F&I Management & Training

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 5.0%.

Bank of England Maintains Bank Rate at 5.0%

DATED: 07.08.08

FEED: BoE

Used van values continue to be put under pressure according to data from BCA.
The company’s latest Pulse figures show that values slipped again in June as buyers remain cautious.
Duncan Ward, BCA's UK business development manager for commercial vehicles, said: “There continues to be price pressure in the used van market as average values continue to fall across the board.”
The average value across all sectors dropped to £3,499 in June, a fall of nearly £200 on May’s figure and the biggest monthly drop BCA has seen this year. Average values have fallen by more than £350 compared to those recorded in January 2008.
According to BCA’s Pulse report, fleet and lease vans averaged £3,827 in June - the second month running that values have failed to break the £4,000 watershed. This represented a fall of £152 against May’s values, equivalent to a 3.8% drop. This follows a drop of £147, equivalent to 3.5%, between April and May.
Values for part-exchange stock rose marginally by just £10 in June to £2,074, following a fall of nearly £200 the previous month that was equivalent to a decline of 8.3%.
In the nearly-new sector average values fell significantly to £9,052, a drop of £1,056 against May figures. Values are now some £2,000 behind those recorded in January 2008, although changing model mix at BCA will have contributed to these figures.
Ward said: “The market has now been slowing for most of the year, a situation we have not encountered in the LCV market for some considerable time.
“Buyers are still about in the same numbers, but buying patterns are patchy with a definite two-tier market developing of saleable, good quality stock that is sensibly valued, and difficult to place, poorer quality vans that appear over-valued in comparison.”
Ward said well-presented ready-to-retail vans were making exceptional values as buyers are paying “strong money” to secure them: “Even so, unless buyers already have a home for the van, there may be some hesitance in bidding much above the £7,000 mark.
“Away from the very best of the premium stock it is very much a buyer’s market, with sellers having to look at price to stimulate demand when there is a wealth of choice of similarly specified or condition vans.”
One bright spot according to Ward are LPG vans: “With fuel prices at record levels we have seen a resurgence in values of dual-fuel vehicles (petrol/LPG). Values on the few available have been firming – particularly in the south and Home Counties – but it’s fair to say there has been a step-change in demand in recent months.”

DATED: 05.08.08

FEED: AM

Drivers are being shamed into slowing down with new roadside signs that flash up their vehicle's registration number. The signs read number plates of speeding cars and flash them up on a giant screen with the warning message: 'slow down'. They are being tried out on London-bound drivers on the A12 dual carriageway at Kelvedon, near Colchester in Essex. Mark Pooley, of the Highways Agency, said: "We are investigating whether the system has an effect on the behaviour of drivers. We will assess the vehicle speed data and look at what impact the message had on drivers and how well the technology worked with live traffic. "Existing vehicle-activated systems only show the speed limit sign but do now show the vehicle number plate." None of the drivers whose registration numbers are flashed up will receive a speeding ticket during the seven-week trial.

DATED: 05.08.08

FEED: AW

Money will be used to help consumer finance division
Chrysler has secured a $27bn (£13.7bn) finance agreement in an attempt to help its struggling business financial arm, according to the Financial Times.
The US carmaker hopes the funding will enable it to continue offering discounts and incentives to customers wanting to finance their purchases of Chrysler, Jeep and Dodge vehicles.

The American company has attempted to offset rumours about its financial woes by reporting that as of 30 June, it had cash reserves of $11.7bn – a figure only slightly lower than at the end of 2007.
The carmaker said that it was “well ahead of plan”, earning a first-half profit – before taxes, interest and restructuring costs – of $1.1bn.
These claims come despite Chrysler’s US July sales standing 29 per cent lower than last year.

DATED: 05.08.08

FEED: MT

Pendragon has put the former headquarters of Reg Vardy up for sale.
The move comes despite the motor retailer's insistance earlier this year that it would not close Houghton House in Sunderland.
Pendragon took over the property when it acquired Reg Vardy
The Newcastle office of estate agent Storeys has begun pitching the building to businesses in the area for sale or lease.

