Wednesday, May 13, 2009
Chrysler Dealers positive about future
Chrysler dealers in the UK are feeling positive about the brand’s future following the announcement by Barack Obama earlier this month that the carmaker had filed for Chapter 11 bankruptcy.
It was also announced that Fiat would take a 20% stake in the company.
Adrian Lewis, Marshall franchise director for Chrysler Jeep and Dodge, said that the move was “extremely positive” and left Chrysler in a better position than some other troubled manufacturers.
He added that Marshall was committed to the brand and would have departed the franchise long before now if had intended to do so.
“We are pushing business as usual and that is the best message we can take out to the marketplace,” Lewis said.
Supplies of vehicles and parts are ample and unaffected, he added.
Chrysler UK said US actions do not affect the day-to-day operation in Britain.
“It will continue to operate as normal and will continue to market, sell and service vehicles and honour all warranties. We look forward to building a vibrant new company with less debt, a stronger balance sheet and a richer product portfolio,” said Chrysler.
David Dyson, Lookers financial director, added: "The way everything works over in the US is very different to the UK, but it's just far too early to say what's going to happen. Obviously our risk is minimised because we only have one site."
DATED: 13.05.09
FEED: AM
Three bidders for SAAB
Fiat, Geely and an unnamed German bank are reportedly the three bidders most likely to buy Saab, according to a GM source.
A Swedish newspaper also suggested that GM boss Fritz Henderson has already dismissed Chinese car maker Geely’s bid for Saab for fear of Chinese-market competition for the luxury Buick brand.
Neither Saab nor GM will officially confirm the list of bidders.
Geely has officially denied any plans to bid for Saab, although representatives of Geely have reportedly visited Saab’s Trollhattan headquarters.
DATED: 13.05.09
FEED: AM
Van Manufacturers are feeling the pain
That the LCV market is suffering massively is hardly news. What is more interesting is who is suffering most and least as the recession bites.
At the top of the sales chart, Ford is out on its own, as usual. Its market share dipped slightly, but recovered by the end of Q1, despite the novelty of the new Transit wearing off.
In second place Vauxhall is benefiting from the new engines in the Vivaro, as is Nissan with its sister model (which is also benefiting from the new Navara cleaning up what is left of the pick-up market).
This makes the performance of Renault, the third member of the alliance, look even worse, with market share down. Given the poor performance of Renault cars recently, this does look like a company in trouble in the UK.
Over at the other major van alliance, PSA-Fiat/Iveco, things are a little more stable. Peugeot and Citroën combined are more or less holding station, although Fiat and Iveco are losing ground a little.
Any decline in van penetration is particularly serious for Fiat as its boss, Sergio Marchionne, has made no secret of the fact that most of its European profits in 2006/2007 came from commercial vehicles.
Among the smaller manufacturers, the downturn has been occasionally brutal. That is inevitable – nervous buyers seek safety, and big manufacturers are prepared to throw big discounts at maintaining share. LDV’s share has gone from 1.77% to 1.0%, which does put its plea for assistance into context.
LDV as a supplier of western technology to GAZ in Russia made sense, at least at a conceptual level, but an independent LDV that cannot command even 2% of its home market? That is lower than Rover managed before its collapse.
Meanwhile the contrasting figures for Mitsubishi and Land Rover are interesting. Mitsubishi clearly has issues: having successfully ridden the wave of privately run double cab pick-ups, it is inevitably losing sales as that wave crashes. At the same time, many dealers are rueing the loss of Jim Tyrrell, the man who was “Mr. Mitsubishi” for so many years.
The rise in share at Land Rover is due to the introduction of the Ford 2.4-litre engine in the Defender which made it so much better to drive and also more reassuring to own.
DATED: 13.05.09
FEED: AM
Auctions hint at recovery for used van sales
Much like the used car market, used van sales have seen a glimmer of light. According to auction houses used LCV prices fell by an average of around 27% overall in 2008, close to £1,000.
