www.am-online.com July 2015 £8.00
FORD VIGNALE / P24
AUTOMOTIVE MANAGEMENT
Mondeo is first of Ford’s ‘premium’ sub-brand
INTEREST RATES ARE AT AN ALL-TIME LOW
BANK LOANS ARE MORE FREELY AVAILABLE YOU HAVE BEEN MAKING
SOLID PROFITS SO IS IT TIME TO GO OUT AND
ACQUIRE? Your guide to buying a new business (or making the most from selling an old one) / P33 V O L K S WA G E N / P 19
S S A N G Y O N G / P 74
FA C E T O FA C E / P 5 0
Carmaker says it is listening to dealers on targets, not dictating
Tivoli SUV will play a big part in dealer recruitment drive
Hodgson Newcastle MD on why organic growth is right for his dealer group
Events
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July 17 2015
AM Executive Breakfast Club
Simpson’s in the Strand, London
September 15 2015
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October 20 2015
AM Used Car Conference
St Georges Park, Burton Upon Trent
November 6 2015
AM Executive Breakfast Club
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November 10 2015
AM F&I Compliance Conference
National Motorcycle Museum
February 2016
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February 11 2016
AM Awards
ICC, Birmingham
May 2016
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Simpson’s in the Strand, London
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Whether you plan to acquire or exit, there is a ‘right’ way to buy and sell he 2015 AM100 supplement accompanying this issue of AM shows that records continue to be broken, dealer revenue and profitability have increased and the number of people working within the top 100 dealer groups has risen. With such a strong backdrop to the motor retail industry, and amid favourable economic conditions in general, the climate is right to consider whether to grow through acquisitions or sell up and reinvest the money. Advisers in this specialist area share their thoughts on the right ways to manage acquisitions and disposals on pages 33, 36, 41 and 45. Although their expertise varies from taxation through to employment law, you may notice a common thread – planning ahead. Planning is a focus of Hodgson Newcastle, our Face To Face dealer profile on page 50. Yet acquisitions are not. Its owner, Steve Hodgson, has driven the group’s growth carefully, with an emphasis on delighting customers and managing debt, and he remains determined to prioritise what is right for his business, even if, occasionally, that isn’t what his manufacturers want. One manufacturer hoping it will get what it wants is Ford. It wants its customers to stop deserting to the German premium brands. How does it hope to achieve that? By turning metropolitan dealerships into large FordStores and by offering a premium, personalised experience through its Vignale sub-brand. Turn to page 24 to learn more.
T
am-online.com/ami/
ouR ExpERT conTRIBuToRS philip nothard He is retail and consumer valuations editor at cAP, which he joined in 2010 after two decades working in motor retail, culminating in running dealerships for european motor Holdings, lythgoe motor Group and Arnold clark. In this issue (p29), he suggests that not everything in the world of retail car sales is as rosy as the headline figures would suggest. prof Jim Saker As director of the centre of Automotive management at loughborough University’s Business School, Saker is a key figure behind the drive for management recognition and skills in the motor retail sector. This month (p58), he explores how looking at the crowdsourced adverts of a crisp company could make your marketing more effective.
The editorial team Email: am@bauermedia.co.uk Website: www.am-online.com Twitter: @amchatter LinkedIn: am-online.com/linkedin
Stephen Briers Editor-in-chief
Tim Rose Managing editor
Jeremy Bennett Associate editor
Danielle Bagnall Senior reporter
AM Digita lD Conferenc ealer e
Book ticke amdigitaldtes today at: aler.co.uk Silverstone , Sept 15, 2 015
am-online.com July 2015 3
In this issue July 2015 50
HODGSON NEWCASTLE ‘WE ARE NOT GOING TO BE A MANUFACTURER’S PUPPET’
33
ACQUISITIONS HOW TO GROW YOUR BUSINESS EFFECTIVELY
41 INTEGRATION GETTING THE POST-ACQUISITION MIX RIGHT
Your news
7
News digest The FCA gives dealers less than three months to enforce GAP rules; Seat’s new brand director wants more dealers to invest in fleet business; Swansway Group is investing £12 million in several new-build sites in the North West.
Market intelligence
13 14 15
17
19 24
Market share There has been a change in the line-up of the six brands that are in the crucial 2-3% range of UK market share.
