F&I Management & Training

All new models of cars and vans should be equipped with special daytime lights from 2011 to improve road safety, the European Commission says. The EU directive - not yet law in all 27 member states - means vehicle lights will also be more environment-friendly, the commission says. The Daytime Running Light (DRL) comes on automatically when the driver starts the engine. Industry executives have backed the proposal, the commission says. It speaks of "very positive" results for road safety in EU countries where DRL is already mandatory, such as in Scandinavia. The directive envisages that from 7 February 2011 all new types of passenger cars and small delivery vans will have to have DRL. Trucks and buses will follow from August 2012. When it is dark, the driver has to switch on the headlamps manually - in that case, the DRL goes off automatically. "This will make a positive contribution to our goal of reducing fatalities on European roads whilst being more fuel efficient then existing lights," commission vice-president Guenter Verheugen said on Wednesday. The DRL's energy consumption is just 25-30% that of the normal driving light and when using LED (Light Emitting Diode) technology for DRL, the energy consumption is only 10% of the current average, the commission says. It argues that DRL makes vehicles more visible to all road users. But the Conservative transport spokesman in the European Parliament, Timothy Kirkhope MEP, warned that too much light could distract drivers and put cyclists and pedestrians at greater risk. He called for an independent assessment of the technology before any EU-wide approval of DRL.

DATED: 26.09.08

FEED: AW

Consumers are giving car dealers a run for their money when it comes to successfully negotiating a better deal on a car purchase, according to a recent survey[1] by Experian®, the global information services company. Recent research by Experian's CreditExpert.co.uk to find out which situations British adults were most likely to negotiate prices in has revealed that, as a result of the current economic environment, over half the population (57 per cent) are more willing to drive a hard bargain compared to 12 months ago. Most significantly for the trade, a car purchase is the item that consumers have been most successful with when bartering for a lower price (38 per cent). Kirk Fletcher, Managing Director of Experian's Automotive division, said: "The rising costs of living and running a car means that consumers are driving a much harder bargain with dealers. Furthermore, it is no secret that the car market is experiencing challenging times and dealers have been more willing to meet demands in order to secure deals. "Over the last few years consumers have spent more time on the Internet researching everything about a vehicle before even setting foot in the showroom. Consumers are more geared up than ever before to get a good deal. By the time they enter a dealership, they already know how far they are willing to negotiate." The research also found that men are around one and half times more likely to have been able to negotiate a better deal on a car. This is also increasingly the case the older the car buyer. For example, car buyers aged 45 to 54 years old were two and a half times more likely to have secured a better price on a car than those between 18 to 24 years old. Kirk concluded: "The key message for dealers is that knowing as much about their customers as their customers know about them has become even more vital. Many dealers have already recognised the value of this and are taking steps by maximising the value of the data they hold on their customer databases. Data cleansing is essential to this and enables dealers to identify and target those who are most likely to buy soon. "Keeping an eye on the market for changing trends is also key to spotting opportunities they can tap into. Knowing what is happening in the market, knowing which customers are likely to upgrade and which ones are downsizing. Which vehicles are increasing in sales compared to those that are losing their appeal? Where is there a greater demand for the cars that dealers are struggling to sell in their own areas? "Experian's MarketView OnLine, for example, provides direct access to Experian's extensive range of automotive market data and analytical tools. Dealers have been able to access information such as new car registration data from the SMMT, the latest DVLA car parc data and used car transactions data, giving a greater insight into what people are buying and where."

DATED: 26.09.08

FEED: AW

Super fuels are a "waste of money" and fail to improve performance, according to a report by consumer group Which?. However, fuel providers dispute the findings and methodology of the report. Which? tested three of the premium fuels against standard petrol and said that they were not better for a car in the long run. It comes as the price of oil continues to fluctuate, with motoring groups saying fuel prices at the pumps should be lower. Evidence disputed "For many cars it is a waste of money paying over the odds for so-called 'super fuels'," said Richard Headland, editor of Which? Car magazine. "The standard fuels we tested were all up to the job, whether from a major fuel brand or a supermarket. "There is no conclusive evidence to show that super fuels are better for your car in the long run. So in a time of high oil prices, why would you choose to pay more?" The report said that Shell V-Power gave a 1.6-litre Ford Focus a marginal power increase, but filling the car on this petrol for 12,000 miles would cost £115 more than using Shell's standard petrol. But a spokesman for Shell said: "Shell V-Power can help keep new cars performing like new for longer, and in some cases can help rejuvenate older cars." The magazine's findings suggested that Tesco's Super Unleaded decreased the power of the Ford Focus. But the retailer said it had some "major reservations" about the report's methodology. "Independent testing by leading car performance experts has been done on multiple cars over tens of thousands of miles and shows that Tesco Super Unleaded 99 Octane gives better fuel economy and better performance than other unleaded fuels," a spokesman said.

