 Stoneacre Motor Group has bought three Ford dealerships from Polar Ford for an undisclosed sum. Transfer over The dealerships, based in York, Scarborough and Thirsk, will transfer over to Stoneacre on the 1 August. Polar Ford is working closely with Stoneacre Motor Group to ensure a smooth handover for all its employees, with consultations taking place throughout July. Staff transfer over under TUPE regulations. Upcoming changes Dealerships will also be writing to customers informing them of the upcoming changes. Polar Ford is part of Ford Retail, which is the largest Ford dealership group in the UK. It will continue to serve the Yorkshire region with dealerships in Bradford, Barnsley, Wakefield, Castleford and Huddersfield. Stoneacre is a privately-owned dealer group ranked 63 in the Motor Trader Top 200 Dealers with a turnover of £163m. It operates 20 franchised dealerships, predominantly along the M62 corridor. It recently acquired a Ford dealership in Goole. DATED: 09.07.09 FEED: MT |
Thursday, July 09, 2009
GM confirms Chinese bid for Opel
General Motors has confirmed a bid from Chinese firm Beijing Automotive Industries (BAIC) for Opel.
Opel, GM's European arm, was separated from its parent firm and temporarily placed with a trust fund before GM entered bankruptcy.
A deal with Canadian car parts firm Magna International to take over Opel has been agreed but not finalised.
Several bidders have shown an interest in buying Opel, including BAIC, but GM has only confirmed the Chinese bid now.
"Its very common if we get bids from other companies during the process" said GM.
It added that the Magna deal was near completion.
Several Chinese firms have been looking to buy western car marques. Rover and MG are already owned by the Nanjing Automobile Corporation (NAC), and Sichuan Tengzhong Heavy Industrial Machinery is hoping to acquire the Hummer brand.
Closely watched
The Opel deal has been closely watched because of its implication for jobs.
Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
The German government promised the firm 1.5bn euros (£932m), including a bridging loan, to help boost finances until the Magna sale is concluded.
Under the Vauxhall brand, the firm employs 5,500 UK workers and has plants in Luton and Ellesmere Port. There have been worries that UK workers will suffer sharp job losses.
Interest Rate Announcements
Bank of England Maintains Bank Rate at 0.5% and continues with £125 Billion Asset Purchase Programme
DATED: 09.07.09
FEED: BoE
Used car prices rise in June
 Average used car prices continue to grow but at a slower rate than that seen in the first few months of 2009, according to the June Pulse report from auction house BCA. Average prices rose £77 to £5,850 compared to May and are now 14.3 per cent ahead of June 2008 Part exchanges With demand for affordable transport staying high, values have increased in the part-exchange sector for seven consecutive months. The average price improved by £45 to £2,405. Year-on-year values are ahead for the second month running, up £250. June saw another increase in nearly-new values, up £1,690 against May to reach £16,382, the highest recorded in a year. BCA communications director Tony Gannon said: "The current supply and demand equation is keeping prices high. Low stock levels "Stock levels remain relatively low, and certainly behind normal levels for the current period in previous years. "Consumer demand remains firm and with the vast majority of vehicles on offer being sold, conversion rates remain exceptionally high and values reflect this." BCA also reports on the longer-term quarterly movements, and shows that Quarter 2 2009 established a new record average value of £5,785 - beating the previous highest of £5,722 in Q1 of 2008 by £63. Year-on-year, Q2 09 is some £450 ahead of last year. DATED: 09.07.09 FEED: MT |
Stoneacre buys three Polar Ford dealerships
MG Rover bosses accuse Brown of blocking financial aid
The four former directors of MG Rover have accused Gordon Brown of blocking state aid to save the company from collapse four years ago.
John Towers, Nick Stephenson, John Edwards and Peter Beale, who have been criticised for making tens of millions of pounds from the car company before its collapse, have released a 20-page report claiming that Tony Blair, the then Prime Minister, wanted to save MG Rover.
However, the men claimed in the dossier that plans to advance a £120 million loan to the company were blocked in April 2005 by Mr Brown, who was then the Chancellor.
As a result, the company collapsed. This week Business Secretary Lord Mandelson confirmed that the Serious Fraud Office was looking the case for a criminal investigation into the collapse of the company.
The dossier compiled by the four men said: "The Government is doing and will do anything to disguise the role played by senior political figures in the closure of MG Rover."
The report also claimed that the Department of Trade and Industry "not only failed to support MG Rover but they poured millions of pounds into rival foreign manufacturers such as Ford, Nissan, BMW, Vauxhall and Peugeot".
However, the allegations that Mr Brown 'pulled the plug' on MG Rover have been flatly denied by the Government.
China car sales continue to soar
Car sales in China rose 48% in June from a year ago, boosted by government incentives and the continuing resilience of the country's economy.
Sales hit 872,900 vehicles last month, the biggest increase since February 2006, said the China Association of Automobile Manufacturers.
Chinese car sales are continuing to benefit from cuts in sales tax, and subsidies to trade in older vehicles.
It comes as the wider China economy continues to grow at more than 6%.
The most recent official data showed that the economy expanded at an annual rate of 6.1% in the first three months of 2009, a slight slowdown from 6.8% in the final three months of 2008, against the backdrop of the global recession.
'Proud result'
Domestic Chinese car sales overtook those in the US for the first time in December of last year, and this trend has continued.
While 872,900 cars were sold in China in June, 859,847 were bought in the US.
Global carmakers are now increasingly targeting China as a key growth market.
"It was really hard for our auto industry to achieve such a proud result against a backdrop of general gloom in the international auto industry," said the China Association of Automobile Manufacturers, which is authorised by the Chinese government to release the data.
US carmaker General Motors recently reported that its sales in China rose 38% in the first half of this year, while Ford's sales in China increased 14% over the same period.
Work to widen M25 is started by Transport Minister
Work to widen key sections of the M25 as part of a £6.2 billion contract to improve and maintain England's busiest motorway - creating thousands of new construction jobs - was officially started yesterday (Wednesday, July 8) by Transport Minister Sadiq Khan.
The work involves widening two sections of the M25 between junctions 16 and 23 - from the M40 to the A1 (M) and junctions 27 and 30 - from the M11 to the Dartford River Crossing.
