Friday, October 28, 2011
Saab signs potential takeover deal with Chinese investors
Saab has signed a memorandum of understanding (MoU) with Chinese companies Pang Da and Youngman for the sale and purchase of 100% shares of Saab Automobile and Saab GB for €100 million (£88m).
The agreement is subject to a definitive share purchase between Swedish Automobile, Pang Da and Youngman which also needs to be approved by shareholders, relevant authorities and certain other parties.
The £88m will be paid in instalments and Saab said an important consideration it to enter into the transaction is the commitment of Pang Da and Youngman to provide long term funding for the business.
The MoU is valid until November 15 which will give Saab more time to reorganise the business.
Saab’s administrator Guy Lofalk had applied for the business to exit reorganisation and be declared bankrupt but has now applied to withdraw his application.
This latest lifeline with Saab's Chinese investors is the latest in a twisting saga to save the company from bankruptcy.
Saab terminated its provisional agreement with Youngman and Pang Da for a 53.9% stake in the Swedish brand for £213 million on October 24. The Chinese investors also made a full bid to buy 100% of Saab but their first offer was rejected.
Saab had secured a second round of funding four days ago in the form of £44.6 million from US private equity group North Street Capital to help the business continue as it restructures. This offer has now been revoked in light of recent developments.
The Swedish brand won approval on September 22 to go into bankruptcy protection in order to restructure its business.
Saab GB has said it’s still “business as usual” in the UK. Dealers have access to new and used car stock and the business has launched marketing campaigns offering free servicing deals on both new and used cars to help boost confidence.
There’s still no estimated date for when production will restart, but Saab GB will continue to operate the business in the UK as normal and has sufficient funding in place to meet all creditor obligations and will continue to pay all employees, dealers and suppliers.
Saab is offering UK customers two years’ free servicing on all approved used Saabs to attract more business into showrooms.
DATED: 28.10.11
FEED: AM
MG Motor UK selects GMAC UK as finance partner
MG Motor UK has selected GMAC UK, a subsidiary of Ally Financial Inc, to be its preferred retail financing provider in the UK for manufacturer programmes and standard rate finance.
GMAC UK will provide financing to MG customers under the MG Financial Services brand.
Guy Jones, sales and marketing director of MG Motor UK, said: “As a company with extensive experience, resources and capabilities in the UK market, GMAC will support our brand and help us grow our business.
“This important development allows us to offer a competitive range of retail finance products for the new MG6 GT, Magnette and following models.”
GMAC and MG have entered into a multi-year agreement to finance new and used vehicle sales for customers through MG dealers.
GMAC is also the preferred financier for Vauxhall, Chevrolet and Saab dealers and their customers in the UK.
DATED: 28.10.11
FEED: AM
Audi dealers face continuing wait for new director
Audi dealers look unlikely to greet a new UK director of the brand ahead of their preparations for the 12-plate campaign next March.
The process of appointing a replacement for Jeremy Hicks is still on-going, said Audi UK’s head of PR Jon Zammett.
However, he declined to comment on whether an announcement will come before the end of the year. Zammett said filling such an important role cannot be rushed.
Hicks was put on gardening leave in August ahead of joining Jaguar Land Rover at the start of November as managing director of its UK sales operation.
The search for his successor has also been impacted by the change of managing director at its parent Volkswagen Group UK, which has seen former Nissan Europe executive Simon Thomas take over from Robin Woolcock.
The new Audi UK director must be approved by both Thomas and Audi AG executives in Germany.
DATED: 28.10.11
FEED: AM
HML could bring new lenders to sector
Financial outsourcer HML, a subsidiary of the Skipton building society, believes it is in a position to enable the entrance of new lenders to the UK motor market through “white label” partnerships.
The company operates a totally outsourced model whereby a funder would provide capital, but HML would supply people, infrastructure and portfolio management for a market entry.
The company has recently started exploring possibilities with overseas finance providers, as well as venture capitalists and private equity providers in the UK.
Graham Donald, HML’s commercial manager, said the company is identifying sources of capital, but added “there are no bites just yet.”
Once licensed by the Financial Services Authority and registered at the Office of Fair Trading, Donald said, a supplier of capital would be free to go direct to the public or partner with dealer groups.
As well as courting potential new market entrants, the company is exploring the domestic car finance market with a view to purchasing and managing portfolios of PCP and HP loans.
Donald said the company also had plans to explore the development of deposit products to captive finance companies with banking licenses.
“We’re making people aware of what HML does,” said Donald. “We have huge experience within the mortgage sector, but people don’t necessarily know we’re here in motor finance.”
DATED: 28.10.11
FEED: MF
Wednesday, October 26, 2011
Car finance applications rise by 18%
New and used car finance loan applications are up by 18 per cent year-on-year, as consumer demand for asset-backed car finance grows, according to data from Creditplus.co.uk, the online car finance provider.
