Thursday, June 03, 2010
New Managing Director - Mercedes-Benz Cars
Mercedes-Benz UK has announced today that Gary Savage has been appointed as Managing Director, Mercedes-Benz Cars, taking over from Dermot Kelly, who will retire at the end of June 2010.
Savage brings with him a depth of knowledge and experience of the automotive industry, most recently from his role as Managing Director Citroen UK. He has also held a number of senior positions in Seat and Audi, part of the Volkswagen Group, including Head of Operations for Audi UK.
Wilfried Steffen, President and CEO of Mercedes-Benz UK, commented; "Gary Savage has consistently delivered significant business results in all his previous roles and firmly established his professional reputation within our sector. His role will be to lead the delivery of our passenger car strategy, working with his team to maximise sales volumes in the UK and champion the highest quality customer service, retailer professionalism and brand values."
He added: "Dermot Kelly has played a major part in driving forward the Mercedes-Benz passenger car strategy, making Mercedes-Benz and smart the successful brands they are today. I would like to wish Dermot well and at the same time welcome Gary to the company."
Lexus - 10 years at the top of JD Power
The brand was ranked highest in satisfying new-vehicle owners for a 10th consecutive year, with a score of 846 on a 1,000-point scale.
Lexus performed particularly well in three of the four key measures: vehicle quality and reliability; vehicle appeal; and service satisfaction. Honda was in second place with a score of 825, followed by Jaguar (818), Mercedes-Benz (817) and Toyota (814).
At the model level, Lexus, Honda and Toyota each captured two awards.
The Lexus RX (SUV) and IS (compact executive car); Honda Jazz (small car) and Accord (upper medium car); and Toyota Aygo (city car) and Yaris (small car) each ranked highest in their respective segments.
Also receiving segment-level awards were the Kia cee'd (lower medium car); Mazda MX-5 (sports car); and the Mercedes-Benz B-Class (MPV).
The 2010 UK Vehicle Ownership Satisfaction Study (VOSS) is based on the evaluations of more than 17,000 online interviews from UK car owners after an average of two years of ownership.
The study was fielded in December 2009and January 2010.
The report also found vehicle owners who are highly satisfied with their service experience are four times more likely to return to that dealer, compared with less-satisfied vehicle owners.
DATED: 03.06.10
FEED: MT
Citroen UK boss quits for another car brand
First anniversary
Savage left the brand yesterday (2 June) just two weeks short of his first anniversary at the helm. He joined the brand in June 2009 from Audi where he was head of marketing and brand development for Russia.
Prior to that he was Audi's UK head of sales and marketing.
Surprise
A Citroen spokesman admitted the departure was a surprise but confirmed that Christophe Musy, sales director of North Europe, would take over day-to-day operational duties at the Slough based company.
DATED: 03.06.10
FEED: MT
Porsche aims to boost used car business
The company's new car sales have been decimated in the downturn, down to 5,280 in 2009, half of what they were in 2005 when 10,542 vehicles were sold.
Approved used Porsche cars undergo a 111-point check at a Porsche Centre prior to going on sale.
The warranty covers, without restriction, 100 per cent of the labour and material costs of all components in the engine, fuel system/cooling system, transmission/drive assembly, steering/suspension, brake system, air conditioning/heating, electrics and body.
The checks include verification of service and ownership history and the warranty is fully transferable if sold privately or back to a Porsche Centre.
There are currently just under 600 approved Porsches detailed on the company website in the approved scheme.
DATED: 03.06.10
FEED: MT
Payment protection insurance restrictions likely to come into play
Plans to restrict the sale of the controversial payment protection insurance (PPI) look set to go ahead.
The Competition Commission wants to ban PPI being sold at the time loans are granted.
It said customers would benefit from being given time to find more appropriate and better-value cover.
The commission's decision is still provisional and open to final consultation - with a final verdict to be published in July.
Plans to restrict PPI sales were first released in January last year.
However, after an objection by Barclays, the Competition Appeal Tribunal asked the commission to review the plans - especially whether they would inconvenience customers who could not buy PPI at the same time as taking out a loan.
