Wednesday, December 23, 2009

IM Group brings Great Wall to the UK in 2011

Subaru, Isuzu and Daihatsu importer IM Group is to import vehicles from Chinese car manufacturer Great Wall from 2011 in the UK.

IM Group had been sizing up a deal with Great Wall earlier this year. The deal will see IM Group import vehicles to the Baltic states of Estonia, Latvia and Lithuania next year and then the UK and Scandinavia will follow in 2011.

The entry of Chinese models into the UK will be much quicker than analysts predicted, with many citing at least five years before manufacturers from China broke through.

It’s unclear what models Great Wall will be bringing to the UK but it insists all have been built to meet EU approval standards which will deliver the “crash-worthiness equal to European and Japanese vehicles”.

IM Group has operated in the Chinese market for over 15 years and employs a team of 40 at its Beijing office.

The UK-based importer said it would reveal further details about the deal next year.


DATED: 23.12.09


FEED: AM


Power is now 'with lenders'

The balance of power between dealers and finance companies has clearly shifted to the providers, according to a consultant in the motor industry retail finance sector.

“There will continue to be changes to pricing models, something that is vital for the long-term viability of finance companies in the motor arena,” he said.

“Finance has gone through major change over the past year with the independent finance supplier base shrinking significantly.”

Black Horse became the dominant force in the sector during 2009 with the absorption of Bank of Scotland Dealer Finance when Lloyds Banking Group acquired the bank.

Though the choice of lenders has become smaller, sector advisers say there will be opportunities in 2010.

Another consultant said: “Dealers can maintain finance income by increasing overall sales penetration.

“They will be ideally placed from the beginning of next year to achieve finance sales because the personal loan market remains depressed.

“With higher interest rates and tighter underwriting, dealers should focus on making a little from as many transactions as possible.”

He said that with the right level of energy and leadership, dealers could establish finance as a sustainable profit centre.

“To achieve this they must ensure customers see dealer finance as the best first place to go to for car finance,” he said.

A credit analyst said the Consumer Credit Directive arriving next summer could mean radical changes to the way cars are sold and delivered.

“There will be a 14-day cooling off period for finance,” he said.

“Details for the new regulation remain under discussion and all dealers must endeavour to keep close to this regulation and adapt to it.”


DATED: 23.12.09


FEED: AM



General Motors hires Microsoft finance chief

General Motors (GM) has appointed the chief financial officer of Microsoft as its new finance chief.

Chris Liddell, who is originally from New Zealand, will take up the position in January.

Mr Liddell joined Microsoft in 2005 after working at the International Paper Company.

Ray Young, GM's outgoing chief financial officer, is being transferred to China in February to serve as vice president of international operations.

Mr Liddell spearheaded a cost-cutting plan at Microsoft that included the biggest job cuts in the history of the company.

GM declared itself bankrupt in July. Earlier this month, Fritz Henderson stepped down from the post of chief executive.

Chairman Ed Whitacre, who was brought in by the Obama administration earlier this year, is acting as an interim replacement.


DATED: 23.12.09

FEED: GG

Sweden in crisis talks over Saab's future

The Swedish government has held emergency talks with unions to prepare for the possible closure of Saab, despite new offers for the carmaker.

Enterprise Minister Maud Olofsson expressed doubts about whether Saab could be saved at this late stage.

But a bid by Dutch luxury car firm Spyker, which was due to expire at 2200 GMT on Monday, has been extended indefinitely.

Saab owner General Motors said last Friday it would wind down the carmaker.

It has since received several inquiries about buying its subsidiary.

Shares in Spyker soared following the announcement of a renewed bid for Saab on Sunday. Initial talks between the two companies had broken down.

"We have made every effort to resolve the issues that were preventing the conclusion of this matter and we have asked GM and all other involved parties to seriously consider this offer," he said.

"We are very confident that our renewed offer will remove the impasse that was standing in the way of an agreement on Friday, and this would still allow us to conclude the deal prior to the expiry of the deadline originally set by GM."

But Maud Olofsson cast doubt about the possibility of a deal being struck.

