franchise value, behind Land Rover,
it calls network density with no open points Mr
Mercedes, BMW and Audi, due to relatively low
Balshaw said that if geographical challenges come
returns according to Mr Balshaw, he forecast that
Lexus would achieve up to 16,000 registrations in to light with volume growth one or two new sites
might be established.
2016.
He said: “We stood by the network in difficult
He said: “This year’s total should be up nearly
times providing support when it was needed. Part
26% and we plan to repeat that in 2015 with new
of that involved maintaining overhead absorption
products like the NX SUV coming through.
at a 54% industry norm. That was despite our
Despite some tough times our network has been
parc of up to eight-year-old cars diminishing from
patient and loyal, with very few people giving up
over 100,000 to 87,000 cars and falling warranty
the franchise, as it remained profitable.
throughput. We maintain strong retention levels
with up to 80% of new car buyers taking service
THE ANALYST’S VIEW
plans. Dealers can see we are serious about our
UK presence.”
Lexus in the UK is close to being invisible beyond a loyal and fairly
Responding to retailer unrest about allegedly
hard-core minority clientele. After nearly 25 years in the British market
its inertia remains down to brand awareness or lack of it. It is not about
over complex CSI and sales target bonus
having a poor image, but having one at all and one that is clearly
structures Mr Balshaw said Lexus planned to
defined.
simplify the system early next year in consultation
with the dealer council.
The time is ripe for a total brand re-launch, below a corporate
He added: “Our dealer council has a major
excellence halo, with several new products coming through to fill
influence through quite vocal dialogue and
yawning gaps, like the NX compact SUV and RC350 coupe.
challenging meetings. There is no benefit for
The more distinctive new cars embody high technology and have
them or us in having over complex programmes
Lexus’s cast-iron reliability reputation, having previously lacked identity
which only hold back performance.”
and suffered from the bland leading the bland syndrome, plus hybrid
Addressing the issue that retailers will not
technology dependence.
generate sufficient funds to invest in a corporate
Within our ultra brand-conscious premium sector Lexus’s basic
identity refresh programme, due to be applied
marketing problem is the ‘not for me’ syndrome. For too long they
over the next three or four years, Mr Balshaw said:
have been perceived as being USA-centric but even worse many
“An average of between £100,000 and £150,000
uninformed people think they are American cars, which is anathema.
is a reasonably modest commitment and we will
help through in-house leasing finance options.”
I would adopt a carefully targeted bout of presence marketing, to bring
The head of Lexus since April 2011 said it
Lexus onto consideration lists. It needs some subtlety, more below
would not compete in the backyard of Germany’s
than above the line activity. That avoids the cost, clutter and noise
involved in seeking higher share of media and TV advertising voice.
dominant premium manufacturers at their own
game, but remain a challenger brand with
Lexus’s global approach excludes diesels: fine in the USA, but a major
consistently improved recognition and
European and UK operational handicap. Tougher EU emission
consideration levels during the past three years.
standards should put diesel under increasing technological and cost
He forecast the new NX SUV and CT coupe,
pressure, which might help Lexus. Good CSI results generate strong
with respective targets of 3,500 and 1,000 units
loyalty and re-purchase rates but that does not equate to high
annually, would emulate the CT200h’s sustained
conquest factors through preaching to the converted.
70% conquest level. A new CSI initiative is also
Professor Kevin Morley, Aston University Business School
underway, aimed at improving the customer
“
The carretailing sector
is unique in not
knowing how
much you make
at handover
“
16
OCTOBER 2014
Photocopying these pages may break copyright law
www.auto-retail.com
Oct p16,17_Oct p16,17 07/10/2014 15:56 Page 9
BRAND INSIGHT
journey though applying feedback rapidly
LEXUS MODEL REGISTRATIONS
and responsively to suit individual centres.
2012 Units 2012 Share 2013 Units 2013 Share 2014 Units 2014 Share
Model
From a retailer perspective Keith
CT
55.97%
4704
46.38%
38.29%
4181
1744
Duncan, managing director of the multi
GS
8.13%
683
7.69%
7.40%
693
337
franchise, Edinburgh-based EasternIS
12.45%
1046
21.95%
36.60%
1979
1667
LS
0.24%
20
0.84%
Western Group, said the Lexus franchise,
0.66%
76
30
RX
23.19%
1949
23.13%
17.06%
2085
777
which the company has held since 1998,
LF-A
0.02%
2
remained a double-edged challenge.
Total Lexus
0.41%
8404
0.40%
0.43%
9014
4555
Eastern-Western provides sole Lexus
representation in Scotland with Edinburgh
average of 0.42%, while BMW and Mercedes account for
and Glasgow outlets, turning over £40 million out of the
4.6% and 3.4% respectively in our territories and Audi takes
group’s 15-franchise, 25-site £450m annual total and this
5.7% of the Scottish market. Lexus remains something of a
year targeting 700 new Lexus sales, 35% up on 2013.
rarefied franchise, with pretty thin air up there. We have
While the average Lexus UK network return on earnings
been doing it for a while and are not bad at it with a good
is below 1% this year, with Eastern-Western registering
hit rate from a limited line up.”
above 1%, Mr Duncan said: “It is a challenge within our
Mr Duncan maintained that colossal German ranges
group because other premium brands we represent,
dictated larger, land-hungry premises, plus more staff and
(Mercedes and BMW) plus Audi enjoy higher shares of
voice and market presence. You spin the Lexus plates but
overheads. Lexus enjoyed the blessing in disguise of smaller
the minute one falls off you lose profit centre money.
operations, remaining lower-volume viable businesses with
“Lexus stands at 0.26% in Scotland versus a British
good sales and service hit rates.
It is understood that BMW dealerships in Scotland require
£20,000 daily revenue break-even levels while EasternKEERESOURCES’ VERDICT
Western’s two Lexus sites, are closer to a combined
£16,000.
