Wednesday, December 24, 2008

Nidd Vale Group turns to used cars

Harrogate-based franchised dealer Nidd Vale Group is looking to focus on its used sales into next year in reaction to the forecast downturn in the new car market.

Nigel Pullan, Nidd Vale Group chief executive, told AM he had created a new position of head of procurement and remarketing to make sure the group’s focus was pinpointed on bolstering its used sales.

Graham Wilson will return to Nidd Vale after a 22-year absence to take up the new role.

Pullan said: “Graham will be liaising with the sales managers and he’ll be a part of the senior management team in our weekly and monthly meetings.

“He’s one of the best known guys in used car sales and he’s very well known in the area and to Nidd Vale. He used to be in a sales role in the early days of the company when we were based in Knaresborough.”

Asked about Nidd Vale’s used car expectations next year Pullan said: “With the current market, I’d actually be happy to keep used car sales at the current level.”

Pullan declined to disclose used figures for the group.
Nidd Vale has three sites holding franchises with Mazda, Mitsubishi, Saab, Seat, Vauxhall and Peugeot. 

The £75 million turnover business had planned for growth, but like most retailers that has been put on hold until the UK’s economy recovers from recession.

Pullan said: “Things are going pretty well at the moment considering the problems the economy is facing.

“We had a very good first half of the year, October wasn’t as bad as we were expecting, but November has been quite tough. Things are still looking positive for the future.”

Pullan welcomed the cut in VAT to 15% but was 
disappointed that the first year rate of Vehicle Excise Duty wasn’t scrapped in the Pre-Budget Report.

“I agree that it should be scrapped but I can see how
it would have been difficult for the Government to turn its back on environmental issues. 

“I would also like to have seen a bigger cut in VAT rates too. There should also be more pressure put on banks to pass down base rate cuts to customers.”


DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:49 pm

Car industry needs credit guarantees says Bentley

Bentley has said that the luxury sector is not immune to the recession and the car industry needs credit guarantees to survive.

Stuart McCullough, sales and marketing chief at Bentley, says the financial crisis is hitting the car industry so badly because the whole system runs on credit.

He said: "Suppliers, manufacturers, dealers and the customers are dependent on credit. Someone has turned the oxygen off.

“Businesses and consumers need credit guarantees to kick-start the business and if something is not done quickly, job losses are inevitable and the luxury sector is not immune.

"Orders and profits are down. How long will it last. I can't answer that, we can only try and configure the business to cope."

Volkswagen-owned Bentley employs around 3,800 people and has seen a fall of around 20% in sales this year having broken through the 10,000 annual sales mark for the first time last year.

It has already had to halt the night shift at its assembly plant in Crewe and has extended its Christmas shut-down to January 12. 

McCullough said: "We have good industrial relations with the unions at Crewe. We all share the pain. On the positive side we will continue to invest in new products and we believe that these new products will drive a renaissance. We have not changed our research and development plans, in fact we are accelerating them. We will take on more apprentices and we see a future in manufacturing and engineering."

In the meantime, he added that the current financial climate was like "driving through fog, we have to proceed with caution. It's a situation which no one could have predicted."


DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:48 pm

Co-operative Motors closes Volvo and Hyundai sites

Wolverhampton-based Co-operative Motors has closed its Volvo and Hyundai dealerships, with the loss of 23 jobs, reported Express and Star.

Following the dealerships’ demise, another site in the city, Evans Halshaw Vauxhall has reportedly made up to 33 people redundant.

The Pendragon owned showroom would not comment but a worker’s relative said: “This is the last thing any of them would want at Christmas. It’s a sign of the times at the moment but everyone is just devastated.

It’s Ford dealership in Wolverhampton is believed to be unaffected.


DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:47 pm

Year of growth for Hatfields Group despite cutting dealerships

Hatfields Group has achieved revenue growth despite having trimmed down its dealership portfolio.

While many other similarly-sized dealer groups have remained relatively flat or declined, the business has seen annual turnover to November 2008 rise to £117.4 million from £109.7 million 12 months ago.

The progress, which moved Hatfields up nine places to 83rd in the November AM100, has been made despite recent downsizing.

