Tuesday, May 25, 2010
Derby factory wins contract to build Auris hybrid
It's something of a British success story that Toyota's Burnaston plant near Derby has been awarded the contract to build a hybrid model, which was previously the preserve of just two high-tech plants in Tsutsumi, Japan and Kentucky, USA.
The Burnaston factory has been through the mill during the recession and this Auris hybrid is a vote of confidence in the workers and management of the 18-year-old plant.
The Auris hybrid will be produced on the same production line as the current Auris and Avensis models and there are 149 new processes, 395 new parts, 28 new pieces of production machinery and modifications to a further 40 machines and tools to make the petrol/electric hybrid.
In addition Toyota's engine plant at Deeside has been modified and equipped to produce the 1.8-litre Atkinson Cycle petrol engine that powers the hybrid.
It's a measure of the plant's efficiency and logistics planning that the hybrid will take just 6.6 minutes more to build than the 24 hours it takes to build a conventional Auris.
Toyota has trained all its 4,000 staff at Burnaston and Derby in hybrid production processes and more than 80 per cent of the production staff have elected to take a newly introduced level 2 National Vocational Qualification (NVQ) in hybrid vehicles.
With Toyota quality under the spotlight in recent months, preparations for the hybrid have been extensive. The hybrid range has the lowest warranty costs of any Toyota and the company is aiming to keep it that way.
In build safety and quality are largely a function of ensuring the correct assembly and tightening of critical braking and high-voltage electrical connections. The inverter alone has 29 connectors and there are new computer-controlled vision checking system for welds on high voltage cables.
The integrity of the braking system is inspected with a new endoscope system which carries a camera into the inside of the brake pipe.
At the end of the line there is a new procedure at the test track to ensure the hybrid is examined in all its modes of operation including regenerative braking.
New Vice President at Mazda Motor Europe
Mazda Motor Europe announced today that Martin Benders has been appointed Vice President for European Sales Operations. He will assume his new position effective today, and will report to Chief Operating Officer, Philip J. Waring.
Martin Benders, 58, brings a wealth of automotive experience to his new position in Europe. He has worked for Mazda since 1985, when he joined the company as Administration Manager for Mazda Australia. After this he held various executive positions, including Regional Sales Manager and National Marketing Director, and was instrumental in making Mazda Australia one of Mazda's strongest national sales companies. His most recent position was General Manager of the Global Marketing Division at Mazda headquarters in Japan. Mr. Benders is Australian by birth, and holds Bachelor and post-graduate degrees in Commerce from the University of Queensland (Brisbane). Mr Benders is fluent in English and Dutch.
"I am delighted to have Martin Benders onboard as our new Vice President for Sales," said Mr. Waring. "He has a well-deserved reputation in the motor industry for developing and implementing sales and marketing strategies that deliver outstanding results. He possesses the ability and experience to do an outstanding job managing our national sales company organisation on a daily basis, and I am confident that he will be successful at maximizing our sales performance."
Monday, May 24, 2010
Vauxhall workers agree pay freeze
Workers at Vauxhall's plants in Ellesmere Port and Luton have agreed to a two-year pay freeze as part of a Europe-wide restructuring deal.
The Unite union, which represents Vauxhall workers, has signed an agreement with General Motors, which owns Opel/Vauxhall in Europe.
Workers in Germany have signed a similar deal.
GM said the UK agreement would save it 26.5m euros (£23.1m), with cuts worth 265m euros planned across Europe.
The two-year pay freeze in the UK has already begun, GM said, starting at the beginning of 2010.
Cost savings in GM's UK pension schemes have also been implemented, and a total of 519 jobs have gone from the Luton plant, which makes the Vivaro van, and at the company's headquarters.
European cuts
Vauxhall is currently in talks with Renault to build the next-generation Vivaro as a joint venture at Luton.
No jobs are being lost at Vauxhall's Ellesmere Port plant, which will become the only plant manufacturing the Astra model later this year.
In Germany, Vauxhall's sister brand Opel has agreed cuts worth 177m euros with its workers, with about 4,000 jobs expected to be lost.
A pay freeze has also been agreed, along with cuts to holidays and bonuses.
In return, Opel plans to invest in the development and manufacture of a new small car to replace the Corsa model.
Opel/Vauxhall's chief executive Nick Reilly said the European agreements with workers were "important steps" in the process of creating a new sustainable company.
"Employees demonstrated that they are ready and willing to contribute to the company's future when they are offered security and long-term prospects in return," he added.
Renault urged to scrap car name Zoe
French carmaker Renault is facing a backlash over plans to christen a new model Zoe.
Parisian Zoe Renault, 23, has hired lawyers to insist that Renault scrap its branding.