"I think it will be very difficult, but we also have to try every possibility to save Saab," she said.

Worker frustration

Spyker has submitted a new 11-point proposal to GM, addressing the issues that ended talks.

It is thought that the new offer does not include a loan from the European Investment Bank, which would allow the deal to go through quickly enough to meet the end of December deadline.

Spyker is partly owned by the Russian banking tycoon Vladimir Antonov. He joined as chairman in April 2008 and is also the main shareholder in the Lithuanian bank Snoras and Russia's Conversbank.

Sweden's unions have urged GM to consider the new offer.

IF Metall chairman Stefan Loefven said: "I understand the frustration felt by everyone who is dependent on Saab, to be thrown between hope and despair is terrible. GM must now respond with a serious examination of the new bid."

Saab employs 3,400 people in Sweden and GM has estimated that 8,000 people would suffer indirectly from its planned closure.

Last year, Saab lost 3bn kronor (£255m; $412m). It has not made a profit since 2001 and made up 1.1% of GM's global sales last year.

GM pledged to become a leaner company when it emerged from bankruptcy protection in July this year. It had been hit by a sharp slump in sales - partly because of the financial crisis, but also because of stiff competition from Japanese rivals.

The company is now 62% owned by the US government.

GM is planning to focus on its four core brands - Buick, Cadillac, Chevrolet and GMC - as well as its European business Opel.



DATED: 23.12.09

FEED: GG

Rates & VAT creates New Year challenge for auto

Deloitte anticipates that the automotive industry will wake up with a headache on New Years day as significant VAT changes, including the rate returning to 17.5% and the introduction of the new EU-wide VAT package, come into force.

To help clients implement the changes as smoothly as possible, Deloitte, the business advisory firm, has re-launched its VAT Hotline. The Hotline offers immediate general advice on any technical, practical and systems related questions on the 1 January 2010 VAT changes.

David Raistrick, indirect tax partner at Deloitte, comments: "In addition to the VAT rate returning to 17.5% after 13 months at 15%, 2010 also sees the introduction of the new EU-wide VAT Package. We anticipate an influx of queries from companies asking for clarification on how to adhere to the guidelines, and consequently we have doubled the number of staff manning the VAT hotline compared to the number we had on standby when the VAT rate decreased earlier in the year. Early indications show a significant number of calls have been received from a broad range of industry areas in addition to automotive.

"Not only will businesses have to contend with determining what VAT rate applies when sales span 1 January, they will also need to be prepared to overcome systems issues, such as reprogramming systems and completing VAT returns, and the practical issues including re-pricing sales tickets.

"Getting the wrong VAT rate on big ticket items such as motor vehicles could be costly to dealers or result in an unexpected cost to customers. Similarly, there is some confusion regarding leases that span the 1 January date."

The VAT Package includes changes to the rules that determine where a supply is made for VAT purposes - currently services are generally treated as being supplied in the country of the seller, from 1 January 2010 this change to the country of the customers for business to business transactions. Additionally, there will be a new requirement to file EC Sales Lists for services supplied to other EU countries and new rules simplifying the procedures for claiming back VAT incurred in other EU countries.


DATED: 23.12.09

FEED: GG

Rates & VAT creates New Year challenge for auto

Deloitte anticipates that the automotive industry will wake up with a headache on New Years day as significant VAT changes, including the rate returning to 17.5% and the introduction of the new EU-wide VAT package, come into force.

To help clients implement the changes as smoothly as possible, Deloitte, the business advisory firm, has re-launched its VAT Hotline. The Hotline offers immediate general advice on any technical, practical and systems related questions on the 1 January 2010 VAT changes.

David Raistrick, indirect tax partner at Deloitte, comments: "In addition to the VAT rate returning to 17.5% after 13 months at 15%, 2010 also sees the introduction of the new EU-wide VAT Package. We anticipate an influx of queries from companies asking for clarification on how to adhere to the guidelines, and consequently we have doubled the number of staff manning the VAT hotline compared to the number we had on standby when the VAT rate decreased earlier in the year. Early indications show a significant number of calls have been received from a broad range of industry areas in addition to automotive.