It closed two Hyundai dealerships last year, and in August relocated one Chrysler outlet from a solus site to alongside its Sheffield Jaguar business.

Last month, its management decided to close a second Chrysler dealership in Doncaster.

Gareth Williams, managing director, said: “No other Hatfields businesses are under review at this time. The group remains financially sound and we are actively looking at new opportunities as they arise.”

In its last financial year Hatfields made £693,000 operating profit.

Williams said the growth in turnover has been fuelled by all its franchises. 

The Jaguar XF has overtaken the X-Type to become the biggest selling Jaguar model for the group, and has boosted revenue at its six Jaguar sites.

“Additionally, sales of new and used Hyundai vehicles have improved, contributing to the growth in turnover,” Williams said.

“Chrysler has been consistent for us despite the reduced number of dealerships in the group. This level of activity is largely a result of the impressive performance at Hatfields Bury, where we have sold 630 new and used Chrysler, Jeep and Dodge cars in the last year, compared to 368 units in the preceding 12 months.”

Hatfields Doncaster closed because “the solus status of the business was not viable in the short term”, he said.

The move resulted in six staff being redeployed within the group and nine being made redundant, six of whom have since found alternative employment.

Hatfields now has six Jaguar outlets, two Hyundai and two Chrysler.

It also has authorised repair franchises for Mercedes-Benz, Hyundai, Land Rover and Mitsubishi.


DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:46 pm

Paragon launches online auctions

Leasing sector support group Paragon plans to create the third biggest auction company in the UK with a new subsidiary, Paragon Remarketing.

It has recruited Peter Davies as the subsidiary’s managing director and former BCA stalwart Paul Joyce as director of sales and events.

The weekly online auctions will start in the third week of January. Five vendors have signed up, including manufacturers.

Davies said: “We entered the sector because the Paragon group is one of the biggest service providers to the automotive industry.”

The company has 355,000sq ft of stock preparation areas and transports 500 vehicles a day, so remarketing for leasing companies is “a logical step” he said.

“We can bring these cars to market through our sale or return programmes at low cost in a shorter time than traditional auction houses because we can sell the vehicles from a de-fleet centre.

“This can take out a significant amount of costs in the overall process of bringing a car to auction.”

To attract dealers, the auctions will have no buyers’ fee. Paragon estimates it will annually remarket 20,000 vehicles aged either three to 12 months or two to three years. 

It will target motor retailers wanting young used car stocks.
Davies, who previously held a senior marketing and business development role at US energy provider Indec, said: “We believe that a no buyer fee is a compelling factor when buyers are deciding where they source and purchase their cars.”

Customers and partners, including manufacturers and rental companies, understand the benefits of no buyer fees, 
he said. “They are not necessarily paying anymore than they do to a traditional auction house.”


DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:45 pm

DC Cook Direct in Liquidation

DC Cook Direct has gone into liquidation and has ceased trading.

The company’s website has closed down and advises that the directors have commenced liquidation proceedings.

DC Cook Direct is advising anyone that is owed money that hasn’t been contacted to call administrators Tenon Recovery. 
 

DATED: 24.12.08


FEED: AM


# posted by Profit Training Ltd : 1:44 pm

Wessex Group to close £6m turnover site but also invests

Bristol-based Wessex Garages will close a £6 million turnover dealership it has run for 15 years after failing to agree terms with its landlord, but it is investing elsewhere.

Keith Brock, managing director, said the freeholder of his Nissan and Citroën outlet in old premises at Hereford wanted a 48% rent increase before agreeing to a new 10 or 15-year lease.

The landlord, a Channel Isle trust, acquired the freehold in 2006 from the widow of Octav Botnar, first UK distributor of Nissans (then badged Datsuns here). The lease expires on Christmas Eve.

“We started negotiating early this year but could 
not reach an agreement,” said Brock. “If the landlord had made an acceptable offer, I might have agreed, which could have been difficult now the market has fallen so far.” 

Twenty-two staff at the Hereford dealership will lose their jobs. 
Wessex has 200 employees and Brock said other redundancies were possible. He said group turnover would be around £55 million this year (including the Hereford site) and “less” in 2009.

“We are cutting costs on what we have but investing in the future,” he said. 

