Friday, August 14, 2009
MG Rover directors could face disqualification
Following Monday's (August 11) decision by the Serious Fraud Office that it would not pursue criminal proceedings against the so-called 'Phoenix Four', a Department for Business spokesman said: "The Secretary of State [Lord Mandelson] has been advised that there are good grounds to bring disqualification proceedings. These would be civil rather than criminal proceedings."
Disqualification, which would be decided by a court, lasts for two to 15 years and bears with it a measure of disgrace in business circles.
The 'Phoenix Four', John Towers, Nick Stephenson, John Edwards and Peter Beale, were at the centre of a political and media storm when MR Rover collapsed in 2005 with the loss of more than 6,000 jobs.
A spokesman for the 'Four' said they had done nothing wrong that justified disqualification.
Remit promotes motor industry apprenticeships
'School and college leavers looking for an interesting and varied career should give serious thought towards making their next step a motor sector apprenticeship,' according to Rob Foulston, Chief Executive of Remit, the training arm of the Retail Motor Industry Federation (RMIF), and the lead training provider for the retail motor sector.
Foulston continues: 'With GCSE and A Level results due to be announced in the next few weeks, many young people will be wondering what their next step will be. For many this could mean a motor industry apprenticeship. '
The motor industry offers a far greater range of career options than many young people realise. Media portrayals tend to focus on the role of service technician, but there is far more to the motor industry.
Remit can place young people in high quality apprenticeship training programmes in a wide range of job roles including:
- Service Technicians
- Vehicle Body Repairers
- Vehicle Painters
- Motor Cycle Technicians
- Parts Consultants
- Sales Advisors
- Service Advisors
- Administrators
- Tyre and Exhaust Fitters
Apprentices are fully employed from day one and benefit from earning at the same time as learning and achieving nationally recognised qualifications.
Russia set for scrappage scheme
Russia is set to introduce its own car scrappage scheme following the success of similar programmes in the US and Europe in boosting car sales.
The Russian Industry and Trade Ministry said the scheme could be introduced in January next year.
Russian media reports say that a 50,000 ruble ($1,567; £942) incentive will be given to motorists who trade in their old car and buy a new one.
Carmakers have been hit particularly hard by the economic downturn.
"The car has to be running, it should be registered with the traffic police and it should have all of the necessary documents," said the ministry's automotive industry director Alexei Rakhmanov.
To qualify for the scheme, a car must be at least 10 years old, the reports say.
Last week, the US boosted funds in its own "cash for clunkers" scheme after it proved popular with car owners.
Motor lobby attacks EU emission plans for vans and light trucks
Vans and light trucks sold in the European Union will have to meet tighter environmental standards within four years, under plans being developed by the European Commission and already strongly criticised by the automotive lobby.
Light commercial vehicles have so far been exempt from the EU emissions standards for passenger cars set late last year.
The proposals would set average CO2 emissions from LCVs at 175 g/km by mid-2013, compared with slightly above 200 g/km for new LCVs today, according to internal Commission documents. A long-term target of 135 g/km is also tabled.
The proposal is due to be finalised by the Commission by the end of September, when it would go before the European Parliament and member states for ratification.
However, ACEA, the European motor manufacturers' lobby group, has dismissed the plans as 'unenforceable' saying its members could not meet new standards within such a short period.
With LCVs having a seven to 10-year lead time between design and production, ACEA secretary general Ivan Hodac said the 2013 schedule was completely out of reach. He also warned that the proposals would add up to ?6,000 to the price of each vehicle.
Jaguar Land Rover secures funding
The Indian owner of Jaguar Land Rover has told the UK government it no longer needs support for the carmaker, after obtaining private funding.
Tata said it had secured some direct bank loans, as well as guarantees that would allow it access to a £340m European Investment Bank loan.
Government funding had been offered but did not materialise, after a failure to agree terms of any cash injection.
Business secretary Peter Mandelson said the development was "welcome".
"The fact that the banks and commercial capital markets are meeting JLR's funding is a clear sign of confidence in the company, its products and the automotive sector," Lord Mandelson said.
He added that the additional funding would allow investment in future models and for the XJ saloon to be launched on schedule.
"This is a good and encouraging outcome for JLR, its workforce and its supply chain," he added, saying the government had offered bridging finance, and would be "willing to help again if necessary".
In a letter to Lord Mandelson, Tata chairman Ratan Tata said he hoped the funding that had been secured would help it "succeed in re-establishing these venerable British brands to their earlier glory".
