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Daily News Round UpBack

Dealer losses in May provide ‘clear evidence’ of pre-registrations says ASE


The average UK motor dealership produced a small loss of £384 in May, a contrast to the £5,000 profit made in the same month of the prior year.

This has created a further drop in the return on sales percentage which now stands significantly below the rolling 12 month comparative, according to dealer performance specialists ASE.

The average dealer now stands £27,000 behind the result for the first five months of 2014.

ASE chairman Mike Jones said: “Over recent months I have been highlighting a worrying trend as we see dealer new car sales falling whilst new car registrations continue to rise.

“This continued in May with sales down 5.2% compared to May 2014.

“This was in contrast to the SMMT reported registrations data which grew 2.4% year-on-year.

“Overall in the current year-to-date, whilst registrations are up 5.7%, reported dealer sales are down 2.9%.”

This provides “clear evidence” of an increase in dealer self-registrations in 2015,” he said.

Used car retail sales are up 6.1% year on year providing potential evidence of the liquidation of some of the pre-reg vehicles.

Total investment in used vehicle stock has fallen from its peak levels at the end of March as per the normal seasonal pattern.

Stock levels are, however, significantly above 2014’s comparative with stock investment 10% up.

“This continues to be due to an increase in both average stand-in-values which are 5% up and the number of units in stock.

“This combination is driving a significant decline in used car return on investment in spite of the increased volume of retail sales.”

Aftersales continues to improve slowly but steadily, with further marginal gains in overall efficiency.

This improvement continues, however, to be outweighed by an increase in overheads.

“The quarter-end result for June will clearly be pivotal in shaping the overall result for the year. Given the surge in registrations on day 19, I expect the gap between sales and registrations to grow.”

ASE profitability stats


Swansway reports double-digit rise in turnover and profits in 2014 accounts

Car dealer Swansway has today reported a 20% growth in year-on-year profit before tax and 18% increase in revenue.

The newly filed 2014 accounts for the family-run group show PBT at £6.2 million and turnover, £436.1m.

At £7.8m the AM100 group’s operating profit was up 17% on the previous year.

New car and van sales volumes increased by 17% on 2013 and used vehicles by 12%.

By brand, Audi and Volkswagen Cars profits improved, while VW Commercial Vehicles profitability fell slightly due to “management issues” at one of the four centres.

Swansway’s single Seat centre delivered a profit “in excess of” £400,000. Land Rover returns were “very satisfactory” and the Peugeot dealership in Chester produced a result on a par with 2013.

Honda, however, was described as struggling in terms of volume and profitability.

“The brand suffers from a lack of variety across the product offering and market share continues to fall,” the group said. “We expect this decline will reverse to some extent in 2015.”

Swansway director Peter Smyth, said:”2014 was the year when our culture of ‘caring, honest and proud’ really showed how powerful a focus on customer service can be in delivering increased profits”.

The group operates 19 franchised dealerships across the North West and West Midlands.

2014 saw the group win the Volkswagen Dealer Group of the Year award for passenger cars, alongside the Volkswagen Commercial Vehicle Dealer Group of The Year award; a double win which was a first for any dealer.

Crewe Volkswagen and Wrexham Volkswagen were placed first and second in the Volkswagen One Business Awards; Crewe Audi number three in the UK and Crewe Seat number two.

“We’re doing a good job for the brands and increasing profitability for ourselves; with a £12m investment in new-build sites we have much to look forward to.”

Ground has already been broken on a new Fiat/Citroen centre in Chester which will add the Alfa Romeo brand to the Swansway portfolio in early 2016; also opening in 2016 will be a new-build Jaguar centre in Crewe.


High pressure CNG filling station for M6 gets go-ahead

CNG fuels have attainted planning permission for a CNG filling station, expected to open in the last quater of 2015. The filling station will be located close to junction 28, on the M6 in Leyland, Lancashire.

The new station will be the first high pressure connected, public-access CNG filling station in the UK, capable of refuelling hundreds of HGVs per day. The new filling station is also expected to supply 100% renewable biomethane.

The station’s first major customer is expected to be Waitrose, part of the John Lewis Partnership.

Philip Fjeld from CNG Fuels said: “Our customers can save more than 40% of their diesel cost, even after the recent drop in diesel prices, and cut CO2 emissions by more than 20% by using CNG. If fleets choose to fuel their trucks with Bio-CNG, they will be running on 100% renewable gas.”

He continued: “Because the new station is directly connected to a high pressure gas pipeline we can “fast-fill” hundreds of HGVs a day. We plan to rollout additional public-access local transission system (LTS) CNG stations in the years ahead, meaning more companies can switch to CNG or Bio-CNG. Companies that choose gas will then be paying a lot less for fuel and also making big greenhouse gas savings.”

Waitrose, part of the John Lewis Partnership, has a regional distribution centre (RDC) less than one mile from Leyland LTS CNG station, and will be the anchor customer for the CNG station.