"Not only will businesses have to contend with determining what VAT rate applies when sales span 1 January, they will also need to be prepared to overcome systems issues, such as reprogramming systems and completing VAT returns, and the practical issues including re-pricing sales tickets.

"Getting the wrong VAT rate on big ticket items such as motor vehicles could be costly to dealers or result in an unexpected cost to customers. Similarly, there is some confusion regarding leases that span the 1 January date."

The VAT Package includes changes to the rules that determine where a supply is made for VAT purposes - currently services are generally treated as being supplied in the country of the seller, from 1 January 2010 this change to the country of the customers for business to business transactions. Additionally, there will be a new requirement to file EC Sales Lists for services supplied to other EU countries and new rules simplifying the procedures for claiming back VAT incurred in other EU countries.


DATED: 23.12.09

FEED: GG

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Spyker shares soar on Saab offer

Shares in the Dutch luxury car firm, Spyker, have soared after it renewed a bid for General Motor's Swedish car business Saab.

By mid-morning Spyker shares were up 27% at 2.17 euros in Amsterdam. GM has until 1700 US Eastern time (2200 GMT) on Monday to respond to Spyker's bid.

Spyker's chief executive Victor Muller said on Sunday he was "very confident" his new offer would lead to a deal.

GM says it is "evaluating" inquiries from several parties into Saab.

The new offer follows GM's statement last Friday that it would start winding down Saab after initial talks with Spyker failed.

"We have made every effort to resolve the issues that were preventing the conclusion of this matter and we have asked GM and all other involved parties to seriously consider this offer," Mr Muller said.

"We are very confident that our renewed offer will remove the impasse that was standing in the way of an agreement on Friday, and this would still allow us to conclude the deal prior to the expiry of the deadline originally set by GM."

Worker frustration

Spyker has submitted a new 11-point proposal to GM, addressing the issues that ended talks.

It is thought that the new offer does not include a loan from the European Investment Bank, which would allow the deal to go through quickly enough to meet the end of December deadline.

Spyker is partly owned by the Russian banking tycoon Vladimir Antonov.

Sweden's unions have urged GM to consider the new offer.

IF Metall chairman Stefan Loefven said: "I understand the frustration felt by everyone who is dependent on Saab, to be thrown between hope and despair is terrible. GM must now respond with a serious examination of the new bid."


DATED: 23.12.09

FEED: GG

Scrappage lifts UK car production

UK car production rose by 15.7% in November compared with a year earlier, the first increase in more than a year, industry figures have shown.

There were 112,948 cars made last month, the Society of Motor Manufacturers and Traders (SMMT) said.

It put the rise down to the continuing impact of the car scrappage scheme and increased stability in major European car markets.

But the SMMT warned that next year would be "tough" for manufacturers.

So far this year, 914,117 cars have been made, which is down 34.4% on the same point a year ago.

The figures for commercial vehicle production were less encouraging. Output fell to 9,186 in November, down 16.2% on the same month a year earlier.

Government support

"Whilst the November figures represent the smallest recorded fall in the past 14 months, the sector is still down almost 60% on the year to date," said SMMT chief executive Paul Everitt.

"Total vehicle production is still well below previous levels and 2010 is set to be another tough year with considerable uncertainty at home and abroad," he added.

"It is essential that governments continue to sustain and strengthen economic recovery, improving access to credit and encouraging investment in new technologies and products."

In September, the government announced that the scrappage scheme, which it introduced in May, would continue, at a cost of £100m.

The scheme allows motorists to trade in cars more than 10 years old in return for a £2,000 subsidy on a new model.

The extension incorporates an extra 100,000 vehicles, including vans that are eight, rather than 10, years old.


DATED: 23.12.09


FEED: GG

Former Lex boss becomes chair of HR Owen dealer group

HR Owen, the specialist car dealer group, today announced that Jon Walden has been appointed non-executive chairman from January 1.