DATED: 05.08.08

FEED: AM

BMW Group will miss its 2008 targets this year after it revealed a 43.5% drop in quarterly pre-tax profit to €602 million (£477m) due to worsening market conditions.
The drop shocked analysts which were predicting pre-tax profits of €1.04 billion (£823m). BMW now forecast a 2008 pre-tax profit margin of four per cent, after previously expecting earnings before tax to exceed last year's adjusted level of €3.78bn (£3bn).
BMW said: "Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the US dollar, the impact of the international financial crisis and a weaker US economy.”
Chief Executive Norbert Reithofer said 2009 was shaping up to be a “difficult year full of challenges”.
He said: "We will use the strong headwinds as an opportunity for change and continue the process of renovating and optimising our business.
“We must and we will intensify our efforts on both the cost and revenues side even further.”
In order to battle the downturn in expected profits, BMW will be reducing production volumes and models that were intended for the US will now be sent to countries with higher margins.
The BMW Group is aiming for 2010, as an intermediate target, to achieve return on sales of at least 6% and in the automobiles segment.
Despite the gloomy outlook, BMW Group registered sales volume growth for all three brands from April to June.
The total number of BMW, Mini and Rolls-Royce brand vehicles delivered to customers increased by 4% to 413,087 units. Sales of BMW brand cars went up by 2.3% to 344,019 units. The Mini brand also recorded strong growth with the second-quarter sales volume up by 13.5% to 68,756 units. Rolls-Royce Motor Cars recorded an extremely high growth rate, with 312 units sold in the quarter, a 72.4% increase.

DATED: 05.08.08

FEED: AM

David Smith, CEO of Jaguar Land Rover, has said the two-brands will be able to operate with more freedom under the ownership of Tata, free from the financial constraints which tied them down at Ford.
Smith told the Financial Times: "Financial constraints had made life much more difficult at Ford.
"Tata wants us to be more autonomous, I’ve got all the executive authority I need to make day-to-day decisions without having to consult with Tata board members."
Smith will meet with Tata's chairman, Ratan Tata and its chief executive, Ravi Kant every couple of months to review progress on plans strategies and future products.
JLR is currently implementing plans to move the brands upmarket into the £100,000 area and the recruitment of 600 more engineers.
UK dealer group Inchcape announced it would be sticking with JLR after meeting with Tata bosses in Mumbai. It was convinced by the new direction Tata would be taking.

DATED: 05.08.08

FEED: AM

New brand is bucking downward market trend
San Motors, a new name to the UK retail sector, claims it will exceed its dealer recruitment target this year.
The fledgling brand currently has 14 dealers, including sites in Guernsey and Dundee, and expects to have between 30-35 sites by the end of the year.

UK managing director Tony Waite said reaction from dealers to the Storm had taken the franchise by surprise as it only planned to recruit eight sites this year.
“Dealers like the car because they can make a 20 per cent margin which is pretty unique in the industry,” he said.
The Storm, which is a two-seat convertible, has only just gone on sale.
The car retails for £9,995 and has a glass-fibre body, a 1.2 Renault Clio engine and is manufactured in India.
It will be followed by an as yet unnamed and sportier two-seater in October powered by a 1.6-litre Peugeot engine.
The brand will be attending the new Motor Trader Dealer Drive later this year.

DATED: 05.08.08

FEED: MT

Global group impressed by new owner Tata’s plans for the prestige marques
Inchcape has reversed its decision to dispose of its Jaguar and Land Rover franchises in the UK having been impressed by new owner Tata’s plans for the brands.
The dealer group runs 10 outlets for each of the marques which Ford sold to Tata for £1.15bn in March.

“Tata is a highly regarded industry player,” said Ken Lee, Inchcape’s group communications director.
Lee said Inchcape would have ended its relationship with Jaguar and Land Rover had a venture capitalist bought them.
“They were in the original group of brands we said we were exiting from,” he said.
But he said Tata had pledged to put investment behind the brands and had confirmed new model plans.
“We’ve had a great 18 months from the brands,” he added.
During the first half of 2008 Inchcape Retail sold five Vauxhall sites for £14.3m and plans to dispose of 12 more non core dealerships – including franchises for Ford, Kia and Renault - as it focuses on its prestige portfolio.
Lee said Inchcape Retail, which is ranked second in the Motor Trader Top 200, now commanded 8 per cent of the premium segment in the UK.

