Saturday, September 19, 2009
SMMT calls for Scrappage Scheme extension
The Society of Motor Manufacturers and Traders has written to business secretary Lord Mandelson urging government to extend the successful scrappage incentive scheme which has helped boost consumer spending and secure UK jobs in the motor industry.
After 15 months of consecutive decline in the new car market, the scrappage incentive scheme has reignited demand, resulting in year-on-year growth in July and August and a dramatic cut in the rate of decline in vehicle production.
"Consumer confidence is still weak and recovery remains extremely fragile," said SMMT chief executive Paul Everitt. "Avoiding a relapse in demand is critical to the UK economy and an extension to the scrappage incentive scheme, which has already proven its credentials as a cost-effective support mechanism, will ensure a more stable outlook for vehicle demand."
SMMT is calling on government to extend the Scrappage Incentive Scheme through to the original close date of the end of February 2010, to counter the likely negative impacts of a return to the higher rate of VAT and the introduction of the first year VED rates.
The facts.
- Over 100,000 new vehicles have been registered under the scrappage scheme with an order bank of a further 100,000 suggesting the scheme will run out of funding in late October/early November.
- One fifth of the cars registered were either built in the UK or have an engine produced here.
- The scrappage scheme is largely self-funding with the 15% VAT paid on a car bought for £7,650 covering the £1,000 government contribution.
- SMMT estimates that 70% of the cars bought under the scrappage scheme represent additional sales which would not otherwise have happened in 2009.
- The average CO2 emissions of a car bought under the scheme are 131.8g/km, 13.5% lower than the pre-scrappage market average of 152.3g/km.
- The average car scrapped under the scheme is 12.6 years old with estimated CO2 emissions of 181.9g/km - 27.6% higher than its replacement.
- 76% of cars bought under the scrappage scheme were classified in the Mini or Supermini segments.
- 85% of a vehicle's lifetime CO2 emissions come through use meaning the scheme is likely to save some 2.7m tonnes of CO2.
- Pre-1999 vehicles will have a Euro 2 engine as standard compared to Euro 4 in new vehicles. These engines deliver more than a 50% improvement for harmful emissions.
- Compared to ten year old vehicles, new cars now have higher EuroNCAP ratings, more safety technology as standard and improved security features.
- SMMT now forecasts the new car market to end 2009 at 1.85m units, above pre-scrappage forecasts but well below the 2.47m pre-recession five year average.
Luxury carmakers bullish on sales
Germany's premium carmakers Audi, BMW and Daimler have forecast improved sales next year.
Rupert Stadler, chief executive at Audi, said: "With the help of our new A1 model, we will be able to increase our sales by at least 10,000 cars in 2010."
This year the manufacturer expects to sell more than 900,000 cars, 10 per cent less than in 2008.
Dieter Zetsche, Daimler's chief executive, expressed similar optimism. He said: "We expect [premium] markets to recover next year and we also expect a positive sales performance for Daimler."
At BMW, head of sales Ian Robertson, said that sales would start to pick up in the fourth quarter. He said: "In the months to come we will see growth again. MINI has already returned on the path to growth."
However, the executives caution that growth will come from a low base as the market for premium cars has shrunk rapidly this year.
Government loan powers up electric car maker
The government yesterday (September 17th)announced a £10M loan to Tata Motors European Technical Centre (TMETC) under the Automotive Assistance Programme (AAP) set up to support investment in a lower carbon future for the industry.
The £10M from Government will support £25M of investment from Tata Motors to develop and manufacture electric vehicles in the UK. The award of the AAP loan is a tangible demonstration of the UK government's commitment to the development of low-carbon vehicles and to the reduction of C02 emissions. The scheme is intended to support companies as they invest in greener products and processes, and this first award under the scheme demonstrates the UK government and industry working together for a lower carbon future.
Business Secretary Lord Mandelson said:
"The government is determined to help the car industry to exploit fully the opportunities offered by green manufacturing. Today we are backing Tata as Tata backs Britain.
"This loan will strengthen our electric vehicle manufacturing expertise, securing and creating high value engineering jobs in the West Midlands. TMETC will continue to invest in R&D in the next generation of sustainable transport, helping it become a lead player in this exciting and important technological area."
Tata Motors has developed a 4-seater Electric Vehicle, based on the Tata Indica Vista passenger car which was launched in India last year. The Indica Vista electric vehicle has a range of up to 200km and a top speed of 104kph (electronically limited) and will be in production before the end of 2009.
UK Scrappage Scheme - Aftermarkets effects
Launched with much hype during the height of the recession when the motor vehicle industry was experiencing the most difficult of times, the end of the Government scrappage scheme is almost upon us. This being the case, now is a good time to pause and reflect on what its effects have been not only on new car sales but further downstream as well.