Walden has worked in the automotive sector for 27 years in various roles, including chief executive of Lex and as a director of RAC.

Ramon Pajares, acting chairman since John MacArthur retired in May, said: "Jon has a wealth of experience in both the motor and other industries, and we are delighted to welcome him to the Board."

Jon Walden said: "I am really looking forward to joining the Board at a time of great opportunity for the business and to working with the team.

" H.R. Owen represents many of the world's most prestigious brands and has a strong balance sheet."


DATED: 23.12.09

FEED: AM


GM to 'wind down' Saab business

GM says it has failed to sell its Swedish car brand Saab and will begin "an orderly wind-down of Saab operations".

GM had been in talks with the Dutch speciality car maker Spyker over a sale. Talks with Sweden's Koenigsegg also fell through earlier this year.

"We regret that we are not able to complete this transaction with Spyker Cars," said GM Europe boss Nick Reilly.

GM has been trying to sell Saab as part of its turnaround plans since January.

Mr Reilly added that all debts would be paid and that the winding-down would be "an orderly process".

A statement from the firm said that Saab would continue to honour all warranties, while providing service and spare parts to current Saab owners around the world.

Last week, Saab - which employs about 3,000 people - agreed a deal with Beijing Automotive to sell it some of Saab's technology. That deal will not be affected by the latest announcement.

GM said its focus would remain on its four core brands - Buick, Cadillac, Chevrolet and GMC - as well as its European business Opel.


DATED: 23.12.09

FEED: GG

New rules for BVRLA leasing brokers

The BVRLA Leasing Broker Committee has strengthened its Code of Conduct as part of ongoing moves to improve standards of professionalism and customer service in the sector. The new code will take effect from 1 January 2010.

The enhanced code places more emphasis on after-sales service and requires all BVRLA leasing broker members to play an active role in dealing with customer queries and complaints. Leasing Broker members will have to provide clear guidance on how cancellations are made and communicated, together with details of circumstances in which a customer may be liable for a cancellation charge.

The new version of the code also requires leasing brokers to make the full terms of any business they sign available to the leasing company providing funding, to improve transparency and to raise standards.

"The Leasing Broker committee has been instrumental in helping us make these necessary changes to the Code of Conduct," said John Lewis, chief executive of the BVRLA.

"This revised code reflects current business practices and legislation and will instil greater confidence among our member's customers."

The strengthened Leasing Broker Code of Conduct is the first of a series of measures that the BVRLA is implementing to improve broker standards across the sector. The association is looking to introduce a new accreditation process for leasing broker staff and a set of best practice customer service guidelines that focus on whole-life contract management, including the end-of-lease period.

Created in autumn 2007, the BVRLA Leasing Broker Committee has focussed much of its efforts on improving customer service, and has already produced results. Since 2008, the proportion of leasing broker members with complaints referred to the BVRLA conciliation service has fallen from 13% to 5%.


DATED: 23.12.09

FEED: GG

Court approves plan for SsangYong to exit bankruptcy protection

SsangYong's restructuring plans have been approved by the courts in South Korea.

It clears the way for the implementation of a three year programme designed to increase competitiveness, return to profitability and triple revenues over this year, said the carmaker.

The Seoul Central District Court said SsangYong’s revival was proven to be worthier than its liquidation.

The ruling now allows SsangYong to seek additional investment and financing, as well as forging ahead with its new model programme.

Although some overseas creditors had opposed the plan, SsangYong had secured a landslide number of votes for the plan from shareholders, collateral-based and non-collateral bondholders and domestic creditors.

The plan includes a write-off of 80% of the shares held by Shanghai Auto Industry Corporation (SAIC) which will reduce its stake from 51% to 11.2%, and a conversion of 393 billion won of debt into new shares.

Other shareholders will see their holdings written down at 3-to-1 initially, with a further write-down for all shareholders in January.

Paul Williams, managing director of SsangYong distributor Koelliker UK, said: “This is the news we have been waiting for. It’s been a very frustrating year with considerable uncertainty, but this decision means that SsangYong has a lifeline and I know that our Korean colleagues are determined to turn the company around.