The Transport Minister witnessed early progress on widening 22 miles of the motorway between junctions 16 and 23 from three lanes to four in both directions.
Mr Khan said: "Today marks a major step forward in our commitment to 'Building Britain's Future' and increasing capacity on the busiest sections of motorways and trunk roads.
"This vital scheme will tackle the nuisance of congestion, improve journey time reliability and safety and help boost the productivity of our businesses. Everyone who uses these important stretches of motorway, whether business or leisure travellers, will benefit from the massive investment.
"It is also a huge boost to the economy - the construction schemes will employ between 3,500 and 4,000 people until 2012 in addition to around 850 people employed on the 30-year operations and maintenance work."
Work to widen the second section - 16 miles of the M25 between the M11 and the Dartford River Crossing - will begin this month. Both sections are due to be completed before the Olympics in 2012.
Up to 200,000 vehicles a day use the sections of the M25 that will be widened. The Highways Agency says that work will be phased to reduce the impact on road users and keep as many lanes open as possible.
Tuesday, July 07, 2009
New car registrations fall 15.7% in June
New car registrations fell by 15.7% in June to 176,264 units, but it was the smallest fall in 12 months.
New registrations fell by 25.9% year-to-date.
Paul Everitt, Society of Motor Manufacturers and Traders chief executive, said: “We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations.
“SMMT expects the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery.”
Sue Robinson, director of the RMI national franchised dealers association (NFDA), said: "The true impact of the vehicle scrappage scheme will be felt over the next few months, as the volume of orders made via the scheme are processed and consumers receive their cars.
"It can take up to two months for a new car purchase to go from the initial order to the delivery to the customer, so most of the purchases made under the scrappage scheme have yet to translate into sales. We expect the full impact of the scheme to make itself felt from next month onwards."
Pace of decline slows slightly as first few weeks of scrappage takes effect
- The new car market posted its smallest decline since July 2008, at -15.7%, in June. The scrappage scheme will have a positive impact on volumes, although the impact is likely to be lagged. SMMT had expected the market to decline to 153,000 units (as forecast in April), with the actual being 15% higher at 176,264 units.
- Registrations to private buyers rose for the first time since November 2007 in June, up 3.9%.
- Demand for small cars also picked up, with the mini segment showing growth of 145.4% in the month, while superminis took a record 37.2% share of the market. Ford’s Fiesta was the best selling model for a fifth time this year.
- The growth in small car demand contributed to the fall in diesel penetration, with small cars tending to be petrol powered. However, diesel market share is still up over the year-to-date.
- The market remains down 25.9% or 322,524 units over the first half of the year. Volumes in quarter two were down 21.2%, marking a sixth successive quarterly decline. SMMT is due to review and revise its full year forecast later this month.
- The average new car CO2 emissions fell to 152.3g/km in the first half of 2009, this was 3.6% below the 158.0g/km recorded in full year 2008 and 19.8% below the 1997 level.
Single PPIs stopped
Banks and other lenders have stopped selling single premium payment protection insurance alongside loans in the wake of a damning Competition Commission report.
They were originally to be outlawed from October 2010 but the Financial Services Authority called for an earlier stoppage because of “ongoing concerns”.
DATED: 07.07.09
FEED: AM
Block Exemption: Change a long time coming
It’s a pound to a penny that the overdue changes in Europe’s Block Exemption regulations will not be announced in accordance with the timetable.
And it is a reasonably safe bet that the politicians will defer it just before the summer break, go away on a long holiday and fail to get anything through before the end of the year.
For all UK car dealers, the measures the European Commission finally comes up with will determine how the sector makes money in the next decade. More important still for the owner drivers, the changes could have a bearing on how valuable their business is, and how easy it is to sell.
Consultation period
But as usual, delivery of that information is infernally slow.
Last May, an EC publication assessed how the regulations had been working up to that point. It was largely self-congratulatory; the view was that there was not that much need for change.
A consultation period was due to run to the end of the autumn but that never happened.
Instead, DG-Competition of the European Commission published the submissions on the internet, click here to view the document.
ICDP, the Solihull-based car distribution consultancy, was quick to publish the response that there was little support for the self-satisfaction of the regulators, or for the regulations that seemed likely to arise in the next phase.
ICDP director Andrew Tongue said: “With the exception of carmakers and importer associations and some of the member state governments, there is very little support from the rest of the industry, from national level regulators or from legal opinion for the conclusions drawn in the May 2008 evaluation report.”
Sceptics’ forecast
Then came the announcement that the new regulations would get an airing in March; then it was May. According to the latest gossip, it will be mid-to-late July. Hence the informed forecast from the professional sceptics, that our elected representatives will shuffle the job under the pending tray and make a grab for the beach towel.
The period of time set aside for drafting the framework for the new regulations then gets shot to pieces, and the existing Block Exemption expires in just under a year’s time on May 31, 2010.
DATED: 07.07.09
FEED: AM
MG Rover in fraud investigation
The Serious Fraud Office (SFO) is to investigate the circumstances surrounding the demise of Birmingham-based carmaker MG Rover in 2005.
Business Secretary Lord Mandelson said in a statement that the SFO must see if there are "grounds for prosecution".
It follows a four-year inquiry into the collapse, which led to 6,000 job cuts.
The four executives in control of MG Rover at the time said there was "no suggestion of improper conduct", calling an investigation "ridiculous".
Lord Mandelson said: "There has been a comprehensive and thorough investigation into the events which led to the company failing, workers losing their jobs and creditors not getting paid. The SFO must now see if there are grounds for prosecution."
On Sunday, a spokesman for the MG Rover directors had said: "The directors have at all times willingly accounted for their actions, which kept MG Rover alive for five years."
When the MG plant at Longbridge, Birmingham, closed the government announced a £150m support package for those losing their jobs and for the estimated 12,500 people affected in subsidiary firms.
Report delayed
The new investigation comes after the completion of a four-year inquiry under section 432 of the Companies Act by inspectors appointed by the Department for Business, Innovation and Skills.
Part of that investigation was supposed to find out what had happened to the more than £400m left to Phoenix Ventures when it took over MG Rover from BMW in 2000.