According to Malcolm Tagg, the Director General of the VBRA, the UK's leading Trade Association for Vehicle Body Building, CV, Car Body and SMART repair, the scheme has been no bad thing in terms of stimulating new car sales and removing "old Bangers" from the roads, but has had little effect on the vehicle repair and servicing industry. Interviewed recently he commented, "Any reasonable and, for the tax payer, affordable incentive that stimulates the automotive market must be a good thing with the proviso that it does not mask natural competition. On this basis I believe the Government have got things "right". Additional sales promoted by the scheme have contributed to better headlines, probably saved some jobs and allowed more money to circulate within the system."
Reflecting on how the scrappage scheme had impacted onto downstream vehicle markets Tagg added, "It might have been expected that opening the taps at the head of the process by which vehicles are brought onto the roads would rub off in some way with repairers and in other aftermarket sectors. This is an expectation based on the supposition that older cars generate more work for repairers and others but it is in fact not totally the case. For example, older vehicles tend to be third party insured and of relatively low value. This means that they tend not to be repaired unless absolutely essential, continued running with cosmetic damage or scrapping being the most favoured options." Continuing Tagg added, "Another often overlooked factor is that during the entire period of the credit crunch there have been fewer vehicle movements per se as both individuals and organizations endeavor to husband the financial resources at their disposal. Fewer vehicle movements obviously result in fewer accidents so repairers suffer."
Concluding Tagg stated, "Overall we must view the scrappage scheme as a useful initiative that has brought benefits to the main vehicle manufacturers. The scheme itself, together with several other factors, has not provided any benefits to the repair market although it has not harmed it in any way either, the net impact being neutral."
Dealer troubles helped by used car market
Ford and BMW bosses have said dealers’ recent troubles have been severely helped by the turn in the used car market.
Nigel Sharp, managing director of Ford of Britain, said that after a sharp dip in used car values last year they have now gone up in a V-like shape. Ford dealers have found a shortage of used cars resulting in more efficient trading because of less inventory.
When they do get hold of second-hand vehicles, there is more profit than previously and they are sold quickly which means less stocking issues.
Tim Abbott, BMW managing director, added that its network has re-assessed its business model. This has meant a shift towards aftersales and used cars.
He said used car profitability was up and that used car stock turn had improved dramatically.
DATED: 19.09.09
FEED: AM
Used car market shows resilience
UK used car market is expected to be at 6.8 million units by the end of this year, a growth of 7% in a decade.
The figures come from Trend Tracker, The Future of the Used Car Market in Great Britain 2009-2014.
Although the used car market shrank by 5.9% in the first half of this year it will still have grown from 6.38m units in 1999 to an estimated 6.8m by the end of this year – a growth of 7% in a decade.
At its peak in 2006, the used car market in the UK saw 7.7m cars change hands.
Declining new car sales
In contrast, new car sales have been declining since 2003 and experienced a particularly rapid decline in the past 12 months. Trend Tracker estimates that around 1.78m new cars will be sold in 2009, which is down 31% from the peak in 2003. This estimation is still more confident than the Society of Motor Manufacturers and Traders which is estimating a 1.76m new car market this year.
As a consequence, the ratio of used to new car sales in the UK has moved from 2.9:1 in 1999 to a forecast 3.8:1 in full-year 2009.
Rising used car values
Average used car values have continued to rise for the past several months as stocks reduced. According to some estimates, as many as a quarter of businesses operating fleets have lately been holding on to company cars for an extra year before replacing them.
European factories have been cutting the over-production of new cars, removing nearly-new pre-registered stock from the used market.
What good late-plate used stock has been available has been snapped up by franchised dealers, whose falling new car sales brought a dearth of part-exchanges and drove them to frequent the auctions where, until this past year, they had more often been sellers than buyers.
According to Trend Tracker’s report, 2009 is expected to see average used car values reach £5,600, 17% higher than in 1999. With this increase in average selling price, and the increase in used car sales volumes since 1999, the value of the entire used car market has increased from £30.5 billion in 1999 to an estimated £38.1 billion in 2009 – an increase of 25%.
DATED: 19.09.09
FEED: AM
Focus on used car profitability as volume drops
Dealers need to target increased used car profitability as scarcity of used car stock hits volumes.
“Dealers are going to find it more and more difficult in the next few months to find the stock they want to sell at the price they want to pay, which will unavoidably have an impact on the windscreen price,” said RAC Warranty sales and marketing director Ian Simpson.
“All of this means that dealers will almost inevitably sell fewer cars in the medium term until stock levels start to recover, although the extent of the problem is difficult to predict, as is the point in time at which stock levels will start to recover.
Simpson said to offset lower volumes, dealers need to look at ways at increasing profitability by ensuring a properly structured sales process is in place to take customers through each element of the used car sale.
Point of sale products
Dealers must offer point of sale products ranging from warranties to paint protection in a manner that demonstrates advantages and emphasises value-for-money.