Its further study found that "many customers would place very significant value on being given the time and space to choose the right PPI product - or indeed to decide that PPI is not right for them", said commission deputy chairman, Peter Davis.
A "significant" number of customers appreciated the convenience of buying PPI at the point of sale of credit, he added.
"Overall we concluded that PPI providers are overstating the loss of convenience that would result from the introduction of a prohibition on selling PPI during the credit sale."
DATED: 03.06.10
FEED: AM
Block Exemption revisions
New rules
The EC said the new rules, between carmakers and authorised dealers, repairers and spare parts distributors, are intended to increase competition in the market for repair and maintenance by improving access to the technical information needed for repairs and by making it easier to use alternative spare parts.
"(The rules) will allow the Commission to tackle manufacturers' abuse of warranties when they request that cars are serviced only in authorised garages. The new rules will also reduce distribution costs for new cars by eliminating overly restrictive rules," said Vice-President of the Commission and Competition Commissioner Joaquin Almunia.
Information
Threshold
The new rules introduce a 30 per cent market share threshold above which agreements between car manufacturers and authorised repairers will no longer be block exempted. The EC said this will make it easier for it to tackle possible abuses such as the refusal to grant independent repairers access to technical information. It will increase competition between authorised and independent repairers.
Benefits
"I strongly believe the new framework will bring tangible benefits for consumers by bringing down the cost of repairs and maintenance that represent an excessive share of the total cost of a car over its lifetime. It will also reduce the cost of distribution by doing away with overly restrictive rules," said Almunia.
The EC said the new rules will strengthen repairers' access to alternative spare parts which can represent a big share of the repair bills.
Warranty issues
Car manufacturers will no longer be able to make the warranty conditional on having the oil changed, or other car services carried out, only in authorised garages. However, carmakers may request repairs covered by the warranty, and paid for by the manufacturer, be carried out within its authorised network.
The EC said this was an important issue as it estimated repair bills account for an around 40 per cent of the total cost of owning a car.
Distribution rules
The EC also said it has simplified the rules regarding the distribution of cars and treat it like any other market.
"The current distribution model will continue to be exempted in most cases, but certain sector-specific clauses which have proven ineffective or counter-productive will not be carried forward," it said.
"The new regime will give carmakers more flexibility to organise diverse networks in which multi-brand dealers co-exist alongside dealers fully committed to promoting the brands of a single manufacturer."
Dates
The new rules on the repair and maintenance markets will come into force on 1 June 2010. Rules on distribution will be valid from 1 June 2013 until 31 May 2023.
The Commission will monitor developments and take appropriate remedial action if it detects problematic behaviour or changed competitive conditions, as it has done in the past.
DATED: 03.06.10
FEED: MT
Mixed welcome for new block exemption rules
The new EC regulations, which come into effect today (1 June) grant more power to independent service and repair sites by providing greater access to technical information from carmakers and the ability to source alternative spare parts rather than those supplied by the manufacturer.
Positive
"This can only be a positive move for consumers and in particular the independent garages who already provide convenient, high quality and affordable service and repairs," said David Moran, head of RMI Independent Garages.
The rules have also clarified that first oil changes can be carried out by independent garages without invalidating new car warranties.
"It was important that consumers and independent garages received clarification on manufacturer warranty demands, as both were perhaps confused by simple items such as the first oil change having to be done in a franchised garage to maintain the warranty; this simply wasn't the case."
Mixed bag
However, the RMI's National Franchised Dealers Association described it as a "mixed bag" which does not "represent the best outcome for competition, for consumers or for dealers".
"The framework represents a mixed bag of both negative and positive outcomes for dealers and the aftermarket, the most positive of which is, perhaps, the Commission's commitment to monitor the industry, and manufacturer behaviour, on an ongoing basis," said NFDA director Sue Robinson.
Political agenda
"The Commission regrettably appears to have pursued a political agenda for simplified regulation at all costs, against the wishes of many small and medium sized businesses, consumers and, indeed, the European Parliament," she said.