DATED: 26.09.08

FEED: AW

Large plc dealer groups are assessing which poorly performing sites to sell off once the September plate change has run its course, according to Rapleys, the commercial property and planning consultancy.It said recent trading statements from the leading listed groups, coupled with the drop in new car sales, has led groups to closely scrutinise their portfolios.
The consultancy said values for freehold automotive property have dropped by between 15 and 20 per cent over the past 12 months.
Rapleys said the underperforming sites were more likely to be disposed as vacant properties rather than trading entities.
While the consultancy said several manufacturers were stepping into the market to fill longstanding open points, it added that other businesses, such as discount food and convenience retailers, were looking at well positioned dealer sites for alternative use.
"Whilst trading will undoubtedly be difficult over the next few months we still see some positives in the market and would expect demand for well located property to remain robust if sensibly priced," said a Rapleys spokesman.

DATED: 25.09.08

FEED: MT

As part of its plan to introduce 13 new products in the period leading up to 2012, Nissan will introduce a small van globally in 2009.The vehicle, based on the NV200 Concept first presented at the 2007 Tokyo Motor Show, will launch in Japan next spring and reach European dealerships in the second half of 2009. The new model will be called the NV200.Nissan also announced its ongoing development of a mass-market hybrid-powered LCV to be launched by the end of 2012.The Hybrid Cabstar prototype was presented at this year's Hannover Motor Show and Nissan has estimated that its reductions in CO2 and fuel consumption will amount to up to 30 per cent."We have not yet reached our full potential," said Andy Palmer, corporate vice president, LCV business unit. "We aim to expand out business much further with smart new products and services that meet the needs of our customers, both in Europe and around the world."

DATED: 25.09.08

FEED: MT

Pinewood's Pinnacle dealer management system has been given approval by Volvo Car UK.
Pinewood already holds DMS certification for Vauxhall and approvals from manufacturers including Peugeot, Saab, Land Rover, Jaguar, Ford, Hyundai, Citroen, Suzuki, Mitsubishi and Honda.
Pinewood managing director Neville Briggs said: “The endorsement process was rigorous and we have worked very hard with Volvo and its pilot retailers to ensure our integration will create genuine opportunities for process improvement and a high user adoption."
Briggs said Pinnacle provides full integration into Volvo systems including menu pricing (GPSS), labour operations (VSTG), parts stock management (LDC and DSP), parts EPC (VIDA), Volvo vehicle load file, warranty management including contributions and SBI, service notifications, vehicle price list and composite production.

DATED: 25.09.08

FEED: AM

Daimler AG is holding talks with Cerberus Capital Management LP about selling the German automaker's remaining 19.9 percent of Chrysler LLC, Daimler spokesman Han Tjan confirmed today.\Daimler confirms that the company is in discussions with Cerberus Capital Management regarding the redemption of its remaining 19.9, according to a statement released by the German automaker.The private equity firm Cerberus bought 80.1 percent of Chrysler from Daimler in August 2007 for $7.4 billion. Daimler retained 19.9 percent. It remains unclear how much the remaining Chrysler stake could be worth. Tjan declined to provide more details about the talks.

DATED: 25.09.08

FEED: ANE

Mercedes-Benz is introducing a powerful new lithium-ion battery that has 10 times the power of traditional lead batteries, while saving drivers 20% on fuel efficiency. The manufacturer's S400 BlueHybrid, which is due to be launched in 2009, is expected to become the first hybrid car with an electric motor powered by a lithium-ion battery. Lithium-ion batteries are already well established in the electronics market and have long been anticipated as the future in the electric and hybrid vehicle sector. Smaller and lighter than the nickel-hydride batteries used in hybrid cars such as the Toyota Prius and Honda Civic IMA, the new battery is claimed by Mercedes to represent a world record in fuel economy for luxury cars. The 20 bhp electric motor combined with a V6 279 bhp petrol engine propels a Mercedes S350 to a top speed of 155 mph. The hybrid model has a 0-62 mph time of 7.2 seconds and returns 30 mpg, compared with the conventional model's 23 mpg.

DATED: 25.09.08

FEED: AW

A $25 a barrel surge in crude oil prices - the largest single one-day rise - is likely to send UK petrol and diesel prices soaring again following recent pump price cuts. In recent weeks the price of crude oil has dropped by around a third from an all-time high in July of $147 a barrel. However, continuing unrest in the American financial sector sent the price of crude soaring by up to $40 a barrel to around $130 during trading yesterday (Monday, September 22). Although, prices dropped slightly towards the end of trading to about $116 a barrel. It is feared that the rise will give fuel retailers a reason to stop cutting the price of petrol and diesel, which has been the trend in the past few days. However, even with this week's rise in crude oil prices the AA says pump prices continue to remain too high in relation to the price of crude oil in July. The oil industry says it takes around six weeks for crude oil prices to feed through to the pumps, so the AA argues that petrol and diesel prices on forecourts should be lower.