Lexus has a genuinely interesting and novel product
portfolio but remains confined to niche status, due largely
He added: “Pro-rata returns related to working capital are
to petrol-hybrid dependence, the technology restricting
pretty fair. The franchise lacks that comfortable tipping point
business car appeal due to many companies maintaining
where volume and scale become self-perpetuating in terms
diesel-only policies.
of parc and throughput. That is why the new NX SUV is
crucial. We are virtually sold out with just 40 cars for
This particularly inhibited the CT200h, which has under
Scotland. It was delayed from September to October and
achieved in sales terms, although Lexus responded rapidly
and modified its CVT transmission to counter criticism of
there has been a disproportionately strong response. If we
an unrefined driving experience under acceleration.
get sufficient NX numbers and the rest of the range sustains
volume it could represent a step change.”
That supposedly breakthrough model has had to run to
Commenting on Lexus’s NFDA poll rating, behind
stand still as the cost-effective new Audi A3, Mercedes Apremium
rivals, Mr Duncan said: “Sadly that over-states
class and second generation BMW 1-series landed in
network morale out there, reflecting lack of profitability.
quick succession.
Lexus’s UK management are eminently accessible and
Lexus’s great hope is that more stringent Euro6 emissions
reasonable but they are requesting heavy new CI
regulations put hybrids on more radar screens and the
investment.”
dominant German premium brands sell more of them,
The Lexus veteran argued there was a disconnect between
raising awareness and consideration levels. Expect the
investing
potentially six figures without equivalent annual
usual suspects to continue upholding the diesel cause,
revenue being generated and any Lexus funding had to be
striving to maintain eco credentials and minimise cost
increases.
offset by sufficiently rapid turnover.
Despite running what he described as a specialised and
Volume growth of 29% for Lexus looks significant but
specialist franchise with dedicated staff, Mr Duncan said
leaves it below 0.5% of the market. Network viability,
Lexus, in common with other brands, over complicated the
particularly overhead absorption, must be challenging for
running of franchises through prosaic CSI and sales
standalone operations.
performance bonus structures.
There is nothing wrong with Lexus being perceived as an
He said: “Lexus is not unique with systems dreamt up by
upmarket complementary Toyota counterpart and there is
folk who appear not to understand this business, that make
merit in sharing resources and facilities.
us jump over hurdles doing deals at an initial loss. Then we
claw back via complex mechanisms, schemes within
There are great expectations for the distinctive new
schemes. Keep it simple; we know how to run our
compact NX SUV but with a modest annual target volume
businesses. The car-retailing sector is unique in not knowing
of 3,500 units it will be limited to worthy minority player
status. Along with the RC coupe there are two reasons for
how much you make at handover.”
dealers to be cheerful.
Mr Duncan praised Lexus for becoming less USA-centric
in
its product portfolio and applying more frequent model
We believe the NX can have a stable extended RV
refresh
and replacement cycles. Ever more reliable products
honeymoon, and in whole-life-cost terms it ranks just 0.65p
meant negligible warranty income and the predominant
per mile dearer than an equivalent BMW X3 X-drive over
hybrid powertrain is consistently more reliable than most
three years and six months and 1.8p cheaper than an Audi
Q5 quattro.
diesel counterparts.
Mark Jowsey, manufacturer liaison director,
KeeResources.
www.auto-retail.com
Author Hugh Hunston is Auto Retail Bulletin’s
new car expert
Photocopying these pages may break copyright law
DECEMBER
2007
OCTOBER
2014 17
Oct p18,19_Oct p8,9 07/10/2014 15:56 Page 8
EUROPE
MAKERS SNUB VOLUNTARY CODE OF CONDUCT
by Tristan Young
“
It is not
ranchised retailers will have to rely on
our plan to
legislation from the European
Commission to clamp down on unfair
agree to a
trading
practices after ACEA, the organisation
code
that represents European car manufacturers,
said it does not intend to agree a post-Block
Exemption code of conduct.
Speaking to Auto Retail Bulletin at last month’s
European Car Dealer Conference organised by
CECRA, Marc Greven, ACEA’s legal affairs
director, said the organisation wasn’t planning to
commit to the code of conduct which is currently
on the table.
The code of conduct has been worked on by
CECRA over the past year as a way of making car
makers commit to fair play with retailers following
the European Commission’s scrapping of Block
Exemption in May 2013. The aim of the code of
conduct is to reduce unfair trading practices
between manufacturers and retailers.
“It is not our plan to agree to a code,” said Mr
Greven. “This is because we see this as something
that is between individual manufactures and
retailers. It comes down to contract level.”
He added that it was not ACEA’s job to work on
this. “We work on the legal side, that’s our job.”
The ACEA stand-point means that retailers
across Europe must now rely on a commitment by
the European Commission to seek a legislative
F
“
pop them on
your card.
solution if a code of conduct isn’t reached by the
end of 2014.
However, even this is not guaranteed. The EC
changed its wording this year from “intends” to
“reserves the right” to bring in legislation on unfair
trading practices.
Speaking at the CECRA conference last week,
Carlo Pettinelli, director of industrial innovation
and mobility industries, at the EC’s DG Enterprise
and Industry said the wording was changed
because he couldn’t promise something on behalf
of a the next DG. Indeed, the new DG will oversee
a larger department also including internal markets.
He did, however, add the subject was firmly in the
minds of the department.
Bernard Lycke, director general of CECRA, said
the lack of regulations particularly exposes smaller
rather than larger dealer groups.
“CECRA predicted there would be more unfair
trading practices, due to the lack of regulation,”
said Mr Lycke. “And in early 2013 we published a
report following lots of dealer feedback.”
He recommended that because of the lack of
progress with ACEA, individual countries should
lobby their governments for local level laws pushed
by national organisation, “even if it means a
fragmentation of the markets”.
Author Tristan Young is the
editor of Auto Retail Bulletin
Let’s
g
BCA lets you buy today
and pay later.