The company said provisional car finance acceptances have increased by nearly 50 per cent year-on-year. The average car loan amount has increased from £7,068 in 2010 to £7,350 in 2011 and the average cash deposit has leapt by 490% per cent to £1,406.
“These figures show that asset-backed car finance continues to be extremely popular and has the edge over other purchasing options, as consumers are able to tailor a finance package to suit their budget,” said Shaun Armstrong, managing director of Creditplus.
“Our typical internet audience comprises 26 per cent prime, 23 per cent subprime and 51 per cent near prime. Over the last 24 month we have seen the near prime market grow due to many people trying to clear debt, and so their credit files have improved. However, some consumers have also struggled in recent months and although they still have very good credit files, they are no longer considered prime.”
Earlier this month the Finance & Leasing Association reported that car dealers had achieved their highest share of the private new car finance market for four years.
In the last 12 months 57.9 per cent of new car buyers used dealer finance. The number of new cars bought on finance was up by 17 per cent in August, and the number of used cars was up by 8 per cent, compared with August last year.
DATED: 26.10.11
FEED: AM
Tuesday, October 25, 2011
The Car Finance Company to put £66m into market in next two years
A new car finance company with a unique business model focused on physical branch sales has recently announced major growth plans, after four years of keeping a low profile in the industry.
Subprime specialist The Car Finance Company plans to inject £66m into the motor finance market in the next 24 months as part of a planned expansion drive.
The company, which won the Lender of the Year award at the recent F&I Awards held by Frontline Solutions, operates out of three physical premises on British high streets but hopes to expand to 20 locations over the next two years.
Although the branch strategy incurs overhead costs, it’s not something founder and managing director Mark Smith is afraid of: “We’re meeting every customer. We’re getting to know them, and can be sure they understand every term in the contract. They must understand every term and condition, or we won’t lend money to them.”
Smith says his company's model is built on an ethical foundation, based on trying to make car finance as approachable and affordable to consumers as possible, with an emphasis on repeat business rather than high rates charged.
Under the company's method, dealers submit proposals to their local branch, before sending customers on to the shop to have their applications underwritten. If this is not possible, The Car Finance Company will send representatives to the dealer to meet customers face to face.
“Our model is different and we will accept the costs involved, because spending time with the customer is essential to us,” said CEO Andrew Walton-Green. “We’re looking at a long-term model. We don't want the customer to feel like a pariah. We want to help people who genuinely want to repair their credit.”
Their fourth office opens in Chatham in November and staff have already been hired for Reading, Crawley, Bristol, the south coast of Wales and Cambridge, with a growth from 27 to 90 employees projected for the current growth spurt.
“As long as we can maintain quality, we can go faster,” said Walton-Green.
DATED: 26.10.11
FEED: MF
Widespread pessimism about UK economy "overdone"
Anthony Hilton, Evening Standard financial editor and chair at the AM Financial Conference 2011 next month believes widespread pessimism about the state of the UK’s economy is "overdone".
Hilton said: "My take on the economic outlook is that there are good reasons to be optimistic and that widespread pessimism is overdone.
"As the UK recovers from recession it traditionally has several years of above average growth.
"It is often not appreciated at the time in the aftermath of a downturn how well things are going. In the 1990s politicians were ridiculed for seeing "green shoots" but with hindsight they were right."
Hilton will be talking at the AM Financial Conference 2011 on November 15 at the Oxford Belfry and will provide delegates with his analysis of the recovering UK economy, as well as his views on the automotive retail market.
Hilton believes businesses should have their fingers crossed for cheer next year.
He said: "VAT will cease to be an issue at the turn of the year, and sterling has been pretty steady at its lower level for some time now. Oil prices are all over the place day by day but still significantly below their peak.
"Finally there is the simple fact that if people don't have much to spend, retailers have to cut prices to tempt them into the shops. That ought to make 2012 a bit more cheerful than this year. That is certainly what happened last time. As Jonathan Loynes of Capital Economics points out, inflation also hit 5.2% in September 2008. But it was down to 1.1% just 12 months later."
DATED: 26.10.11
FEED: AM
Nidd Vale plans to relocate Harrogate showroom and HQ
Nidd Vale Motors is planning to relocate its multi-franchise site and headquarters in Harrogate to a new purpose-built 20,000 sq ft car showroom next to St James’s Business Park in Knaresborough.
Its current site on Leeds Road would make way for a new Marks & Spencer Simply Food shop.
The dealer group is holding public consultation at Leeds Road giving details of the planning application which will be presented to Harrogate Borough Council later this year.
The Leeds Road site currently holds Vauxhall, Saab, Mazda, Seat and its aftersales business.
DATED: 26.10.11
FEED: AM