“We have sometimes struggled with our Kia, Nissan and Fiat franchises, but their models are likely to be the sort of cars people want in an economic downturn.

“Things aren’t fantastic for us at the moment, but we’ve always been profitable, and are again this year. 

“Apart from Hereford, the rest of the business is fine. We took a hit on some big Nissan 4x4s, but we are all right now.”

Wessex Garages has solus Kia and Nissan dealerships in Bristol, and those brands plus Fiat at Newport in south Wales.

In Cardiff, it has Fiat (plus Abarth) and Kia on one site, and is spending £1.2 million on a Nissan outlet on adjoining land. 

In Gloucester, the group has Nissan and Fiat, and will be adding a Kia dealership.

DATED: 24.12.08

FEED: AM

# posted by Profit Training Ltd : 1:43 pm

Monday, December 22, 2008

HPI sold to Solera Holdings

Aviva has sold HPI Limited to Solera Holdings.
The company's general insurance CEO Igal Mayer said: "This sale is part of our on-going programme to transform our UK general insurance business through an increased focus on our core insurance and vehicle breakdown activities, allowing us to provide a first-rate service to our customers."
The gross assets of HPI were £112 million as at October 31.
Solera also owns the estimating system provider Audatex.
Aviva acquired HPI in 2004 which has a comprehensive database of UK vehicles offering customers a variety of services.
These include vehicle identity and keeper checks, mileage verification, finance statuts and valuation.

DATED: 22.12.08

FEED: AM

# posted by Profit Training Ltd : 8:49 pm

Ford stuck with Volvo ?

Ford may soon have to face the prospect of being “stuck” with Volvo because the ailing Swedish brand has become a luxury no other car manufacturer can afford, it was claimed this week.As the troubled US giant finally announced it was ‘re-evaluating strategic options’ after months of denying it wanted a disposal, industry analyst Professor Garel Rhys rated Volvo as potentially impossible to sell.“As we move from recession into depression across the industry, every company is counting the funds for its present business. “The luxury of purchasing another brand and the extra costs of trying to imbed it would be enormous and I wonder if anyone would want to do it.“Volvo is not an attractive proposition because sales have been on a downward trend and it is not profitable. No potential buyer comes to mind, given that every global market is turning down and there’s no sign of growth,” he said.In an interview with AM, Rhys said that while Volvo was bigger than Jaguar and had greater assets, it was unlikely to attract interest either from the industry or venture capitalists.“It’s true that PSA and Renault are barred from 11% of the market because they don’t have a non-volume brand, but that doesn’t mean that Volvo would allow them automatic access. “Even though Ford has spent a fortune on it, it’s not in the same league as the German premium brands. There might be some emotion behind the name, but Volvo is not powerful in a commercial sense.”Fellow analyst Professor Peter Cooke, of Buckingham University’s automotive business school, said:
“A buyer would need to be someone with deep pockets looking to build a global brand quickly. Perhaps an Eastern buyer might be appropriate.”Ford, which said the re-evaluation process would take several months to complete, has also approached the Swedish government for funding in a joint move with GM, which is also keen to bolster finances at Saab.
Observers believe that securing Swedish backing for its national brands would make them more attractive to potential buyers.

DATED: 22.12.08

FEED: AM

# posted by Profit Training Ltd : 8:46 pm

New Chevrolet MD upbeat about the future

Chevrolet UK has appointed a new managing director following Rory Harvey’s promotion within General Motors UK.Mark Terry has moved to the post from Saab GB, where he had been operations director since 2006. After 30 months in Chevrolet’s driving seat, Harvey last month became after-sales director for GM UK & Ireland, responsible for all brands in its portfolio. Harvey joined Chevrolet at a time when its sales were in decline. In his first year (2006), they fell 6.75% to 14,381. Since then, he has overseen a turnaround. So far this year, sales are up almost 2% on 2007 at 17,643.Terry intends to build on this success. “Over the coming years, my ambition is to establish Chevrolet not just as the car of choice in the value sector, but for a multitude of customers in many key segments such as MPV, SUV, youth and family.”He believes Chevrolet is well placed to take advantage of the current economic challenges.“Not only do we have great value cars that appeal to cost-sensitive consumers but in the SUV market, Captiva offers exceptional value for customers looking to consolidate their financial position,” he said.Future products include the Cruze compact family car in the first half of 2009, a production version of the Beat concept and, from 2010, the Camaro convertible and Volt zero-emission car.