Dealer profitability The average UK motor dealership
4 July 2015 am-online.com
Used cars Average monthly used car wholesale values have shown their first rise since November.
Analysis
New car registrations Growth in the UK new car market is slowing, with May’s registrations of 198,706 units just a 2.4% rise over the same month last year.
everything in the retail car market is as rosy as the figures on the surface would suggest.
produced a marginal profit in April of £3,000, down £6,000 year-on-year.
29
Insight
33
How to acquire effectively
38
Make your franchise fit for sale
41
After the acquisition
45
Top tips before you buy or sell
How Volkswagen made itself the listening brand
With an eye on the long term, Volkswagen has adapted to market changes and rapid growth by consulting its dealer network.
Ford gives the Mondeo some premium polish
With its new Vignale sub-brand, Ford hopes to hold on to its corporate customers and perhaps attract more by marrying high-spec cars to a premium aftersales experience.
Don’t believe the hype on the retail car market
CAP’s Philip Nothard says not
With acquisition the ‘only real route to growth’, manufacturer approval, longterm planning and due diligence are essential to dealers’ strategies.
Should you decide it is time to exit, proper planning can maximise the value of your business. Properly integrating your new business’s staff and systems is vital to post-acquisition success.
Disposals and acquisitions can be complex. Motor retail business advisers share their best advice.
For the latest motor retail industry news, visit am-online.com Sign up to get AM news daily by email: am-online.com/newsletter
DEALERS AND SUPPLIERS IN THIS ISSUE: Alphera Financial Services ............................8 Arnold Clark.................................................7, 10 ASE ......................................7, 10, 34, 38, 41, 45 Autoclenz............................................................63
FORD MONDEO VIGNALE PUTTING A PREMIUM POLISH ON THE BLUE OVAL
24
BCA...................................................................7, 17 BDO.......................................................................61 Caffyns ..................................................................7
74
CAP.......................................................................29 Deloitte ................................................................13
SSANGYONG TIVOLI A VITAL DRAW FOR NEW DEALERS
Drive Vauxhall...................................................66 FCA .........................................................................7 FLA .......................................................................13 Ford of Britain..............................................8, 24 Gtechniq ..............................................................64 Halfords.................................................................8 Hexagon................................................................7 Hodgson Automotive ......................................50
50 54 58 61 63
‘Acquisition is not the way to grow our business’ Managing director Steve Hodgson believes organic growth, not loanbacked acquisition, is the right route for Hodgson Newcastle.
AM poll
More than 40% of respondents to our latest poll plan to acquire a dealership in the next 18 months.
Jim Saker’s view from the business school Prof Jim Saker explores how a crowdsourced crisp advert could help to boost your marketing.
Dealers risk ‘horrendous’ non-compliance penalties BDO’s Malcolm Thixton issued a stark warning on the consequences of failing to take FCA regulations seriously to delegates at the latest AM F&I Executive Breakfast Club.
Help your dealerships to clean up Paint and upholstery protection,
valeting and SMART repair can boost customer service scores as well as your bottom line.
HRC Law......................................................41, 45 Inchcape................................................................8 Jewelultra ..........................................................63
Showroom
74 76
SsangYong Tivoli
SsangYong says its new SUV is the right car to help it triple registrations. But does it have the right dealers?
Suzuki S-Cross Members of Suzuki’s dealer network are very satisfied with the brand, according to an NFDA survey.
Coming soon
82
In August’s issue – published July 24
Progress Škoda MD Terence Byrne on Škoda coming last in the recent NFDA satisfaction ratings; how to make efficiency savings in motor retail; and the Volvo XC90 reviewed.
Manheim.............................................................17 MHA MacIntyre Hudson........................33, 68 Motorclean.........................................................66 Napthens .....................................................41, 46 NFDA....................................................................13 Norton Way Group ............................................8 Peugeot .................................................................8 Revive...................................................................66 Seat.........................................................................8 SMMT...................................................................13 SsangYong..........................................................74 Swansway .....................................................8, 10 UHY Hacker Young............................33, 39, 41 Vertu Motors .......................................................7 Volkswagen........................................................19 Volvo .....................................................................10
am-online.com July 2015 5
NEWS DIGEST
T H E N E W S YO U C A N ’ T A F F O R D T O H AV E M I S SE D
8
F O R D A I L Y N E W S , V I S I T: am-online.com T O g E T A M ’ S F R E E D A I L Y N E W S L E T T E R , V I S I T: am-online.com/newsletter FOLLOW AM ON TWITTER: @amchatter
Seat fleet push
10
Seat’s new brand director wants more dealers to invest in fleet business.