DATED: 05.08.08

FEED: MT

BMW has warned that deteriorating business conditions means it will miss its targets for 2008. The warning came as it reported pre-tax profits of 602m euros ($937m; £474m) in the three months to the end of June - 43.5% below the same period in 2007. The result was well below expectations and BMW shares fell by 7.9% in early trading in Frankfurt. BMW's warning follows Daimler's decision last week to cut its earnings guidance for the year. Shares in other European carmakers were hit by the news, with Volkswagen falling 3.1% and Renault down 3.4%. 'Another difficult year'"Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the U.S. dollar, the impact of the international financial crisis and a weaker US economy," BMW said. And the carmaker said it was not particularly optimistic about next year either. "We assume that 2009 will be another difficult year full of challenges," said chief executive Norbert Reithofer. BMW's profits have also been depressed by one-off charges. It has made a 695m euro provision to cover financial risk, which includes current falls in the price of used cars, which reduces the amount that BMW can get for cars when they reach the end of lease deals. It also spent 107m euros on reducing staff numbers.

DATED: 01.08.08

FEED: AW

General Motors has reported a three month net loss of $15.5bn (£7.8bn) as North American sales fell by 20%. GM took a $3.3bn charge for buying out the contracts of 19,000 hourly workers who left at the end of June. It also wrote off $1.3bn because of reduced values of big, used cars, which cut the value of formerly leased cars owned by its financing unit, GMAC. Without one-off charges, GM lost $6.3bn compared with a net profit of $891m in the same period of 2007. It is the third biggest quarterly loss in the carmaker's history. On 15 July, GM announced the latest stage of its restructuring plans, which include laying off thousands of workers, speeding up the closure of truck and sports utility vehicle (SUV) plants, selling assets and suspending its dividend. GM is not the only company suffering from the state of the car market. Other firms suffering Earlier in the day, BMW warned that its profits for 2008 would be below forecasts and predicted a "difficult" 2009. Also on Friday, Nissan reported a 42.8% fall in its three month profits. Net profit fell to 52.80bn yen ($491m; £248m) between April and June, compared with 92.31bn in the same period of 2007. "In the face of the severe operating environment, Nissan remains resilient but cautious on the outlook for our industry," said chief executive Carlos Ghosn, who also runs Nissan's French partner Renault. Nissan said it was trying to limit the effects of the slowing US car market by raising prices, cutting jobs and reducing truck production.

DATED: 01.08.08

FEED: AW

Shanghai Automotive has said that assembly of MG cars has recommenced at Longbridge, in preparation for the brand's UK re-launch next month.
The Chinese carmaker, which owns the MG brand, hopes to build 700 units at the Birmingham factory by the end of the year.
Longbridge is the final assembly point for the TF, whose components are largely manufactured in China.
Its UK dealers are due to begin sales of the limited edition TF LE500 launch version next month.
Retailers were invited to Longbridge in mid-July to examine the car, which is priced £16,399. Only 500 units are being sold, before a wider range of TF variants goes on sale.
Click here to see the BBC’s video report on the new MG TF LE500 here.

DATED: 01.08.08

FEED: AM

General Motors is reportedly in talks with Indian 4x4 manufacturer Mahindra & Mahindra about selling its Hummer brand.
However Reuters quotes sources as saying Mahindra already has plans to launch its own pick-ups and SUVs into the US market.
The news agency said talks are continuing, but with limited interest from Mahindra. GM is also in discussions with vehicle manufacturers in Russia and China, it claims.