DATED: 22.12.08

FEED: AM

# posted by Profit Training Ltd : 8:45 pm

NFDA and FLA rap Competition Commission over PPI proposals

"Preventing customers from buying PPI when they take out new credit will mean that many vulnerable people go unprotected just when unemployment is rising sharply." - Stephen Sklaroff, FLA director general

The Competition Commission publishes its final proposals to change payment protection insurance (PPI) sales methods next month after receiving scathing criticism of its draft proposals.The commission wants a 14-day gap between the sale of a loan to a customer and a PPI to protect it.
It is also proposing a total prohibition on sales of single-premium PPI policies, saying they are a barrier to customers switching providers and make costs difficult to compare. Formal responses closed on December 4. The National Franchised Dealers Association and the Finance & Leasing Association opposed the commission’s proposed 14-day cooling off period.Sue Robinson, NFDA director, said: “We urged that this proposal be reconsidered in the interests of dealers and consumers, and in the light of economic conditions.”Consumer groups have for years said many companies present the PPI option as if it were part of the normal contract, making buyers less likely to shop around.
They say effective and cheaper PPI is available independently.Robinson said a cooling-off period could make it very difficult for dealers to sell PPI products, and leave consumers unprotected if unable to repay a loan.“In the current economic climate, where many consumers are concerned about the possibility of redundancy, PPI is a crucial way of ensuring they are able to cover their loan payment,” she said. Robinson said that if PPI sales were reduced through the move, finance houses unable to protect customers might seek other ways of protecting their debt. “This could be through tighter lending criteria, and higher APR rates, all of which would be to the detriment of the consumer,” she said.Stephen Sklaroff, FLA director general, called on the commission “at this late stage” to reconsider.
“Preventing customers from buying PPI when they take out new credit will mean that many vulnerable people go unprotected just when unemployment is rising sharply,” he said.“The loss of single-premium PPI will result in worse terms for many customers. The commission’s proposals will raise the cost of credit, and have ignored the prime minister’s concerns about rising interest rates.”

DATED: 22.12.08

FEED: AM

# posted by Profit Training Ltd : 8:43 pm

Streamlining plan helps Suzuki

Suzuki GB has introduced a number of programmes to help its network survive the current economic slump, including cutting back on demonstrators and bringing in consultants to streamline businesses.
With around 85% of all Suzuki sales to retail customers, it is more exposed than most to the downturn.
Stories of some dealers advertising new cars on a 0% APR 50/50 scheme, where buyers pay half now, then the other half in 18 months suggests its 147-strong network is struggling, especially as many are small owner-driver operations.

Suzuki GB hopes to end 2008 with around 26,000 units sold, down 6,000 on last year.
But it is positive for next year, especially with the launch of the sub-£7,000 Alto in March, which will give it four low-emission models in the A and B segments.
Dale Wyatt, general manager, dealer development, was upbeat about the network’s chances next year, and has introduced a number of programmes to help.
He said: ‘Our dealers are suffering in the current market the same as others, but we believe there are a number of positives out there.
“We’re still expanding the network, with three new dealers in the last month.
“At our dealer conference recently we announced a raft of measures, such as fewer demos next year and a more sensible approach to targeting where levels are agreed quarterly rather than second guessing the next 12 months at the start of the year.
“We’ve also introduced new budgeting software at cost price to help manage cashflow and made available a consultancy that can help take cost out of a business in areas such as utilities bills and back office operations."
There is aftersales improvement, a used car programme and a showroom and enquiry management system.
“We’re also seeing an increase of around 10% in finance business, thanks to working with Black Horse."
Deals such as the 50/50 offer do not originate with Suzuki GB, and Wyatt said he was actively encouraging network innovation.
He said: “We are much less controlling than many other brands. Because many of our dealers are owner drivers and know their own local markets well, we celebrate their entrepreneurship and don’t constrain them.”