From now on, ADP Dealer Services will be CDK Global.
This is just the next step in our journey.
And part of our ongoing commitment to drive success for our
clients around the world.
Here’s what we promise to do.
Simplify our products so your job is easier
Innovate new ways to connect you with your customers
Serve you as a trusted partner
We’ve developed a trade buyer finance facility to help you grow
your business. Once you’ve been approved, you can buy vehicles
in any of our auctions. We will fund the hammer price, fees, VAT
and also delivery costs, and you don’t have to pay a penny until
you sell the vehicle.
Deliver business insights you can act upon.
Helping you grow your business.
Formerly
Dealer Services
For more information please visit
www.cdkglobal.co.uk
bca.co.uk/partnerfinance
18
OCTOBER 2014
Photocopying these pages may break copyright law
www.auto-retail.com
Oct p18,19_Oct p8,9 07/10/2014 15:56 Page 9
EUROPE
RETAILERS WARNED ON DATA SUPPLY
C
CORE PRINCIPLES
ar retailers have been warned to make
sure they are aware of data supply
5. Data must not be kept longer than
1. Data must be processed fairly and
necessary
lawfully
agreements within their franchise
contracts.
6. Data must be processed in accordance
2. Data must be processed for specified,
Speaking at the European Car Dealer
with individuals' rights
explicit & legitimate purposes
Conference Miles Trower, a partner at solicitors
TLT, said that retailers must weigh-up the worth
7. Data must be kept secure
3. Data held must be adequate, relevant
and not excessive
of such agreements.
8. Data must not be transferred outside the
“Data laws have been around for a long time,
EEA unless adequate protection is in place
4. Data must be accurate and date
but data collection is growing faster than ever,”
said Mr Trower.
“Data is key to growth. Who owns the data; car
“However, if a dealer agreement allows for data to
makers or dealers? And if it’s supplied to the other
pass to the manufacturer then the ‘who owns it’
then can they use it?
argument is academic.”
“Each customer has control of their data, but they
Mr Trower said one solution was to use separate
can provide consent for it to be used. But this must
databases for different business departments:
be clear. However, the database structure can be
“Separate databases can be an advantage [particularly
owned by a company.”
in the sale of a business or the loss of a franchise]. So
Mr Trower added that data laws are under review
you could have a new car database, used car database
and are likely to get stronger.
and an aftersales one, not just a single one including
“The dealer’s contract with the manufacturer should new cars.
cover data, but often doesn’t. There is increasingly
“It can be worth it to sign-up to an agreement to
broad use of data by car makers. Permissions can
supply data to the manufacturer, but the judgment
cover new cars – connected cars – aftersales and so on. must be made by retailer.”
TAKING ANALYTICS TO A NEW LEVEL
Today’s analytics infuses and enhances all areas of
automotive retail. It enables OEMs to offer a personal and
seamless customer experience. It increases employee
engagement and drives more efficient business processes.
However, in order to harness its power, OEMs require a
KPI-driven implementation strategy that is flexible, scalable
and tailored to their business goals.
Embracing analytics allows OEMs to create a more
differentiated brand experience for automotive consumers.
To do this they require a partner capable of offering that
rare combination of thought-leadership, deep industry
experience and appropriate technology tools.
Only then can they transform the vast quantity of available
customer and vehicle data into profit-generating insights
throughout their organisation. The bottom line is that
success hinges on a KPI-driven approach that secures
optimal connectivity between the car, the customer and the
retail experience.
There are three key objectives of a data-driven retail
strategy:
1. Turn big data into action by identifying a customer’s DNA
– the patterns and factors that lead to sales – and use
analytics and data modeling to provide the insights that
improve dealer performance.
2. Implement a people@retail program to ensure that sales
and service employees have the data, tools and
techniques necessary to evaluate and improve customer
experiences.
3. Create a connected retail strategy that automatically
corrects sales strategies to reflect customer needs so
www.auto-retail.com
they don’t abandon your brand in favour of a competitor
more in tune with their desires.
REINVENTING RETAIL IN A BIG DATA AGE
In today’s multichannel retail environment, your dealership is
only one stop along the customer journey.
If you want to maximize the impact of your retail network
you have to build your retail strategy around a digitalphysical fusion – achieving excellence at every touch-point.
At MSXI we have been researching the impact of big data
for some time. We have worked with several global
automotive brands to develop integrated and proactive
approaches that anticipate customer behavior as well as
identifying and preventing customer defection before it
happens.
In addition to data analysis we provide sales coaching and
talent assessment as well as customer retention strategies,
mystery shopping, social listening, live chats, call screening
and contract labour utilisation. As a result we have
discovered that the development of proprietary customer
insights combined with distinctive data capabilities not only
generates new revenue streams but also accelerates long
term business growth.
MSX International is the one of the leading global providers
of outsourced business and training solutions. With 5000
industry experts globally, we offer solutions and tools based
on more than 70 years of hands-on experience in
automotive retail network and human capital solutions
spaces.