He added: “Certainly, our experience during the recession is that customers have become more receptive to products that provide a large degree peace of mind, something that has seen our warranty sales rise by about a fifth in the last 12 months.”
DATED: 19.09.09
FEED: AM
Thursday, September 17, 2009
Focus on used car profitability as volume drops
Dealers need to target increased used car profitability as scarcity of used car stock hits volumes.
“Dealers are going to find it more and more difficult in the next few months to find the stock they want to sell at the price they want to pay, which will unavoidably have an impact on the windscreen price,” said RAC Warranty sales and marketing director Ian Simpson.
“All of this means that dealers will almost inevitably sell fewer cars in the medium term until stock levels start to recover, although the extent of the problem is difficult to predict, as is the point in time at which stock levels will start to recover.
Simpson said to offset lower volumes, dealers need to look at ways at increasing profitability by ensuring a properly structured sales process is in place to take customers through each element of the used car sale.
Point of sale products
Dealers must offer point of sale products ranging from warranties to paint protection in a manner that demonstrates advantages and emphasises value-for-money.
He added: “Certainly, our experience during the recession is that customers have become more receptive to products that provide a large degree peace of mind, something that has seen our warranty sales rise by about a fifth in the last 12 months.”
DATED: 17.09.09
FEED: AM
Vauxhall jobs 'by no means certain' says union boss
The fate of 5,500 Vauxhall workers and thousands of other people employed by companies that supply parts to the vehicle manufacturer are by no means certain, according to Tony Woodley, joint general secretary of trade union Unite.
He was speaking at a 'Saving Vauxhall jobs, defending the UK car industry' fringe meeting at this year's TUC congress.
Mr Woodley was speaking as senior officials from Magna International, the company that has taken a 55% stake in Vauxhall parent company General Motors Europe, flew into London for talks with Business Secretary Lord Mandelson.
Mr Woodley said: "As of right now, there are no long-term commitments for either Ellesmere Port or Luton. If we listen to what Magna has actually said, it has committed to nothing beyond 2013."
It is thought that the government is prepared to commit about £400 million to Magna in return for promises to keep Vauxhall's plants at Ellesmere Port and Luton open in the long term. He has conceeded, however, that there will be job losses.
Distractions drive motorists to take risks
RAC is calling for the focus of safety campaigns to be widened to include all potential in-car distractions, such as adjusting the radio or heating and air-conditioning controls as well as the dangers of using mobile phones.
The move comes after the 2009 RAC Report on Motoring revealed that more than a third (39%) of UK motorists become seriously distracted when driving.
Young drivers (17 to 24 year olds) are the most likely to lose concentration behind the wheel with over half (55%) confessing that they become 'seriously distracted'.
One in five young motorists said they drive while listening to music through headphones, and 16% even admitted to putting on make-up behind the steering wheel.
Although over a quarter (26%) of drivers between the ages of 17-24 admitted to texting while on the road, just 3% of the same group actually considered this behaviour acceptable.
Motorists were also asked which of their in-car gadgets and technologies they found to be most distracting, the top five were: In-car music/changing CD and radio controls (57%), sat-nav systems (41%), mobile phones (32%), air-con controls (31%) and dashboard warning lights (21%).
The research also looked at the impact in-car distractions can have on driving performance and the potentially fatal distances that vehicles can travel when motorists avert their eyes from the road for just a few seconds.
In response to the findings, David Bizley, RAC director of technical said: "This clearly shows that in-car distractions continue to be a significant road safety issue, especially for the new generation of drivers.
"While in-car gadgets do make journeys easier and more entertaining it's important that they are used appropriately. Even a split second distraction can have potentially disastrous consequences.
"Legislation to limit certain distractions is in place, but it's evident that many of the Government's messages are not getting through to motorists. The number of fatalities as a result of in vehicle distractions has increased 50% over the last three years. You only have to consider the number of motorists that continue to text and drive to see that greater awareness of how to use in car-technology responsibly is needed."
Dealers told to maximise used sales
RAC Warranty said the scarcity of used car stock is hitting volumes of sales and that dealers need to compensate by looking at ways of increasing yield - especially point of sale F&I products such as warranties and Gap insurance.
"Dealers are going to find it more and more difficult in the next few months to find the stock they want to sell at the price they want to pay, which will unavoidably have an impact on the windscreen price," said Ian Simpson, sales and marketing director at RAC Warranty, said:
"All of this means that dealers will almost inevitably sell fewer cars in the medium term until stock levels start to recover, although the extent of the problem is difficult to predict, as is the point in time at which stock levels will start to recover.
To offset lower volumes Simpson said dealers need to have properly structured sales processes in place when dealing with customers.