Swansway Swansway Group is investing £12 million in new-build Honda, VW, Citroën and Fiat centres in the North West.
FCA
IN BRIEF
Dealers have less than three months to enforce gAP rules
MINIMUM WAgE
The Financial Conduct Authority has released its final findings on the general insurance market study on gAP sale competition, together with the rules it will be introducing. Car dealers selling GAP insurance have until September 1 to ensure new rules on add-on sales are enforced. These include having to provide customers with
information to help them shop around and introduce a deferral period in all cases. The product cannot be introduced and sold on the same day. The FCA is standing by its September 1 deadline for the new rules to come into force, despite some objections during the consultation period that this didn’t give the industry enough time to implement them. To view the rules, visit am-online.com/GAPrules.
VERTU
Vertu Motors has added to its franchise portfolio with the acquisition of MSB Škoda in Darlington. The parent company of Bristol Street Motors has purchased the site on McMullen Road for £1.5million. It will operate as Bristol Street Motors Škoda Darlington. The current team will remain under general manager Tia Saddique. Robert Forrester, chief executive of Vertu Motors, said: “We are continuing to develop by adding to existing franchise relationships, as well as exploring new manufacturer partners. “This acquisition increases the group’s total number of sales and aftersales outlets to 117, and will enable us to generate further profitable growth for our shareholders and wider choice to our customers.”
ARNOLD CLARk
The growing success of its used car operation has contributed to the boost in turnover and profitability of Arnold Clark Automobiles, helping to mitigate tightening new car margins. The AM10 dealer has reported 2014 turnover of £3.2 billion and profit before tax of £107 million, up 12% and 26% respectively yearon-year. New car sales accounted
Car dealers have been warned that the maximum penalty for not paying the national minimum wage has increased from £20,000 per employer to £20,000 per employee. ASE tax manager Bett Twiggs said: “While most employers would not consider themselves [likely] to fall foul, it is easy to do so where a sales exec is on a low salary plus commission.”
BCA BCA Marketplace has acquired SMA Vehicle Remarketing, a car auction services group with centres in Edinburgh, Kinross, Leeds, Newcastle and Birmingham, for £42 million. The figure includes the repayment of existing debt. SMA posted earnings of £4.7m for the year to the end of October 2014 (before interest, taxation, depreciation and amortisation), on revenue of £37.2m.
TOP TRACk HEx AgON LOTUS Lotus has its first dealership in London in six years, after classic and sports car dealer Hexagon regained the franchise in two locations in the capital. The full range of Lotus models, from Elise to Exige to Evora, will now be sold from Hexagon’s East Finchley and South Kensington sites, making it the only Lotus dealer inside the M25. Hexagon was previously a Lotus dealer between 1964 and 1976.
Six dealer groups feature in the latest Sunday Times Top Track table, which ranks Britain’s top 100 private companies by sales. Arnold Clark is in 10th place in the national table, Marshalls is at number 34, JCT600 at 51, Listers 54, Greenhous at 75 and Benfield 83.
CAFFYNS for only about 2% of its profit. The PCP funding method has proved a boon in new car sales and while Arnold Clark also benefits from this phenomenon, it has also started providing the product on up to 36-month-old used cars, with finance company support. The 2015 target for the Glasgowbased company is to sell a total of 300,000 cars. In 2014, it sold 100,000 new and 150,000 used. Arnold Clark is one of numerous
dealers to cite margin pressure driven by increased targets, often tightened from a quarter to a month. Managing director Eddie Hawthorne said: “Is this behaviour acceptable? No. Is it sustainable? No. “There has to be some return for us otherwise there would be no point in the business, given the levels of investment expected,” he said.
