F&I Management & Training

The managing director of Scotland's John Martin Group is upbeat about his company's annual performance, despite the Government "threatening sales" by increasing VAT to 20%.

Gordon Nisbet heads the Edinburgh-based dealer group and was responding to the publication of annual figures that show pre-tax losses of £728,000 in 2009 following a deficit of £3.92 million in 2008.

Turnover in 2009 was £146.79 million while 2008 delivered a turnover of £141.78 million.

Nesbit told AM: "I feel very positive about the future. We had a hard time two years ago but we've restructured, cut overheads, sold garages and made budget cuts.

"September is looking good for us and while the Government are certainly not helping the trade by increasing VAT and the second six months of the year could be tougher than the first six months, I still feel upbeat."

In July the John Martin Group sold its prominent Belmont site in Aberdeen to Peter Vardy where it had operated Vauxhall and Chevrolet franchises and is now developing a former car storage site at nearby Kemnay where Nesbit said the plan was to establish new dealerships.

"I'm not prepared to say who they may be at this time," he said, "but we are talking to some manufacturers and are currently working on the premises and showroom areas."

The UK’s automotive finance is wary of a shift in power planned by the Government, which intends to abolish the Financial Services Authority (FSA) and give more regulatory power to the Bank of England.

The Finance & Leasing Association is asking the Government to state where the Office of Fair Trading’s current responsibility for consumer credit will end up.

An FLA statement said: “We want to know if it will stay with the OFT or be moved to the new Consumer Protection and Markets Authority. This will affect motor finance providers as they are licensed by the OFT.”

The FLA is also pressing for clarity on the Government’s attitude towards financial regulation .

Many dealers will welcome the abolition of the FSA by 2012 when the Government intends to have a new financial structure in place. The FSA’s burdensome regulations on the sale of financial and insurance products caused considerable resentment. Some dealers pulled out of the sector.
In their election campaign, the Conservatives made clear their determination to streamline financial regulatory bodies.

Chancellor George Osborne confirmed that he will give the Bank of England the key regulatory role. The FSA will cease to exist in its current form, but chief executive Hector Sants, will stay on to oversee the transition.

Sir John Vickers, former head of the Office of Fair Trading, is to chair a commission to look into the potential break-up of the UK’s biggest banks.

The commission will take at least a year to review whether investment banks should be split from deposit-taking institutions on the high street.
Osborne said the Government was proposing a new system of regulation that “learns the lessons of the greatest banking crisis in our lifetime”.

Alphera grows product range

Alphera, BMW Group Financial Services’ multi-make retail arm, is planning to launch a tyre
insurance product soon and other revenue streams later for dealers, said director Spencer Halil.
Shortfall Insurance, added this summer to Alphera’s range, can be bought in showrooms or, following a quote via www.alpheraprotect.co.uk.

Halil said: “Shortfall Insurance is a good additional sales opportunity for motor retailers because many customers are unaware of the potential problems that can arise if a financed vehicle is written-off by their motor insurance company.”

Policyholders are covered for up to four years on new and used vehicles with a maximum claims value of £35,000. This includes dealer-fitted accessories valued up to £2,000 in the premium, which they can pay in a single payment or instalments.

DATED: 16.08.10

FEED: AM

In the first six months of 2010, more people used dealer finance than personal loans or savings to make a new car purchase.

New figures show that 264,377 people used forecourt finance to buy a new car, which was 49.4% of all new cars sold to consumers. The number of new cars bought on finance was up 26% in the first half of 2010.

According to the Finance & Leasing Association, 57% of dealer finance by value was provided through a Personal Contract Purchase (PCP) deal. These deals have become increasingly popular in the recession because of the flexibility offered to customers (1). Dealers can tailor repayment terms to their customers' budget and the customer has a choice at the end of the contract on whether to hand the car back, buy it outright or use any equity as a deposit towards their next deal.

Business purchases of new cars were also up, by 15% in Q2 2010 compared with Q2 2009. Businesses have begun to replace old fleets, whose useful life had been extended because of the recession.

Commenting on June's motor finance figures, Paul Harrison, Head of Motor Finance, said:

"The first half of 2010 has been very positive for dealer finance. We do expect consumer demand to reduce in the next few months but November and December is likely to see a pick up in demand as customers rush to buy new cars before the increase in VAT to 20% affects prices."

More staff for classic car firm Morgan in Malvern Link

The Worcestershire-based Morgan Motor Company has said it will be taking on extra staff as its new model goes on show.

The Malvern Link-based company normally makes classic cars but is launching its new Eva GT, a four-seater coupe, in California, on Sunday.

Chief executive Charles Morgan said he envisaged taking on up to 40 staff.

The company produces 850 cars a year. The new model will be on sale in two years' time.

"Morgan's strategy throughout the recession was not to overexpose and to concentrate on the markets that are going well," Mr Morgan said.

He said producing a car which differed to its classic cars was a brave new move.

The firm currently employs 160 staff and most of Morgan's cars are produced on site.