DATED: 17.09.09
FEED: MT
Tories pledge to scrap FSA
Many dealers would be likely to welcome a different regulator if the Conservatives win the next General Election and carry out their commitment to change, said RMIF director Sue Robinson.
Shadow chancellor George Osborne has said the Financial Services Authority (FSA) should be scrapped and the Bank of England given full responsibility for supervising financial institutions. “We will give the Bank the tools to do the job,” he said.
Robinson said: “FSA regulations for motor dealers have been cumbersome at best and in many cases have lacked clarity and relevant consultation.
“RMIF members have often commented on this when discussing finance issues with us. As a result many would be likely to welcome a different regulator.”
If such a change were to be introduced, the RMIF would want to ensure that it was fully consulted on any issues relating to the retail motor sector, she said.
Many dealers have protested about the way the FSA has performed its role of protecting consumers by regulating retailers who provide financial and insurance products to car owners.
The Finance and Leasing Association declined to comment on the proposal. So did Black Horse, the UK’s dominant motor retail lender following its absorption of Bank of Scotland Dealer Finance. Lloyds TSB Asset Finance, which owns Black Horse, was also saying nothing.
Chancellor Alistair Darling wants a Council for Financial Stability to co-ordinate the Treasury, Bank of England the FSA in regulating financial institutions. The Conservatives say the existing system did not prevent financiers taking undue risks and ignoring problems which led to the Government spending billions supporting some of the UK’s biggest banks.
HPI will shake up POS loans
HPI will “revolutionise” showroom loans with Finance Gateway, giving dealers free direct access to leading providers. Santander, Fortis and Southern Finance have joined the network.
Daniel Burgess, HPI automotive director, said: “We will deliver quality, volume business while enabling dealers to maximise profits from point-of-sale finance deals.
“Finance Gateway will help them secure more cars sales and avoid customer disappointment. It also offers consumers a competitive yet responsible credit proposition.”
Burgess said the product was offered with no commission claw-backs for dealers, and an instant online proposal from the finance company best suited to a customer’s personal credit rating and the profile of the car.
DATED: 17.09.09
FEED: AM
FLA presses Government over loans
Talks started last autumn and have continued throughout this year following Government intervention to safeguard banks’ loans.
In a report on Government assistance for the motor industry, the Commons’ Business and Enterprise Select Committee said it recognised the need to provide support for companies providing motor finance to consumers and businesses.
Stephen Sklaroff, FLA director general, said: “Access to well-priced wholesale funding is still a problem for many motor finance providers and that means they may become unable to meet demand for car finance.
“We now need practical action on schemes to help improve the availability and affordability of funding.”
Online FLA training to help dealer staff to sell point-of-sale finance has helped to increase retail penetration over 50% during the past 12 months. In the year to June, says the FLA, showroom finance sales on new cars accounted for 52.4% of the total market.
Carlyle Finance CEO Mark Standish said: “There is a great opportunity for dealers to really make finance count to close sales. A number of loan providers have moved to increase loan rates over recent weeks and to limit the best rates for advances over £7,500 on other occasions.
“The knack for dealers is to increase finance penetration by being price competitive – making a little from a lot means the result will be more.”
UK recession could end this quarter
The UK economy contracted by 0.7% between April and June, a significant improvement on the 2.4% fall in the first three months of the year.
Mervyn King, Bank of England governor said the economy was growing again but said the strength and sustainability of the recovery was still highly uncertain.
King’s comments follow figures which show inflation has fallen to its lowest level since February 2005.
The Consumer Prices Index (CPI) dropped to an annual rate of 1.6% in August from 1.8% in July.
But the Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments and housing costs, rose, to -1.3% from -1.4%.
Some analysts predict the economy will return to growth in the current quarter spelling an end to the recession. However, many have said the recovery will be weak with rising unemployment.
The European Commission has forecast the UK economy to grow by 0.2% between July and September, which is less than France, Germany and Japan which have already broken free of the recession.
DATED: 17.09.09
FEED: AM
Wednesday, September 16, 2009
Carmakers urge scrappage renewal
Carmakers are calling for European governments to continue their popular car scrappage schemes.
Many major economies, including the UK and Germany, introduced "cash for clunkers" programmes, which helped to boost new car sales.
There are concerns that sales will now fall sharply without incentives as the schemes come to an end.
Ford and Toyota are among automakers that told the BBC they want governments to extend their scrappage schemes.
More than 8bn euros ($11.4bn; £7bn) has been spent by the UK, German and US governments on car scrappage.
'Abruptly'
"We've been very happy and very grateful that governments, particularly Germany and the UK, have put scrappage schemes into place," said John Fleming, chairman of Ford Europe, at the Frankfurt car show.
"We're worried that it's going to stop very abruptly. So what we'd like to see is it extended for a period of time," he added.
If not, then the schemes should at least be wound down more slowly, Mr Fleming said.