'Onerous' terms
Tata bought Jaguar Land Rover for £1.7bn in June 2008 from Ford.
It currently employs 14,500 people, having made 450 redundancies at the start of the year.
The firm is based in Gaydon, Warwickshire, and has factories in Castle Bromwich and Solihull, in the West Midlands, and Halewood, on Merseyside.
It has seen a sharp fall in vehicle sales following a worldwide drop in demand.
Mr Tata said that the terms of a £175m bridging loan which had been offered by the government had been "very onerous and hence unacceptable".
However he accepted that it was right that the business department had wanted to be satisfied that the firm was sustainable, and to get an idea of how much was required to meet its needs.
The attack of the clones continues
Despite ongoing warnings of the very real threat of car cloning, leading vehicle information expert HPI believes people are more at risk of buying a cloned car than ever before. As the recession takes its toll on the UK, criminals are using more sophisticated methods to clone vehicles and HPI warns dealers that they need to be as aware as consumers to avoid falling foul of these fraudsters.
Car cloning is the vehicle equivalent of identity fraud - criminals steal a car and give it a new identity copied from a similar vehicle already on the road. The criminal will disguise the unique 17 digit Vehicle Identification Number (VIN) on the stolen car, as well as using a stolen V5/logbook to try to legitimise its identity.
HPI is providing four simple but effective rules to reduce the risk of buying a clone.
One... Always check the provenance of the car. One vital check is to find all the VIN/chassis numbers on the vehicle to make sure they match, and then use the HPI Check to ensure they tally with the registration number of the vehicle. Shockingly, a recent member of the public who conducted an HPI Check arranged to buy a car from a seller on a lay by on the A47 in the East Midlands. The buyer conducted an HPI Check but only against the registration number, as no vehicle documentation was made available by the seller and the VIN number given appeared to be incorrect. Under pressure to buy the car there and then, cash changed hands and the deal was done. Subsequently, the new owner identified the correct VIN and called HPI. The correct VIN related to a stolen vehicle, confirming the car was indeed a clone.
Two... Know the car's market value. The trade will know that anyone paying less than 70% of the market price for a vehicle should be on their guard. No seller will want to lose money on their sale. In one recent case an HPI customer paid £11,000 cash for a vehicle HPI valued at £21,000. There is rarely such a thing as a bargain and in this case the car was later proven to be a clone.
Three... Don't pay with a substantial amount of cash, particularly if the car is costing more than £3,000. Some cloners will take a bankers draft as part payment, because the cash part is sufficient profit without ever cashing the bankers draft. Most crooks selling cloned cars would rather walk away from a sale than take a payment that could be traced back to them. Despite strong advice to buyers to pay via the banking system, HPI still hears of many buyers who go on to pay in cash and subsequently find out that the car is a clone, and that they've lost both their money and the vehicle.
Four... Check the vehicle's V5/logbook. Stolen V5 documents are currently being used to accompany cloned vehicles, but the HPI Check includes a unique stolen V5 document check as standard. This will confirm whether or not the document is one that the DVLA have recorded as stolen.
"Today it's almost impossible to sell a stolen vehicle without changing its identity, which has led to a rise in car cloning," explains Daniel Burgess, Automotive Director at HPI. "Anyone who buys a clone stands to lose the car and the money they paid for it, as the stolen vehicle will be returned to its rightful owner. Our best advice is conduct a vehicle history check and always proceed with caution. We can help you uncover a fake and walk away."
As well as revealing whether the car is registered as stolen, has been written-off, or is on finance, the HPI Check also protects dealers with the HPI Guarantee(3). This provides up to £30,000 financial reimbursement in the event of the car not being everything it seems - including a clone. If dealers are concerned that they may purchase a cloned vehicle, they should call HPI for further advice on 01722 422422
Scrappage scheme at half-way mark
Almost 155,000 new cars have been ordered through the government's scrappage scheme since it was launched in May, official figures show.
This means that more than half of the money set aside to fund the scheme has been spent.
Almost one-fifth of the orders were made in the South East of England.
Analysts say the scheme contributed to the rise in UK car sales in July, which was the first increase in monthly sales since April last year.
'Great deal'
Announcing the news, Business Secretary Lord Mandelson said the scheme was "a great deal for manufacturers and dealers, not to mention customers".
"The scheme has contributed to a 13.5% jump in car manufacturing," he added.
UK car sales rose 2.4%, to 157,149, in July compared with the same month last year, the latest industry figures showed last week.