"Most importantly, we can start planning properly for 2010, including the new C200 compact car.”

For the eighth month in succession, SsangYong increased UK sales in November over the same month last year.

This year to the end of November, SsangYong new passenger car registrations have hit 762, a 28.5 per cent improvement over 593 registrations in the same period last year.

Paul Williams, added: “Despite the problems in Korea, our dealer network has remained positive and loyal, and this is reflected in our sales performance in very difficult circumstances.

"Today’s court decision in Seoul means that we have turned a corner and we owe a big thanks to the dealers for toughing this out and seeing it through.”


DATED: 23.12.09


FEED: AM


Virtual BMW sale a 'sell-out'

A virtual sale conducted by BCAon behalf of the BMW Group recorded a 100% conversion and generated a turnover of nearly £8.5 million in December, said the auction company.

The Special BMW Virtual Sale took place in London on December 10 with around 125 dealers present and a total of 325 cars offered from BMW.

Highest price of the day went to a 0909 BMW750i.L Saloon, in Space Grey that sold for £57,200, equivalent to 118% of CAP Clean. The BMW Z4 3.0 35iSDRIVE Roadster models sold strongly, averaging £35,250 or 119% of CAP at 5,000 miles.

BMW group remarketing manager Tony Dean said: “This exceptional event was our biggest single sale turnover this year and achieved the highest values versus CAP and Glass’s Guide that we have seen in 2009.

"The outstanding success of this sale underlines the desirability of the BMW range and demonstrates the commitment of our dealer network towards used cars.”


DATED: 23.12.09


FEED: AM


GM finance chief to play key role in international operations

The shake-up in top level management at General Motors continues apace with chief financial officer Ray Young moving to an international role.

Mr Young (47) has been named vice president, international operations, reporting to Tim Lee, president of GM International Operations, with effect from February 1, 2010.

In this newly created role, Mr Young will lead the International Operations finance organisation, in addition to other international operating responsibilities that will be further clarified in the near term. He will continue to be the chief financial officer of GM until a replacement is named.

GM chairman and interim CEO Ed Whitacre said: "Ray has been instrumental in leading the company through an extraordinarily complex bankruptcy and subsequent actions taken to reshape GM's business.

"Looking ahead at the needs of our business, it has become clear that Ray's vast global experience and financial expertise will be essential in managing the challenges and dynamics of growing our international business."


DATED: 23.12.09

FEED: GG

Government to allow wider use of 20 mph schemes without speed humps

New proposals to allow councils to put in place 20 mph schemes over groups of streets without the need for traffic calming measures such as speed humps were announced today by Road Safety Minister Paul Clark.

The Government is encouraging local councils to introduce 20 mph schemes into residential streets and other roads where cycle and pedestrian traffic is high, such as around schools, shops and parks.

In the past, councils wanting to implement 20 mph schemes on groups of roads have had to do so in 'zones' which require traffic calming measures such as speed humps. 20 mph limits without traffic calming were only recommended on individual roads.

However, following a successful city-wide trial in Portsmouth which suggested it is possible to significantly reduce speeds on residential streets without speed humps or other traffic calming measures, the Department for Transport plans to allow 20mph limits to be used across more streets where traffic speeds are already low without the need for such measures.

Paul Clark said:

"The number of people killed and seriously injured on Britain's roads has fallen by 40% since the mid-1990s and Britain now has the joint safest roads in the world. But too many pedestrians and cyclists - including many children - are still being killed or hurt on the roads around their homes and schools.

"We have seen that 20 mph zones with traffic calming measures can make a real difference to the safety of local roads. But we've also looked at the latest research and listened to councils and residents who want to introduce 20mph limits on a series of roads where physical traffic calming measures aren't possible or practical.

"Allowing councils to put in place 20 mph speed limits on more streets without speed humps or chicanes will mean that they can introduce them at a lower cost and with less inconvenience to local residents."

Last week a report published in the British Medical Journal found that 20 mph zones in London had led to a dramatic reduction in the number of accidents in those areas and called for more 20 mph zones and limits to be put in place.