Author Felix Serrano is vice president UK, Iberia and
Latin America of MSXI (www.msxi.com), a
commercial partner in Auto Retail Bulletin
Photocopying these pages may break copyright law
DECEMBER
2007
OCTOBER
2014 19
Oct p20,21_Oct p19,20,21 07/10/2014 15:57 Page 1
ANALYSIS
MANUFACTURER PROMOTED RETAIL FINANCE OFFERS
MAKE & MODEL
ALFA ROMEO
MiTo, Twinair Sprint
Giulietta
1.4 Progression
1.4 Progression
Quadrifoglio Verde
AUDI
A1
Sport 1.4
Sportback Sport 1.4
A3
Sport 1.2
Sportback 1.2
A4
Saloon SE Technik 2.0 TDi
Avant SE Technik 2.0 TDi
RS 4 Avant 4.2 FSI
A5
Sportback S Line 2.0
Coupe S Line 2.0
RS5 Cabriolet 4.2
Q3, S Line Plus 2.0 TDi
CITROEN
C1, VTi
C3, VTR+
C3 Picasso, VTR+
DS3, DStyle
DS4, e-Hdi 115
C4, Cactus
C4 Picasso, Hdi VTR+
Grand C4 Picasso, e-HDi
FIAT
Panda
Pop 1.2
Easy 1.2
4X4, 1.3
Punto
Pop 1.2
GBT 1.2
500, Lounge 1.2
500S
1.2
0.9 Twinair
500L
Trekking 1.6
MPW Pop Star 1.4
FORD
Ka, Studio 1.2
Focus, Studio 1.6
Fiesta
Studio 1.2
Titanium 1.0
B-MAX, Titanium 1.0T
C-MAX, Zetec 1.6
Kuga, Titanium 2.0
S-Max, Zetec 2.0
HONDA
Jazz, 1.4 i-V-TEC
Civic, 1.8 SE Plus
CRZ, 1.5 Sport
CR-V, 1.6 i-DTEC
Accord, 2.0 i-VTEC
HYUNDAI
New generation i10, SE 1.0
i20
Classic 1.2
Active 1.2
ix20
Classic 1.4
Style 1.4
i30
Classic 1.4
Sport 1.6
i30 Tourer, Classic 1.6
ix35, SE 1.6
i40, Active 1.7 CRDi
i40 Tourer, Active 1.7 CRDi
OFFER OTR
OFFER
DEPOSIT
MONTHLY PAYMENT
£18,750
PCP, £1,000 dealer contrib
£2,464
48
£18,750
HP, £500 dealer contrib
£7,918
36
£30,770
HP, £2,000 dealer contrib
£12,102
36
Interest rate down on A1, low rates on RS4 and RS5 Cabriolet
FINAL PAYMENT
APR
OFFER ENDS
n/a
0.0%
31/12/14
£209
£287
£463
£5,463
n/a
n/a
0.0%
0.0%
0.0%
31/12/14
31/12/14
31/12/14
£16,705
£17,325
PCP
PCP
£3,311
£3,369
36
36
£219
£229
£8,002
£8,300
7.4%
7.4%
31/12/14
31/12/14
£20,500
£21,120
PCP
PCP
£3,873
£3,728
36
36
£259
£269
£10,452
£11,001
7.5%
7.4%
31/12/14
31/12/14
£29,620
£30,920
£57,160
PCP, £4,300 dealer contrib
PCP, £4,300 dealer contrib
PCP, £4,000 dealer contrib
£5,810
£5,879
£8,616
36
36
36
£299
£319
£599
£12,439
£13,170
£28,773
7.4%
7.4%
4.9%
31/12/14
31/12/14
31/12/14
£34,425
PCP, £4,000 dealer contrib
£6,720
36
£369
£34,675
PCP, £4,300 dealer contrib
£6,557
36
£359
£69,505
PCP, £6,000 dealer contrib
£13,883
36
£779
£34,600
PCP, £1,000 dealer contrib
£5,975
36
£359
Lower deposits required on a number of Citroen models
£10,015
PCP
£1,557
36
£129
£12,615
PCP, £2,000 dealer contrib
£2,077
36
£149
£15,265
PCP, £2,750 dealer contrib
£2,279
36
£169
£16,570
PCP, £1,000 dealer contrib
£3,285
36
£189
£21,595
PCP, £4,500 dealer contrib
£3,265
36
£229
£16,110
PCP
£3,295
36
£205
£19,830
PCP, £1,000 dealer contrib
£3,903
36
£229
£20,970
PCP, £1,000 dealer contrib
£4,194
36
£255
No consistency across the range, but some interesting deals nonetheless
£14,884
£15,410
£27,845
£20,032
7.4%
7.4%
4.9%
7.2%
31/12/14
31/12/14
31/12/14
31/12/14
£4,798
£4,116
£5,308
£6,906
£7,145
£6,900
£8,417
£8,473
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£7,645
PCP, £1,450 off
£9,895 PCP, £1,000 off, £500 dealer contrib
£15,295
PCP, £1,400 dealer contrib
£119
£129
£219
48
48
48
£119
£129
£219
£2,649
£2,790
£4,944
6.4%
2.7%
4.2%
31/12/14
31/12/14
31/12/14
£8,220
£10,320
£11,820
PCP, £1,955 off
PCP, £1,455 off
PCP, £500 dealer contrib
£149
£189
£1,499
48
48
36
£149
£189
£159
£2,792
£3,403
£5,367
8.0%
8.1%
5.5%
31/12/14
31/12/14
31/12/14
£11,970
£13,370
PCP, £500 dealer contrib
PCP, £500 dealer contrib
£1,499
£1,499
36
36
£159
£179
£5,605
£5,860
5.8%
3.6%
31/12/14
31/12/14
£358
£332
£286
£245
n/a
£6,679
n/a
£4,468
0.0%
7.7%
0.0%
3.7%
31/12/14
31/12/14
31/12/14
31/12/14
£155
£219
£3,351
£4,975
7.2%
4.2%
31/12/14
31/12/14
£109
£159
£179
£239
£239
£289
£5,193
£6,737
£7,397
£6,605
£13,186
£10,605
4.2%
4.2%
4.2%
4.2%
4.2%
4.2%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£189
£423
£305
£229
£415
£6,183
£9,117
£7,178
£12,224
£7,760
0.0%
0.0%
6.9%
0.0%
6.9%
31/10/14
31/10/14
31/10/14
31/10/14
31/10/14
£99
£4,612
5.9%
31/12/14
£19,790
HP, £500 dealer contrib
£6,402
36
£19,790
PCP, £1,000 dealer contrib
£332
48
£15,840
HP, £500 dealer contrib
£5,044
36
£15,840
PCP, £1,000 dealer contrib
£245
48
Ford mainains focus on low monthly payments on PCP schemes
£8,445 PCP, £500 off, £552 dealer contrib
£155
36
£13,995
PCP, £1,950 dealer contrib
£241
36
£9,695 PCP, £300 off, £750 dealer contrib
£1,659
24
£1,440 PCP, £500 off, £750 dealer contrib
£3,833
24
£15,345
PCP, £1,250 off
£4,421
24
£17,680 PCP, £500 off, £2,500 dealer contrib
