F&I Management & Training

The Finance and Leasing Association (FLA) and the Retail Motor Industry Federation (RMIF) have agreed a Memorandum of Understanding on asset registration to assist their members.

The Memorandum, which comes into effect on 1 October 2008, promotes the prompt and accurate registration of vehicles with Asset Registration Agencies by finance companies and motor dealerships. It also introduces a resolution procedure to guide members in the event of a dispute.

FLA Director General Stephen Sklaroff said:
"The FLA is committed to timely and accurate asset registration. The recording of lenders' financial interests with Agencies means their valuable assets are protected. This is particularly important in the current climate. I am pleased that we are working closely with the RMIF on an issue which is of great importance to members of both organisations."

RMIF Director Sue Robinson added:
"The Memorandum will give added security to dealers on asset registration. The RMIF encourages all of its members to provide full and accurate descriptions whenever registering vehicles. Dealers should contact their preferred Asset Registration Agency to learn more." 

Jaguar and Land Rover are cutting production at three of their UK plants due to falling demand.

Jaguar's Halewood plant in the north of England will cease production for a week starting October 27 because of falling demand for the X-Type and Land Rover Freelander models built there.

While Jaguar's European sales increased to 24,600 from 21,100 compared with the same period last year, reports said X-Type sales fell to 8,292 units from 9,363.

Land Rover sales were down across the board, with overall registrations falling to 54,261units from 63,669 in the first eight months and Freelander sales dropping to 21,935 from 24,999.

The brands are also cutting production at their Solihull factory, near Birmingham, from two shifts to one and the factory's scheduled shutdown at the end of October has been increased from one week to two.

Castle Bromwich, where the XJ upper-premium sedan and XK premium roadster are built, will have one non-production day per week.

Motor World, the car care retail chain, has been placed into administration following a significant downturn in sales, resulting in 95 site closures and 300 redundancies.

BDO Stoy Hayward, the appointed administrators, have successfully managed to sell the remaining 142 sites to Pacific Retail, a company funded by the existing investors Bailey Capital, saving 500 jobs.

Some of Motor World's retail units were trading at a direct loss.

"Despite a strong trading name and presence on the high street, Motor World Ltd has been a direct casualty of the credit retail difficulties and the continuing squeeze on available credit," said Dermot Power, business restructuring partner at BDO.

Bailey Capital's Martin Waite said: "We remain acutely aware that difficult trading conditions will undoubtedly continue; but remain hopeful that we can move the business forward."

DATED: 03.10.08

FEED: MT

Thee automotive industry is set for a period of "profound shifts and challenges", according to a study by PricewaterhouseCoopers.

Increasing fuel costs, CO2 emissions reductions, fluctuating exchange rates, shifts in consumer behaviour and a challenging economic climate are just some of the issues facing the automotive industry the latest PricewaterhouseCoopers report Global Automotive Perspectives 2008 found.

"The outlook for the global automotive market is challenging to say the least. Manufacturers and suppliers need to be preparing themselves to survive the intensity of competitive pressures," said Philippe Vincent, PwC partner.

"Great opportunities exist for the automakers and suppliers who will be able to deliver solutions to this structural industry transformation.

"A clear challenge lies in the ability of western automakers to adapt to the clear dichotomy existing between the established, mature markets and emerging markets."

PwC said a successful strategy for carmakers would be to adopt separate approaches to the two markets and establish themselves securely in mature markets before moving onto emerging ones.

The report said the approach should be adopted quickly as PwC predicted that from 2007 to 2015 emerging markets will represent 18 times the estimated growth in light vehicle assembly than mature ones.

"In mature markets, it is about managing what goes on beneath a static surface -- in emerging markets' dynamic environments, companies must strategically position themselves to benefit from growth opportunities," said a PwC spokesman.

"Those managing location issues with the concomitant capacity, together with a product portfolio that addresses anomalous market needs at the most attractive cost, will profit from the challenging global environment."

The report also found that despite its falling sales in the US and Europe, Toyota was currently executing the most balanced global strategy.

By 2015, PwC forecast Toyota to remain the leading global alliance group with a forecast light vehicle output of 11.3 million.

General Motors will experience the next biggest rise due to its success in quickly establishing a strong presence in several emerging markets.

The Renault-Nissan alliance, which PwC predicted would move from fifth in the rankings to third, due to to its large stake in AvtoVAZ and the continuing success of its Logan line of low-cost vehicles.