He said that carmakers in Europe could lose sales of 13 to 14.5 million units without the scrappage.
Funding for the schemes have started to run out.
Various schemes
The 5bn-euro German scheme, the largest of any government, ran out early this month. It encouraged almost two million motorists to scrap their old cars and exchange them for new ones.
The German scheme has been so successful that analysts said increased car sales played a part in the economy's exit from recession in the second quarter.
The UK car scrappage scheme - where a £2,000 incentive is paid to motorists who scrap cars registered before 31 August 1999 to buy a new car - is currently due to end in February, or when the £300m the government has allocated towards the scheme runs out - whichever happens first.
And the US version spent its $3bn allocation in a matter of weeks.
"We need some help... until the first half of 2010," said Tadashi Arashima, president of Toyota Europe.
Carlos Ghosn, the chief executive of Renault said that winding down the schemes gradually was the "best way".
"Some countries are going to stop it brutally," Mr Ghosn said. "In these cases... it may be a bit bumpy."
Indian electric cars spark GM interest
General Motors is poised to join forces with the Indian start-up that leads the world in budget electric cars in a deal that could come to define the fallen American giant's efforts to reinvent itself.
GM, which is struggling to reform its image as the maker of gas-guzzling SUVs, is in advanced talks with Reva, based in Bangalore, whose G-Wiz is the best-selling electric car in the UK.
The discussions centre on the creation of a 50-50 joint venture that would give GM access to the Indian company's technology.
Ssangyong submits turnround plan
Ssangyong Motor the South Korean carmaker that filed for bankruptcy protection in February, has submitted a turnround plan to a Seoul court that would cut by a fifth the stake held by China's largest carmaker .
It asked the court to allow a five-for-one writedown of the stake held by its largest shareholder, SAIC Motor, followed by a further writedown at a later date. Ssangyong is also seeking a three-to-one writedown for other shareholders Ssangyong - which has $1 billion of debt - also wants creditors to agree to convert some debt into shares, leaving lenders with a 42% stake in the company.
If the rehabilitation plan succeeds, SAIC's controlling 51% stake in Ssangyong would be cut to just 11.2%.
The court will review Ssangyong's proposal and meet creditors on November 6 to decide on the plan's timeframe.
Car chiefs want scrappage scheme extension
With funds for the scrappage scheme incentive running dry, car bosses are calling for a replacement scheme to avoid car sales "falling off a cliff".
The £3 billion fund set aside for the scheme was expected to last until next March, but the funds will most likely run out at the end of next month.
Lord Mandelson has already ruled out an extension of the scrappage scheme and
Tony Whitehorn, managing director of Hyundai UK, whose company has seen a sales boom under the scrappage scheme, said: "The money is two thirds gone and at the current rate it will be gone by the end of October.
"It has been a massive success but if it comes to a sudden halt we will see car sales across the industry fall off a cliff. We need the government to start thinking now about what comes next.
"The industry needs a soft landing, hopefully that will be through some sort of extension of the current scheme and then a gradual tapering off. The scheme has to end at some point, we all understand that, but it needs to be a gradual landing."
Hyundai saw its sales rocket more than 300 per cent in August to 3,700 cars.
Whitehorn added: "Yes, we have benefitted but so has the whole industry and so have all the dealers. Vehicle sales in the UK are down 22% over last year but without scrappage that would be 30%.
"The Government has got to come up with some announcement as to what happens beyond October because lots of wheels have to be put in motion. The current scheme has proved that given an incentive people are willing to spend. It would be madness just to stop it.
"Scrappage may have artificially stimulated the market but that doesn't matter."
Toyota Motor Europe chief Didier Leroy also called on incentives to be continued.
"They have come to a stop in Germany and the market has gone completely dead because the government has not announced what happens next.
"Everyone is expecting some sort of replacement scheme but until they are told what it is they are staying out of the showrooms."
There is agreement as well from the luxury end of the market where there has been little benefit from the scrappage scheme.
Bentley's sales and marketing chief Stuart McCullough said: "We have not sold any cars through the scrappage scheme but in terms of the industry generally it has worked very well and put much needed liquidity into the market.
"What the industry doesn't need is a hard landing."
DATED: 16.09.09
FEED: AM
FLA presses Government over loans
Talks started last autumn and have continued throughout this year following Government intervention to safeguard banks’ loans.
In a report on Government assistance for the motor industry, the Commons’ Business and Enterprise Select Committee said it recognised the need to provide support for companies providing motor finance to consumers and businesses.
Stephen Sklaroff, FLA director general, said: “Access to well-priced wholesale funding is still a problem for many motor finance providers and that means they may become unable to meet demand for car finance.
“We now need practical action on schemes to help improve the availability and affordability of funding.”
Online FLA training to help dealer staff to sell point-of-sale finance has helped to increase retail penetration over 50% during the past 12 months. In the year to June, says the FLA, showroom finance sales on new cars accounted for 52.4% of the total market.