"It is clear that the Commission intends to scrutinise the sector going forward for evidence of market abuses by manufacturers and has committed to taking action where necessary. The RMI hopes the Commission does not need to exercise this commitment too frequently in future."
DATED: 03.06.10
FEED: MT
SsangYong target of Indian takeover
Indian automaker Mahindra & Mahindra has begun a takeover approach for troubled Korean carmaker SsangYong.
The Indian company, which only recently bought a majority stake in electric vehicle manufacturer Reva, confirmed that it has submitted a letter of intent to bid for SsangYong.
"We have submitted an expression of interest for Ssangyong. If we are one of the companies shortlisted, then we will undertake a due diligence," Pawan Goenka, president of Mahindra's automotive sector told reporters.
"We have to look at the economic viability of the company and how it fits into our strategy before we make a bid," Goenka said.
When asked to put a value to the deal, he said Mahindra had just expressed an intent to make a bid for Ssangyong. "Just because we have expressed an interest does not mean we will finally make a bid," Goenka said.
"We will do it only if it makes economic sense," said Bharat Doshi, Mahindra's group chief financial officer.
Goenka said Mahindra would have to examine the reasons why Ssangyong sales have fallen and "whether they can be fixed."
"We have an expertise in utility vehicles and that should help us in this," Goenka said.
South Korean media put the deal at $300 million-$500 million, but analysts said Mahindra was more likely to bid in the range of $100 million to $300 million to recapitalize Ssangyong, which was forced to undergo a capital writedown last year.
DATED: 03.06.10
FEED: AM
HR Owen: Walden reveals his plans for the prestige car dealership
Jon Walden, chairman of the supercar franchise dealer group HR Owen, has said the recent high profile resignations of several board members was “no surprise” in an interview with AM in which he outlines his plans for the company.
HR Owen’s boardroom is a very different place after a series of dramatic departures – first chief executive Nicholas Lancaster left after 16 years with the group.
Then resignations followed from non-executive directors Ramon Pajares, Tony Smith and ex-Pink Floyd drummer Nick Mason, who’d served on the board since 1996, 2001 and 1999 respectively.
Walden, who has had the publicly-listed group under a strategic review since joining in January, said the resignations were “no surprise” as a change of management was needed to move forward.
“Reshaping our board is an essential ingredient of moving the company into the next phase of its development,” he told shareholders.
Walden is now leading the hunt for Lancaster’s replacement but stresses he will not be rushed.
Nor will he be led on who should replace Lancaster in the prime CEO position by the shareholders, which include carmaker Bentley and Lancaster himself, who still has a 20% stake in the company.
“This decision…is a decision for the board,” said Walden. “It is not a decision for the shareholders.”
Industry observers expect the winner of the post, which provided Lancaster with a £312,000 basic salary plus bonuses, benefits and two company cars, to have significant motor retail experience.
But the rumour mill will continue to work overtime.
“I have no one in mind, we are doing a search and expect a good shortlist – this is a very attractive role,” said Walden.
“But we have not set a timescale that would be a foolish thing to do.”
Lancaster co-founded HR Owen in 1994, since when he had held the CEO post with a stated aim of making it “the Harrods of the motor retail industry”.
At its height, the group turned over more than £500m and had a broad spread of franchises for supercar and premium brands.
However in recent years Lancaster led the business through disposals and down-sizing to focus on its high-margin supercar brands, ending with a group that turned over only £125m last year.
Unfortunately for the company, its downsizing was finalised just as the recession sent that sector of the car market into freefall.
Walden who is now at the helm, at least until the new CEO is appointed, explained his thinking on how the company will now return to growth.
“Our used car operation has performed well over the past 18 months in both volume and prices,” he says. “We don’t have specific plans yet but we are exploring how we can grow in this area more than we have. The used area is one we are present in, one we perform well in and one where there is more opportunity for us.”
Any additional used car outlet, which is likely to be outside of HR Owen’s traditional London home, will remain true to its luxury and sportscar roots.
“We will increase our presence [in the used car arena],” confirms Walden.
“And, as I keep saying there is a world outside of London full of people who buy cars.”