DATED: 03.10.08

FEED: MT

Subaru's UK operation considered alternative stock funding in the wake of the banking crisis which prompted Lloyds TSB to buy HBOS earlier this month.
"We have about £65m worth of stock funded by HBOS, so when the shares dropped to 80p at one point we thought we'd be needing to make alternative arrangements," said the brand's managing director Lawrence Good.
He warned the current economic turmoil would have long term affects on the car retailing sector and could destabilise some retailers and car brands.
"At present to make a small fortune in the motor industry you start with a large one. The level of investment some of these groups have in their businesses, and the pressure from banks, has left a number of dealer groups and manufacturers quite vulnerable," he said.
"We've seen how major dealer groups such as Pendragon have been hit."
Speaking last week before the official release of the September sales figures Good confirmed the market was significantly down during the plate-change month.
"None of us can say what's going to happen in the next 12 months but currently the market is 30 per cent down, some manufacturers 65 per cent down. So we will see some big changes."


DATED: 30.09.08

FEED: MT

Paul Williams will become the new Chairman of the Retail Motor Industry Federation (RMIF) on 1 October 2008.

Paul succeeds Alec Murray, who is stepping down after 18 months in the role. Commenting on his tenure, Murray said: ‘It has been my pleasure to help guide the RMIF through the last 18 months, and a great deal of change. The Federation is now in a much stronger position, and has the potential for positive growth.’ Incoming Chairman Paul Williams, who is Chairman of Vertu Motors, added: ‘Alec Murray performed an excellent job guiding the RMIF through the many changes it has undergone over the last 18 months, including the purchase of ReMIT and the overall restructuring of the Federation. I will provide guidance to take the RMIF into its next stage of development.’

DATED: 30.09.08

FEED: RMI

Despite poor new car sales figures in August, dealers are maintaining used car sales activity, according to Manheim Retail Services managing director John Simpson.
Total showroom, online and telephone traffic were up in August compared with the previous three months.
However, traffic was marginally down in the large and medium family segments. Interest was highest in the medium family and small hatchback segments.
Generally, sales were up in August compared with the previous three months, excluding the large family segment which fell back slightly.
Mike Pilkington, managing director of Manheim Auctions & Remarketing, said that although retail stock prices were down in August compared with the previous three months, the fall of £17 was considerably less than in recent months, with age and mileage also falling slightly.
While first time conversion rates in the auction halls fell by 9% across the range, and specifically by 15% for large family cars, this is explained partly by the traditionally lower conversion rates in August.
Dealer part-exchange values held up well with a drop of just £79, although conversion rates dropped 5%.

DATED: 30.09.08

FEED: AM

Mazda has appointed Mark Cameron, formerly marketing director, as sales director, following the promotion of Jeremy Thompson to managing director.
Cameron was appointed marketing director in July 2005, following five months heading up the Mazda brand team responsible for product strategy.
Prior to this, he worked at Ford for eleven years.
Jeremy Thompson said: “Mark's task will be to ensure that Mazda's dealer network continues to be both profitable and productive to sustain our sales volume targets in the current economic climate and beyond."
The appointment of a new marketing director is yet to be announced.

DATED: 30.09.08

FEED: AM

The problem with bail-outs, the 'American Solution'

If you owe the bank $10, it’s your problem. If you owe the bank $10m, it’s the bank’s problem.

If you and a million others owe the bank $10 each, it’s still your problem – but now it’s also the bank’s problem.

If the bank then sells to an investor the $10 you owe, it ought to be the investor’s problem. But if you have a problem repaying the $10 and the bank insured the investor against your problem, then it’s both the investor’s problem and the bank’s problem.

Your problems and your neighbours’ problems and the investor’s problems mean the bank now owes another bank $10bn. That is both banks’ problem. But if banks can’t or won’t pay the $10bn they owe to other banks, it’s very quickly a $700bn systemic problem.

And if the government then owes the banking system $700bn, it’s your problem.