£3,603
24
£24,595
PCP, £1,500 dealer contrib
£5,466
24
£24,840
PCP, £1,500 dealer contrib
£6,933
24
No deposit required on Civic, 0% finance deals available
£15,445
PCP, £500 dealer contrib
£4,225
24
£24,360
PCP, £500 dealer contrib
£0
36
£21,125
PCP
£5,302
36
£27,315
PCP
£6,846
36
£26,580
PCP
£6,704
36
Zero percent finance on i30 Tourer
£8,595
PCP
£2,262
24
£8,495
£9,595
PCP, £250 dealer contrib
PCP, £750 dealer contrib
£1,970
£2,174
24
24
£119
£129
£4,037
£4,228
5.9%
5.9%
31/12/14
31/12/14
£12,515
£14,615
PCP, £250 dealer contrib
PCP, £500 dealer contrib
£2,868
£2,757
36
36
£179
£219
£4,165
£4,930
5.9%
5.9%
31/12/14
31/12/14
£12,395
£15,385
£14,690
£18,600
£19,105
£20,355
PCP, £500 dealer contrib
PCP, £500 dealer contrib
HP
PCP, £1,500 dealer contrib
PCP, £1,500 dealer contrib
PCP, £1,500 dealer contrib
£3,211
£5,240
£7,526
£3,221
£4,010
£5,218
36
36
36
36
36
36
£159
£199
£199
£249
£269
£299
£4,101
£5,057
n/a
£6,757
£5,631
£6,290
5.9%
5.9%
0.0%
5.9%
5.9%
5.9%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
MOTOR FINANCE MADE SIMPLE
blackhorse.co.uk
TERM
Zero percent interest rates maintained, dealer contributions up on Giulietta with PCP
£15,345
HP
£0
36
£438
Finance subject to status. Indemnities may be required.
Oct p20,21_Oct p19,20,21 07/10/2014 15:57 Page 2
ANALYSIS
MAKE & MODEL
MAZDA
2, 1.3 Sport Venture
3, 1.6 SE
5, 2.0 Sport Venture
6, Saloon SE-L
CX-5, SE-L
MERCEDES-BENZ
A Class
180 SE
B, 180 SE
C, 200 Sport
CLA, 180 Sport
CLS, 220 BlueTEC
E, 220 BlueTEC SE
GL, 350 BlueTEC AMG Sport
GLA, 220 CDI AMG Line
ML, 350 BlueTEC AMG Line
S, 350 BlueTEC SE Line
SL, 400 AMG Sport
SLK, 250 CDI
NISSAN
Note, Visia 1.2
Juke, Acenta Premium
Qashqai, Visia DIG-T
370Z, GT
RENAULT
Twingo, Play SCe
Clio, Expression+ 1.2
Captur, Expression+ TCe90
Zoe, Dynamique Intens
Scenic, Dynamique 1.5
SEAT
Mii, I-TECH 1.0
Ibiza, Toca 1.4 SC
Leon, 1.2 SE
Altea
1.6 I Tech
XL 1.6 I Tech
SKODA
Citigo, SE 1.0
Fabia, S 1.2
Rapid, S 1.2
Roomster, S 1.2
Superb, S 1.4
Octavia, Hatch S 1.2
Yeti, S 1.2
SUZUKI
Alto, SZ
Splash
SZ2 1.0
TOYOTA
Yaris, Active 1.0
iQ, 1.0
Aygo, x-cite 1.0
Auris, Active 1.3
Verso, Active 1.6
Rav4, Active 2.0
Prius, T Spirit 1.8
GT86, Boxer 2.0
VOLKSWAGEN
Up!, 1.0
Polo, SE 1.0
Beetle, 1.2
Golf, S 1.2
Jetta, 1.4
Touran, S 1.2
Passat Saloon, S 1.4
Sharan, S 1.4
Touareg, 3.0 TDI R Line
Phaeton, 3.0 TDI
VOLVO
V40
T2 R-Design
Cross Country D2 SE
V60, D2 R-Design
V70, D4 SE
S60, D2 R-Design
S80, D2 SE
XC60, D4 FWD R-Design
XC70, D4 FWD SE
OFFER OTR
OFFER
DEPOSIT
MONTHLY PAYMENT
FINAL PAYMENT
£217
£277
£321
£340
£279
£20,715
PCP, £472 dealer contrib
£2,495
36
£269
£22,535
PCP, £1,635 dealer contrib
£2,999
36
£289
£29,495
PCP, £2,785 dealer contrib
£3,198
36
£329
£2,545
PCP, £679 dealer contrib
£3,999
36
£309
£46,500
PCP, £4,879 dealer contrib
£6,799
36
£499
£34,915
PCP, £3,884 dealer contrib
£4,999
36
£355
£60,750
PCP
£9,157
36
£729
£31,035
PCP
£4,027
36
£359
£53,930
PCP, £2,694 dealer contrib
£8,366
36
£619
£66,910
PCP
£10,789
36
£839
£72,500
PCP, £4,537 dealer contrib
£7,299
36
£749
£33,795
PCP, £5,629 dealer contrib
£4,279
36
£299
Price discount on Note, reduced interest rate on Juke plus higher dealer contribution
£9,995
PCP
£2,562
36
£115
£16,470
PCP, £1,250 dealer contrib
£3,080
36
£199
£18,265
PCP, £750 dealer contrib
£3,786
36
£209
£32,015
PCP, £1,500 dealer contrib
£7,379
36
£370
Deals continue on selected models
£9,995
PCP
£2,355
48
£99
£12,495
PCP, £1,250 dealer contrib
£1,745
48
£139
£14,195
PCP, £1,000 dealer contrib
£1,855
48
£169
£15,195
PCP, £2,750 dealer contrib
£2,250
48
£129
£17,732
HP
£0
48
£369
Discount on Mii, reduced deposit on other models
£9,995
PCP
£2,762
36
£65
£12,870
PCP, £2,875 off
£2,731
42
£109
£16,935
PCP, £1,000 dealer contrib
£3,886
36
£175
£17,345
PCP, £2,000 off
£5,188
£18,065
PCP, £2,000 off
£5,018
Zero percent deals continue on selected models
£9,060
PCP
£2,526
£9,945
PCP
£2,778
£11,690
PCP, £1,500 off
£3,399
£12,105
PCP
£3,469
£18,315
PCP, £1,500 off
£5,153
£16,310
PCP
£6,101
£16,715
PCP
£4,794
Good headline monthly figures
£5,999
PCP
£861
£19,591
£21,212
£29,245
£23,225
£28,045
£31,420
£32,535
£35,110
PCP, £500 dealer contrib
PCP, £500 dealer contrib
PCP, £500 dealer contrib
PCP, £4,250 dealer contrib
PCP, £4,500 dealer contrib
PCP, £4,500 dealer contrib
PCP, £750 dealer contrib
PCP, £4,250 dealer contrib
£2,374
£3,199
£6,038
£6,344
£6,362
£7,466
£5,891
£8,262
Finance subject to status. Indemnities may be required.