But there are green shoots of recovery. Average prices were on the rise in January, and February has also seen rises, albeit small at 1.8%.
James Davis, Manheim group commercial manager, said: “It’s difficult to forecast where the used market for LCVs will be at the end of this year. One thing that is definitely happening is leasing and contract hire companies are extending vehicles more and more.
“From the dealers I have spoken to demand is still there. Demand is good enough that dealers are buying to stock models.”
One of the major differences for the used van market in comparison to the last recession is the internet.
Extensive research
Business and retail customers can easily search out prices from across the UK and much like cars, customers can extensively research specifications and variations in price.
Duncan Ward, BCA general manager for commercial vehicles, said: “The last decade has seen steady growth in the used car market.
“Everything was ticking along quite nicely and then a slight blip occurred in the first quarter of 2008. I think there was more panic in the car market, but vans were following closely behind. A decline started in residual values as well as demand until, at the back end of last year, LCV prices had reached the bottom.”
Since the start of this year, BCA has seen a remarkable resurgence in used van activity, said Ward.
This surge in demand has come from two main places.
Many people who were putting off buying new vans have had to make a decision and have gone for the cheaper used option.
Another is that bigger trade businesses have been making staff redundant and those people are now deciding to go it alone and looking for their daily workhorses in the used market.
Optimistic forecast
Although things are starting to look up in the used market, Ward believes the turnaround will still take time.
He said: “I can’t see the market bouncing back to normal levels this year, but it’s very difficult to predict. There will always be a business need for vans and that’s not going to change.
“People were so worried about the market place last year that they were putting off a purchase for as long as they could. I think a threshold has been crossed and optimism is starting to return.”
Dealers should be concentrating on acquiring stock in the £4,000 – £5,000 price range which is ready to retail and needs little or no servicing work. This is a notable step up from the conditions at the end of 2008, when the sub-£3,000 market was strong, but little else was attracting buyers.
“It will always come down to condition and that goes for whatever the situation the market is in.”
Ward’s advice to dealers was to keep an eye out for hot vans with high power outputs. While it would be expected that customers and businesses alike are reining in their spending, Ward said top-spec vans like the Volkswagen Transporter Sportline, Vauxhall Vivaro Sportive or Ford Transit Sportvan were proving popular.
He said: “Because they’re so hard to come by they always get snapped up.
“The double-cab pick-up market has also seen a really big turnaround this year. It’s one of the nearest things you can get to buying a standard car, so it might be the case that buyers are killing two birds with one stone by buying something they can use privately as well as commercially.
“There’s also been recent activity for older, higher mileage examples simply on price alone. Values have recovered somewhat this year, but remain well behind where they were when the credit crunch began.
DATED: 13.05.09
FEED: AM
Black Horse takes over BoS finance
Black Horse Motor Finance will now become the group’s sole brand for dealer finance. It is hoped this transfer will be complete by September.
Black Horse said a detailed review was carried out on BoS’s motor finance operations and it was decided the majority of them were “no longer financially viable or core to the business”.
The combined Black Horse business will be larger than either Black Horse or BoS Dealer Finance previously were.
Black Horse was unable to provide a figure of what slice of the dealer finance market it would now have as a result of the consolidation, but said it positioned the company as the “clear market leader”.
This change will result in the loss of 910 full-time jobs which will affect 985 full and part time staff over a two-year period.
A spokesman for Black Horse said George Grant,
previously the boss of BoS Dealer Finance, had decided to leave the business to pursue “other opportunities”.
Other managerial staff from BoS Dealer Finance are currently going through a selection process which it is hoped will be completed in July.
Chris Sutton is now managing director of the new combined motor finance business at Black Horse.
A spokesman for Black Horse said: “Although there will be some changes to customers’ day-to-day dealings with us, in general it will be business as usual.
“We will be working alongside our dealer customers to minimise the impact of these changes on their day-to-day business operations.