Auto Trader to launch part-exchange tool

Auto Trader has announced plans to launch a new online part-exchange tool for car buyers.

The service will help further qualify a customer choosing a specific car from a dealer by offering a part-exchange value based on prices being achieved across Auto Trader’s live data, rather than guide book residual values.

The Part Exchange Guide tool is currently being piloted by 200 car buyers ahead of its roll-out.

“We’re trying to address the key consumer pain point which is around haggling at the dealership. We also know that price negotiation with consumers is the biggest deal breaker for dealers,” said Karolina Edwards-Smajda, trade solutions director.

“By addressing these needs we’re trying to bring consumers and retailers closer together by aligning their expectations in terms of the part-exchange value of the vehicle and to help retailers engage with consumers earlier in the process.”

In a separate move the business confirmed it will launch a Trip Advisor style dealer rating service which will encourage retailers to respond to negative comments.

“Consumers are demanding that they are able to see dealer ratings. At the moment they’re looking all over the place on social media sites and we feel it’s important to put it in one place as a one stop shop and give dealers the opportunity to respond.”


AutoProtect launches service plan programme

kshopAutoProtect has entered the service plan market with the launch of Foresight Service Plan.

The company has tested the programme with dealers with a view to increasing aftersales and F&I sales through more frequent contact with customers.

Offering automated quotes using carmaker data, it can be integrated with dealer management systems.

Jo Selby, national service manager with AutoProtect, said: “We have designed the Foresight Service Plan with the dealer in mind.

“They can use the retention tool for finance and cash customers to contact a specific customer at a specific time with a specific offer that is simple, compelling and relevant,” he said.

The programme provides automated quotes and service reminders from a dealer’s existing database.

It is supported by an inbound and outbound call centre, national field sales team and internet presence.

AutoProtect provides insurance products and dealer warranties to carmakers and retailers of all types and sizes throughout the UK, Europe and South America.


Fleets switching out of diesel

Businesses are starting to move away from diesels, according to fleet management company CLM.

CLM believes that higher initial prices for Euro6 diesels and higher on-going maintenance costs have seen a trend of fleets moving to petrol and hybrid vehicles.

CLM’s figures showed that at the end of quarter four in 2014, diesel models accounted for 90.4% of all new models ordered by it’s customers. However, by the end of quarter one of this year that rate had fallen by 4.8% to 85.6% of all new orders.

CLM general manager Simon Cotton claims that fleets will face problems with Euro6 diesels, however all new cars will have to be Euro6 from September 2015.

“The latest generation lean-burn petrol models face no such problems and their upkeep and maintenance, compared to future diesel models, could be viewed as less complicated and more straightforward, with lower front end costs, improved economy and better carbon emissions,” he said.


EU decision on emissions testing sets route to cleaner, healthier cities

The approval of the European Commission’s proposals for real-world driving air pollution emission tests is the first step in ensuring a marked reduction in NOx emissions, claims Emissions Analytics.

From 2017, part of the type approval process for passenger cars in Europe will include a compulsory real-world test using a portable emissions measurement system (PEMS). For the first time, official tests will be conducted outside the laboratory to measure NOx levels emitted in real driving against the regulated limits.

“Our data on the very latest Euro 6 diesels shows an improvement on Euro 5 of 49%,” explains Nick Molden, CEO of Emissions Analytics. “We believe the manufacturers, anticipating this legislative change, have really stepped up their game and the results are encouraging, although still mixed.”

As a leading provider of real-world emissions data, Emissions Analytics has data on over 350 diesel cars. The earliest Euro 6 diesels produced levels of NOx on average 7.1 times the legislated limits, as shown in the report from the International Council on Clean Transportation in 2014, to which Emissions Analytics contributed. Recent Euro 6 diesels show marked improvements in NOx emissions, but are still more than three times the legislated limit of 0.08g/km.

However, a recent project with The Sunday Times highlighted that, although car manufacturers have made considerable progress, there’s still a sizable challenge ahead. Emissions Analytics concluded that the average variance of all the Euro 6 diesel cars so far tested is 4.4 times the legislated limit, but what was particularly striking was the variance between model types, as manufacturers employ different approaches to reducing emissions.

The newly approved Real Driving Emission (RDE) test procedure has been designed to tackle the long standing discrepancy between lab-based testing and real-world results.

Molden said, “We think this is a good decision by the Commission and member states. Emissions Analytics started testing tailpipe emissions on the road four years ago as we identified this was the only way to truly understand real-world performance. It is good to see this is now being recognised in the legislation.”


Surprise results put BMW as least expensive make to repair

Premium cars are amongst the least expensive to repair, whilst some low priced cars rank as the most expensive

Dipstix, the website dedicated to helping motorists manage their cars, has revealed that BMW, Mercedes, Honda and Toyota are amongst the least expensive car makes to repair, with Saab, Subaru, Hyundai and Skoda ranking as the most expensive.