Listed dealer group Caffyns has announced revenues up 8.9% to £210 million and underlying profit before tax up 14% to £2.47m for the year to March 31, 2015. Profit before tax rose to £11.44m from £1.57m last year. New unit sales were up by 6.6% on a like-for-like basis in the period, while total UK new car registrations rose by 7.5%.
am-online.com July 2015 7
NEWS DIGEST S E AT
New Seat boss wants more dealers to invest in fleet business. Seat’s new brand director Richard Harrison wants more of his dealers to invest in helping increase the level of corporate car business achieved by his company. Harrison said the Milton Keynes-based subsidiary was also lending additional support to dealers who are servicing fleets, with dedicated sales and management account teams. “At present, 16 of our total of 123 dealers make the investment that is necessary to give front-line support to our fleet ambitions and I’m encouraging others to follow their lead. “We have between 3.55% to 4% shares of the Leon and Ibiza segments and I’ll be looking to achieve similar results in the new categories we will soon be entering.”
T O R E A D A M ’ S D A I L Y N E W S L E T T E R , V I S I T: a m - o n l i n e . c o m / n e w s l e t t e r
HALFORDS FINED
A car service sting by Trading Standards officers found “multiple failings” at a Halfords Autocentre site and led to fines and costs totalling almost £47,000. Technician Alex Tovey at the Halfords Autocentre workshop in Filton failed to spot or fix 11 of 20 defects which South Gloucestershire Trading Standards officers had rigged on a Vauxhall Astra before sending it in for a £235 service. North Avon Magistrates Court was told all the defects should have been picked up during the major service. The failures included not checking or replenishing the brake fluid, broken or missing lightbulbs, faulty windscreen wipers, oil leaks and irregular tyre pressures. Halfords Autocentre pleaded guilty to eight charges under consumer protection laws and was fined £32,000, plus costs of £14,862 and a £120 victim surcharge. In its defence, it said the issues undiscovered were not “overtly dangerous” and its technician had identified two faults the trading standards engineer was not aware of.
Inchcape continues to win market share in the Uk, according to its new boss.
8 July 2015 am-online.com
MARk PICkLES Peugeot UK has appointed Mark Pickles as its new marketing director. Pickles has worked across almost all areas of Peugeot since he joined the group in January 2000. Before that, he spent five years in dealerships. He moves from his current role as UK aftersales director for the PSA Group.
NEIL WILLIAMSON Former brand director of Seat UK Neil Williamson has been appointed chief executive of Jardine Motors. Current CEO Mark Herbert is to move to a role in Asia with parent company Jardine Matheson Group on completion of a handover to Williamson in July.
ANDY B A R R AT T
INCHCAPE
Stefan Bomhard, the new chief executive of Inchcape, said the company is in a strong position to capitalise on favourable market conditions in the UK and acknowledged tougher trading in used cars. He said UK revenue growth had been strong, “with our brand portfolio continuing the long-term trend of winning market share”. Across all its global operations, group revenue was £2.191 billion, up by 4.1% at constant currency (0.9% below last year at actual currency). Like-for-like revenue was up 4.9% at constant currency (0.3% below last year at actual currency). Demand for vehicles was “solid” and ahead of last year. Aftersales activities, accounting for about 50% of the group’s gross profit, performed “well and in line with expectations, driven by the new car growth of recent years resulting in a growing oneto five-year car parc in the majority of its markets”. Inchcape also announced that Nigel Northridge had been appointed as a senior independent director with immediate effect.
PEOPLE NEWS
N O R T O N WAY g R O U P
Norton Way group is partnering kia for the first time, having been selected to operate the carmaker’s new flagship outlet in West London. The four-floor flagship site will trade as GWR Kia and is angled towards the M4, with the top floor featuring a glass facade, showcasing Kia’s vehicles. It will feature 3D headsets for waiting customers, a café with seating for more than 40 people, an iPad customer experience area, and near field communication (NFC) technology. One area in which NFC will be used is within the café, to send a signal to customers when their vehicle is ready after a service. Seven service and two MoT bays are on the lower ground floor, with space to expand to 15 bays. The site will also have parking for more than 30 customers and EV charging points. GWR Kia has been designed with sustainability in mind; featuring air source heat pumps, CHP (combined heat and power) generation, and roof-mounted solar panels.