DATED: 25.09.08

FEED: AW

Nissan is planning to double its LCV business revenues by 2012.
The Japanese manufacturer will be introducing 13 new LCV products by 2012 with the first a new NV200 small van, which will hit UK roads in the second half of 2009.
Nissan has also refreshed its Cabstar with a new automatic transmission for spring 2009 and is planning on a launching a Hybrid Cabstar before 2012.
Andy Palmer, corporate vice president, Nissan Motor Company, LCV business unit, said: “We have not yet reached our full potential. We aim to expand our business much further with smart new products and services that meet the needs of our customers, both in Europe and around the world.”
As well as 13 all-new models, the increase in revenue is expected to come from geographic expansion of the LCV business. In September, Nissan starts selling its commercial vehicle range in Russia.
Sales start with two vehicles, Cabstar and the NP300 pick up, with a view to offer a range of six products in 2012. Nissan has already established a network of eight dealers, and plans to expand it further.
Outside of Europe, the geographical expansion will be implemented with the introduction of commercial vehicles in North America (in 2010) and India (in 2010-2011).

DATED: 25.09.08

FEED: AM

Nissan is planning a dramatic expansion of its retailer high performance centres from 11 to as many as 25 as part of a strategy by managing director Paul Willcox to harness the brand’s sports car heritage.
UK customers have ordered 1,300 £54,800 Skyline GT-Rs, half the annual European allocation, and Willcox admitted that the company has failed to exploit the appeal of its stablemate, the “lost gem” 350Z.
He also hinted that Nissan could be planning a Mazda MX-5 sized sports car and said: “We must connect the GT-R to the rest of the brand, something which Honda failed to do with its NSX.
“The 350Z is our lost gem and we need to spend more on that car to make it better known when the 370Z arrives next April.”
Willcox admitted: “It would also make sense to include other sports cars in the portfolio, and for us to have an MX-5 type of sports car is logical.

DATED: 25.09.08

FEED: AM

The European Union has agreed a £8.78 million grant for training workers at Vauxhall's Ellesmere Port assembly plant.
The grant from the North West Regional Development Agency is payable over six yearly installments from 2009, when production of the next generation Astra will begin.
The plant, in Cheshire, employs around 2,200 workers.

DATED: 25.09.08

FEED: AM

Chrysler president Jim Press met his UK dealers last week and was told of mounting concerns over low sales, high list prices and brand confusion.
Some in the network want the manufacturer to drop Dodge in the UK, saying no attempt has been made to establish it as a distinctive brand. One dealer said: “We want to give customers a clear choice between a value and a 4x4 brand, Chrysler and Jeep”.
Other dealers believe the UK network has to contract from around 70 to 40 or 50 selling a smaller range of models. “A number of us loyal to Chrysler believe this is the only way to achieve profitability,” said one.
A meeting was taking place at the National Motorcycle Museum near Birmingham as AM's last issue went to press. Dealers were asked in advance to table questions on issues of concern, and a vigorous exchange was expected.
Afterwards Press was continuing discussions with the network over dinner. He joined Chrysler from Toyota where he was the first non-Japanese board member.
Product rationalisation
Before the meeting one dealer said: “We’ve heard a lot of talk about product rationalisation, but nothing has happened.
“The problem with the Chrysler brand is that PT Cruiser has finished, we’re no longer selling Crossfire and Sebring doesn’t work in the UK. The Caliber is replacing the PT Cruiser as a cheaper alternative to a Focus or an Astra, but should be badged a Chrysler.”
Another dealer said: “Many of us have been telling Chrysler for ages that list prices are too high. The 300C has a place in the British market, and we can sell a few Voyagers and Grand Voyagers, but there are too many models for the sales that can be won. We have to stock too many demonstrators.”
Dealers meet Federico Goretti
Earlier this month a group of Chrysler UK dealers met new UK managing director Federico Goretti.
One said: “We put some points strongly to him. We had an especially good relationship with Simon Elliott and hope to develop one with his replacement.”
Elliott left Chrysler to become managing director of Volkswagen commercial vehicles in the UK.
Chrysler UK and senior dealer council members declined to comment on recent discussions.
Brand identity
In America, Press has said Chrysler “will adapt its course according to the changing market”, rather than using past successes to carve a path.
He accepted the need to generate brand identity, saying each had a core theme: Jeep off-road, Dodge volume and performance and Chrysler affordable luxury.
Press has said he hoped to put an end to the many recent deviations in that strategy.
He wants Chrysler to appeal “to drivers rather than consumers”.
Seven new models are due for launch over the new few years. One will be a car-based, fuel-efficient compact SUV likely to be sold under the Jeep Cherokee brand.
Chrysler, owned by investor Cerberus, is investing close to £1 billion in its main Detroit assembly plant.