But sales so far this year are still down 22.8% on the same period last year.
Under the UK scrappage scheme, a £2,000 incentive is paid to motorists who scrap cars registered before 31 August 1999 to buy a new car.
Half of the money is paid by the government and half by the car industry.
The government put aside £300m for the scheme, enough to fund 300,000 transactions.
eBay to start selling new GM cars
General Motors (GM) and eBay are launching a trial scheme in the US that will allow customers to buy new GM cars via the auction website.
More than 225 of GM's 250 Californian dealers have signed up to the scheme, which will allow consumers to either pay a fixed price or try to haggle.
The trial will run from 11 August to 8 September and is part of GM's continuing efforts to boost sales.
The carmaker emerged from bankruptcy protection in early July.
Expansion plans
All four of GM's brands - Buick, Chevrolet, GMC and Pontiac - will be available through the eBay scheme.
Customers buying a car via the website would then have to pick it up from one of the participating GM dealerships.
Lorrie Norrington, president of eBay marketplaces, said that if the trial is successful, it could be extended across the whole of the US, and that similar schemes with other carmakers may also be launched.
Some GM dealerships in the US already sell second hand cars via eBay, but this is the first time new vehicles have been put on sale through the website.
"I think they should have done this a long time ago," said Inder Dosanjh, one Californian GM dealer.
GM bidder pledges to keep Vauxhall
RHJ International, the Belgian group vying to buy Vauxhall/Opel says it has no plans to close the car firm's two manufacturing plants in Britain at Luton and Ellesmere Port.
RHJ and Magna International are the two companies bidding to take a controlling stake in General Motors Europe. It had been thought that a new owner would close at least one of the UK plants and ditch the Vauxhall brand as part of a cost-cutting drive.
However, RHJ chief executive Leonhard Fischer says that if his company is successful it would lay off 10,000 of GM Europe's 58,000 staff. The cuts would be spread across its operations, and he said there was no intention of shutting the UK factories.
He also rejected suggestions that, if successful, the company would sell GM Europe back to GM of America in a few years time.
RHJ is also planning to cut the amount of state funding needed to underwrite its bid for Vauxhall/Opel, in an effort to win favour in Germany and edge out Magna International.
RHJ plans to tell the German and other European governments that it needs 3.6 billion euros of taxpayer-funded loan guarantees, compared with its current 3.8bn euros request or the 4.5bn euros being sought by Magna.
No probe into MG Rover collapse
The Serious Fraud Office (SFO) has said it does not intend to launch a criminal investigation into the collapse of carmaker MG Rover.
Its announcement comes a month after Business Secretary Lord Mandelson asked the SFO to study the results of a four-year independent report into the saga.
Midlands-based MG Rover collapsed in 2005 with the loss of 6,500 jobs.
The four executives in control of MG Rover, the so-called Phoenix Four, have always denied any wrongdoing.
The SFO said that it could not comment about the reasons for its decision because the inspectors' report had not been made public. It will be released on 11 September.
Lord Mandelson defended the decision to refer the matter to the SFO.
"Now the report will be published, the fraud office having made their decision, and people can judge, in the light of that report, everyone's responsibilities," he said.
For the Conservatives, shadow business secretary Kenneth Clarke called on the government to publish the report "as soon as possible".
"My suspicion has always been that delayed publication of the report was being sought because of criticism of the government within it," he said. "I wait to see if my fears are allayed."
'Flabbergasted'
The Phoenix Four - John Towers, Nick Stephenson, Peter Beale and John Edwards - came in for criticism after the firm's collapse when it was revealed that they had taken an estimated £40m in pay and pensions from the company.
A spokesman for the directors said they had always maintained there was no basis for a criminal investigation as the question of fraud had never been raised.
They were "flabbergasted" when Lord Mandelson referred the matter to the SFO, he added.
"The decision to refer the matter to the SFO was the latest in a long line of bizarre and wholly unnecessary twists in the MG Rover story," the spokesman said, adding the directors had "very little faith" in the inquiry, and were sceptical whether the department would publish a final report that was "properly balanced and objective".
"The directors and many others with an interest in MG Rover fear that anyone thinking that this inquiry will get to the heart of the matter is in for a disappointment."
Former workers at the MG Rover plant in Longbridge, speaking to the BBC, said they had not expected great things from the inquiry.
One of them, Stephen Gregory, said it had been a "shock" when MG Rover first went under, but he had since "moved on" and become a driving instructor.