Ford of Britain has appointed Andy Barratt as its new chairman and managing director, from July 1. Barratt will succeed Mark Ovenden, who has been appointed president and chief executive of Ford Sollers – the joint venture of Ford Motor Company and JSC Sollers – in Russia.
PAU L W O ODHE A D Swansway has appointed former Audi national sales manager Paul Woodhead as its new group aftersales director. Woodhead began his career as a technician and progressed through to dealer principal, before joining Volkswagen Group UK, where he worked for 18 years.
SPENCER HALIL Motor finance provider Alphera Financial Services has appointed Spencer Halil as its new director. Halil succeeds Andy Gruber, who is to leave the group after accepting a senior role with an overseas captive finance company.
Driving customers from your site to your site
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CONFERENCE 2015
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market intelligence 14
Market share
there has been a change in the line-up of the six brands that are above the crucial 2% Uk market share threshold.
15
the news in depth
17
dealer profitability
the average Uk motor dealership produced a marginal profit in april of £3,000, down £6,000 year-on-year.
Used cars
sponsored by
average monthly used car wholesale values have shown their first rise since november.
U K n e w c a r r e G i s t r at i o n s
Growth in the UK new car market is slowing may figures show consumer-led growth in new car registrations ‘is not sustainable’ Growth in the UK new car market is slowing, with May’s registrations of 198,706 units just a 2.4% rise over the same month last year. that compares with year-on-year growth of 5.1% in april, 6% in March, 12% in February and 6.6% in January. the society of Motor Manufacturers pointed out that May’s “steady” growth was still the 39th consecutive month of increases in the market. private registrations in May totalled 91,841, a rise of 1.2%. Fleet registrations were 4.5% ahead at 100,599 units. business registrations fell 11.5% to 6,266. year to date, private registrations are only 1.3% ahead, while fleet orders are 11.8% up. Smmt chief executive mike Hawes said: “we anticipate a natural levelling out of the overall new car market throughout the remainder of 2015.” David raistrick, Uk automotive leader at
Deloitte, said: “the growth in fleet sales has been key to the UK new car market maintaining this upward trend, as there has been a distinct slowing in the increase in private sales, compared to 2014. “May’s results showed that the increase in new cars sold to private buyers over the first five months rose by only about 6,600, compared to a rise of about 57,700 for the first five months of last year. yet growth in fleet sales has increased from 40,000 cars to 58,000 cars in the same period. “this could be the first real indication that the consumer-led growth, which kick-started the UK new car market nearly three years ago, is levelling off and is not sustainable. “with the UK car parc standing at around 32.6 million cars on the road, this represents over one car for every two people. this figure suggests that there is little prospect of the UK car parc increasing significantly enough to allow
for the continued rate of growth in new car sales, whilst also supporting the used car market and underpinning residual values.” Sue robinson, nFDa director, said: “strong manufacturer deals and low-cost finance incentives offered by dealers and manufacturers during 2015 have no doubt influenced many consumers to buy. “increase in the fleet markets shows that business confidence has returned, allowing them to invest in replacement vehicles. “competitive pricing and strong incentives remain important if the sales trend is to continue throughout the second half of the year.” chris Sutton, managing director of Black Horse, said: “the summer months usually show a slowdown of car sales ahead of the september plate change. however, as this month’s data shows, dealers clearly remain bullish that they will sell new cars off their forecourts.”
r e G i s t r at i o n s b y M a r K e t s e G M e n t 2015
private 528,732
2014
private 522,098
0
200,000
400,000
F i n a n c e s tat s Fleet 549,022
Fleet 491,232
600,000
800,000
business 41,318
business 45,644
1,000,000
a p r i L M o t o r F i n a n c e M a r K e t: n e w c a r s new cars bought on finance by consumers through dealerships apr-15 change on 3 months to previous year apr 2015 Value of advances (£m) 1,245 +17% 4,616 number of cars 75,929 +11% 285,846 new cars bought on finance by businesses through dealerships number of cars 52,409 +29% 134,604
1,200,000
Source: FLA
change on previous year +14% +8%
12 months to apr 2015 14,639 916,160
change on previous year +14% +9%
+15%
498,938
+13%
dealer finance for new retail cars in the year to april was at a record high for the second successive month. Figures released by the Finance & Leasing association show the share financed by its members reached 77.3%, ahead of 76.8% in the 12 months to March. in april, point-of-sale consumer new car finance was up 11% by volume and 17% by value year-onyear. Used car finance advanced 15% by volume and 19% in value. geraldine kilkelly, head of research and chief economist at the Fla, said: “in april, the consumer car finance market grew at its strongest rate since september. this contributed to growth of 8% in new business volumes in the first four months of the year.”