The publication of the report by the business department's inspectors will now be delayed pending a decision on whether there will be criminal prosecutions.
But Professor David Bailey, director of Coventry University Business School, said he did not want to see the report stalled any further.
"I'd like to see that [report] in the public domain because workers, suppliers and communities affected by this do deserve some answers."
He added that while it was right that the SFO was brought in if there was "inappropriate behaviour or the suspicion of it", he was surprised that it had taken four years.
Phoenix Four
MG Rover went into administration under insolvency procedures in April 2005, with debts of more than £1bn. Its assets were sold in 2006 to China's Nanjing Automobile, which revived the MG sports car brand.
A quartet of executives known as the Phoenix Four had taken control of the company in May 2000 after originally buying MG Rover for a nominal £10.
The business came with an interest-free loan of £427m from BMW, the previous owner.
"John Towers, Nick Stephenson, Peter Beale and John Edwards are estimated to have taken out more than £40m in pay and pensions in the years before the business went down," said BBC business editor Robert Peston.
The Commons public accounts committee criticised the government in 2006 for being too distant from Phoenix Ventures and not sufficiently prepared for its demise.
Professor Bailey said that the inspectors' inquiry that has yet to come out should be critical of the government and its industrial policy as well as the company.
'Heart of the matter'
A spokesman for the directors said that "time and again they asked for government help and didn't get it".
"Four years and £16m of taxpayers' money has been swallowed up on this [Department for Business] inquiry and the directors' major concern that it will fail to get to the heart of the matter, which is why the government withdrew its offer of a loan to the company at the eleventh hour, allowing 6,000 workers to lose their jobs," they said.
Their statement added: "Four years on, any suggestion of another further investigation is frankly ridiculous and smacks of kicking this issue into the long grass."
They also said the government had refused more than 30 requests under the Freedom of Information Act which would have revealed correspondence and documents.
They said these would have "shed some light on the government's role in the affair".
NFDA: Scrappage impact in coming months.
'The true impact of the vehicle scrappage scheme will be felt over the next few months, as the volume of orders made via the scheme are processed and consumers receive their cars,' says Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), representing the UK's car dealers.
New car sales for June 2009, announced today (Monday 6 July 2009) show that 176,264 new cars were sold in June, 15.7% per cent down on June 2008.* One positive sign is the return of the private buyer to the new car market, particularly encouraged by the scrappage scheme.
According to Robinson, 'It can take up to two months for a new car purchase to go from the initial order to the delivery to the customer, so most of the purchases made under the scrappage scheme have yet to translate into sales. We expect the full impact of the scheme to make itself felt from next month onwards.'
*Sales figures courtesy of the Society of Motor Manufacturers and Traders (SMMT)
Scrappage scheme helps car orders
The UK's car scrappage scheme has started to have a "positive impact" on the industry as new car sales fell at their slowest rate for almost a year.
New car registrations fell by 15.7% in June compared with the same month last year, smaller than May's 25% drop.
The Society of Motor Manufacturers and Traders (SMMT) said 176,264 units were sold during the month.
The scrappage scheme, which offers a £2,000 incentive to scrap old cars, accounted for about 10% of sales.
The scheme came into effect on 18 May.
Car buyers are given a £2,000 discount on a new car if they scrap one that is at least 10 years old. Half of the money will be paid by the government and half by the car industry.
The SMMT said 29,796 vehicles had been sold under the scrappage scheme since its start, while government figures show that, up to 21 June, some 87,000 orders had been placed.
The Department for Business, Innovation and Skills says that at this rate, the scheme would be exhausted by the end of October. It had first forecast that it would last until March.
Professor David Bailey, director of Coventry University Business School, said the pressure would be on the government to extend the scheme into the new year.
But the business department is "adamant" that there are no plans to extend it.
'Steady progress'
"We are beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations," said Paul Everitt, chief executive of the SMMT.
"SMMT expects the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery."
Although June was the 14th month in a row to see sales of new cars fall, it was the smallest monthly decline since July 2008.
The number of new cars sold in the UK in June was about 15% more than the 153,000 figure predicted by the SMMT in April.
Private buyer registrations were up 3.9% year-on-year, the first rise in this sector since November 2007.
And demand for small cars picked up - with the "mini" segment showing 145.4% growth over the year and "superminis" taking a record 37.2% share of the market.
However, the total number of cars sold in the first six months of the year is still 25.9% down on the first half of 2008.
'Stabilisation'
According to Ian Robertson, BMW's group marketing director, the crisis that has hit the motor industry appears to be over.
"From the first quarter of the year to the second quarter of the year, there was a stabilisation of a negative trend," he said.
BMW has introduced cheaper entry models for both its BMW and Mini brands in order to benefit from the government's scrappage scheme.
"We've seen an improvement in sales," he said, adding that the 1.5 millionth Mini has just rolled off the production line at its factory in Cowley, near Oxford.
However, Mr Robertson said the government had missed an opportunity by its failure to link the scheme to car emissions.
"They could have added a CO2 target, which would have prevented some of the cheap and cheerful cars, which aren't necessarily that environmentally friendly, from qualifying," he said.
'Less snobbery'
Hyundai also reported that UK sales had almost doubled in June from the same month a year ago - which it said was largely due to the scrappage scheme.
UK managing director Tony Whitehorn said that "scrappage customers" were generally buying small cars, that were often their first new vehicle.
"They're looking for a good return on their money, and things like a five-year warranty are important to them as well as having modern vehicles," he said.
"The scrappage customer doesn't tend to have as much brand loyalty or any snobbery. They're coming to it fresh and are doing plenty of research before they decide what to buy."
However, Professor David Bailey, director of Coventry University Business School, said that while the car industry may have bottomed out, it wouldn't properly start to recover until wider confidence and the housing market picks up.
Magna's Demel poised for revenge on Marchionne
Vienna-born Demel was the first non-Italian to head Fiat's car business but was ousted by Marchionne in 2005 when the two men clashed over a restructuring strategy for the crisis-hit Italian automaker.
Despite withdrawing Fiat's bid for Opel at the last minute on May 29, Marchionne would still like to add the German carmaker to his Fiat-Chrysler empire.