DATED: 25.09.08

FEED: AM

Full integration of HBOS into Lloyds TSB could take up to two years, according to HBOS chief executive Andy Hornby.
The news came in a letter from Hornby to HBOS staff which detailed why the decision to sell up to Lloyds was the right idea.
Rival bidder
Since the takeover deal was announced on September 17 there have been reports that a rival bid from another bank could be made as the deal between HBOS and Lloyds is still yet to be approved by shareholders.
According to Sir Peter Burt, an ex-HBOS owned Bank of Scotland governor, the £12.5 billion offer from Lloyds values HBOS at a quarter of what it was valued at a year ago. He said this would “usually” attract other companies to bid.
This raises further questions about the deal. The combination of Lloyds and HBOS would usually defy competition laws, but the Government has given its backing on financial stability grounds.
On that basis it’s unlikely another bidder would be given the Government’s blessing for a rival takeover.
Insider trading
City watchdogs are expected to investigate huge profits made by speculators in the two minutes of trading at the London Stock Exchange before the HBOS and Lloyds deal was made public.
Details of the takeover were made by the BBC’s business editor Robert Peston at 9.00am on September 17, four hours before a formal announcement, sending shares soaring from 88p to 215p.
However, at 8:57am and 8:58am two buyers acquired more than 20 million HBOS shares at 96p making a profit of nearly £190m.
The Financial Services Authority (FSA) would not comment to say if was starting an investigation into circumstances over the merger.

DATED: 25.09.08

FEED: AM

Black Horse Finance, whose parent company Lloyds TSB has launched a £12.2 billion takeover bid for rival HBOS, has restructured its motor division.

The move will enable Black Horse Finance's field sales staff to spend more time helping dealers drive sales and maximise profits.

As part of an ongoing review, Black Horse is removing non-added value activities and has reviewed the amount of time its 235-strong field staff spend on administration issues.

It is also providing dealers with additional technology to let them control their business better by tracking progress of finance proposals rather than calling their account managers.

Chris Sutton, Black Horse Motor and Leisure managing director, also intends to promote the customer benefits of point of sale finance more aggressively.

He is interviewing for a marketing and product director, a new position at the company, who will develop products that are attractive for dealers and their customers.

Black Horse is also ramping up its approved dealer programme to highlight its brand in the showroom and give customers peace of mind when buying finance.

DATED: 23.09.08

FEED: AM

The Scottish Motor Trade Association (SMTA) has acquired a buying group company set up by its own members for an undisclosed sum.

The group, named SMTA Trading Partners, was initially set up three years ago by five members. It was owned by the members but run by the SMTA.

Membership had increased to 49 by the time of the buy-out.

Douglas Robertson, SMTA chief executive, said: “The SMTA board felt that buying the company would allow its doors to be opened to all SMTA members without the necessity to buy a share in the company.”

Trading Partners hopes to save each dealer up to £25,000 by pooling their buying power and getting discounts on consumables such as oil, number plates, waste management services, tyre disposal, stationery, overalls, water, workshop consumables and valeting materials.

It has no plans to try to gain discounts on parts or utilities.

After generating £500,000 in turnover from 49 members, the SMTA will now be marketing the buying group to its 900 members. It believes it can generate up to £2 million turnover.

Robertson added: “With increased turnover will come keener pricing from selected suppliers.

“We’re in early discussions with other trade associations with a view to allowing their members to purchase through Trading Partners,” he said.

DATED: 23.09.08

FEED: AM

New York's last two remaining independent i-banks are changing their status and becoming banks. But aren't they banks already?
Well, yes and no. They are investment banks, which isn’t quite the same thing. I-banks are not licensed to take in deposits like regular banks, which of course prevents them from profiting by such tiresome drudgery as simply looking after customers’ money for them. But it also means that they are not subject to all those pesky, time-consuming and very expensive regulations about capital requirements that apply to regular banks – a lightness of touch on the corporate tiller which suited them very well indeed until about 10 days ago.


The world post-Lehman’s and AIG looks a very different, and much less hospitable, place in which to engage in such footloose and freewheeling capitalism. So, both Goldman Sachs and Morgan Stanley have had their applications to become traditional bank holding companies - directly regulated by the Federal Reserve – fast-tracked through to approval. Anyone who’s desperate to lodge their life-savings in an account with Goldman Sachs or Morgan Stanley has just seen their dream move a step closer as consequence.

But the bosses of these two humbled giants are keeping strangely quiet about the real reason they have so eagerly sought the constraining embrace of regulation. Regular banks can access the Fed’s ‘lender of last resort’ function for emergency loans and financial support. Something which both Goldman’s and Morgan Stanley may both very well be in need of in the near future. Some commentators see even this capitulation as only an intermediate stage, something to keep them out of trouble until suitably large, stable and well-funded merger partners can be found. How are the mighty fallen.

After Friday’s record gains, the markets on Monday are in more reflective mood, with bank shares down again and the FTSE dropping 0.25%. The details of the proposed vast US rescue plan are being eyed more carefully, as are the consequences of the temporary ban on shorting. Events in the ‘real economy’ are looking gloomy too – house prices fell by 1% in August, and unemployment is rising apace – so the prospects are far from rosy. What happens in the next phase – the coming few weeks or months – will determine whether last week’s bloodbath was the beginning of the end, or just the end of the beginning.