Carlyle Finance CEO Mark Standish said: “There is a great opportunity for dealers to really make finance count to close sales. A number of loan providers have moved to increase loan rates over recent weeks and to limit the best rates for advances over £7,500 on other occasions.
“The knack for dealers is to increase finance penetration by being price competitive – making a little from a lot means the result will be more.”
Tories pledge to scrap FSA
Many dealers would be likely to welcome a different regulator if the Conservatives win the next General Election and carry out their commitment to change, said RMIF director Sue Robinson.
Shadow chancellor George Osborne has said the Financial Services Authority (FSA) should be scrapped and the Bank of England given full responsibility for supervising financial institutions. “We will give the Bank the tools to do the job,” he said.
Robinson said: “FSA regulations for motor dealers have been cumbersome at best and in many cases have lacked clarity and relevant consultation.
“RMIF members have often commented on this when discussing finance issues with us. As a result many would be likely to welcome a different regulator.”
If such a change were to be introduced, the RMIF would want to ensure that it was fully consulted on any issues relating to the retail motor sector, she said.
Many dealers have protested about the way the FSA has performed its role of protecting consumers by regulating retailers who provide financial and insurance products to car owners.
The Finance and Leasing Association declined to comment on the proposal. So did Black Horse, the UK’s dominant motor retail lender following its absorption of Bank of Scotland Dealer Finance. Lloyds TSB Asset Finance, which owns Black Horse, was also saying nothing.
Chancellor Alistair Darling wants a Council for Financial Stability to co-ordinate the Treasury, Bank of England the FSA in regulating financial institutions. The Conservatives say the existing system did not prevent financiers taking undue risks and ignoring problems which led to the Government spending billions supporting some of the UK’s biggest banks.
HPI will shake up POS loans
HPI will “revolutionise” showroom loans with Finance Gateway, giving dealers free direct access to leading providers. Santander, Fortis and Southern Finance have joined the network.
Daniel Burgess, HPI automotive director, said: “We will deliver quality, volume business while enabling dealers to maximise profits from point-of-sale finance deals.
“Finance Gateway will help them secure more cars sales and avoid customer disappointment. It also offers consumers a competitive yet responsible credit proposition.”
Burgess said the product was offered with no commission claw-backs for dealers, and an instant online proposal from the finance company best suited to a customer’s personal credit rating and the profile of the car.
DATED: 16.09.09
FEED: AM
Electric car deal is key to saving Vauxhall jobs
Prime Minister Gordon Brown will lead a government delegation to Vauxhall's Ellesmere Port plant today (Tuesday, September 15) in a bid to safeguard the jobs of thousands of Vauxhall workers.
Mr Brown is expected to meet senior management at General Motors UK to discuss proposals for the carmaker's new electric Ampera model to be produced at the Cheshire plant.
The talks will also involve Business Secretary Lord Mandelson amid Government hopes that the factory will become one of the leading electric carmakers in Europe.
GM hopes to build 220,000 plug-in hybrid Ampera models in the UK every year to 2015 and has already met with Mr Brown to try to secure tax breaks to produce the new model.
The carmaker is also thought to want the Prime Minister to order public charging points for electric cars to be installed on thousands of British streets.
The talks, which follow the sale of GM Europe last Thursday (September 10) to a consortium led by Magna International, comes amid concerns that the deal will result in job losses at the UK factory and its sister plant in Luton.
Separately, business secretary Lord Mandelson is seeking talks with senior executives at Magna when he could offer up the prospect of £400 million of taxpayer's money, if the company agrees to safeguard the future of the Luton plant.
GM's Luton van factory is considered to the most vulnerable to closure as a contract to produce van models expires in 2013, and the company has said nothing about a replacement.
Women drivers want safer cars
Women drivers in the UK place safety as their number one priority when buying a car, but are 30 per cent less likely to know about certain safety features than men, according to research by the eSafetyAware! campaign for the AA.
Generally two out of three UK car buyers who place a high priority on safety when choosing a vehicle have little or no knowledge of new features that will protect them and their families.
Research carried out across Europe for the eSafetyAware! campaign, a joint venture that includes the European Commission and European motoring organisations including the AA, shows that 71 per cent of Germans know about Electronic Stability Control (ESC) and other new safety features - compared to only 41 per cent of UK drivers.
Women are involved in seven out of 10 car purchase decisions in the UK but are 30 per cent less likely to know that the newer safety features are available to them.
These features include: ESC, blind spot monitoring, lane support systems, speed alert, and warning and emergency braking systems.
The study also showed that people are one third more likely to choose eSafety systems when they are aware of them and would be willing to pay more to have these systems fitted.