Demel is playing a key role in stopping him. On June 25, he was in Detroit with Magna co-CEO Siegfried Wolf ironing out sticking points over Magna's Opel offer with General Motors CEO Fritz Henderson and GM's lead negotiator Jim Smith.
Magna remains the front-runner for Opel even if GM is talking with other bidders.
Insiders say Demel will lead the new Opel with the current management team of GM Europe President Carl-Peter Forster and Opel Managing Director Hans Demant.
Magna has attracted criticism from some quarters because it does not have any experience running a volume carmaker. Building niche cars at its Magna Steyr unit in Austria is not enough, critics say.
Bankruptcy judge ok's sale of GM assets
A U.S. judge on Sunday approved General Motors' bankruptcy sale, in a move that will allow the company's most profitable assets to exit bankruptcy protection under government ownership. ...
Friday, July 03, 2009
Marshall takes on Hyundai in Cambridge
The company has been on the acquisition trail since the beginning of the year.
Last month Marshall took on the Kia franchise in Ipswich and bought Ipswich Jaguar from Lookers. The company already represented Jaguar in Cambridge and Peterborough and the addition of Ipswich gave the group the largest contiguous territory for Jaguar in the UK.
De Vries purchase
In February Marshall bought three DeVries Honda dealerships.
Commenting on the Hyundai move, chief executive, Daksh Gupta said:
"As part of our stated plan to grow our business nationally, we are keen to expand our portfolio of franchises.
Great service
"We continue to evaluate many interesting and scalable opportunities where our values and approach to the business will deliver great service to our customers and reward our shareholders and brand partners in the process."
Tony Whitehorn, managing director of Hyundai in the UK, said: "We are delighted to be partnering with Marshalls in Cambridge whose number one focus is the same as ours - customer satisfaction. The people of Cambridge are 'in for a real treat' with the Marshalls and Hyundai partnership."
DATED: 03.07.09
FEED: MT
Glass's appoints Andy Carroll as MD
Carroll joins the company on 1 August having worked in the automotive sector for 20 years.
Senior roles
He held senior sales and marketing positions at GM Europe, including sales director for commercial vehicles and chief operating officer of internet car retailer OneSwoop.
He was managing director of GM Daewoo UK and subsequently managing director of Chevrolet UK. More recently Carroll was head of international sales & marketing at GAZ Group.
Carroll joins Glass's from a large dealer group, where he has been working as a board adviser. He has a Masters Degree in Manufacturing Engineering from Trinity Hall, Cambridge and an MBA.
"Glass's is a tremendous brand that is rightly proud of over 75 years of innovation and insight," said Carroll.
Tumultuous times
EurotaxGlass's International group chief executive officer Alastair MacLeod said: "The past 12 months have been tumultuous ones for all of Glass's customers.
"The business landscape has changed forever, and I am looking forward to engaging with those customers and to further develop Glass's relevance, excellence and value."
DATED: 03.07.09
FEED: MT
Marshall buys Ipswich Jaguar from Lookers
Marshall buys Ipswich Jaguar from Lookers |
Marshall Motor Group has acquired Ipswich Jaguar from Lookers. Marshall already represents Jaguar in Cambridge and Peterborough and the addition of Ipswich gives the group the largest contiguous territory for Jaguar in the UK. The Ipswich Jaguar business will continue to operate from its existing site in the town centre and all of the former Lookers staff have transferred to Marshall. National ambtions "We have represented Jaguar for over 35 years and have an excellent relationship with them. We are very grateful to Jaguar for their support in this acquisition. With Ipswich, we now cover the whole of Suffolk and Cambridgeshire with the nearest non-Marshall Jaguar dealerships over 40 miles away," he said. Jaguar partnership Marshall is already established in Ipswich having added the Kia franchise to its Vauxhall and Chevrolet businesses at Ransome Europark earlier this month. DATED: 03.07.09 FEED: MT |
Tuesday, June 30, 2009
UK car industry rescue plan a £2.3bn flop
A flagship UK Government scheme to help the car industry survive the recession has yet to pay out a single penny, despite the threat of job losses at Jaguar, Land Rover and Vauxhall.
The £2.3 billion Automotive Assistance Programme (AAP) was launched in a blaze of publicity on March 11, when ministers predicted it would aid more than 100 carmakers and suppliers. The Government said at the time the scheme would provide 'real help now'.
Yet three months on, the AAP has yet to pay out a penny. MPs on the House of Commons Business Committee were told earlier this month that just four applications were 'close to approval', with no predicted date for the first payment.
Asked about the loans made, Ian Gregory, director of the automotive sector at the Department for Business, Industry and Skills, said: "It's a round number - it's none. I can't pretend to be anything other than disappointed."
Insiders blamed the lack of payouts on Government bureaucracy. The committee heard that similar schemes in France and Germany had been paying out for some time.
The AAP, the brainchild of Business Secretary Lord Mandelson, was designed to use £2.3bn of Government loans and guarantees to unlock £1.3bn in loans from the European Investment Bank for investment in 'greener' vehicles.
One of the four applications has been made by Jaguar, which employs 14,500 in the West Midlands and Merseyside. The union Unite told MPs Jaguar remained in 'serious financial difficulty' because of the Government's failure to act.
Volkswagen delivers Porsche deal ultimatum
Volkswagen has delivered Porsche an ultimatum to accept a tie-up between the two carmakers in a deal that would be backed by the Qatar Investment Authority.
Porsche hit out at its rival after Volkswagen issued a deadline of yesterday (Monday, June 29) for the luxury carmaker to agree to a merger plan. Volkswagen subsequently denied that an ultimatum had been issued, although reports suggested that the company was pushing for a tie-up by the end of June.
Wolfgang Porsche, head of Porsche's supervisory board, called the ultimatum from Volkswagen and its key shareholder, the German state of Lower Saxony, 'damaging'.
He added: "Ultimatums do not belong in the 21st century. We won't be blackmailed."
The proposed tie-up would lead to a complicated system of cross-ownership between the two groups and their main shareholders.
Porsche currently holds a 51 per cent stake in Volkswagen while Porsche is controlled by the Porsche and Piech families.
Under the proposed terms, Volkswagen would take a 49.9 per cent stake in Porsche.