DATED: 30.09.08

FEED: FT

Dermot Power, Graham Newton and Matthew Dunham, Business Restructuring partners at BDO Stoy Hayward were last week (Thursday 25 September 2008) appointed as joint Administrators of Motor World Ltd. Motor World Ltd is one of the UK's largest independent automotive car care retailers, trading from a chain of 237 retail units across the country. The Company also specialises in additional products including cycles and other leisure accessories. As a result of a significant downturn in retail sales on the high street, 95 of the 237 retail units have been closed immediately with the loss of 300 jobs. The Administrators have however been successful in selling the remaining 142 units of the business to Pacific Retail Limited; a Company funded by the existing investors Bailey Capital Limited. This has resulted in saving approximately 500 jobs. The business trades from a head office in Huddersfield. Motor World Ltd. had suffered from a significant downturn in retail sales on the high street which had led to a considerable number of its retail units trading at a direct loss. Dermot Power, Business Restructuring partner at BDO Stoy Hayward says: "Despite a strong trading name and presence on the high street, Motor World Ltd has been a direct casualty of the current retail difficulties and the continuing squeeze on available credit." Martin Waite of Bailey Capital says: "We remain acutely aware that difficult trading conditions will undoubtedly continue; but remain hopeful that we can move the business forward following the restructuring that has taken place, and the consequent strengthening of the management.

DATED: 30.09.08

FEED: AW

Rob Lindley will resign as managing director of Mazda UK today to pursue a career with McLaren Automotive.
Jeremy Thomson, Mazda UK sales director, will be promoted as new managing director following Lindley’s departure.
Philip Waring, Mazda Motor Europe vice president sales, told dealers in a memo: “Like his predecessors, Jeremy has been with the company since its formation and brings with him a wealth of experience gained in both the fleet and marketing areas, as well as his previous role as sales director.
“I am confident that he will guide the company through the tough economic climate which we face today and ensure that both Mazda and its dealer organisation are well positioned for the future.”
Mazda UK said details of Thomson’s successor as sales director would be made in a separate announcement.

DATED: 30.09.08

FEED: AM

The partial nationalisation of the Fortis finance and insurance group by the Benelux nations is a temporary solution.
Yesterday the Belgian, Dutch and Luxembourg governments rode to the rescue of Fortis with an 11.2 billion Euro bailout.
Fortis is the first big European bank forced into crisis talks by the credit crunch and saw nearly a quarter of its stock market value wiped out over the last week.

DATED: 30.09.08

FEED: AM

Volvo claims its new XC60 compact SUV has come along at just the right time to take advantage of the migration away from large 4x4s and will compensate for reduced demand for the XC90.
Steve Mattin, design director for Volvo, said: "It's the perfect time for the XC60 because of downsizing. The real large SUVs are dinosaurs, they're gone - especially in the US."
In the UK he acknowledged the market for the XC90 had become tough, so rather than lose customers to the competition, Volvo was launching the XC60 this year to cater for the growing demand for smaller crossover vehicles.
The XC60 enters UK showrooms on 15 November and the brand expects it to notch up 5,000 sales in 2009.
The diesel variants will dominate sales with the D5 expected to take 50 per cent and the 2.4D 47 per cent - leaving a meagre 3 per cent of buyers opting for the T6 petrol version.
A spokeswoman for Volvo said there had been a "debate" about whether to bring the petrol XC60 to the UK due to the very small volumes anticipated.
She said the brand had decided to offer it "for now" but suggested the decision could be reviewed in future.
Volvo said the XC60's main competitors in the UK would be the Land Rover Freelander, which leads the premium compact SUV segment, and the BMW X3.
The brand claimed the XC60's City Safety technology made it the safest Volvo model to date - drastically reducing the risk of low speed impacts, which it said accounted for 75 per cent of all accidents.
Volvo claimed the system would cut the number of collisions in the XC60 by 40 per cent.
A spokesman said the system had resulted in a 25 per cent reduction in insurance premiums in Germany and predicted a similar decrease for the UK.
Volvo's 137 dealerships will receive balloon car dummies to demonstrate the accident avoidance safety technology to potential customers.