“In the short term BoS will continue to accept and write new business. Black Horse will continue to offer credit at existing levels based on its usual commercial criteria.”
Consumers shun '09' reg. in favour of used cars
March's motor finance figures from the Finance and Leasing Association show:
- Consumers purchased 3% more used cars with dealer finance in March 2009 compared with March 2008.
- But purchases of new cars on finance were down 27% in the same period.
- Consumer leasing of new cars fell 22% in March 2009 compared with March 2008. Personal Contract Purchase (PCP) fell by 2% and HP by 35% in the same time period.
Motorists are taking advantage of the good used car deals available. The proportion of new cars bought by consumers on finance now stands at 53.9% of all consumer new car registrations (436,023 vehicles).
March is an important month for dealers and normally new registration plates are popular. March sales of new cars often account for 20 per cent of a dealer's annual sales. The figures show that new car finance is yet another part of the motor industry being impacted by the recession.
Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: "The used car market is faring better than the new car market. This is a great time for consumers to buy a used car, as although volumes are up on this time last year, the value of finance provided is down - used cars are cheaper than a year ago. But March's figures reflect the effect of the recession on the motor finance market. This highlights the need for Government action to ensure the supply of finance meets demand."
GM chief on Vauxhall's future
General Motors' chief executive Fritz Henderson has offered no reassurances on the future of Vauxhall.
His comments came as he said it was probable that the struggling US vehicle manufacturer would file for Chapter 11 bankruptcy protection by a June 1 deadline set by the US government.
More than 5,000 people work at Vauxhall in the UK and Mr Henderson said he could not go into detail about what other parties may plan for Vauxhall and other GM Europe operations if the division was sold.
However, he did say that Vauxhall's plants in Luton and Ellesmere Port had performed well. GM plans to continue to have a stake in the European business if it is sold, although it is expected to be a minority holding.
Used values rise for sixth consecutive month
Average used car values rose for the sixth consecutive month in April, according to the latest BCA's Pulse report.
The average auction values in April increased to £5,641, a rise of £59, or 1 per cent, over the £5,582 recorded in March. BCA suggested this indicated the market is "beginning to settle" pointing out that earlier in the year there were monthly rises of up to £400+.
Year-on-year April values are ahead of the April 2008 average figure of £5,406 by £235 or 4.3 per cent. It is the second month running that the year-on-year figures have shown growth, following falls throughout much of 2008.
Stock remained at relatively low levels in April, with part-exchange volumes falling after showing some growth last month. Strong demand from trade buyers once again kept sale conversions high, but BCA described buyer activity as "more muted than it was in February and March".
"April has been something of a surprise, as all the signs were that the market was beginning to soften. In fact, demand has held up exceptionally well, resulting in another modest, but welcome, increase in average value, month-on-month," said
BCA Communications director Tony Gannon.
"Compared to April last year, average values are ahead by more than 4 per cent, which indicates the strength of the recovery and suggests values are very much back on track. In fact the market has improved by more than 18 per cent from the bottom of the slump last October," he said.
DATED: 13.05.09
FEED: MT
New car finance business hit in March
Consumers purchased 3 per cent more used cars with dealer finance in March 2009 compared with March 2008 but purchases of new cars on finance were down 27 per cent in the same period.
FLA head of research and chief economist Geraldine Kilkelly said: "The used car market is faring better than the new car market.
"This is a great time for consumers to buy a used car, as although volumes are up on this time last year, the value of finance provided is down - used cars are cheaper than a year ago.
"But March's figures reflect the effect of the recession on the motor finance market. This highlights the need for Government action to ensure the supply of finance meets demand."
The FLA said consumer leasing of new cars fell 22 per cent in March 2009 compared with March 2008. Personal Contract Purchase (PCP) fell by 2 pere cent and HP by 35 pere cent in the same time period.
Motorists are taking advantage of the good used car deals available. The proportion of new cars bought by consumers on finance now stands at 53.9 pere cent of all consumer new car registrations (436,023 vehicles).