DATED: 01.08.08

FEED: AM

Almost half of franchised dealers say they are forced to regularly pre-register cars in order to meet manufacturers’ new car targets. It’s a figure that is likely to rise in the second half of the year as the market continues to falter in the face of rising fuel bills, higher car tax charges and the economic downturn.
Responding to a Sewells Information & Research survey carried out on behalf of AM, 219 of the 447 dealer respondents said they pre-registered cars last year and were continuing to do in 2008.
Most – 68% – pre-registered fewer than 49 vehicles last year; 20% pre-registered between 50-100 cars and just over 11% pre-registered more than 100 cars.
However, 94% of dealers believe that pre-registering is bad for the industry. It ties up money in stock that they would not choose to buy and creates an imbalance of cars that is too heavily weighted towards nearly-new.
This prevents dealers from sourcing the two-year-old cars that the market wants and that offer greater profit margins.
Adrian Rushmore, managing editor of Glass’s Guide, said: “Nearly-new is the most competitive sector because everyone has got them.”
Many of these cars end up on car supermarket forecourts or internet websites often advertised at prices that undercut franchised dealers.
Asked which manufacturers are most active in the pre-registered market, dealers named Vauxhall top, with 15% of respondents claiming it was the worst culprit.
Two French manufacturers were next – Renault (10%) and Peugeot (9.2%) – followed by Fiat (7.2%). BMW is a surprise fifth on 6.4%, way ahead of premium rivals Mercedes-Benz (2.8%) and Audi (1.2%).
Industry insiders also point to Ford and Volkswagen with one adding: “Just do a search on Auto Trader for sub-six-month stock and you’ll see who’s doing all the pre-registrations.”
Pre-registering has long been seen as the real driver of new car sales figures which makes a mockery of the Society of Motor Manufacturers and Traders’ monthly figures. Estimates on cars ‘sold’ in this way range from 200,000 to almost 400,000 – almost 17% of last year’s 2.4 million new car market.
According to CAP figures, almost 400,000 cars under six months old were sold last year. Even taking into consideration dealer demonstrators and manufacturer company vehicles, it’s a sizeable chunk of the market that is primarily pre-registered, according to CAP operational development manager Mark Norman. “This stock is competing with dealers’ new stock and it’s Catch 22,” he added. “If the price gap isn’t big enough between new and nearly-new then people will naturally buy the new car; if the gap is too big then it will affect depreciation.”
Norman expects the situation to worsen because carmakers have already ordered their stock for the year. “We are in an oversupply situation. Until the manufacturers can turn off the tap, it won’t improve,” he added.
It’s a view shared by his counterpart at Glass’s. Rushmore believes dealers are “at breaking point”. “I don’t think they can take much more,” he said. “The market conditions will become progressively more difficult as we go through the year and manufacturers have got to recognise the pressures that dealers are under and support them.”
Rushmore puts much of the blame for pre-registering cars on the volume-based bonus structure. “It puts dealers in a corner and forces them to pre-register. They take the bonus, but they also take the pain,” he said.

DATED: 01.08.08

FEED: AM

Network concerned over falling sales and investment levels after boss resigns
Chrysler Group dealers have been thrown into disarray following the sudden resignation of managing director Simon Elliott and his subsequent appointment as director of Volkswagen’s commercial vehicles operation.
Elliott returned to head up and restructure UK operations at the beginning of the year after managing the brand’s Chinese operations.

'Sales fell during the first six months of the year with Chrysler dropping by 14 per cent while Jeep sales slipped 11.7 per cent.
Sales in June, the most recent month for SMMT figures, showed Jeep tumbling 50.4 per cent to just 357 units, while Chrysler dropped 28 per cent to 739 units.
In the same period the fledgling Dodge brand saw volumes rise by 73 per cent, but from a low starting point, with year to date sales totalling 3,038 units.
John Rudney, owner and managing director of Horsham Car Centre, one of the UK’s few solus Chrysler Group sites, said he was saddened by Elliott’s exit as he believed he had the “experience and passion” to turn around the business.
“I really regret that he’s gone as I had high hopes for him and I trusted the guy. I am concerned about the future for the franchise.
"It needs someone who can take leadership and secure huge amounts of investment from the US,” he said.
The Chrysler Group was formed last November following the demerger of DamilerChrysler, with the new operation 80 per cent owned by Cerberus, the US private equity firm.
Since then the newly independent operation has been badly hit by the downturn of the US car market.
One dealer who contracted Motor Trader, but wished to remain anonymous, said the departure of Elliott was bad news for the network.
“I’m really concerned especially when you consider he was brought back from China to do a job which he has clearly not been allowed to get on with. Many dealers in the network thought a lot of Simon and his abilities,” he said.
Elliott’s appointment in January this year followed the equally sudden departure of Peter Lambert as UK managing director last October.
Elliott’s starting date at VW, a company he began his career at 27 years ago, has yet to be announced.
Chrysler said it is still in the process of naming a successor.