DATED: 29.09.08

FEED: MT

Car dealers are facing additional VED charges of £10,000 a year under new rules on the tax treatment of part-exchanges and pre-registered dealer demonstrators being introduced by the DVLA.
The new rules, due to be introduced in January 2009, will place a restriction on VED refunds to dealers who have completed a Sorn, or statutorily off-the-road, declaration for used vehicles.
"This is going to have a significant impact on dealers. At present most dealers cash in the VED when they get a part-exchange and then sell the car complete with a new tax disc, the price of which is usually added to the sale," said Mike Jones, a partner at Trevor Jones, the specialist motor trade accountancy firm.
"Under the new regulations it appears that dealers can only obtain a refund when they are declared the registered owner of the vehicle and they have declared the vehicle Sorn," he said.
According to the DVLA the Sorn confirmation letters are sent within four weeks of receipt but this delay could leave dealers out of pocket.
"This will significantly delay the process of obtaining a refund and, in effect, reduce the size of the refund as the dealers would then have to claim for a month less," he said.
"I think the financial impact is likely to be up to £10,000 for the average dealer, although if they choose not to throw VED in with the price of the car this would be significantly reduced."
According to Jones dealers might be tempted to write-off the VED refunds rather than take a further hit on book values falling whilst they wait for their Sorn to be processed.
"In the current environment moving used vehicle stock quickly is of paramount importance. Dealers need to decide how they want to react to the changes. For vehicles taken in as a part-exchange dealers are likely to forgo the refund which will reduce their trade sale profits," he said.
One dealer who contacted Motor Trader said the rules would seriously affect the way they trade their used stock."I don't believe dealer networks realise the full implications. Customers trading-in cars at dealers will have to cash the tax in themselves and declare the car Sorn which will mean the dealer cannot then demonstrate the car on trade plates as they currently do.
"Imagine the impact if 50 per cent of your used car stock cannot be demonstrated because they are Sorn," he said.


DATED: 29.09.08

FEED: MT

Car dealers have been warned to pay closer attention when appraising part-exchange vehicles in order to maximise profits during this turbulent period of economic instability.
Vehicle condition is more important than ever, according to Manheim Auctions, as trade buyers are significantly reducing trade values for damaged or missing items.
Its research found that broken windscreens devalue cars by between £100 to £300, cracked headlights by £75 to £150, whilst serious damage to alloy wheels could lose as much as £50 to £150 per wheel.
Poorly repaired accident damage affected a vehicle's value by up to £250 per panel and interior condition affected prices by between £100 and £350.
Aside from the condition of the car, the age old issue of documentation was also found to significantly affect re-sale values.
A typical three-year-old car with no service history could lose £200 - £500 and missing V5s cost £200 to £300. Expired MoTs cost between £150 and £300.
"As the tough market continues I think that there is little prospect of trade buyers not coming down hard on damaged or missing items for the foreseeable future," said Mike Pilkington, managing director for Manheim's auctions and remarketing division.

DATED: 29.09.08

FEED: MT

AvtoVAZ pays Renault €220m for right to use low-cost sedan to underpin next Lada range

Russia's largest carmaker, AvtoVAZ, will pay Renault €220 million to allow it to build Lada cars based on the Logan. AvtoVAZ will pay Renault €100 million for licensing rights to the B0 platform, which underpins the Logan range developed and built by Renault's Romanian subsidiary Dacia. It will pay €120 million for licensing rights to two Renault engines for the next generation of Ladas.

DATED: 29.09.08

FEED: ANE

UK showrooms and garages are missing out on an estimated £17.4 million each week because of the poor treatment received by female customers, according to new research. Kiss the Fish, the sales and management training firm, is hosting a conference next month to address the issue and show dealers how to attract and retain female customers. The company estimated there are more than 14 million women drivers in the UK who are believed to influence over 60% of car purchasing decisions. The research, based on interviews with 100 female drivers, also found women are five times more likely to experience poor service when visiting a showroom or service garage than men. "Some respondents said they got more attention when buying shoes than they did when buying their last car," said Scott Carson, director of Kiss the Fish. "Others felt neglected, as they were left standing there when car salesmen frequently went off to speak to their boss or colleague in finance. "The sector could be missing out on a staggering £17.4m each week because of disgruntled female buyers." Dr Iain MacRury, of the University of East London, who has been studying the different car retailing approaches to men and women, said: "The automotive industry is overly focused on meeting the needs of men and is missing some great business opportunities.

DATED: 29.09.08

FEED: AW

Backdated road tax rises of up to £245 are being watered down to head off a damaging revolt among Labour MPs. Controversial moves to hit millions of motorists with cars bought as long ago as 2001 when new Vehicle Excise Duty rates are introduced in April 2009 with further rises scheduled for April 2010 will be overhauled, according to the Daily Mail. Quoting an unnamed ministerial source, the paper claimed it was confirmation of the private assurances Chancellor of the Exchequer Alistair Darling gave rebels that he would 'fix' the problem in his autumn Pre-Budget Report.