"As far as the report goes, I think it was expected," he added. "I didn't expect anything else to happen other than [that it would be] brushed under the carpet and we don't hear anymore about it."
China sale
The study of MG Rover came after the completion of a four-year inquiry, costing £16m, by independent inspectors appointed by the Department for Business, Innovation and Skills.
The Phoenix Four took control of MG Rover in May 2000 after buying it from previous owner BMW for a nominal £10. They also gained an interest-free loan of £427m from the German firm.
They were eventually unable to turn around MG Rover's fortunes, and it went into administration under insolvency procedures in April 2005, with debts of more than £1bn.
Its assets were subsequently sold in 2006 to China's Nanjing Automobile, which revived the MG sports car brand.
VW to buy 42% in Porsche
Tuesday, August 11, 2009
Fiat buys Bertone
Coachbuilder Bertone's sale to Fiat has been approved by Italian Industry Minister Claudio Scajola.
Consequently, Fiat will invest ?150 million over three years in the struggling contract manufacturer, which is best known for its work on cars ranging from the Lamborghini Miura to the Volkswagen Polo during its 96 years in business.
Fiat boss Sergio Marchionne has said he wants to use Bertone's Turin plant for niche vehicle production, but has declined to say which models he is planning beyond revealing they will be sold in Europe and the USA.
Italian press reports suggest that, from late 2011, Fiat could use the Bertone plant to make everything from convertibles to large saloons.
The Bertone family lost control of its coachbuilding business when bankruptcy administrators took control in February 2008.
Government must help, says FLA
Latest figures released by the Finance & Leasing Association (FLA) show the smallest drop in private new and used cars bought with dealer finance since September 2008.The number of cars bought by consumers using finance obtained through dealerships in June fell by 6% compared with the same month a year earlier. But the FLA warns that more financial stimulus and a long-term plan from Government are needed if lenders are to meet demand when the economy recovers.
New motor finance business was down significantly in the first half of 2009 compared with 2008. During that period, the number of private new and used cars purchased using dealer finance fell by 23% and 10% respectively.
The business car finance market also struggled. Finance provided to businesses for new cars fell in the six month period to June by more than a third compared with the same period in 2008. Business confidence remains low with companies delaying investment not least because of the availability and cost of credit.
Commenting on June's motor finance figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: "We have seen the smallest drop in motor finance since September 2008, but motor finance providers are still very concerned about the lack of well-priced funding on the wholesale markets. While most lenders are able to meet demand at the current reduced levels, if demand increases in the second half of the year the availability of credit for car buyers may become an issue.
"The Government needs to prepare for a sustainable recovery by ensuring that the car finance industry has the capacity to meet future demand."
Mondial urges dealers to educate customers on warranty
Mondial Assistance is urging dealers to educate customers on the terms and conditions of their warranty package to avoid misunderstandings or leaving customers out of pocket.
Liz Grindell, warranty manager for Mondial Assistance in the UK, said: "A misunderstanding over terms and conditions can not only leave consumers out of pocket, it can cause bad feeling between them and the manufacturer.”
Grindell said many used car owners are cutting down costs by carrying out their own vehicle repairs and maintenance or using independent garages rather than manufacturer approved dealer networks.
She said: “Car owners can be unaware of how disregarding the terms and conditions of their warranty can influence its benefits. For example, some manufacturer warranties when in their third year won't pay a claim for work that hasn't been carried out by a manufacturer approved dealer or by an independent who hasn't used manufacturer approved parts.
“Some consumers are choosing to ignore the manufacturer's recommended service schedule, but don't realise how this impacts on their warranty. But manufacturers and dealers should be educating their customers to make them aware that if they skip or delay a service to make short term savings, they run the risk of a fault occurring that would have been identified and resolved if it had gone to the garage at the right time.”
Grindell points out that if the approved used or manufacturer extended warranty cover for faults occurred due to a missed service, the car owner is then left to foot the bill which could potentially destroy any future relationship with the manufacturer.
DATED: 11.08.09
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Used van prices flatten out in July
Wholesale used van prices dropped by just 0.6% or £19 in July in comparison to June, according to Manheim Auction’s latest monthly van market analysis.
Although this is the second month in which average values have fallen following five consecutive month-on-month increases in average wholesale used van prices the falls are minimal.
Compared with July last year average wholesale used van prices are actually up by 5.2% (£153) with average age the same at 54 months and average mileage 3,385 miles lower at 67,803.
The latest report highlights that values of vans more than two years old were largely in line with the overall market with a fall of 0.7% (£20) while greater variances were experienced by vans less than two years old.