DATED: 01.08.08

FEED: MT

Job losses will happen in US by November
General Motors plans to cut almost 5,000 salaried employees from its North American staff by 1 November as part of a cost-cutting initiative.
The cuts would amount to 15 per cent of GM’s white-collar North American workforce.

The announcement has come amid predictions that the American carmaker is poised to post big second quarter losses.
GM has also said it will cut back on its vehicle leasing operations, which could cause its US sales to drop even further.
It has been predicted that the carmaker’s total revenue will fall about 3 per cent in the second quarter and that GM will suffer an operating loss of $1.49bn (£75m).
In an attempt to offset its struggles in North America, GM has been relying on strong international operations.

DATED: 01.08.08

FEED: MT

Nissan is recalling 70,000 Sunderland-built Qashqais because of a possible fault with the steering mechanism. The recall affects vehicles built between November 2006 and June 2007, which were fitted with a component found to be faulty. Letters have been sent to the affected Qashqai owners across the world to arrange for the fault to be remedied.

DATED: 01.08.08

FEED: AW

Strength of RAC name crucial to new warranty brand The RAC name is proving crucial in the credit crunch-affected used car market to the success of the motoring organisation's new warranty brand. RAC Warranty was launched by the RAC in partnership with The Warranty Group in January and Ian Simpson, sales and marketing director, said that a large part of the new brand's initial success was thanks to dealers recognising the strength of the RAC brand in providing customer reassurance. He explained: "Dealers are telling us the same thing again and again. Customers worried about the credit crunch want a warranty that provides a high degree of reassurance - and trust that the RAC would only put their name to something highly dependable. "There are many car warranty brands available but almost none of them have any recognition outside the motor industry. Being able to say to a customer that you are providing an RAC warranty is a persuasive tool for a dealer." Simpson added that this argument became even stronger for older vehicles being sold by independent dealers who did not operate at the top end of the market. He said: "Used car customers who are spending less money are even more concerned that there is a really effective safety net available that will help them if a problem develops with their vehicle. For these people, the RAC Warranty brand is exceptionally strong." Simpson added that the features attracting independent used car retailers were not just the credibility of the RAC brand but the strength of the product range, easy and effective administration systems and high quality point of sale material. He continued: "This list of benefits is proving very attractive to independent used car retailers and they are coming on board very quickly. We are really pleased with the response we have been getting. "Deals with major dealer groups obviously take a little longer to complete but there are a number in progress and we hope to announce our first very soon."

DATED: 01.08.08

FEED: AW

German brand is third in year-to-date sales list
Volkswagen has leap-frogged Ford to become the world's third largest carmaker by vehicle sales.
According to figures for the first six months of the year, VW increased global sales 7.2 percent to 3.31 million cars and trucks, while Ford sales fell 11 percent to 3.09 million.

Ford was the world number two until five years ago when it was overtaken by Toyota.
Now it has dropped into fourth place as sales in the US have plummeted 14 percent as fuel prices have risen above £2 a gallon, hitting demand for its large pickup trucks and SUVs.
Ford can no longer count Jaguar and Land Rover in its sales figures having sold the British brands to Indian manufacturer Tata Motors last March.
Company boss Alan Mulally says Ford will put more emphasis on fuel-efficient small cars in the future leaning on models produced in Europe.
Meanwhile, VW has seen sales grow in emerging markets such as China, India, Brazil, Russia and Ukraine.
Toyota has since moved into the number one spot and sold 4.82 million vehicles in the first half of 2008 according to preliminary figures, while GM reported sales of 4.54 million.

DATED: 01.08.08

FEED: MT

Used sector is up despite downward market trends
London has seen the greatest increase in used 4x4 sales in the first quarter of the year, despite rising fuel prices, the congestion charge, and eco-friendly consumer trends.
Figures from the DVLA and Experian show Greater London buyers bought 11 per cent more SUVs in quarter one compared to the same period last year.