The merged company would be 40 per cent owned by the Porsche and Piech families, with Lower Saxony taking 20 per cent, the Gulf state of Qatar 15 per cent via its Qatar Investment Authority investment vehicle, with a unnamed sovereign wealth fund taking a further 5 per cent.
While Volkswagen is pushing for the deal, Porsche remains in talks with the Qatar Investment Authority and could still look to agree a deal exclusively with the sovereign wealth fund to get itself out of financial difficulties. The manufacturer has debts of €9 billion.
Government receives MG Rover inquiry report
The official report into the collapse of MG Rover four years ago has been delivered to the Government.
The inquiry was established soon after the collapse of Britain's last independently-owned major car company in 2005 amid widespread outrage over the way the company's owner, dubbed the 'Phoenix Four', had netted tens of millions of pounds for themselves.
Officials and ministers at the Department for Business are now deciding when to publish the report. No formal date has yet been set. The total cost of the inquiry was £15.9 million.
The 'Phoenix Four', businessmen John Towers, Peter Beale, John Edwards and Nick Stephenson were vilified for their role in the collapse of MG Rover, which was owned by a company called Phoenix Venture Holdings, with the loss of 6,000 jobs.
GM to be liable for future claims
US carmaker General Motors has agreed to accept liability for future product claims, paving the way for the firm's emergence from Chapter 11 bankruptcy.
Eight state attorneys general and consumer groups had opposed part of GM's bankruptcy plan to free it from future liability for vehicle defects.
The firm now says it will "assume all products liability claims" regardless of when the product was purchased.
The firm faces a hearing on 30 June over its restructuring plan.
Under the reorganisation plan, the government would hold 60.8% of a "New GM", with 17.5% owned by the United Auto Workers Trust and 11.7% owned by Canada's government.
Documents submitted to a bankruptcy court filed before the weekend showed the firm had accepted responsibility for future claims.
GM had previously said it would not assume responsibility for future claims by consumers against the firm - regarding "accidents or other discrete incidents arising from the operation of GM vehicles".
But there had been concerns that this could leave huge numbers of consumers with limited legal rights, because they would be seeking compensation from a firm with largely unprofitable assets.
"The fact that 'New GM' will protect consumers injured by defective 'Old GM' cars is a positive development for public safety," The Ad Hoc Committee of Consumer Victims of Chrysler and GM said in a statement.
Under the restructuring plan, the new GM will not however take on liability for pending claims against the firm.
Those claimants will have to seek compensation from the old firm.
Lookers to raise £80m to cut debt
Car dealership group Lookers is to raise £80.7 million in a fully underwritten share sale to reduce its debts and change its banking arrangements on to more favourable terms.
The announcement, which coincided with the company's annual general meeting, will see 201.85 million new shares issued at 40p each, a 19% discount on last Thursday's (June 25) closing price.
Chairman Phil White said: "Lookers has established a solid basis for protecting profitability in the current difficult trading environment and is trading relatively resiliently. The group's balance sheet will be strengthened significantly as a result of the offer. The improved capital structure will provide significant flexibility to enable the group to pursue its development strategy and capitalise on opportunities as the market recovers."
The company will use the cash raised to repay a £50m high interest loan, reduce a term loan by £15m and reduce a revolving credit facility by £11.5m.
The Lookers board recently agreed with its lending banks the accessing of up to £210m in loans until April 2012.
Commenting on the current crisis facing the UK motor industry, Lookers said: "The global economic downturn, uncertainties in financial markets and rising unemployment have affected UK consumer confidence. A reduction in consumer credit to finance car purchases has compounded this drop in consumer confidence."
Nevertheless, the company believes that the current Government and motor industry scrappage scheme designed to boost new car and van sales should improve registrations and thereby help strengthen the company's retail sales.
Lookers says that its like-for-like new car sales for the first five months of 2009 are 10% ahead of the market and the motor division's performance in the period was ahead of budget, despite market pressures affecting sales of new cars.
Describing the current new car market as 'extremely challenging', Lookers said that although its increasing sales would gain market share the decline in volume had reduced profits compared to the same period in 2008. Lookers says that its used car sales and aftersales business continue to grow.
In a statement, the company said: "The board believes that fragile consumer confidence will mean that 2009 will be challenging for the new car market. However, the impact of the UK scrappage scheme should ultimately benefit new car sales, and the board is endeavouring to optimise the opportunity that this presents to maximise sales.
"The board believes that the Group is well placed to take advantage of opportunities which may arise and emerge from the current downturn as a stronger and more efficient business."
At the AGM, it was announced that chief executive Ken Surgenor, who will be 65 in August, will stand down from the board on September 30. Peter Jones, currently managing director of the motor division, will takeover as chief executive on October 1. However, Mr Surgenor will remain with the group running the Charles Hurst group of businesses in Northern Ireland.
Peugeot plans to cut dealer network
Peugeot plans to cut its 266-strong network, with around 26 dealers being given notice of termination.
Rod Philpott, director of network development, said Peugeot was looking to have 250 UK sites and with new dealerships and terminations, it would balance out to around that number.
He added that it was impossible to pinpoint why dealers have been terminated.
"It could be they didn't sell enough cars, or they weren't good with customers or property issues. It's not fair to generalise," commented Mr Philpott.
Friday, June 26, 2009
Jobs warning at Jaguar Land Rover
More job cuts may be made at Jaguar Land Rover, after the carmaker reported a £280m 10-month loss, owner Tata Motors has warned.
Tata also said that further shutdowns were likely at Jaguar Land Rover's factories in Castle Bromwich, Coventry, Solihull and Halewood, Merseyside.
Jaguar Land Rover currently employs 14,500 people, having made 450 redundancies at the start of the year.
Sales of Jaguar and Land Rover cars fell 32% in the 10 months to 31 March.
The number of vehicles sold fell to 167,000 from 246,000 a year earlier, as worldwide demand fell sharply due to the recession.
Tata said that while Jaguar Land Rover sales slumped "considerably" last year, one highlight had been "a very strong consumer response" to the Jaguar XF model.
The £280m loss was for the same period to 31 March, which was Jaguar Land Rover's first 10 months under the ownership of India's Tata.