APR
OFFER ENDS
£4,375
£6,317
£6,022
£6,466
£10,240
0.0%
0.0%
0.0%
0.0%
5.9%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£10,500
£9,600
£14,125
£12,500
£21,125
£16,950
£32,600
£17,950
£25,825
£30,000
£33,700
£16,600
6.5%
5.8%
4.9%
6.4%
5.5%
6.3%
6.1%
6.3%
5.4%
3.4%
0.0%
6.3%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£4,726
£6,959
£8,511
£12,438
7.9%
6.9%
6.9%
4.9%
05/01/2015
05/01/2015
05/01/2015
05/01/2015
£4,292
£4,528
£5,841
£6,005
n/a
6.9%
6.9%
8.3%
6.9%
0.0%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£4,957
£4,076
£7,106
0.0%
7.6%
4.9%
31/12/14
31/12/14
31/12/14
36
36
£219
£239
£5,856
£6,134
5.9%
5.8%
31/12/14
31/12/14
36
36
36
36
36
36
36
£65
£105
£129
£145
£169
£149
£179
£4,258
£3,491
£3,775
£3,560
£7,246
£6,413
£6,953
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.9%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
42
£99
£2,221
9.9%
31/12/14
£139
£2,945
9.3%
31/12/14
£188
£177
£183
£254
£308
£344
£408
£436
£3,278
£3,696
£5,148
£4,968
£6,028
£9,263
£9,749
£10,050
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
4.9%
15/12/14
15/12/14
15/12/14
15/12/14
15/12/14
15/12/14
15/12/14
15/12/14
£95
£145
£185
£199
£255
£279
£305
£345
£539
£745
£3,964
£5,408
£6,009
£7,193
£6,495
£6,375
£6,237
£8,745
£19,598
£12,910
7.5%
7.4%
7.5%
7.2%
7.5%
7.5%
7.5%
7.5%
6.8%
6.5%
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
05/01/2015
£249
£249
£299
£429
£299
£399
£329
£399
£10,145
£11,094
£10,550
£11,385
£9,157
£8,257
£14,365
£11,812
5.9%
5.9%
5.9%
6.9%
6.9%
6.9%
5.9%
6.9%
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
31/12/14
£7,999
PCP
£853
42
Monthly payments down on most models
£9,995
PCP, £1,000 off
£1,000
36
£11,100
PCP, £1,000 dealer contrib
£1,110
36
£11,595
PCP
£1,160
36
£13,995
PCP, £950 off
£1,400
36
£16,995
PCP, £775 off
£1,700
36
£22,495
PCP, £1,000 dealer contrib
£2,250
36
£25,295
PCP, £1,000 dealer contrib
£2,530
36
£26,605
PCP, £1,000 dealer contrib
£2,661
36
Interest rates and monthly payments reduced on selected models
£8,635
PCP
£2,372
36
£12,435
PCP, £1,000 dealer contrib
£2,460
36
£14,835
PCP
£4,121
36
£16,975
PCP, £750 dealer contrib
£4,060
36
£18,815
PCP, £2,000 dealer contrib
£3,504
36
£19,565
PCP
£5,595
36
£20,375
PCP
£5,698
36
£25,060
PCP
£7,103
36
£47,500
PCP
£14,232
36
£48,055
PCP
£13,581
36
Hefty contributions on most models
MOTOR FINANCE MADE SIMPLE
blackhorse.co.uk
TERM
Prices creep up, but zero deposit and zero percent interest maintained
£14,015
PCP, £500 dealer contrib
£0
42
£17,955
PCP
£0
42
£21,015
PCP, £1,500 dealer contrib
£0
42
£21,755
PCP, £1,000 dealer contrib
£0
42
£25,055
PCP
£6,124
42
Increased dealer contributions
36
36
36
36
36
36
36
36
oct p22, 23_Oct p22, 23 07/10/2014 15:57 Page 8
ANALYSIS
REGISTRATION GROWTH LEVELS OFF
N
Source: SMMT
Source: SMMT
Source: SMMT. Detailed analysis available from smmt.co.uk
“
22
OCTOBER 2014
Photocopying these pages may break copyright law
www.auto-retail.com
Source: SMMT. Detailed analysis available from smmt.co.uk
“
TOP 15 BRANDS FLEET/RETAIL REGISTRATIONS, SEPTEMBER 2014
ew car
MONTH END
MONTH END
MONTH END
MONTH END
LAST YEAR
LAST YEAR
registrations in
PRIVATE FLEET
PRIVATE FLEET
September were
FORD
27,240
27,082
54,322
26,358
24,726
51,084
at their highest level for
VAUXHALL
18,085
23,090
41,175
18,087
23,223
41,310
10 years, hitting 425,861
VOLKSWAGEN 19,174
18,678
37,852
16,763
16,341
33,104
units, a rise of 5.6% on the
AUDI
13,668
11,867
25,535
13,425
12,404
25,829
same month last year,
BMW
12,579
12,312
24,891
12,244
15,064
27,308
according to the SMMT.