DATED: 22.12.08

FEED: AM

# posted by Profit Training Ltd : 8:41 pm

Tata 'to inject cash into Jaguar'

Tata Motors, the owner of Jaguar Land Rover, is to inject "tens of millions" of pounds into the British carmaker, according to the Financial Times. A spokesman for Tata Motors did not deny the report. A cash injection by the Indian owner would give the UK government more time to decide whether to use public money to bail-out the company. Business Secretary Lord Mandelson had cast doubt on a bail-out, saying the state was a "lender of last resort". Debasis Ray, head of corporate communications for Tata, did not not deny the report but would not say how much money would be injected. "It is our company and we are running a business," he said. "Discussions with the government, however, are confidential and cannot be revealed. We have to run the company and are doing so to the best of our abilities." State aid The carmaker has asked the government for financial support and its case has been backed by unions which say the industry needs help. Labour peer Lord Bhattacharyya had suggested ministers were discussing a £667m loan package for Jaguar. But Lord Mandelson said that Tata group must "look to their own resources." Jaguar Land Rover has been hit hard by a dramatic slump in sales that has affected carmakers across the world. In the US, the government has agreed to a $17.4bn (£11.6bn; 12.4bn euros) bail-out package for its auto industry. In the UK, the Confederation of British Industry has said urgent government loans are needed to preserve 800,000 UK jobs in the carmaking industry. The Unite union says tens of thousands of skilled jobs are "hanging by a thread".

DATED: 22.12.08

FEED: AW

# posted by Profit Training Ltd : 8:41 pm

Toyota braced for historic loss

Japan's biggest carmaker Toyota has forecast its first annual loss in 71 years due to plummeting sales and a surge in the value of the yen. The firm said it expected a loss of 150bn yen (£1.1bn) in yearly operating profits - from its core operations. Japan also posted a trade deficit of $2.5bn (£1.7bn) in November as exports fell at a record rate. The rising yen saw export levels down 26.7% from a year earlier, the ministry of finance said. The carmaker recorded an operating profit of 2.27 trillion yen last year. Toyota said it still expected to make a profit on a net level for the year ended March but has cut its forecast sharply to 50bn yen, down from a previous estimate of 550bn yen. It is the second profit warning by Toyota in less than seven weeks. The latest estimate is far lower than its net profit of 1.7 trillion yen earned the previous year. Falling sales Toyota's president Katsuaki Watanabe said that the company now expected to sell 8.96 million vehicles around the world this year, down 4% from the previous year. This is very, very, very bad. There's a chance that they could fall into the red in the next business year as well Koichi Ogawa, Daiwa SB InvestmentsSend your comments Unlike previous years, he gave no goal for 2009. Toyota said in a statement it was cutting its profits forecast because of the soaring yen "as well as a review of sales plans following a faster than expected contraction of the auto market". Japanese carmakers have all been hurt by plummeting car sales in their key overseas markets, including the US. The surging yen has eroded their overseas earnings and also hit their profits - the dollar has fallen to 13-year lows against the Japanese currency. Honda last week cut its annual profit forecast by 67%, and outlined a list of counter-measures such as putting off non-urgent investments to prop up its profitability. Deteriorating sector In the United States, President Bush threw the struggling carmakers General Motors and Chrysler a lifeline of up to $17.4bn to stave off bankruptcy as they reel under slumping demand. Commenting on Toyota's latest announcement, analysts said it underlined the problems now facing Japan's car exporters. "This is very, very, very bad. There's a chance that they could fall into the red in the next business year as well," said Koichi Ogawa of Daiwa SB Investments. "This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy." Fujio Ando of Chibagin Asset Management added: "This shows how rapidly and badly the auto sector has deteriorated." "Toyota will likely revise down its earnings numbers or sales forecast again in late January or February as I don't think the business environment will become any better," he said. Output slashed Japan typically runs a trade surplus due to strong demand for its products - but the surging yen has hit demand for its goods. Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop. Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency. Exports to the rest of Asia declined 26.7%. Imports were also down - 14.4% overall - due in part to lower oil prices. Japan's economy - the world's second-largest after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row. The government has forecast zero growth in the year ending March 2010.

DATED: 22.12.08

FEED: AW

# posted by Profit Training Ltd : 8:39 pm

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