Where to start? After almost a year of speculation about who had let their traders run amok with their balance sheets, who was hiding the biggest losses, who was too big to fail, the credit crunch unmasked its victims last week, delivering the failure of a bulge bracket investment bank, the abrupt halt of the thundering herd and the multi-billion pound takeover of one of the UK’s largest banks. Though it has to be said that for many of the wider population, the most significant early consideration was whether it would get those dreadful Halifax adverts off the telly.

Lehman Brothers’ 158-year history ended in ignominy. The Federal Reserve refused to prop it up or indeed to offer any guarantees to those ready to buy the group (which included Barclays and Bank of America). In doing so, the Fed drew a line in the sand: investment banks could no longer expect the taxpayer to pick up the tab for their incompetence.

Once this principle had been established, other investment banks scrambled to secure their positions. Merrill Lynch was first to go in a deal with Bank of America welcomed by the markets. There was a certain schadenfreude in seeing Wall Street’s most aggressive group taken over by a mom-and-pop American institution. Morgan Stanley revealed talks with China Investment Corporation and with a 70% fall in third quarter earnings, Goldman Sachs must be looking round for a sugar daddy to shore up its balance sheet.
Barclays picked its moment to hoover up some of Lehman’s unwanted assets. They cost it next to nothing and will soothe Bob Diamond’s ambition, putting Barclays firmly among Wall Street’s big players.
The fate of another UK high street bank was more prosaic as HBOS gave in to the inevitable and agreed a deal with Lloyds TSB. There was no Northern Rock-style vacillation from the Chancellor this time and it was agreed that competition would be a secondary consideration to the ‘stability of financial markets’. Nice to know that regulators can bend their own rules when the moment requires.

So Howard and his collection of dancing girls may shortly be off our screens, but is it just bad news for them? Despite apocalyptic talk of the ‘end of the world as we know it’, the week showed capitalism at its most functional. Capitalism is nothing if not Darwinist and this showed those that took stupid risks, failed. And for the most part, it was right that they should be allowed to fail, otherwise what incentive exists to be clever? As Darwin suggested, it is not the strongest that survive, but the most adaptable.

Inflation

It was unquestionably a ‘good week to bury bad news’, Mervyn King’s letter to Chancellor Alistair Darling went almost unnoticed. He blamed the 4.7% inflation figure for August on high global food, oil and gas prices. This is a little disingenuous. Oil and agricultural commodities prices have now been falling sharply since July. The real blame should lie at the door of greedy utilities companies who insist on raising consumer prices to protect their profit margins in spite of falling prices.
The assumption has been – and indeed King suggests this in his letter – that inflation will come down in response to the global slowdown in food and energy prices, but if they are not passed onto the beleaguered consumer, inflation may stick around longer than expected. King is expecting inflation to peak at 5% in the next couple of months. Borrowers will have to wait a little longer for the, surely now inevitable, interest rate fall.

Given that interest rates remain the only tool to curb inflation, we must question how inflation is measured and dealt with when it entirely misses the house price slump – on which interest rates have an impact – and is geared into global oil and food prices – on which interest rates have no impact. Nick Clegg in his speech at the Liberal Democrat conference suggested that house prices be included in inflation statistics. This seems eminently sensible and had it been done before, may well have avoided the huge boom in house prices that has left so many UK households crippled with debt and without the wherewithal to weather this slowdown.