MERCEDES
10,202
13,180
23,382
9,122
12,134
21,256
NISSAN
10,287
12,263
22,550
9,853
10,266
20,119
The third-best all-time
PEUGEOT
10,890
6,975
17,865
9,326
9,834
19,160
September was close to the
TOYOTA
8,091
9,141
17,232
9,254
7,658
16,912
430,763 units registered in
HYUNDAI
6,203
8,662
14,865
6,290
8,189
14,479
September 2004 but still
CITROEN
7,168
7,102
14,270
6,526
6,156
12,682
below the best-ever
KIA
7,485
5,807
13,292
6,704
6,024
12,728
September, in 2003 when
RENAULT
7,504
5,489
12,993
5,160
3,885
9,045
439,365 units were sold.
FIAT
7,650
4,497
12,147
7,911
3,756
11,667
New car registrations in
SKODA
5,885
5,106
10,991
5,419
4,961
10,380
March this year were also
figures: “It brings great news
September’s bumper volumes.
close to 2004 levels.
“Demand for the new 64-plate that the 64-plate change this
The figures mean that
has been boosted by intensifying month is the best performing
registrations for the year-to-date
month since September 2004.
reach 1,958,196, up 9.1% on the confidence in the UK economy,
The market remains significantly
with consumers attracted by a
same period last year, and
high with increased footfall and
wide range of exciting,
indicate that growth is levelling
interest from consumers which
increasingly fuel-efficient, new
off.
show that the sector is stable and
cars.”
Mike Hawes, SMMT chief
growing.”
Senior automotive executives,
executive, said: “September’s
David Raistrick, UK
speaking to Auto Retail
strong performance underlined
Automotive Leader at Deloitte,
Network, said they were very
the continuing robustness of the
happy with the performance and added that company car sales
UK new car market, particularly
were also a good indicator of the
had anticipated the slight
in the context of last
broader economic picture: “If
slowdown in growth rate in the
RETAIL REGISTRATIONS BY AREA, SEPTEMBER 2014
the new car sales are
final
quarter
of
the
year.
The
% CHANGE
AREA
MONTH
MONTH
representative of the
market had been growing by
END
END LAST
YEAR
performance of the UK
10% on a year-to-date basis.
LONDON
32,991
31,256
5.55%
economy, there are further signs
As expected, demand in
WEST MIDLANDS
26,186
24,420
7.23%
that confidence within the
September has been led by the
NORTH WEST
25,335
24,197
4.70%
business sector is improving.
retail market (up 5.9% in the
SCOTLAND
21,865
20,321
7.60%
month) but there are clear signs Fleet and business car sales are
SOUTH
19,131
17,968
6.47%
of tactical registration by certain now seeing the sort of growth
EAST
18,976
17,597
7.84%
that has been provided by private
brands. Auto Retail Bulletin
YORKSHIRE
15,137
14,548
4.05%
sales over the past two and half
understands
the
September
NORTH EAST AND CUMBRIA
13,759
13,396
2.71%
years. This contributed to diesel
market
was
1.5%
behind
the
WALES
10,972
10,246
7.09%
sales exceeding petrol sales at the
same period last year with two
SOUTH EAST
8,475
7,801
8.64%
end of August, and the private
days to go to the month end.
WEST
7,025
6,735
4.31%
buyer continues to be attracted
However, franchised dealers
EAST MIDLANDS
6,882
6,786
1.41%
SOUTH WEST
6,509
5,976
8.92%
by the lower fuel consumption
that Auto Retail Bulletin spoke
EAST YORKSHIRE/LINCOLNSHIRE
4,546
4,468
1.75%
levels offered by diesel power.”
to were broadly positive, with
NORTHERN IRELAND
3,357
3,149
6.61%
many hitting targets and
Summary
221,146
208,864
5.88%
deliberately pushing
Author Tristan Young is the
registrations into October.
editor of Auto Retail Bulletin
SALES BY CUSTOMER TYPE
TrustFord’s operations director
SEPTEMBER
TOTAL
PRIVATE
FLEET
BUSINESS
John Leeman said that
2014
425,861
221,146
178,771
25,944
consumer confidence was high
TOP 10 BEST SELLING MODELS
2013
403,136
208,864
170,535
23,737
and that as a result the group
1
Ford Fiesta
106,930
% change
5.60%
5.90%
4.80%
9.30%
was experiencing increased sales:
2
Ford
Focus
67,015
Mkt share '14
51.90%
42.00%
6.10%
“During the last three months
3
Vauxhall Corsa
62,693
Mkt share '13
51.80%
42.30%
5.90%
4
Volkswagen Golf
58,664
we have seen a 15% increase in
5
Vauxhall Astra
47,482
retail sales volume on the same
Year-to-date '14 1,958,196
956,381
904,772
97,043
6
Nissan
Qashqai
38,920
period last year.”