Tata's own losses
A spokesman for Jaguar Land Rover said the firm was continuing talks with the UK government about the possibility of some form of financial assistance.
Tata bought Jaguar Land Rover for £1.7bn in June 2008 from Ford.
The warning about possible further job cuts at Jaguar Land Rover came as Tata reported its own losses.
Tata made a net loss of $520m (£315m) in the year to 31 March, which includes the 10 month impact of Jaguar Land Rover.
It was the firm's first annual loss for eight years.
French strike halts Mini producer
Staff at BMW's Mini plant in Oxford have been sent home until Monday after production was halted for a second day by a strike involving French suppliers.
BMW said a French firm which provides bearings for the cars' steering units is being hit by an industrial dispute.
Close to 4,000 workers are employed at Mini's Cowley plant and managers are monitoring the situation.
Mini said the circumstances were beyond its control and it was not the only manufacturer affected by the walk-out.
Receivers appointed at Brooklyn Motors
Brooklyn Motors, ranked 64 in the AM100, has gone into receivership.
Nigel Ruddock and Neil Tombs of Grant Thornton have been appointed administrative receivers today.
Vertu Motors has bought part of the £150m turnover group saving 160 jobs.
Two other Ford sites, at Malvern and Kidderminster, have been sold separately to MTCR Marketing, another company owned by Brooklyn's managing director Tim Hill. That deal has saved 50 jobs.
Four Toyota dealerships and one Skoda operation are understood to have been closed, with the loss of 100 jobs.
We understand that the group had been offered for sale for several months.
Grant Thornton said: "The group had incurred heavy losses over a number of years and was affected by the general downturn in the sector during 2008, as well as the wider economic slowdown."
Toyota has this afternoon confirmed that its centres operated bt Brooklyn at Hereford, Worcester, Cheltenham and Gloucester have ceased trading.
"Future Toyota representation in these areas is currently under review," said a spokesman.
DATED: 26.06.09
FEED: AM
Vertu bags Brooklyn sites
Vertu Motors has bought part of Brooklyn Motor group out of administration.
The purchase includes Worcester Ford, Redditch Ford, Redditch Mazda and an authorised repair franchise for Iveco in Redditch. All include freehold properties.
Vertu has also bought Cheltenham Mazda.
Chief executive Robert Forrester said deal will cost Vertu around £7.9 million and the business acquired complements Vertu's existing Ford operations in Birmingham, Cheltenham and Gloucester.
Vertu Motors will now operate 45 franchised operations, four non-franchised and two standalone service operations.
Forrester added: “There is considerable scope to integrate these dealerships onto Vertu’s scalable platform, and these are excellent volume franchises that strengthen the group’s portfolio balance.”
Vertu's Annual General Meeting will be on July 23.
DATED: 26.06.09
FEED: AM
Thursday, June 25, 2009
Hyundai cashes in on scrappage scheme
This is more than the 11,209 cars the company sold in the first four months of the year, according to SMMT figures.
The company is placing orders with the parent in Korea for further consignments of i10 and i20 models. The top seller is the i10, which costs from £4,995 including the scrappage allowance.
Weak won
Hyundai is benefiting from the weakness of the Korean won.
This week, Glass's Guide warned that some car makers may limit supplies of small cars to the UK and give greater support to scrappage schemes in mainland Europe because of the weak pound.
Glass's Guide managing editor Adrian Rushmore said some small cars, already in demand before the introduction of the scrappage scheme, were in short supply.
Glass's warning
"It is possible that certain models simply won't be available within the scheme's stipulated 16-week timeframe for delivery.
"This situation will be aggravated if manufacturers limit supply to the UK because of the low value of sterling against the euro, recognising that it may be more profitable for them to support scrappage schemes elsewhere in Europe," said Rushmore.
DATED: 25.06.09
FEED: MT
Santander to offer service plans
It ruled that Sandicliffe misleadingly implied it was approved by an official trade body in the ad.
BBC Watchdog
The ad used background music similar to the BBC Watchdog programme and used the claim:
"Say no to dodgy dealers and save twice with your MPS approved dealers Sandicliffe.
The ASA upheld a complaint from a listener who challenged the claim ‘MPS approved dealers' because he said it implied the dealer was approved by an official body.
Sandicliffe said MPS stood for Midlands Price Squad which, it said, was a "tongue-in-cheek creation", intended to help draw people's attention to what to expect when purchasing a used car from a dealer during the credit crunch.
Educating customers
It said it wanted to emphasise to customers that price was not the only consideration; quality of service was also important and they should be aware of "corner-cutting" by other less scrupulous dealers.
It was in this context that they created the fictitious body, 'MPS', which included a website and checklist for buyers.
Sandicliffe said it did not intend to undermine the work of Trading Standards or other regulatory bodies and actually sought to support it.
But the ASA said that at no point did Sandicliffe explain that MPS was a ficticious body and ruled against it in its current form.
DATED: 25.06.09
FEED: MT
ASA tells dealer group to pull ad.
It ruled that Sandicliffe misleadingly implied it was approved by an official trade body in the ad.
BBC Watchdog
The ad used background music similar to the BBC Watchdog programme and used the claim:
"Say no to dodgy dealers and save twice with your MPS approved dealers Sandicliffe.
The ASA upheld a complaint from a listener who challenged the claim ‘MPS approved dealers' because he said it implied the dealer was approved by an official body.
Sandicliffe said MPS stood for Midlands Price Squad which, it said, was a "tongue-in-cheek creation", intended to help draw people's attention to what to expect when purchasing a used car from a dealer during the credit crunch.
Educating customers
It said it wanted to emphasise to customers that price was not the only consideration; quality of service was also important and they should be aware of "corner-cutting" by other less scrupulous dealers.
It was in this context that they created the fictitious body, 'MPS', which included a website and checklist for buyers.
Sandicliffe said it did not intend to undermine the work of Trading Standards or other regulatory bodies and actually sought to support it.
But the ASA said that at no point did Sandicliffe explain that MPS was a ficticious body and ruled against it in its current form.
DATED: 25.06.09
FEED: MT
Inchcape cuts costs amid flat sales
The dealer group said however that its aftersales business, which represents more than half of its gross profit, remains strong.