DATED: 23.09.08

FEED: M

Lloyd Halifax sounds disconcertingly like some character actor from the 1950s, specialising in smooth corporate types, heartbreakers, raiders, even 'spivs and speculators'. Imagine him starring in a tense thriller vehicle called The Black Horse, in which a carpetbagging businessman takes over a venerable but dilapidated house, modernises it and sacks all the loyal old retainers. You can almost hear the hisses already.
The news that Scotland's oldest banking institution, the Bank of Scotland, and its partner Halifax, have been taken over by Lloyds is black indeed. Even though the hoof beats have been thudding closer for some time, it's rare that a takeover in the financial sector should provoke such a strong, emotional public reaction. Given how rarely any of us set foot inside a bank any more, even to organise a mortgage, why should the demise of HBOS resonate so powerfully?
In purely financial terms, the absorption of HBOS may be a good thing, stabilising a tottering institution and setting it on a firmer base. On this occasion, though, symbolism and history outweigh fiscal certainty and loom larger than the potential - or perhaps certain - loss of jobs.
It's often said that Scotland's civil society rests on the Kirk, Scots law and a once distinctive educational system. Curiously, the model promulgated by such scholars as David Daiches, rarely mentions our independent banking sector, an example of how often the humanities prefer to ignore the 'dismal science' of economics. The Bank of Scotland has been around since 1695, founded by an Act of the old Scottish Parliament and capitalised with the equivalent of £8m in today's terms. This places its origins at a cusp in Scottish history, with economic rivalry across the border already acute, and Union looming.
The collapse of the Company of Scotland in the ill-fated Darien Scheme (conceived in an overt attempt to emulate English trade successes, east and west) occurred at around the same time, marked the nation and ushered in Union. Almost no one in Scotland was left unaffected.
The HBOS takeover fits a ready-made space in nationalist thinking. It matters little where the bank's actual seat of power has been since the merger with the Halifax, or indeed that most bank customers rarely, if ever, actually visit a branch any more. What matters here is the perception that a Scottish institution has been taken by an English one and in the process has lost or will lose the right to issue banknotes.
It has become a cliche frequently adduced in speeches at transatlantic weddings, that while Americans know who's on which denomination of banknote, we Scots haven't a clue whether Sir Isaac Newton is worth 20 quid or five, and who Mary Slessor is and why there are all those strange African place names on a tenner. To be sure, the situation is complicated in Britain by the existence of different note-issuing banks, but it turns out we're not as indifferent to their provenance as all that. Though no nationalist, nothing boils my blood faster than having a Scottish note peered at and declined in London. In an instant, I turn from Gordon Brown to Wendy Wood.
It may be that all is not yet lost. It took an act of Parliament to establish the Bank of Scotland, and it may take another to disestablish it or transfer its assets, so perhaps there are political and legal fixes still available to HBOS that might preserve the marque. In the meantime, though, we should take the opportunity to remember that although even the early days of Scottish banking weren't innocent of Mr Salmond's 'spivs and speculators', it has been the banks, and not just courts, Kirk and schools, that for the last three centuries have encouraged, defended and perpetuated much that is distinctive, enlightened and, yes, noble in Scottish life and arts.
The Tonight Show once ran a spoof infomercial in which a group of very plausible bank staff described their services: 'You have a dollar and want dimes? We can do that! Or maybe you've got a 20, and you want three fives and some change? Hey, that's what we do!' The funny part was how long it took most viewers to understand it was a spoof. There's a consensus that banks do nothing but move money around and charge us for the privilege.
All those mysterious deductions on the monthly statement tend to reinforce that view, but for all their apparent and actual dislocation - ATMs, distant call centres, telephone and online banking - the banks are powerful agencies of social evolution, contributing vastly more to creative life, sport and education than several National Lottery Funds laid end to end.
Bank branding at, say, a rugby game is of a very different nature to sponsorship by a brewing, car or, in the good old days, tobacco company, for the simple reason that no product is involved and the 'service' is a unique compact, an undertaking to look after your money, hand it over when you want it, and, as often as not, allow you to spend more of it than you actually have.
The Bank of Scotland's headquarters building is as an integral part of the Edinburgh skyline as the castle (where the bank's assets were strongboxed when the Jacobite army arrived). By the same token, the bank is a living history lesson. It tells us where we came from, how and why we became attached to our southern neighbour, and to a degree how we managed to effect a partial separation again. Above all, how we have been able to enjoy a rich artistic, dramatic, music and literary culture.
For three centuries, perverse though it may seem, we have been accorded the privilege of a rich cultural overdraft. It is not surprising there is a sense of mourning this weekend.

DATED: 22.09.08

FEED: PTL/G

Being an independent training company has its advantages and disadvantages over other training providers owned by banks, finance houses and vehicle manufacturers.

The disadvantages are very clear. There are no guarantees as to where your next deal, job or client is coming from, and you have no captive audience compelled to use you for training and development purposes.

But luckily for us at Profit Training we consider the ups outweigh the downs. As an independent training company when we meet with a dealer client we have to introduce ourselves and our offering, qualify, sell the benefits, trial close, handle objections and close the deal. We then have to do what we promised to do, ensure the client is happy with the results and their return on investment, and then we have to make sure we get paid. I am sure every one of you reading this article will recognise the similarity of our sales process to your own on the sales floor.

But these aren't the advantages of being an independent training company. The real advantages are the simple, uncluttered ability to offer unbiased recommendations without evasion or reservation of any kind. We can offer our dealer clients a cast iron guarantee that any recommendations made or advice given is delivered without any politics or third-party agenda.

Our aims are to deliver a measurable return on investment for clients, to improve their businesses profitability, to improve their income per retail unit, to improve their sales processes, and to ensure that everybody in their sales function has a clear understanding of the businesses objectives, aims and aspirations.

At Profit Training we tend to summarise this process with two important key words:

Confident Competence.

Way too many training providers deliver training courses to dealer delegates that only satisfies the competence aspect of development. The vast majority of these training providers are manufacturer or finance house linked. Critically, their primary agenda is the transfer of knowledge to prove competence in a specific area, an example of which would be a manufacturer running a training course on a particular model roll out or event, or a dealer group buying half a dozen CD-ROMs to ensure their staff have provable technical competence within the guidelines of the FSA to sell general insurance products.

The section that is missing from most of these training courses is confidence, and sadly all too many delegates leave training courses with new knowledge, skills, or abilities that through a lack of confidence they will never use. It is this sort of training which presents independent training companies with an unfair negative image, and a clear and open marketplace.

It is no coincidence that the dealerships or dealer groups that are most profitable have a clear focus on delivering professional independent training to their selling teams, ensuring that all delegates that attend regular training programmes are confidently competent in the areas in which they are expected to sell.