Last summer a pan-European survey by the FIA Foundation showed that Britain's car showrooms were lagging behind other European countries in telling their customers about ESC. It is quite likely that the same applies to other safety features.
Only 18 per cent of staff gave information about ESC without being asked. Even when asked, staff showed bad product knowledge about ESC - one in five knowing that it reduces the risk of skidding and only 36 per cent knowing it worked in all weather conditions. Only one in seven sales people focussed on safety as an important feature with the 'look' and price of cars mentioned more often.
AA president Edmund King said: "Women are very influential in the purchase of 7 out of 10 new cars yet are not as well-informed about modern safety systems that can be life-saving technology as men. Some car showroom staff still promote price, style and performance over safety yet our research shows women rate safety as their number one priority. Buyers can't be expected to know about modern safety features, which can be a closed book to those who don't read car magazines, motoring supplements or watch car television programmes. They should leave the showroom knowing the full facts."
Jean Todt, eSafetyAware! president, said: "Far too many motoring consumers are still unaware of the life-saving potential of eSafety systems. For those of us that know about these technologies, and their potential to save lives, the choice is very straightforward."
Car makers are going green, but.....
Car makers are being forced to make significant cuts in their vehicles' CO2 emissions, but some countries appear reluctant to buy the greenest models - British motorists languish at sixteenth place in a league table of who buys the most polluting models in Europe, according to a study carried out on behalf of the Environmental Transport Association (ETA).
Portuguese drivers are the greenest in Europe when it comes to buying cars with an average CO2 rate of 138g/km (eg. VW Polo) - the least green motorists are from Latvia with a figure of 177g/km (eg. Suburu Imprezza). The average British driver comes sixteenth in the list with 158g/km (eg. VW Passat).
EU regulation is striving to cut the CO2 emitted by cars to an average figure of 130 g/km by 2015.
Director at the ETA, Andrew Davis, said: "Car makers can build green cars, but they need us to buy them. The report found that strict new emissions laws are having a strong effect on the availability of cleaner cars, but wealth, motoring taxes, fuel prices and consumer attitudes, which vary wildly from country to country across Europe, have much more of an effect on how clean a car is chosen."
"There was a fuss in Britain when road tax increased for the most-polluting cars, but we are lax by European standards - we need a more sophisticated carrot and stick approach to encouraging people to drive lighter cars if we want to do better in next year's league table."
BMW unveils two new Mini models
BMW has unveiled two new models of the Mini which will be built in Oxford.
The models, unveiled at the Frankfurt Motor Show, are concept cars - one a coupé and the other a two-door convertible roadster.
They will be produced at BMW's plant in Cowley, where 4,000 staff build three other versions of the Mini.
Graham Diggs, of BMW, said: "It means greater security for everyone who works at the Oxford plant. But we can't at this stage put numbers on jobs.
"Of course we're hopeful that this will mean some additions to the team at Oxford.
"But it takes a long while to turn a concept car into a production car, so it will be a while until we see them on the road."
In February, there were angry scenes when 850 jobs were cut at the Cowley factory, which also closed for a week.
Mr Diggs said: "We had a tough time at the early part of this year, but since then many of the temporary workers that left the company in February and March have come back because demand for Mini is up.
"We are very hopeful for the future, and bringing two new models to market is a step in the right direction."
VW may expand to 12 brands, says chairman
Volkwagen may expand further after its acquisition of Porsche, claimed chairman Ferdinand Piech last night.
On the eve of the Frankfurt Motor Show, Piech told a Bloomberg reporter it may expand to a dozen brands. VW Group's takeover of Porsche takes its brands to 10.
However chief executive Martin Winterkorn said it has no interest in a takeover of Suzuki Motor Corporation, calling it a "nice little company".
VW is reportedly considering a partnership with Suzuki to improve its line-up of small cars.
DATED: 16.09.09
FEED: AM
Magna outlines job loss plans for GM Europe
Magna, the Canadian parts manufacturer which will become the new owner of Vauxhall and Opel, has confirmed it could cut 10,500 jobs across Europe.
Magna’s co-chief executive Siegfried Wolf said the cuts could take up to a year to implement.
Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
British unions have expressed concern about the long-term future of Vauxhall's 5,500 UK workers and its two British plants in Luton and Ellesmere Port.
Magna has also suggested shifting some production from a plant in Zaragoza in Spain back to Germany.
Tony Woodley, Unite's joint general secretary, said: "The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long term future of Britain's plants will continue.
"One of the alternatives could have been the unthinkable position of liquidation. Nevertheless, with Magna as the new owner , we need to make sure that British plants and people are not treated disproportionately during the restructuring that will take place. With that in mind, the union and the Government will no doubt continue to negotiate with Magna.
"We expect financial support from the UK government for Magna to be dependent on the job and plant commitments given by the company."