The company said in a pre-close trading statement that total sales in the five months to May were down 16.3 per cent in sterling terms and 22 per cent in constant currency.
Pre-tax profits in the second quarter are expected to be significantly ahead of the £20m reported in the first quarter but well adrift of the same period last year.
UK performance
In the UK, the company continues to outperform the new car market with like-for-like sales down 21 per cent in a market down 27.9 per cent.
Inchcape has reduced debt to £100m by then end of May compared to the £404m at the end of March by paying off £234m from a rights issue. It also improved cash flow.
As a result of this it expects its year-end debt to be below its previous expectations.
Inchcape group chief executive André Lacroix said the scrappage scheme in the UK had helped boost traffic through its dealerships. The company is set to deliver a solid performance, he said.
Stronger balance sheet
"The group balance sheet has been strengthened considerably due to the successful completion of our rights issue and the positive impact of our operational initiatives on cash flow.
"Given the challenging trading conditions in our markets, we remain focused on executing our five operational priorities of growing market share and aftersales, while reducing costs, working capital and capital expenditure to improve our competitive position and maximise our cash flow.
"Our actions in the first five months provide a platform for us to deliver a solid performance for the full year against the background of what is expected to be a lengthy global industry downturn."
DATED: 25.06.09
FEED: MT
Why was LDV so badly served?
LDV's collapse serves as a bad omen for dealers, buyers and suppliers. LDV had carved out a valuable niche as a specialist vanmaker for fleet and small business buyers. With investment in R&D, facilities and marketing it could have weathered the current downturn and been ideally placed for business buyers once the economy pulls out of recession. However, it has been poorly served on three counts. Where was the government? The government provided a bridging loan but was, of course, embroiled in a crisis of its own making. It took its eye off the ball whilst it tried to limit the damage done by the expenses furore and its dismal performance in local and European elections. The business secretary, Lord Mandelson, who did a commendable job in pushing through the scrappage scheme should have been fighting LDV's corner. When you wish upon Weststar Running out of Gaz What is particularly worrying now is that Gaz is part of the Magna consortium behind the acquisition of GM Europe. If the LDV experience is anything to go by then Vauxhall may find itself out of the frying pan but into the mire. DATED: 25.06.09 FEED: MT |
GM looks for improved offer for European operations
General Motors has invited several investors to hand in improved offers for its European operations, which include Vauxhall based in the UK.
The aim is to tighten the screws on Magna International, which earlier this month became the front-runner in the race for GM Europe when it secured preferred bidder status.
Beijing Automotive Industry Corporation, the Chinese carmaker aims to hand in an improved offer for the GM business by the middle of next month.
Belgium-based investor RHJ International could also make a second offer for the business.
It has emerged that both BAIC and RHJ have been able to look at the books of GM Europe to increase the pressure on Magna amid tough negotiations with the Canadian car parts supplier.
Fiat, an early favourite in the bidding, has said that its offer for GM Europe remained on the table.
Road pricing 'killed off' by new Transport Secretary
Plans to introduce pay-as-you-drive charges on all motorists have been killed off by recently appointed Transport Secretary Lord Adonis.
Road charging has been on the Government's agenda for many years, but it will not be included in the Labour Party's manifesto in the run-up to the general election, which must be held in the next 12 months.
The plans were suspended after 1.8 million people signed a petition on the 10 Downing Street website calling for road pricing to be scrapped.
Lord Adonis has now said: "We definitely are not proceeding with national road charging in the next Parliament. I don't believe as Britain comes out of recession and motorists are feeling under pressure, that it is the time to put road charging on the agenda."
Wednesday, June 24, 2009
AM 100: Listed Companies
Jack Petchey, the 84-year-old former car dealer turned share trader and philanthropist, does not believe the UK’s listed car sector will be on its uppers for long.
He has spent many millions buying 11% of Pendragon, which makes him the biggest single shareholder. He is also the owner of 21% of Lookers, having bought a stake in January.
He has already made profit from investment in H R Owen and European Motor Holdings.
Petchey has made the most of very depressed share prices. Pendragon, which was trading at 2p around Christmas, is now 20p. Lookers bottomed out at 60p, having fallen from 90p.
The reason for the very severe fall in Pendragon was the news that it had breached its banking covenants, would have to pay a ‘fine’ for doing so, and would be forced to renegotiate the loans on worse terms.
So long did the talks go on that investors feared agreement would never be reached. It did happen, but the properties in the company had to be written- down in value by £58 million and shareholders’ funds in the company reduced to £80 million.
Loss-making companies
Pendragon has worked hard to take out the loss-making companies, and the number of dealers in the group now is down from 341 to 280. Volvo, Ford, Renault and Kia are the franchises that have been most reduced.
Nevertheless, the company fell into a loss of £30 million at the pre-tax level, compared with a positive £42 million the previous year.
Lookers has done better than expected over the last year. In April it was able to announce a profit of £14 million (compared with £23 million last year) which became a loss of £15 million after write-downs on the value of the business and goodwill. It paid no dividend in order to con-serve cash.
After lengthy negotiations with bankers it managed to secure fresh borrowings of £210 million which will not fall due for repayment until 2010. The arrangement fees also contributed to the bottom line losses caused by the write-downs. It is possible the company will want to copy Inchcape and raise money from the stock market in a rights issue if conditions allow.
DATED: 24.06.09
FEED: AM
Chinese bidder likely for Volvo
Beijing Automotive Industry Holding Co may place a bid to take Volvo out of Ford's hands.
The Chinese car manufacturer failed in a bid last month for General Motors’ business in Europe and is now expected to send executives to Volvo’s Gothenburg headquarters in Sweden.
The Chinese delegation will tour the factories and review the company’s books according to reports from Bloomberg.
Ford, which remains the only major US car manufacturer not in bankruptcy, is believed to be shedding its international luxury marquees in a bid to focus on rebuilding its name-sake brand and to raise the cash needed to avoid a Government bailout.
Beijing Auto will face a challenge from Geely Holding Group Corporation as it bids to build more profitable vehicles.
DATED: 24.06.09
FEED: AM
Confidence slow to return, says Bank of England
There have been recent signs that the pace of decline in the economy is levelling off but it is too soon to draw strong conclusions from that, Bank of England Governor Mervyn King was quoted as saying on Friday.