Year-to-date '13 1,794,924
869,436
842,223
83,265
7
Volkswagen Polo
36,772
Sue Robinson, NFDA director,
% change
9.10%
10.00%
7.40%
16.50%
8
Audi A3
35,596
Mkt share '14
48.80%
46.20%
5.00%
agreed about the strong retail
9
Fiat 500
35,032
Mkt share '13
48.40%
46.90%
4.60%
element to the registration
10 BMW 3-series
29,655
There are
further signs
that
confidence
within the
business
sector is
improving
oct p22, 23_Oct p22, 23 07/10/2014 15:57 Page 9
ANALYSIS
NEW CAR REGISTRATIONS, SEPTEMBER 2014
SEPTEMBER 14
YEAR TO DATE
MARQUE
2014
SHARE
Ford
54,322
12.76
Vauxhall
41,175
Volkswagen
37,852
Audi
BMW
% MARKET
SHARE
CHANGE
51,084
12.67
6.34
9.67
41,310
10.25
8.89
33,104
8.21
25,535
6.00
25,829
6.41
24,891
5.84
27,308
6.77
Nissan
22,550
5.30
20,119
Mercedes-Benz
23,382
5.49
21,256
Peugeot
17,865
4.20
Toyota
17,232
Citroen
Hyundai
% MARKET
% MARKET
SHARE
2013
262,754
13.42
249,017
13.87
-0.33
210,357
10.74
200,357
11.16
4.99
14.34
168,662
8.61
154,536
8.61
9.14
-1.14
126,487
6.46
114,261
6.37
10.70
-8.85
113,520
5.80
105,313
5.87
7.79
4.99
12.08
106,890
5.46
94,541
5.27
13.06
5.27
10.00
99,096
5.06
86,624
4.83
14.40
19,160
4.75
-6.76
85,418
4.36
86,019
4.79
-0.70
4.05
16,912
4.20
1.89
76,055
3.88
72,831
4.06
4.43
14,270
3.35
12,682
3.15
12.52
66,542
3.40
63,773
3.55
4.34
14,865
3.49
14,479
3.59
2.67
65,564
3.35
61,210
3.41
7.11
Kia
13,292
3.12
12,728
3.16
4.43
62,538
3.19
58,307
3.25
7.26
Skoda
10,991
2.58
10,380
2.57
5.89
60,386
3.08
49,576
2.76
21.80
Fiat
12,147
2.85
11,667
2.89
4.11
53,781
2.75
47,587
2.65
13.02
Renault
12,993
3.05
9,045
2.24
43.65
50,732
2.59
32,320
1.80
56.97
Land Rover
10,915
2.56
9,531
2.36
14.52
45,483
2.32
43,916
2.45
3.57
Honda
9,642
2.26
10,442
2.59
-7.66
44,102
2.25
45,494
2.53
-3.06
Seat
9,594
2.25
8,498
2.11
12.90
42,611
2.18
35,468
1.98
20.14
Mini
9,996
2.35
10,382
2.58
-3.72
36,584
1.87
40,264
2.24
-9.14
Suzuki
8,070
1.89
7,037
1.75
14.68
31,431
1.61
27,187
1.51
15.61
Mazda
8,066
1.89
7,189
1.78
12.20
31,373
1.60
26,027
1.45
20.54
Volvo
7,230
1.70
5,258
1.30
37.50
30,784
1.57
24,851
1.38
23.87
Dacia
3,523
0.83
2,759
0.68
27.69
18,583
0.95
11,631
0.65
59.77
Jaguar
3,173
0.75
3,183
0.79
-0.31
14,627
0.75
13,256
0.74
10.34
Mitsubishi
3,527
0.83
1,813
0.45
94.54
11,162
0.57
7,416
0.41
50.51
Lexus
2,131
0.50
2,013
0.50
5.86
8,629
0.44
7,050
0.39
22.40
Porsche
1,022
0.24
1,248
0.31
-18.11
6,483
0.33
6,021
0.34
7.67
Alfa Romeo
1,014
0.24
1,192
0.30
-14.93
4,464
0.23
4,496
0.25
-0.71
Smart
802
0.19
913
0.23
-12.16
4,016
0.21
4,316
0.24
-6.95
Jeep
762
0.18
326
0.08
133.74
2,844
0.15
1,458
0.08
95.06
3
0.00
2,083
0.52
-99.86
2,764
0.14
9,982
0.56
-72.31
Subaru
617
0.14
522
0.13
18.20
2,140
0.11
1,757
0.10
21.80
MG
357
0.08
104
0.03
243.27
1,840
0.09
273
0.02
573.99
Chrysler
390
0.09
630
0.16
-38.10
1,673
0.09
2,237
0.12
-25.21
Abarth
331
0.08
276
0.07
19.93
1,286
0.07
1,114
0.06
15.44
Ssangyong
363
0.09
161
0.04
125.47
1,215
0.06
505
0.03
140.59
Bentley
206
0.05
147
0.04
40.14
1,160
0.06
941
0.05
23.27
Maserati
158
0.04
28
0.01
464.29
921
0.05
239
0.01
285.36
Aston Martin
144
0.03
119
0.03
21.01
695
0.04
725
0.04
-4.14
Infiniti
214
0.05
25
0.01
756.00
591
0.03
305
0.02
93.77
Lotus
27
0.01
10
0.00
170.00
180
0.01
141
0.01
27.66
Perodua
2
0.00
13
0.00
-84.62
27
0.00
193
0.01
-86.01
Mia
0
0.00
0
0.00
0.00
5
0.00
0
0.00
0.00
Proton
0
0.00
3
0.00
-100.00
1
0.00
18
0.00
-94.44
Saab
0
0.00
0
0.00
0.00
1
0.00
3
0.00
-66.67
Other British
63
0.01
76
0.02
-17.11
624
0.03
644
0.04
-3.11
Other Imports
157
0.04
92
0.02
70.65
1,115
0.06
724
0.04
54.01
5.64
1,958,196
Total
www.auto-retail.com
425,861
403,136
Photocopying these pages may break copyright law
1,794,924
SHARE
%
2014
Chevrolet
2013
%
CHANGE
5.52
9.10
DECEMBER 2007
OCTOBER 2014 23
Source: SMMT
% MARKET
Oct p24_Oct p24 07/10/2014 15:57 Page 1
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