March is an important month for dealers and normally new registration plates are popular. March sales of new cars often account for 20 per cent of a dealer's annual sales. The figures show that new car finance is yet another part of the motor industry being impacted by the recession.
DATED: 13.05.09
FEED: MT
Bank of England Inflation Report
May 2009
The Bank of England has today published its latest Inflation Report.
To view it please follow the link below:
DATED: 13.05.09
FEED: BoE
Gaz confirms interest in Opel
Downturn pushes Nissan into loss
Japanese carmaker Nissan has reported a net loss for the past year, but the results were better than expected.
Nissan reported a net loss of 233.7bn yen ($2.3bn; £1.59bn) for the year to 31 March, but it had previously forecast the loss would be 256bn yen.
Sales of Nissan vehicles fell 9.5% to 3.4 million, with the biggest decline seen in the US market.
Carmakers around the world have been affected by the economic downturn and Nissan said it remained cautious.
'Challenging year'
Nissan - which is 44%-owned by Renault - added that it expected to make a net loss of 170bn yen in the next financial year, and to see a further reduction in its global sales to about 3.1 million vehicles.
"The global recession and financial crisis continue, but we are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence," chief executive Carlos Ghosn said.
"2009 will be another challenging year. Our priorities will be preserving cash, improving our profitability and pursuing deeper synergies within the Renault-Nissan Alliance."
Shares in Nissan fell 1% to 510 yen in Tokyo ahead of the results.
Industry losses
It was a bleak day for Japanese carmakers as Mazda also announced an annual loss of 52.1bn yen, after seeing sales decline by 27%.
On Monday, Japan's biggest carmaker Toyota reported its largest annual net loss to date of 436.94bn yen.
Also on Monday, Suzuki reported a of 5.8bn yen profit for the first quarter of the year, but it said it was downbeat about future sales.
GM bankruptcy 'looks more likely'
General Motors going into bankruptcy protection was looking more likely, the firm's chief executive has said.
Fritz Henderson added the task to avoid the measure was "large" - with his comments sending GM shares down 10%.
The US government has given GM a deadline of 1 June to restructure the business successfully if it wishes to gain more emergency loans.
GM has already warned it will probably need to enter bankruptcy protection if it cannot get the additional funding.
"Certainly the task that we have in front of us is large," Mr Henderson said, but added that there was "still an opportunity and still a chance for it to be done outside of a court process."
GM is continuing plans to close 2,600 of its 6,246 US dealerships - with a reduction in the network part of major cost-cutting plans at the firm, which hopes to reduce its $44bn (£29bn) debt mountain.
It has also not ruled out moving its base from Detroit.
Opel issue
Earlier Mr Henderson reiterated that the firm was in "urgent need of funding", despite having already been given $15bn in loans from the government since December.
Last month, General Motors confirmed that it would be cutting 21,000 jobs worldwide and shutting a number of factories in an effort to stay in business.
As part of the plan, GM is selling a number of its brands - Hummer, Saturn and Saab - and scrapping Pontiac entirely.
It is also in talks to sell its GM Europe business, which comprises Opel, Vauxhall and Saab.
Fiat is the front-runner to take over Opel and Vauxhall, although a number of stumbling blocks are emerging - not least from trade unions and governments, who fear any such tie-up could mothball a number of factories and cost thousands of jobs around the continent.
'Integral part'
Commenting on the prospect of Fiat taking over Opel and Vauxhall in Europe, and any resulting plant closures, Mr Henderson praised Vauxhall's plants in the UK for their "superb work", which he said was "an integral and a crucial part of the business".
He added, though, that he could not stipulate what any new investor in GM Europe would do with the factories.
The Canadian component manufacturer Magna is also in talks to take a substantial stake in GM Europe, and the BBC has learned that the Chinese car company SAIC is also negotiating with GM.
GM has said that while it would surrender control to a new investor in GM Europe, it would like to retain a stake in the business.