The analysis is based on a first year’s database of over 330 repairs, on more than 130 types of vehicle, from 33 manufacturers.

Against an average repair quote of £286, premium makers Mercedes and BMW are the least expensive makes to repair, with average quotes of £211 and £209.

At the other end of the scale, Peugeot ranked fifth most expensive at £401, below Skoda at £442.

Volkswagen owners pay considerably more than drivers of other German rivals do, with VW ranking tenth most expensive at £334.

Servicing and MOTs are the most popular inquiries on the website and Ford and Vauxhall are the most frequently entered manufactures.

Rarer cars included an Aston Martin Vantage.

Dipstix Managing Director David Cederholm, said: “Interestingly, every single car we’ve quoted was between three and ten years old.

“This matches the prime opportunity for independent garages, as cars are old enough to be out of vehicle manufacturer warranty, but new enough to retain sufficient value to make them worth the cost of repair.”

Top ten least expensive cars to repair
  1. BMW
  2. Mercedes
  3. Honda
  4. Toyota
  5. Mini
  6. Lexus
  7. Citroen
  8. Jaguar
  9. Nissan
  10. Chrysler


Over half of drivers fail to service their car before a long trip

Holiday Checks offer drivers’ peace of mind before the summer getaway

Research by the Good Garage Scheme has found that 54 per cent of drivers will not be getting their car serviced before their next long journey, while 15 per cent only get their cars serviced when they are thinking of selling them.

Dave Norton, the Good Garage Scheme’s Technical Manager, said: “We all look forward to the warmer weather and getting away for a well-deserved break, but as our research reveals, over half of drivers risk having a problem on their getaway by not having their car serviced before they depart.”

The study also found that more than a third of people opt for convenience and choose the closest garage to where they live, rather than researching any others that are rated for offering quality and a good service.

In response, the Good Garage Scheme is encouraging motorists to get their cars professionally checked to ensure they are safe, reliable and comfortable as the holiday season kicks in.

The 21-point check provides an expert assessment of a vehicle’s condition, examining essential areas including the condition and level of the coolant and engine oil, as well as the tyres, wiper blades, windscreen and lights.

The research also found that 32 per cent of drivers never check their air conditioning unit, where harmful bacteria and mould can build up in the ducts of ventilation systems.


Heatwave sees air-con work soar by 336 per cent

Demand for air-conditioning work increased tenfold in just three days

Comparison website, WhoCanFixMyCar has reported record-breaking figures as temperatures soared last week, with simple air-conditioning regas work out numbering other air-conditioning work by almost 7:1.

In just seven days, the website broke records with more than 2,600 jobs posted, generating £900K of work.

WhoCanFixMyCar said: “It’s also worth noting that there is a ‘memory effect’ here – even though the hottest days are behind us, air-conditioning demand continues to track ahead of the pre-heatwave level.”

Requests to fix broken electric windows, radiator repairs and window tinting were also up.

WhoCanFixMyCar added: “While we saw a clear spike in air-conditioning re-gas work last week, the truth is that there is a fascinating seasonal variation in demand for air-conditioning, convertible roof and electric window work.

“In fact, heatwave aside, the demand for this ‘summer’ swathe of work leapt up in April and had been pretty steady until last week’s record temperatures.”

May and June saw more requests for convertible repairs than for exhaust repairs, alternator repairs or wheel bearing issues.

The comparison website advises garages to be ready for ‘summer work’ and says it’s commission for these jobs are low, with any up-sell or future work free from further commission payment.


Erik Buell Racing announces motorbike auction on 21st July

Bankrupt motorcycle company set to auction off unsold motorbikes and parts, following foreclosure earlier this year

After the shocking announcement earlier this year that Erik Buell Racing (EBR) were to close its doors and pack up shop – it has been announced that the struggling racing team will hold an auction of its assets on 21st July.

The American sports bike company has certainly struggled over the past few years – performing poorly on the race track and failing to push their bikes on the shop floor. After their funding was cut by Hero Motorcorp, the company announced its closure earlier this year.

The auction will be held on 21st of July as EBR look to sell their assets in bulk – with hopes on a single buyer acquiring all of EBR’s assets and kickstarting the fallen business under a new ownership.

The spoils of EBR’s retirement will have to go through court approval, which will be assessed two days after the auction takes place.

Bidders will be able to purchase everything including the kitchen sink, with unsold motorcycles, parts inventories and even intelligence and data being up for sale.

No doubt, Erik Buell will be crossing his fingers for an all-in-one buy out from a bidder, as he braces himself for the incoming fight for the scraps of what is left of EBR.

Of course, bidders could decide that Buell’s company isn’t worth reviving, resulting in only the basic assets being scooped up by buyers.

We will, of course, keep you updated regarding how the auction pans out, as we will discover whether Erik Buell can salvage anything at all from his expired enterprise.


Posted by Lois Hardy on 07/07/2015