"I could not bear to hear: 'Zoe's broken down' or 'We need to get Zoe overhauled'," she told Le Parisien newspaper.
Renault is facing other petitions from women called Zoe. A Renault spokesman said Zoe was not a "definitive choice".
The all-electric Renault Zoe ZE (zero emission) is set for launch in 2012. Zoe - which means "life" in Greek - was apparently chosen to underline the car's environmental credentials.
Zoe Renault - who has no apparent family link to the company - said in an interview with Le Parisien that she could not bear to be associated with a car for the rest of her life, and all the inevitable sarcastic gibes.
Her lawyer David Koubbi, who specialises in the protection of first names and is representing other Zoes, said he had sent a letter to Renault's chief executive arguing that the plans were an attack on the rights of his clients.
If the company does not change its plans, Mr Koubbi said he would take the case to court.
Automotive Insolvencies Drop In April
Improvement in late payment means financial strength of the industry also remains strong
Nottingham, 20 May 2010 - The rate of business insolvencies[1] for the automotive industry fell from 0.12 per cent in April 2009 to 0.08 per cent in April 2010, according to the latest Insolvency and Late Payment indices from Experian®, the global information services company.
As well as seeing a year-on-year drop, the automotive industry halved the rate of insolvencies recorded last month, from 0.16 down in March to 0.08 in April 2010.
The financial strength (2) of the automotive industry also saw a slight improvement year-on-year, going up to 79.67 from 79.35 in April 2009.
Payment performance amongst automotive businesses saw a slight improvement from 16.57 in April last year, dropping to 16.01 in April this year, but the improvement was not as significant as it has been in previous months resulting in motor traders shifting from being the third fastest payers to the tenth.
Mark Nuttall, General Manager of Experian's Automotive business, said: "The decline in insolvencies and improvement in payment performance in April has meant that the financial strength score of the industry has remained buoyant this month."
Selling more than metal for a more profitable business
"Referrals are a key issue for finance and insurance operations"
In most cases, when people buy a car they have borrowed money to fund the purchase – but if they aren’t using you for finance, your business is losing out.
When customers talk to dealership staff there is still reluctance to admit they are using finance, since customers feel they can always “do a better deal for cash”.
This is where sales executives need to focus on more than just moving metal, with good qualification based on simple routine conversations with customers during the sales process.
They aren’t particularly challenging questions, but they could make all the difference.
Questions could include: How did you fund the purchase of your current car? When does the current finance on your existing car end? What extended warranty did you have on this car? What is your budget for a monthly payment?
Make this a core part of the sales process as early as possible, along with discussions about other core products such as warranties, so customers are considering a service package from the dealer – better than being sold one thing at a time in a never-ending sequence after agreeing to buy a car.
Referrals are a key issue for all finance and insurance operations.
A referral is an introduction to the business manager at the time of sale, or a promise of a follow-up phone call.
Once it has been established that the customer is either captive or can be converted to dealership finance, the business manager’s involvement is required to structure the repayments.
The success of your business manager is going to be dependant on the quality of customer qualification and referrals.
It is vitally important the sales man-ager gets closely involved in monitoring the quality. The best advice is do not let the quality slip – not even a little.
Dealer principles need to work closely with the business manager and the reward will be a consistently high finance penetration.
Ask the right questions
Do you feel your sales executives are afraid to ask relevant probing questions, because they’re afraid of losing the deal?
Many sales execs will openly admit to it. Often they are happy to leave the customer to sort out their own finance.
How much is this costing your dealership? Sales executives need to build rapport with their customers, but they must not lose sight of the fact that their objective is to sell the car – along with all the other services your dealership has to offer. All qualifying questions must lead in that direction.
Business managers should not be left out of important decision-making procedures regarding sales and processes. It could prove costly.
Business managers should be involved with any changes in the approach of the sales team and be able to offer coaching and guidance.
Create a level playing field
When It is a fact of life that customers buying finance will nearly always query a payment.
A few clicks on a mouse are often enough for customers to bring up a range of rival quotations.
How a dealership responds to these is critical.
Firstly, try quoting two payments. Often, the customer will feel more comfortable with the lower one and the negotiation is more likely to succeed. Two payments can be introduced by having, for example, differing deposits or lengths of contract.
A surprising amount of extra money can be made by adding just a few pence to each monthly payment.
Dealers often struggle to get within a customer’s budget when considering 24 or 36-month payment terms, but why not 38 or 39 months?
But the argument is still likely to come back to rival lenders and how they compare to your deal.
The business manager needs to have access to the rates and offers being provided by other lenders.
If a customer says “I am having my funds through XYZ Building Society”, the business manager can keep the discussion flowing by bringing out the information from the rival lender.