However, any strategic decisions, such as opening a used car outlet, will be held off until the new CEO is in place.
While used car sales have held up well, Walden is also exploring the opportunities for more new car sales.
The company is cash rich – it has some £15m in the bank and no debts – so is well placed to acquire prime retail space for a new supercar showroom should it so wish to
“New cars is another area we are looking to expand. We want to explore this further,” says Walden.
“We have an excellent relationship with our existing franchisors and we are talking with them.”
Those talks will revolve around the possibility of opening a new showroom, again probably outside of London.
But while he is talking to his current franchisors, including Bentley Motors, which has a 28% stake in HR Owen, Walden is also open to selling other marques, although not volume brands and he has no plan to return to the brands the group exited while down-sizing.
“It is not inconceivable [that HR Owen would take another franchise] but I would say it will not be in the volume car market,” says Walden.
“But there are other franchises.”
The aftermarket arm of the prestige car dealer group’s operations has also performed well and has caught Walden’s eye.
“The aftermarket also offers attractive options for us,” he said.
“We have got options that many companies don’t have,” he says referring to the company’s cash reserves.
“Our plan is to grow, but measured growth we are not in a hurry and will go cautiously.
“The challenge is to make the right decisions and deliver value to our owners – the shareholders.”
Bentley Motors declined to comment on HR Owen’s changes, except to confirm it held a 28% stake in the group.
DATED: 03.06.10
FEED: AM
Thousands of car buyers at risk of committing finance fraud
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. This was the warning from the Finance and Leasing Association (FLA), which published new figures today showing nearly 2,500 fraudulent motor finance applications in the first three months of 2010.
The FLA statistics also reveal that in the 12 months to March, there were almost 10,000 attempted fraudulent applications to motor finance providers, with a total value of £126.8 million. Rigorous checks by finance companies kept the number of actual cases of fraud down to 960, worth a total £15.8 million.
While there has been a slight decline (3%) in fraud in the first three months of this year compared with the same period 12 months ago, the figures show that a large proportion of fraud cases may be committed unwittingly by car buyers. Almost a third of motor finance fraud (30.8%) in the past year was application fraud where a customer - sometimes unintentionally - gives incomplete or inaccurate information to a lender.
Almost as prevalent (29% of motor fraud) was the fraudulent sale of a vehicle which does not belong to the seller - known as conversion fraud. For most car finance arrangements, ownership of the car does not pass to the customer until the end of the agreement, so customers are committing fraud if they sell their car with outstanding finance. First party fraud was also significant, accounting for 27.7% of fraud cases in the 12 months to March 2010. This is where a customer makes their loan repayments using, for example, a false credit card. The 'customer' may also be illegally leasing the vehicle to another person, through a bogus car rental business, for example.
Paul Harrison, Head of Motor Finance at the FLA said:
"In just the first three months of this year there were almost 2,500 fraudulent loan applications to motor finance providers. 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.
"Car Crime Awareness Week is an opportunity for us to raise the profile of this type of crime, and remind people that they have legal responsibilities when taking out motor finance. If they fail to disclose their credit history during the application process or try to sell a vehicle that is still on finance, they are committing fraud against their lender and may have their car taken from them."
Solid profits coming from Cambria Automobiles
Cambria Automobiles has released its first set of half-year public results which show net profit margins of 1.41% on £175.9m sales.
The company, which floated on the Alternate Investments Market (AIM) in April, recorded a pre-tax profit of £2.5m in the six months to the end of February.
Revenue for the period was £175.9m, up 60% against the first half of its prior financial year. Like-for-like sales increased 58%.
Chief executive Mark Lavery said he was “very encouraged” as the group was trading ahead of the board’s expectations, and he remained optimistic about its full-year performance.
“In operating terms, the new vehicle department showed year-on-year growth of 11% in unit volume sales excluding all scrappage new car sales, and similarly the used vehicle department saw unit growth of 35%,” said Lavery.
“Aftersales revenues and gross profit increased 20% year-on-year, demonstrating that our strategy for improving aftersales contribution continues to have a positive impact.”
DATED: 03.06.10
FEED: AM