Examples of the increases in average month-on-month values in July for vans more than two years old included car derived vans up by 1.9% (£38) to £2,014, large panel vans <>
Not all vans more than two years old went up in value in July with car vans down by 5.8% (£110) to £1,795, fridges down by 3.0% (£83) to £2,667 and boxes and lutons down by 3.8% (£144) to £3,621.
Examples of average month-on-month variances in values for the vans of less than two years include car derived vans which fell by 13.7% (£746) to £4,692, small panel vans which fell by 6.9% (£506) to £6,861 and large panel vans >3.0t down by 7.1% (£561) to £7,331. In contrast, large panel vans <3.0t>
Alex Wright, sales director for commercial vehicles for Manheim Auctions, said: “The early recovery in wholesale used van prices in 2009 does appear to have flattened out.
“We are now well into the seasonal period when values traditionally harden.
"This period usually begins as early as May yet throughout June and July we have seen consistently strong attendances both in the auctions halls and online with healthy bidding and high conversion rates. The marginal fall in average wholesale used van values of just 0.6% in July, following a fall of 0.5% in June, leads us to believe that there is still an underlying strength in the wholesale used van market.”
DATED: 11.08.09
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Dealer finance sales drop slows
New and used cars being bought with dealer finance fell by 6% in June, the smallest drop since September 2008.
However, according to the Finance and Leasing Association which revealed the results, more financial stimulus and a long-term plan from the Government are both needed for lenders to meet demand when the economy recovers.
Motor finance business was down significantly in the first half of 2009 compared with 2008. During that period, the number of private new and used cars purchased using dealer finance fell by 23% and 10% respectively.
The business car finance market also struggled. Finance provided to businesses for new cars fell in the six month period to June by more than a third compared with the same period in 2008. Business confidence remains low with companies delaying investment not least because of the availability and cost of credit.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “We have seen the smallest drop in motor finance since September 2008, but motor finance providers are still very concerned about the lack of well-priced funding on the wholesale markets.
“While most lenders are able to meet demand at the current reduced levels, if demand increases in the second half of the year the availability of credit for car buyers may become an issue. The Government needs to prepare for a sustainable recovery by ensuring that the car finance industry has the capacity to meet future demand.”
Mazda pushes cashflow management
Mazda is pushing better management through its network following the appointment of a new dealer financing manager earlier this year.
Chris Talman, is the Mazda UK’s manager for dealer financing and the new post coincided with Mazda’s switch to Santander for its financing.
Talman’s role is to help monitor dealer cashflow and find ways to reduce reliance on bank overdrafts. He focuses on a small percentage of dealers to assist and improve profitability as a result of more efficient use of financing resources.
The process is being repeated across Europe.
Colin Maddocks, director of network development and financing, Mazda Motor Europe, said: “In a small or medium-sized dealership, there can be tens or even hundreds of thousands of euros locked up in the balance sheet – in unpaid retail financing, un-financed used or demo cars or fleet debtors for example.
“The new Mazda team can review the processes and controls that affect these areas and unlock cash, taking pressure off the dealer’s bank account and freeing up their time to manage the rest of the business.”
Maddocks believes most manufacturer are still using “old-fashioned” business management consultants to help improve dealer profitability by “making a fraction more on a sale here or an aftersale service there”.
He said: “Good dealers do not need that help - it just takes up valuable management time. For those that do require support and guidance this new resource can have a positive impact to our partners businesses helping to manage cash, balance sheet and financing matters."
DATED: 11.08.09
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New GM for Toyota and Lexus fleet
Mark Roden has been appointed general manager for Toyota and Lexus fleet and vehicle remarketing, taking over from Richard Balshaw after his promotion to sales director.
Roden is currently general manager, marketing and strategy for Lexus, a position he has held since August 2006. He was previously Toyota Network general manager.
“Current market conditions are tough for fleet sales however Toyota Optimal Drive, Hybrid Synergy Drive and Lexus Hybrid Drive present a very strong proposition to fleet managers in terms of whole life costs,” Roden said.
“With a refreshed line up in 2009, plus new generation Prius on sale from this month, the team has already been hard at work introducing the benefits of hybrid technology to fleet managers across the country.”
Roden joins the team after a restructure earlier this year to combine Lexus Corporate to simplify the process for sales of both brands to fleet managers, said Toyota.
He takes up the role from 1 September and will report to Richard Balshaw.
DATED: 11.08.09
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