The Government is also reiterating its call for councils to carry out speed limit reviews of their rural roads by 2011, focussing on National Speed Limit single carriageway 'A' and 'B' roads where 41% of fatalities occur. Local authorities should consider reducing the limit on the most dangerous roads where this will have a significant impact on casualties. These decisions remain entirely for local authorities to make based on their knowledge of local roads.

The Department for Transport is seeking the views of local councils on these proposals in order to allow new guidance to be published at the earliest available opportunity.


DATED: 23.12.09

FEED: GG

Inchcape trades ahead of expectations



inchcape_logo_largeInchcape is expecting to close 2009 slightly ahead of expectations.

In a pre-close statement it said total revenue for the eleven months to November 2009 was 11.4 per cent below last year in actual currency and 17.5 per cent below last year in constant currency.

Revenue down

Like-for-like revenue was down against last year by 9.4 per cent in actual currency and 15.6 per cent in constant currency.

In the second half of 2009, the group performance was boosted by strong new car sales in the UK, generated by the scrappage scheme.

Inchcape said its aftersales business, which represents half of group gross profit, was also performing well.

New car sales

"Our UK retail business is enjoying a stronger than expected fourth quarter: New car sales are significantly ahead of last year as we continue to benefit from the scrappage incentive scheme."

The good performance was also due to the VAT increase in 2010 pulling forward demand in the premium sector, something which may impact on sales in 2010.

Margins increase

Inchcape said margins on used cars continued to be exceptionally high.

But the group remained "cautious" for 2010 and does not expect any global car industry recovery to start until "well into the second half of 2010".

André Lacroix, Inchcape group chief executive officer, said: "In 2009, the group has improved customer service globally and we have gained share in many of our markets, while cutting costs and reducing inventory to mitigate the effects of an unprecedented global downturn in the car industry.

"While we continue to expect market conditions in 2010 to remain challenging, the group is well placed to benefit from the market recovery and to take advantage of industry consolidation opportunities in the medium term."

Inchcape will announce its annual results for the year ended 31 December 2009 on 10 March 2010.


DATED: 23.12.09


FEED: MT


Accountant warns dealers for tough 2010

A leading accountant has warned dealers to brace themselves for a tough 2010 following the ending of the scrappage scheme.

Order takers

Business management specialists ASE incorporating Trevor Jones said scrappage had been a "windfall for some but not all of the franchises" and that "a lot of sales executives have become order takers" in 2009.

"It is vital to revisit the sales process and keep revisiting it during 2010 and pay particular attention to the service customers," said Trevor Jones (pictured).

Declining vehicle parc

"Without exception franchises are really concerned about the fall off in the vehicle parc and the knock on downward effect that will have on service volumes and overhead absorbtion," he said.

Jones said dealers needed "to take a long hard lock at service to determine what action should be taken to halt the decline in overhead absorbtion".

Key conclusions

• Banks continued to be difficult in the majority of cases in 2009
• Property values and security levels fell but there was more pressure on overdrafts
• There has been a "massive hike" in renewals
• Banks have not pressed the "destruct button" and a much lower number of dealers have closed than was expected
• Excellent used car performance in 2009 has "slowed dramatically" in recent weeks
• Vast majority of used cars are not now reaching their reserve prices at auction


DATED: 23.12.09


FEED: MT


Seat signs biggest fleet deal with British Gas


Seat has won its biggest ever fleet contract after signing a deal with British Gas to supply 500 Leon Ecomotives.

Green Leon
The deal was brokered by Seat UK's newly-revamped Fleet and Business Sales department and saw the green Leon, which is equipped with stop/start technology and has emission levels of just 99g/km, beat 50 rival models in the tendering process.

"Seat has taken an industry-leading approach; innovative, flexible and way ahead of anyone else involved in the tender process," said Colin Marriott, British Gas' fleet manager.


DATED: 23.12.09


FEED: MT


Arnold Clark adds four sites from GK Group

Arnold Clark has completed its purchase of four dealerships from GK Group, giving the Glasgow-based dealer a foothold in Cumbria.