DATED: 29.09.08

FEED: AW

The car market may be tough but some motor retailers are still failing to properly follow up leads and prospective customers in their used car departments.
Franchised dealers are steadily getting to grips with customer databases and managing their relationship from new car sale to re-purchase.
But there is little emphasis on building a lasting relationship with the used car buyer.
In the latest study, only half of used car buyers could remember which dealer they bought their car from and just one in three had ever been contacted by the dealership post-sale for customer satisfaction. And only one in 10 customers was prospected to see if they were considering buying again.
If they had done so, dealers would have a one in five chance of finding a prospective customer (18% said they or a family member were likely to need a car change within 12 months).
Reactive not pro-active
This lack of pro-active prospecting approach would seem out of touch with the toughening market conditions that dealers currently report.
Professor Peter Cooke, head of automotive management at the University of Buckingham, agreed: “The past few years’ consumer research suggests dealers are commonly reactive rather than proactive when it comes to selling used cars.
“While a used car may not have the same appeal as a new one, to would-be buyers it is still a new car and they expect the same level of attention when buying a used vehicle as a new model – yet there is a clear message emerging that this is not always what happens.”
Franchised dealers’ used car departments continue to get the lion’s share of the market, with 49% of those planning to buy saying they would purchase from this segment.
However, this figure has dipped slightly compared to last year, to the gain of the non-franchised sector, the choice of 16% of respondents. Almost a quarter said they would buy their next used car privately.
The findings, contained in the BCA Used Car Market Report, written by Professor Cooke, are the result of 2,100 interviews with motorists.
Cooke added: “It’s a hard, expensive and time-consuming business continually searching for new customers to interest them in buying a car.
"Keeping in regular touch with existing customers and, at the right time, discussing the possibility of them changing their car is likely to be a much more rewarding approach.
“Many used car dealers are relying on the vast majority of their customers getting in touch, and having to go out and find lots of entirely new prospects to fill the lost golden opportunities.

DATED: 29.09.08

FEED: AM

Dealers looking to concentrate on small business sales can make good profits if they adopt an attitude that they will not sell many cars at the outset.
Instead, those who understand that it requires a consultative approach over a prolonged period, rather than a hard sell, will reap dividends in the long run.
Speaking about Honda’s rapidly expanding small business programme, Dave Girling, national dealer corporate manager, said: “When we started this programme a couple of years ago, we knew that in year one you might get very few sales from it.
“Then in the second year you start to see some growth,” he said.
B2B growth
With 92 dealers now on the programme, 104 dedicated dealer staff and 35 agency staff working on prospecting, Honda has seen explosive growth in B2B sales, with a 57% rise in 2007 over 2006, and a 32% increase this year over 2007.
In 2006, sub-100 sales represented 10% of Honda’s corporate volume. The 2008 split is almost 50/50. Year to date, small business sales represent nearly 10,000 units across the dealer network.
Girling said the consultative approach is key. “It’s about saying to a customer that perhaps if they did things differently, they could save £300,000 over 50 cars over a period of time, rather than just trying to sell to them straight away.
“What we want are account managers giving business advice about funding, whole-life costs and tax.
“In the second year we’re seeing sales of about 120-140 units a year per person. That’s about the maximum any single small business salesperson can do.”
B2B recruits
Honda is looking to recruit another 50 B2Bs in the next year, and then another 50 in the following 12 months, much of it for expansion but some replacements.
Dealers signing to the Corporate Charter get support from Honda UK on recruitment, training and salaries to get the programme off the ground. “Some Honda dealers are now on to their second account manager, and a few even looking at a third,” said Girling.

DATED: 29.09.08

FEED: AM

"The Tata-owned carmaker said it normally ceases production at its Castle Bromwich and Solihull plants during the autumn half-term week, but not Halewood, which builds the Freelander and X-Type."

Jaguar Land Rover will have a week's shut-down of its Halewood factory next month.
The measure, from October 27, is hoped to help bring production back in line with sales.
The Tata-owned carmaker said it normally ceases production at its Castle Bromwich and Solihull plants during the autumn half-term week, but not Halewood, which builds the Freelander and X-Type.

However it needs to reduce production due to less demand.
The plant axed 55 agency workers earlier this month.
Jaguar Land Rover's Solihull plant is reduced to a four day working week.

DATED: 29.09.08

FEED: AM