DATED: 16.09.09
FEED: AM
Tuesday, September 15, 2009
Decline in dealer finance eased in July
Scrappage is having little impact on dealer finance sales with volumes lower than last year, although the rate of contraction recorded in July is the smallest this year, according to the latest figures from the Finance & Leasing Association (FLA).
The FLA said the slight improvement was due to increased competition in the motor finance sector and noted the scrappage scheme "appears to have had limited impact on dealer-financed sales of cars".
Although the cost of wholesale funding remains high, lenders are competing to offer good credit deals in the showrooms.
The number of new cars bought by consumers with dealer finance fell by 4 per cent year-on-year in July. The number of used cars bought by consumers using dealer finance fell by 7 per cent over the same period.
The FLA said its members provided finance for over 408,500new cars bought by consumers in the past 12 months, which was down 20 per cent compared with the previous 12 months.
Small boost for business finance
The business new car finance market showed a low level of growth - up 5 per cent in July compared with the same time last year. But over the past 12 months, this market was down by 23 per cent on the previous year.
"The slight improvement in motor finance volumes in July may in part reflect the impact of the car scrappage scheme. But there is no evidence that scrappage accounted for more than a small number of finance deals on mostly smaller cars," said Geraldine Kilkelly, the FLA's chief economist.
"Motor finance companies still need a long-term and sustainable market for affordable wholesale funds. Otherwise, with or without the scrappage scheme incentive, it will be difficult for the industry to continue to offer good motor finance deals in response to rising demand," she said.
DATED: 15.09.09
FEED: MT
Monday, September 14, 2009
Renault UK fleet and CV boss steps down
Keith Hawes, Renault UK fleet and commercial vehicle director, has decided to leave the company after 10 years in the role in order to “pursue other interests”.
Renault UK said Hawes wanted to pursue other interests, focusing his career in a different direction.
Hawes leaves Renault UK on September 18 and will be replaced by Darren Payne who joins Renault UK from General Motors where he was used vehicle sales, marketing and operations director for GM UK and Ireland.
Payne has also worked for GM as director of UK leasing covering Saab, Vauxhall and Chevrolet and has also worked as GM’s national fleet sales manager.
Roland Bouchara, Renault UK managing director, said: “I would like to thank Keith for his dedication, commitment and integrity.
“He has made an invaluable contribution to the company and I know that I echo the sentiments of everyone at Renault when I wish him success in his future career.”
DATED: 14.09.09
FEED: AM
Motor finance market drops 4% in July
Motor finance business volumes remain lower than last year, but the rate of contraction recorded in July is the smallest this year, according to the latest figures released today by the Finance & Leasing Association (FLA).
The number of new cars bought by consumers via dealer finance fell by 4% in July compared with the same month a year earlier. The number of used cars bought by consumers using dealer finance fell by 7% over the same period. FLA members provided finance for over 408,500 new cars bought by consumers in the past 12 months, which was down 20% compared with the previous 12 months.
The FLA says the improvement in new business volumes compared with earlier this year is most likely the result of competition in the motor finance sector. The scrappage scheme appears to have had limited impact on dealer-financed sales of cars.
Although the cost of wholesale funding remains high, lenders are competing to offer good credit deals in the showrooms.
The business new car finance market showed a low level of growth – up 5% in July compared with the same time last year. But over the past 12 months, this market was down by 23% on the previous year.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The slight improvement in motor finance volumes in July may in part reflect the impact of the car scrappage scheme. But there is no evidence that scrappage accounted for more than a small number of finance deals on mostly smaller cars.
“Motor finance companies still need a long-term and sustainable market for affordable wholesale funds. Otherwise, with or without the scrappage scheme incentive, it will be difficult for the industry to continue to offer good motor finance deals in response to rising demand.”
DATED: 14.09.09
FEED: AM
Scrappage won't be extended says Mandelson
Lord Mandelson has revealed that the government so far has no intention to extend the scrappage scheme.
Speaking on a BBC radio interview, he said it was unlikely to continue past its intended deadline, despite calls from various motoring organisations.
"At the moment we have no plans for extending or renewing it," the business secretary revealed.
The Society of Motor Manufacturers and Traders revealed earlier in the summer that the car buying market remains down 25.9 per cent or 322,524 units over the first half of the year.
NFDA chairman Paul Williams said: "We are bitterly disappointed at Lord Mandelson’s recent comments where he rejected the possibility of continuing the vehicle scrappage scheme without even the courtesy of a meeting with the industry to discuss the issue.
"The NFDA is still waiting for confirmation of a meeting with Government to discuss an extension of the scheme," he added.
Hugh Bladon, spokesperson for the Association of British Drivers, expressed concern that used cars which are still fit to be driven would end up being scrapped.
"That in itself is a bit of a shame," he expressed, adding that they should still be kept on the country's roads rather than "turning them into junk".
DATED: 14.09.09
FEED: AM