In an interview published on the Southern Daily Echo newspaper's website, King was quoted as saying: "We are seeing now some signs that the rate at which outlook was falling is beginning to flatten off but I don't think anyone should draw strong conclusions."
The newspaper said he went on to note that confidence had dropped markedly as the economy had fallen into recession.
"You can't regain it quickly, so it's bound to take a lot longer to recover than it was to fall into recession, which was a very sharp fall in activity over the last six months," he was quoted as saying.
"I don't think it would be sensible to expect activity to pick (up) as quickly."
King's comments in the regional newspaper are in line with the cautious tone on the economy he employed in a major speech he made on Wednesday.
DATED: 24.06.09
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Ford raises prices for third time
Ford is to raise its UK prices by an average of 4%, blaming the move on the weakness of the pound against the euro.
It is the third time this year that Ford has raised prices. They rose by 4.7% in February and by 3.75% in April.
The list price of Ka, Fiesta, Focus and Mondeo models will rise by between £600 and £650 while an S-Max will cost £700 more and a Galaxy will go up by £800.
Ford conceded that raising prices, in a recession with a scrappage scheme in place, "may seem counter-intuitive".
The price rises will apply to orders received after 30 June.
"With so many of our costs priced in euros, there is no choice if we are to maintain a viable business," said Nigel Sharp, managing director of Ford in the UK.
Many of the Ford cars sold in the UK are assembled in Germany and Spain.
'Huge impact'
Mr Sharp said that sterling had been stable at about 1.43 euros for about 10 years up until the end of 2007, but that the pound had recently fallen to about 1.16 euros.
"The cost impact of this drop, on a car priced at £15,000, is close to £3,500, which has to be absorbed by the business," he said.
"The total revenue impact has been huge - well into nine figures - on Ford's UK business."
The three price rises will cancel out most of the savings from the government's scrappage scheme, which gives customers £2,000 off a new car if they trade in a vehicle that is more than 10 years old.
Weak demand
Separately, car dealership firm Inchcape said the scrappage scheme appeared to be having a positive impact so far.
"When the scrappage scheme was introduced, we saw an increase in traffic," Inchcape chief executive Andre Lacroix told the Reuters news agency.
"It is looking promising."
But the company said that customer demand for new vehicles was still weak.
For the first five months of 2009, it reported like-for-like sales down 21%, compared with falls of 27.9% for the whole of the market.
Suspension failures top breakdown list
Suspension failures are the most common cause of breakdowns in the UK, according to a survey by automotive insurance specialist Warranty Direct.
According to analysis of mechanical failures on 50,000 vehicles over the past two years, springs and shocks, upper and lower arms, hubs and wheel bearings represent 8.2% of breakdowns - more than any other component failing.
The survey detailed the top 10 breakdown failures and although suspension failures topped the table in terms of frequency it did not represent the most costly average repair bill.
Suspension failures result in an average repair cost of £322.82, but radiators deliver the most expensive faults of the top ten at £497.84.
Alternators, electric window motors, injection system, driveshafts, ignitions and miscellaneous electrical faults make up the remainder of the top ten faults.
PSA issues cash-raising bonds
PSA Peugeot Citroen is to sell up to 575m euros of convertible bonds as it forecast an operating loss of up to 2 billion euros in 2009.
The group, which recorded a 343 million euros net loss in 2008, said the capital raised from the bond issue would go towards 'general financing needs', development projects, and the extension of the maturity of its existing debt.
In a statement Peugeot said it had no significant repayment dates until 2011, when a 2001 bond of around 1.6bn euros would fall due.
Peugeot, which is seen as one of Europe's most vulnerable automobile manufacturers, also forecast an operating loss of between 1bn euros and 2bn euros this year, citing uncertainties over whether government support will be continued in 2010, and the chance that the company would have to support its suppliers in the continuing market downturn.
The carmaker had previously declined to give guidance for its expected loss this year, saying only that it expected to remain in the red until 2010.
Peugeot received a 3bn euros long term loan from the French government in March, and a ?400m four year loan from the European Investment Bank in April.
On a more upbeat note, the group said it had revised upwards its estimate for a fall in European sales in 2009, now expecting a decline of around 12% compared to a previous forecast of 20%. Peugeot said the new estimate was thanks to the positive impact of scrappage schemes in Germany and other European countries.
Data provider pushes scrappage scheme angle
Data provider, The Trading Floor, is targeting dealers that want to locate customers that qualify for the UK scrappage scheme.
The Trading Floor says it has data about the motor insurance requirements of two million motorists that could potentially take advantage of the scheme.
A spokesman for The Trading Floor said: “We already supply transactional data to many leading car manufacturers, insurers and motor dealers.
“We hold details about people's preferred contact channels, whether it's post, telephone, email or SMS, which further maximises the chances of a marketing campaign being a success.”
The Trading Floor said dealers can use the information to define customers from postcodes, current vehicle type, length of time they’ve owned the vehicle, income, purchasing cycles and the number of family members.
DATED: 24.06.09
FEED: AM
Inchcape fights recession with forecast of better profits
Dealer group Inchcape has forecast a big improvement in quarterly profits, despite continued weak demand for new vehicles.
The group, which has more than 100 showrooms in the UK, said aftersales business remained strong while it has also benefited from ongoing cost reductions.
In the second quarter of the year, Inchcape said profits were expected to be significantly ahead of the first quarter, albeit well below a year ago.
Like-for-like sales in constant currency terms were down 23.8% in the five months ended to May 31, it added.
Inchcape said: "Customer demand for new vehicles is still weak but our aftersales business, which represents approximately half of our gross profit, remains strong."
In the UK, Inchcape said it continued to outperform the industry with like-for-like sales down 21% in a market that is down by 27.9%.
The group, which employs more than 15,000 people and has operations in Singapore, Australia, Hong Kong, Greece, Belgium and Russia, has responded to the industry slump by cutting 2,000 jobs and introducing a salary freeze.
And in May it raised £234 million from shareholders in order to strengthen its balance sheet.
Shares jumped 8% as investors welcomed the profits improvement and the bigger than expected drop in net debt to around £100 million.
DATED: 24.06.09
FEED: AM