The group said it will honour franchise arrangements at the four dealerships: with Ford at Carlisle, Ford and Citroen at Penrith and Workington and Ford, Citroen and Peugeot at Dumfries.

It added that no jobs will be lost.

Sir Arnold Clark, chairman and chief executive, said: “We are delighted to begin trading in these areas.

“This is a new and exciting opportunity for the Arnold Clark Group and we look forward to meeting and welcoming the local communities to our new branches.

It is the first time Arnold Clark, which has 145 dealerships across the UK, has ventured into Cumbria.

GK Group, which employed 150 people at its branches across Cumbria, also operates dealerships in the East Midlands and South Yorkshire.


DATED: 23.12.09


FEED: AM


Drivers' personal details to be handed over to EU



The personal details of nearly 40 million motorists will be open to abuse when they are 'automatically' trawled by foreign states, an internal police report has admitted.

Sensitive information such as driver's address, motoring convictions and medical history will be exposed to routine sifting by police, traffic wardens and other officials across Europe when European Union data sharing plans come into force in 2011.

The 'restricted' document raises fears that the foreign traffic police and other bureaucrats on the continent will be able to hunt down British drivers years after they return home for reasons such as unpaid parking fines.

When the agreement was signed in 2007, ministers said it was part of a campaign against 'serious crime, terrorism and illegal immigration'.

But the report reveals that the government now believes the database run by the DVLA will be routinely accessed even for minor offences.


DATED: 23.12.09

FEED: AW

Car help scheme yet to give funds


A £2.3bn government scheme set up in January to provide funding for UK carmakers has yet to help a single firm, a committee of MPs has found.

The Automotive Assistance Programme was established to provide loans for investment in future technologies.

The Business, Innovation and Skills Select Committee described the programme as a "wasted opportunity".

The Department for Business said it was working with 10 firms to fund projects worth about £2bn through the scheme.

"It is important to understand that the AAP is about long-term investment projects, rather than short-term rescue," said a spokesman.

"We have to work at the pace demanded by the companies and also have to consider the best interests of the taxpayer."

The assistance programme was set up to help car firms with manufacturing facilities within the UK and major car parts suppliers.

Scrappage boost

Its critics have said it is too inflexible.

"When it was announced, AAP represented a genuine opportunity to help the automotive industry," said Peter Luff, chairman of the MPs' committee.

"But it is now December and not a single loan or loan guarantee has been made.

"It is up to the government to prove us wrong, but they must ensure that funds are released to companies very quickly."

While no AAP funds have been released, UK car sales have recovered since the summer, helped by the government's scrappage scheme.

The £400m initiative gives consumers £2,000 off the price of a new car if they trade in a vehicle that is at least 10 years old.

It was launched in May and is due to end in February 2010 at the latest.

The latest industry figures showed that UK car sales rose by 57.6% in November compared with a year earlier.



DATED: 23.12.09

FEED: AW


Car boss says UK dealer numbers will fall 20%

Fiat Group Automobiles managing director Andrew Humberstone believes UK franchised dealer networks will decline by a fifth.

Struggling dealers

He forecast that weaker dealers will struggle when the scrappage scheme comes to end in early 2010 and it will be "very difficult" for them.

For its part, the Fiat network has lost a quarter of its network - 40 dealers - over the past two years but new appointments have brought the network back to 163.

Humberstone aims to grow this to 185 by year-end and 200 by the close of 2011. The company recently took part in the Motor Trader Open Points show to target new recruits to the franchise.

Increase size

Humberstone said he would like some of the dealers in the network to increase the size of their showrooms to display more of the Fiat range. He said up 35-40 per cent of dealers in the network had the potential to expand.

Humberstone said Fiat had not made a profit contribution to its parent in Italy for about 20 years.

At the current currency rate for Sterling against the Euro, it is running at a loss. It needs a rate of Euro1.25 to £1 to be in profit, he said.


DATED: 23.12.09


FEED: MT


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