Back in the US, GM said it was also in talks with two potential buyers for its Hummer brand.
Pay cut for car plant's workforce
Staff at Swindon's Honda plant have been told they will have their pay cut.
Workers at the Japanese car maker had been told to expect a cut because not enough workers had taken redundancy when it was offered last February.
The pay cut is said to be temporary but workers are already on a four-month shutdown at the Wiltshire-based plant.
Now when they return in June, a 3% pay cut for workers and a 5% pay cut for management will be introduced until March 2010.
One worker, who wished to remain anonymous, said the move would mean about £1,000 in loss of earnings a year.
A Honda spokesman said the decision was taken to ensure the long-term survival of the company in Swindon.
The company closed its UK plant in the town for four months last February.
The shutdown is thought to be one of the longest in Britain's recent industrial history.
The move came in response to the downturn in the UK car market.
Production staff, who install and upgrade machinery rather than make cars, are continuing to work at Swindon during the shutdown.
Tuesday, May 12, 2009
Senior management shuffle at Black Horse
Black Horse has announced the appointment of its new senior management team, following news last month that it will close Bank of Scotland Dealer Finance by the end of September.
Managing director Chris Sutton confirmed that following a rigorous selection process, which he conducted alongside former Bank of Scotland Dealer Finance managing director George Grant, the new team had now been appointed.
The new team consists of:
• Tim Smith, who will move from his current position of Black Horse regional director, south to lead the combined motor sales teams in the north.
• Paul McGill, who currently leads the sales and distribution teams in Bank of Scotland Dealer Finance, will take up the Black Horse head of motor, south, role.
• Mike Whytock, who moves from Black Horse regional director, north to head up the combined franchise and leisure businesses (joint ventures, motorcycles, caravans and marine).
• Mike Griffiths expands his current responsibilities for Black Horse fleet and major groups, with the Bank of Scotland Dealer Finance wholesale and strategic accounts businesses moving under his wing.
• Paul Brotherton takes over the combined business support operation, which will include the BOSDF field risk managers.
• Simon Cotton expands his current responsibilities for Bank of Scotland Dealer Finance products to include products, marketing and pricing for the combined business.
DATED: 12.05.09
FEED: AM
Tata tries to raise £1bn without government
Tata is trying to raise up to £1bn by September to keep Jaguar Land Rover afloat without government help.
It is understood that the Indian firm has mandated its financial adviser Citigroup to find banks with a solid credit rating prepared to underwrite some of the £340m loan pledged by the European Investment Bank, reported Guardian.
Tata is also seeking to tap the debt markets to help secure the £500m-£1bn short-term financing package needed. Some of this funding will comprise of a loan facility to be called on if trading is worse than expected.
A Tata Motors spokesman denied that the company was no longer seeking government help for short-term financing.
But Tata rejected the government's conditions for underwriting some of the EIB loan to secure immediate and short-term help. The Indian firm believes it can secure better terms independently.
Talks are continuing about putting together a longer-term financing package involving a consortium of banks, led by state-controlled Lloyds Banking Group. The conditions for the loans are believed to be more conventional than the terms demanded by the government this month for the short-term package and Tata is confident that progress is being made.
Lord Mandelson's business department remains concerned that Jaguar Land Rover could soon run out of cash. A suppliers' bill of about £100m is due this month and many other bills from the last 12 months need to be paid off this summer.
Tata, which controls Jaguar Land Rover through its subsidiary Tata Motors, will cut or freeze investment plans for new models. More redundancies from its 15,000-strong workforce are also likely.
DATED: 12.05.09
FEED: AM
Inchcape attracts Israeli interest
The Toyota importer to Israel has become a strategic investor in Inchcape.
Union Motors, owned by Israeli businessman George Horesh, began buying shares in the London-based listed motor retailer and distributor in November 2008.
By last month, Horesh had built almost a 7% stake in Inchcape.