While the headline rate may be comparable or even cheaper, the business manager should be able to identify whether they are being compared on a level playing field, for example by reviewing whether there is mandatory credit insurance or high document fees.
The additional card up your sleeve is that when the finance is arranged at the dealership, there will be no delay to the car’s delivery date.
But getting the best deal for your customer starts with your negotiations with finance providers.
These days, finance and insurance commission is a vital part of dealership profitability.
It is in every dealership’s interest to take the time and trouble to carefully consider the package offered by their mainstream finance company.
In many cases, particularly where there is manufacturer involvement, the deal may be nationally agreed or uniformly structured for all dealers of that marque.
That will often facilitate the need for a second finance company for used car and other business that may be inappropriate for the tied manufacturer’s representative.
Even if tied to a manufacturer scheme, there is still potential to enhance the scheme in qualitative ways.
What is an ideal finance company package?
A core requirement for the ideal finance company is competitve base rates.
It is absolutely vital that base rates are such that they are not undercut by neighbouring or competitive dealers.
Also important is a generous, but fair commission structure.
A degree of flexibility in the agreement is vital if finance income is to be maximised.
This could include the ability to write below base rate and use a finance subsidy as necessary.
Dealers should be able to make use of document fees for a larger balance or be able to offer a particularly low rate of finance to dispose of an over-age used car or a difficult piece of stock.
It is vital that your finance company can cope with this and provide support.
One of the most critical factors in winning, however, is a speedy response and satisfactory level of acceptances.
A two-hour turnaround for proposals should be achievable.
The rejection rate will vary according to the location and the type of customer and often the level of their deposit in relation to the value of the car.
But you would be wanting to meet with your finance company to discuss as a problem any rejection rate in excess of 15%.
Another source of dealer frustration is a vehicle debtors list littered with finance company balances.
In most cases it is down to dealer and document error. However, in a small proportion it can transpire that general incompetence and tardiness at the finance company results in an unacceptable delay in getting paid.
There is a vast amount of detail to agree in any finance company package.
But it is necessary to consider every aspect.
The package, should be detailed down to the individual headings and agreements sought at every stage to ensure all the points are covered and agreed, carefully and with clarity.
It is also imperative the package is reviewed regularly.
DATED: 24.05.10
FEED: AM
Motor finance fraud drops
The number of fraudulent applications for motor finance in Q1 dropped by 3% against the same period in 2009.
Figures published today by the Finance and Leasing Association (FLA) show nearly 2,500 unlawful finance applications in the first three months of 2010.
In the 12 months to March, there were almost 10,000 attempted fraudulent applications with a total value of £126.8m.
However, rigorous checks by finance houses kept the number of actual cases down to 960, worth £15.8m.
The FLA is concerned that by providing false information in a finance application or selling a car which has outstanding finance, customers may not realise they are committing a serious crime.
Most fraud occurs where a customer gives incomplete or inaccurate information to a lender, or sells a car with outstanding finance, or uses a false credit card to make their loan repayments.
Paul Harrison, head of motor finance at the FLA, said: “Finance companies continue to work closely with police to combat finance crime, but it is vital that consumers are made aware of how fraud could affect them."
Business secretary learns about UK motor industry
Vince Cable, the coalition government's business secretary, visited Bentley Motors in Crewe Thursday.
Cable, who previous to the election was seen by some observers as unsupportive of the motor industry, met directors and employees and saw the new Mulsanne in production.
Cable said: "We need to develop a stronger, more balanced economy by building on the strengths of our manufacturing and other knowledge industries. The UK is open for business and we welcome the investment that is being made here by manufacturing companies, like Bentley, creating highly skilled workforces that will ensure our future growth,” Cable added.
Bentley board member for manufacturing, Doug Dickson, said: "The government must encourage people into the industry through apprenticeships and other schemes as well as committing to increased training of those who already working in it.
"Above all it must promote it internationally if the UK is to have a strong manufacturing sector and thus a strong economy."
DATED: 24.05.10
FEED: AM
Saab signs up JATO in build-up to 9-5 launch
Saab has signed a new contract with JATO Dynamics, ahead of the Swedish firm's launch of its important new model, the all-new 9-5.
Saab has a long-standing relationship with JATO but this is the first contract signed under the management of its new owner, Spyker.
The launch of the new 9-5 model is fundamental to the company's future financial health and viability, and JATO's intelligence is being used to help re-position the brand.
"Other than getting the fundamental engineering of a new car right, the most important factor to a model's success is to have a thorough understanding of the market and for us to have a detailed and complete comparison with competitor products, including specifications and pricing in each of the core markets", says Svante Kinell, manager, Global Business Management at Saab.