The region recorded the second highest increase in the purchase of used multi-purpose vehicles and an increase of 14.3 per cent in used diesel cars, compared to a national increase of 10.1 per cent.“Greater London continues to be the capital of 4x4 drivers. It is also the region to continue to see some of the biggest increases in diesel cars,” said Kirk Fletcher, managing director of Experian’s Automotive division. “Car buyers are more aware of the cost of running a car these days and if the rapid increase in fuel prices continues, we will see a more rapid growth in the sale of alternative fuel cars.
“Certainly over the last couple of years, sales of these vehicles types have risen more swiftly throughout the country.”Despite the increase in certain sectors, total used car sales in London remained static, increasing by a nominal 0.1 per cent.
Total used car sales throughout Great Britain fell by 0.5 per cent from 1,978,465 to 1,999,750 sales.

DATED: 01.08.08

FEED: AM

Liverpool Victoria has received the UK's second largest fine ever for mis-selling payment protection insurance (PPI).
The insurer has been ordered to pay £840,000 after being pursued by the Financial Services Authority (FSA) for "serious failings" in PPI sales.
Earlier this year HSBC subsidiary HFC Bank was fined £1m for similar failings.
The FSA said that Liverpool Victoria added the cost of PPI to quotes for personal loans without customers asking for it.
Around 14,500 customers were not told that PPI was being added to their loan, and that they would pay interest on it.

DATED: 01.08.08

FEED: AM

A Peugeot dealer in Yorkshire has ceased trading due to financial problems.
Matthewmans, which traded in Rotherham with Peugeot and Suzuki franchises, closed its doors after calling in administrators from Grant Thornton.
The business was run by Chris Matthewman, formerly a dealer principal with JCT600.
The outlet had traded since the 1960s as Derek G Pike, first with Fiat then with Peugeot from the 19080s, prior to Matthewman's management buy-in in 2005.

DATED: 01.08.08

FEED: AM

Jaguar Land Rover has selected Fiat Group Automobiles Financial Services (FGAFS) to be its exclusive partner in Europe to provide automotive financial services for its dealers and customers.
The agreement will gradually replace the arrangement with Ford, whose financial arm provided support during the Ford ownership of Jaguar Land Rover.
Under the arrangement, FGAFS, which is a 50%-50% joint venture between the bank, Crédit Agricole Group and Fiat Group Automobiles, will start taking on all Jaguar Land Rover’s financing activities in Europe from February next year, with the transition being completed by June 2009.

DATED: 01.08.08

FEED: AM

West Yorkshire retail group Colin Appleyard has set up an in-house training programme for its management and sales staff.
Previously, staff from the AM award-winning dealer group attended manufacturer training only. Rather than one-off training days, the scheme intends to revisit what has been learnt, looking at how staff have implemented the training into their work.
“Training often goes in one ear and out the other,” said Robin Luscombe, Colin Appleyard senior director.
“We’re trying to overcome this. Rather than return to the workplace and do what we used to do, training one month and going over it the next should help it make a difference to our staff.” Total outlay for training is around £35,000, with more than £1,500 invested per person.
Currently, there are 12 managers and six sales staff undertaking the new programme.
If successful, as Luscombe expects, and if “the economy picks up”, Colin Appleyard will run the training on an annual basis.
For managers, the scheme lasts nine months, while salespeople train for 18 weeks.
Staff turnover at the group is less than 10% but Luscombe hopes the programme will “reduce the costs of having people that don’t last”.
“It will also give people a chance to make themselves into good salesmen,” Luscombe added. Training is one day a week for salespeople and one half-day a month for managers.
Yorkshire Sales and Marketing Developments, the Institute of Sales and Marketing Management provider for the region, will deliver the sales training, while the management coaching will run in conjunction with the Blue Water Partnership.
Luscombe said staff would continue to attend manufacturer training days alongside the scheme. Colin Appleyard already runs apprentice schemes for young technicians, parts assistants and administration staff and it operates a policy of promoting from within.

DATED: 01.08.08

FEED: AM