We have recently delivered a training programme for a large dealer group that was a rerun of a failed programme delivered by another provider. When we interviewed the sales staff at one of the group’s dealerships it immediately became apparent that the training had been 100% effective at imparting knowledge, and 0% effective at imparting skills or confidence in delivering that knowledge to clients.

In a nutshell, the delegates knew their stuff, they just weren't sharing it with customers, and the impact on the businesses F&I profitability was clear to see. We were able to enthuse, energise and encourage the sales teams to use their knowledge to sell products, and improve their income per retail unit from ancillary sales.

I remember when I first came into the motor industry, and F&I profits were often considered to be the icing on the cake, but times have changed and this revenue stream is no longer an option, but a ‘must have’ to ensure ongoing business viability and profitability.

The inordinate amount of regulation via the consumer credit act, the data protection act and the insurance mediation directive (FSA), along with a whole host of associated bureaucracy and red tape has all but suffocated that traditional revenue stream. But those dealers and dealer groups that understand, value and deliver professional independent training are still enjoying a healthy return, good finance profitability, FSA compliance and happy F&I provider partners.

So, in summary if you want your sales teams to understand the products they sell then get those product providers into your business to deliver training. But if you want to profit from your business, and you want your sales teams to have the skills and confidence to work around regulation, understand the requirements and deliver profitable product sales compliantly, then get in touch, we will be delighted to help.

I often get asked about building value in a conversion technique

Quite often when running a training course, delegates tell me that ‘in the real world’ it is almost impossible to get customers to convert from using their preferred funding source to using the dealer's funding source.

The reason I'm often given first is the simple fact that the customer's bank or personal lending source is usually cheaper than the dealer funding option.

So let's be brutal about this, in this particular situation, your customers have an expectation that your funding option is going to be more expensive. They know that you're in selling mode, they are expecting you to sell them something and they may feel that ancillary sales may be more expensive from you them from others, and funding options are no different.

So service that expectation, make them understand that you have additional features and benefits on the product and service you are offering that far outweigh any additional cost that your product, funding or otherwise, may attract

A clearer illustration of this is if you're selling somebody a high range model. Don't be afraid of telling them that they could save themselves a fair few pounds on the cost of acquiring the vehicle. If they are happy to lose some of the features and benefits, CD player, sat nav, air con, etc.

Conversely, if they want to retain the additional features of the model chosen, they must understand that there is a premium price, chargeable over and above that of the base model. This is exactly the illustration that you need to use when talking to them about converting their funding route or preferred method of funding from direct lenders, personal lenders and their bank to your dealer funding option.

Your dealer funding option has clear additional features over and above those offered by direct lenders and Banks, which in turn have their own substantial personal benefits to your customers: For example, protection under the consumer credit act, termination and repossession rights (halves and thirds), and of course the eponymous early settlement calculation. Your funding option also comes with the additional feature of protection under the data protection act. A safety feature, that does not and will not apply to any personal lending.

It is vital that you understand that the banks & personal lenders will quite often advertise lead rates, which some customers may qualify for, but the majority don’t. Critically those banks and direct lenders have an additional and very substantial revenue stream from the sale of personal information, which is neither regulated by the data protection act, nor controlled by the information Commissioner's office in which customers electing to use a personal lending facility opened themselves up for.

Get your customers to ask themselves this question. Where did your junk mail come from?. Today, junk mail lists will be driven by the financial transactions that that customer undertakes. Every time your customer renews or refreshes their personal financial information with their lender of choice, that lender has a substantial commercial advantage and opportunity to trade, sell or share that information with other commercial organisations, which may want to sell products or services to your clients in future.

Consider this summary: 'Our funding option may be a little more expensive than your funding option Mr(s) Customer, but we believe that your financial information should remain confidential, and if you’re no longer borrowing the money, why should you pay interest on it ? This is why we will never sell or trade your private details to anyone, and if you want to settle off the loan early, we will secure you a rebate of the remaining interest on the loan. Your bank will not do either of these things'.

Make this is your opportunity to ask your customers when the privacy and data integrity are important to them. This is a substantial feature that your customers may pay a little more for in their monthly payments. But you can guarantee them that no junk mail will come from your lender, that your lender will not share information with any other commercial third parties, and that their confidential information remains exactly that, confidential. Your option gives your customer Privacy, Security and Protection that a direct lender or Bank will not, and many customers believe that’s a benefit worth paying a little extra for.

So what exactly is the Credit Crunch? Simply put, a large number of Global Banks slowly realised that they were all fighting over the prime mortgage markets, which was capital intensive and low margin due to market competition.

Some bright spark then noticed that there was a whole spectrum of customers who were not prime, they were near prime, sub prime and deep sub prime, and lo! The Banks spotted a golden chance to make a pile.

It was decreed that a non prime customer was inherently a higher risk than a prime one, and therefore the rate that they would be charged for their money to buy their home would be higher than that given to prime customers. Bear in mind at this point that the money is costing the Banks exactly the same, irrespective of who they lend it to.