"Only then can we establish the perfect specification and pricing strategy of our own. Without the right intelligence, our marketing objectives for the launch cannot be met."
Saab is taking JATO's specification data for leading markets along with further specification reports across minor countries.
The data will allow Saab to conduct market analyses in preparation for the 9-5's launch later this year.
"What we like about JATO is that it isn't just a data supplier. JATO is an authoritative and trusted consultant in the broader sense, and its team in Sweden has provided a particularly flexible approach to how it works for us", said Kinell.
Saab's pricing strategy for the 9-5 will be of paramount importance.
With its competitor models regarded as some of the industry's most successful cars, Saab's ability to benchmark the new car in each individual is a primary focus for the company.
Under its new ownership, Saab will be working to re-emphasize its position as a premium manufacturer.
"We think that consumers will be hugely impressed with this car, and we believe that the company's DNA as a high-technology former aircraft manufacturer comes across stronger than ever in the new 9-5," said Kinell.
"JATO's contribution in getting the global specification and pricing strategy exactly right for this the new car is invaluable, and we look forward to the car's successful launch this summer."
DATED: 24.05.10
FEED: AM
Funding boost for ACF Finance
ACF Car Finance expects continuing growth in its provision of sub-prime loans because of a new two-year agreement between its main lender, The Funding Corporation, and Barclays Capital.This is the longest loan agreement in the history of TFC, whose registered address is IM House, Coleshill, near Birmingham, the headquarters of Bob Edmiston’s International Motors, the UK Subaru/Isuzu and Daihatsu distributor.
Norman Beaumont, ACF sales and marketing director, said: “TFC’s funding agreement secures our immediate future as market leader and allows us to power on with further planned developments.
ACF arranges credit throughout its network of eight used-car dealerships. Beaumont said ACF is the only remaining prominent sub-prime lender.
DATED: 24.05.10
FEED: AM
Alphera grows in first quarter
BMW Group stepped up its efforts during the first quarter to grow point of sale finance through dealers holding franchises other than its own.
Alphera, the multi-make retail finance and insurance product division of BMW Group Financial Services, reports the first two months were its strongest for new business.
It was launched in the UK in 2006 and operates in 20 countries.
Spencer Halil, UK director of Alphera, said the uplift in Alphera’s business considerably exceeded the rate of growth in the new car market, which increased by 26.6% in March and 27.3% over the whole quarter.
He saw no reason why that trend would not continue in quarter two.
“We took steps last year to put Alphera in a position where we can maintain our support for dealers at a time when other finance companies have scaled back their activity or withdrawn from the market,” said Halil.
“We are continuing to write new business and will be announcing further additions to our range of products and services in April and May,” he added.
BMW Group has said from the start that it wants Alphera to grow sustainably in the UK.
“We are looking for long-term, mutually profitable partnerships based on the strength of our products and our appetite for high- quality incremental business,” said Halil.
Alphera says nine out of 10 dealers in its survey said they saw Alphera as a highly reliable motor finance specialist offering fresh, strategic thinking on motor finance issues.
DATED: 24.05.10
FEED: AM
Cost of fuel forces drivers to slow down
Motorists are quite literally slowing down because of the escalating cost of fuel according to a new survey by Motorpoint.
Some 69% of people quizzed by the car supermarket giant said their driving habits had changed radically since fuel topped an average of £1.20 a litre for unleaded petrol. Only 31% had not altered their behaviour. Over 1,500 people took part in the poll on the company's website - www.motorpoint.co.uk.
The oil giants have been criticised in recent days for failing to pass on a 2p fall in the wholesale cost of fuel although the likes of Asda are expected to cut forecourt prices shortly. Filling a car now costs £25 more a month than it did at the start of 2010.
Says David Shelton, Managing Director of Motorpoint: "We would urge the new Government not to raise Fuel Duty in its forthcoming Emergency Budget. Although it has been treated as a soft-target by the previous regime, any increases are only likely to exasperate the situation further for motorists already struggling under the weight of record fuel prices."
Syscap argues for leasing to be part of SME scheme
UK independent IT finance provider Syscap is calling on the Conservative-Liberal Democrat government to include leasing as part of its plans to introduce a major new loan guarantee scheme to small and medium enterprises (SMEs).
The previous Labour government’s flagship Enterprise Finance Guarantee (EFG) scheme excluded leasing from the forms of finance it was prepared to guarantee, and according to Syscap, this exclusion partly contributed to a drop in business investment. Figures released by the UK’s Finance and Leasing Association (FLA) reveal that the amount of business finance made available to British businesses was £4.1bn in the first quarter of 2010, down 25% from the year-ago period.
DATED: 24.05.10
FEED: AFE