DATED: 12.05.09
FEED: AM
VW Commercial promotes complete van range
"This helps to support dealers’ overall business,they can sell more hours in the workshop and keep staff busy." - Simon Elliott, VWCV MD.
VWCV is to push its full range of vans harder. It describes the Caravelle as its “best kept secret”, says the Caddy Maxi Life needs promoting more and plans to expand the California range with a close watch on pricing.
The Sport Line – “a sexy-looking van with alloys and tinted glass”, according to Elliott – offers dealers an opportunity
to sell to customers put off by the white van man image.
The network also has opportunities for bespoke van work, such as ply-lining, and vehicle conversions, including minibuses for local authorities. Few vans go out as
standard.
“This helps to support dealers’ overall business,” says Elliott. “They can sell more hours in the workshop and keep staff busy.”
The Ecofuel range is launched this month, starting with the Caddy, while a new van will be announced later this year for launch in 2010.
DATED: 12.05.09
FEED: AM
Car scrappage scheme 'unpopular'
There is growing evidence that the government's forthcoming scheme to scrap hundreds of thousands of old cars is not that popular with motorists.
A new survey suggests most people who have studied the scrappage scheme have decided not to take advantage of it.
Researchers from car price guide Parker's questioned 600 people online.
It found that 70% of respondents said the scheme was not generous enough, and overall 81% said they would not be taking advantage of it.
'Massively disappointed'
The scrappage scheme starts on 18 May. If your car is at least 10 years old you can scrap it, in return for a substantial discount on a new car.
The government will provide a £1,000 subsidy for each car purchased, and manufacturers will provide at least a similar amount.
But Kieren Puffet, the editor of Parker's Guide, said many motorists have managed to find much larger discounts under existing deals.
"They're massively disappointed," he said. "They were hoping for a lot more from the government."
Julia Smith, who lives in Basingstoke in Hampshire, is one of those who initially thought the scheme would be useful, but has since decided against it. She was going to scrap her 13-year-old Volvo, and buy a new one instead.
With the scrappage scheme discounts, a brand new Volvo would have cost her in the region of £21,000. But she then found exactly the same model with less than 10,000 miles on the clock for £17,000. A saving of £4,000 proved irresistible.
"In practice this scheme is just not working," she says. "I think it just hasn't been thought through terribly well."
Lukewarm response
The car industry had lobbied the government to pay a subsidy of £2,000 per car, rather than just £1,000. A similar scheme in Germany was launched back in December, and the government there pays the larger amount. Unlike the British plan, it also includes cars up to one year old.
Paul Everitt, of the Society of Motor Manufacturers and Traders, is lukewarm about the UK scheme.
"We've been dealt the cards that we have," he said. "Our job now is to make the best of it."
But the government says motorists still stand to make savings through the scheme.
Gareth Thomas, the consumer affairs minister, said: "I don't think this will be a flop. But you're right to say there are good deals in the market already."
Business Secretary calls for clarity over Vauxhall's future
Business Secretary Lord Mandelson says he wants 'early clarity and decisions' about the future of General Motors Europe amid growing concerns for the 5,000 staff employed in the UK by subsidiary Vauxhall.
Lord Mandelson met with German ministers last Thursday (May 7), who have already held talks with Fiat bosses on the possible acquisition by the Italian manufacturer of GM and its subsidiaries.
Earlier this week it was reported that German ministers had laid down many conditions on the future of Vauxhall sister company Opel in the event of a Fiat deal.
Lord Mandelson said: "Laying down exclusively German conditions for the company's future is no more acceptable than saying exclusively British interests have to predominate."
He continued: "The British Government will keep an open mind but workers at Vauxhall's UK plants want to be reassured about their future."
Fiat and Canadian parts manufacturer Magna International are said to be leading the battle to buy all or part of GM.
Concerns have also been raised by the Italian Government over possible Fiat plant closures if the manufacturer is successful in its negotiations. It is believed that Fiat is also keen on acquiring GM operations in South America and South Africa as well as across Europe.