So in a nutshell, those that could afford to borrow, or those who just said they could, but hadn’t been great at making payments in the past were offered mortgages to buy property, the loans were priced higher, and the yield for the Banks went through the roof. Happy Days !

Soon, every global Bank wanted a slice of this ‘lucrative’ market, where high profits could be made easily and quickly. But just as quickly came the defaults and late payments, so some of the early players who had been in at the start of the sub prime debacle decided to package up these higher risk loans and sell them on to other banks, and so the merry-go-round of Banks buying each others high risk debts began.

All of a sudden, the UK Banks realised that these high profit bundles came with a serious risk of non-payment, and to protect their ‘investments’ began slowing the amount of money they were prepared to gamble on the LIBOR exchange. This is a mechanism whereby the Banks set the amount and the rate at which they lend currency to each other.

The key thing to bear in mind throughout all of this, is that whilst all these global players are writing down assets, (which attract massive tax allowances and reliefs by the way), each and every one of these high risk home loans have a property attached to them, which has an inherent value typically the same or greater than the exposure of the loan on it.

The Big Banks in the UK, Europe and North America have panicked; they want liquid cash flowing through their veins, not tied up in buildings. Lenders in the UK and Europe find themselves owning bundles of debts that may or may not be paid, but are tied to various properties in North America and elsewhere – not a great position to be in, but a position of their own making, tempted by the promise of high profits.

The UK Banks decided that, as they 'may' get stung by toxic debts that they accepted because they were incredibly profitable*, they would all slowly reduce the amount they put into the LIBOR market, and as a reducing supply of anything drives the price up, the LIBOR rate went up. The Banks, realising they had painted themselves into a corner, were granted a lifeline by the Bank of England, of emergency liquidity finance at special rates.

As Banks recoil from these toxic debts, they over-react by hoarding the liquidity cash granted to them by the Old Lady, and begin reducing their potential liability to debts by reducing credit lines, credit card limits ( often referred to as the credit card target by my wife...) overdrafts and other credit facilities. SME businesses are usually the first to feel the pinch, followed by industries with seasonal fluctuations, like Motor Dealers in March and, oh, September. Perhaps you understand why I feel this economic phenomena should be referred to as the Credit Choke, or the Credit Strangle.

*Anyone remember the white flagger, those customers that (pre-FSA of course...) would nod politely and take everything, Creditor, Gap, MBi, and all at - ahem - a healthy rate ? As a BM I often found that the more profitable the deal was, the harder it was to get it bought by a funder, typically because of the lenders view of the risk, not to the deal per se, but to the client. I would venture that the Banks, tempted by high profits in a lean market, have ignored their gut instinct and approved debts that now carry too high a risk, and all the "profit" has vanished.

Do any of you remember October 21st, 2002?, I was a mere slip of a lad of course, setting up a boardroom for a three day training course I was delivering for a large Manchester based dealer group. At about 08.45 that morning, just after I had neatly lined up name cards, pens, pads and bowls of mint imperials, we had an earthquake. ..Chaos... Mint imperials, pens and name cards everywhere, my training venue was a mess, and I must confess, my trousers came close.

At lunchtime, with all delegates just about to settle back down to the scintillating subject of Conversion Techniques, another tremor, more powerful and longer than that mornings warning shot. Along with my delegates, I was outside the building having a smoke, ( so very un-PC, I know) when gravity seemed to switch off for a while, and the world felt like a ship in the waves, the floor is there one second, and not there the next.

I expect this is how our colleagues in the Financial Services Sector feel right about now. You expect that the floor will be there, and then it isn’t. I know many readers don’t have much sympathy for the FS sector currently, but all of the tumult and upheaval that is currently splashed across the nations media will have a totally profound effect on our service providers in the Motor Industry in the coming months.

We have seen the Northern Rock debacle unravel in recent months, and all of the subsequent finger pointing, but now we have seen one banking leviathan devour another – and Andy Hornby, the HBoS Chief Executive is forced to sign the business, founded 1695, over to his oppo at Lloyds TSB.

Now I don’t know whether you love or loathe our FS providers, but the fact of the matter is that we need them, they fulfil an integral part of the Automotive Industry, they provide wholesale funding, and they can help us close retail and fleet deals that couldn’t be closed without them. They are a tool, a string to your bow, and to lose them would be disastrous to the industry.

The whole Lloyds / HBoS issue is one of confidence, HBoS lost the confidence of key people in the city, and subsequently the share price fell to below £1, and when confidence melts away, the value of that brand goes with it.

Ask yourself, do your customers have confidence in you and your Brand, your products, your services, and most of all you ? Let me tell you that if they don’t, then get it, and get it quickly. Give your customers faith and confidence in your brand, your franchise, your processes, your people and your offering to them, I can pretty much guarantee that those businesses that can deliver consumer confidence will succeed over the coming months, because I will also guarantee that like an earthquake, consumer confidence in the Banking and Financial Services Sector right now will be very flaky.


If you would like Profit Training to help you get the edge and take advantage of the current market conditions, please get in touch, we would be delighted to help.