am-online.com July 2015 13
MARKET INTELLIGENCE THE T WO -PER-CENT CLUB The 2% market share threshold is often seen as a key performance indicator in the UK new car market. Having a market share between 2% and 3% shows that a brand is no longer niche and is getting enough cars onto the roads to become noticed by consumers, and therefore gain more interest from dealers. The ‘two-per-cent club’ had six members at the end of 2014. Five months into 2015, it still has six members, but there has been a change. Seat has dropped off the bottom, as its market share has slipped by 0.17ppts to 1.99% since the start of this year. However, the new entrant is its fellow Volkswagen Group brand Škoda. Škoda’s arrival is also as a result of a decline of its market share to 2.8%, from 3.05% at the close of 2014. However, Seat and Škoda are both awaiting new model launches in the second half of the year, which should make a difference to their volume and share come the end of the year. A
revised Ibiza will ensure an uplift in activity for Seat’s network, and the new Škoda Superb will be of particular appeal to the company car sector. By far the best performer in the twoper-cent club so far in 2015 has been Land Rover. It has made a half-percent gain in the UK, with demand strong for the Range Rover Evoque, ahead of its revisions this autumn, and for the Land Rover Discovery Sport, its new entrylevel SUV, which is being marketed through a £299 monthly payment three-year PCP at present. In contrast, Fiat has lost almost as much share in this very competitive marketplace. It’s a poor sign for a brand that has recently launched its first compact SUV, the 500X, into a rapidly growing segment and which has ambitions of growing registrations this year. Its fashionable 500 is also under pressure from new launches by Smart and Mini. Fiat needs its low- or zero-APR finance offers and PCP deposit contributions to work harder at winning the favour of more consumers.
FINANCE OFFERS
Top finance offers for retail buyers
Ford and Vauxhall continue to lead the battle for UK new car registrations, with extensive packages of finance products to attract or retain customers. The market leader favours personal lease, while Vauxhall features a mix of PCP and HP. Vauxhall extended its Q2 offers to July 1 in the hope of clinching extra deals from the momentum of its marketing campaign in June. Its entry deal is a 2.9% PCP on the Adam Jam 1.2 white, which requires 24 monthly payments of £99 after a deposit of £2,682.36. The optional final payment is £6,000. Sixtymonth Vauxhall HP offers include one for the Mokka Exclusiv 1.4 2wd – monthly payments of £239 after a £5,429 deposit.
Model
The full list can be found at www.am-online.com/offers
14 July 2015 am-online.com
Finance type
3.5 2015 YTD % share 2014 FY % share
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Škoda
Land Rover
Renault
Fiat
Mini
Honda
Seat
For a searchable list of manufacturers’ finance offers, go to www.am-online.com/offers Deposit
Term
Monthly payment
Final payment
APR
Offer ends
£119 £125 £129 £135 £139 £159 £209 £179 £229 £239 £249 £249 £259 £289 £329
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15
£99 £109 £149 £129 £139 £199 £139 £149 £249 £239 £249 £259 £279 £239
£6,000 £7,250 £7,250 £7,820 £8,800 £7,100 £6,517 £7,779 £6,930 n/a n/a n/a n/a n/a
2.9% 2.9% 2.9% 2.9% 2.9% 2.9% 4.8% 4.5% 6.9% 0% 0% 0% 0% 0%
01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15 01/07/15
Ford Ka Studio 1.2 3dr Personal lease * £1,190 48 months Ka Studio Connect 1.2 3dr Personal lease * £1,000 48 months Ka Edge 1.2 3dr Personal lease * £1,032 48 months Ka Zetec 1.2 3dr Personal lease * £945 48 months Fiesta Zetec 1.25 3dr Personal lease ** £3,336 36 months Fiesta Titanium 1.0 3dr Personal lease ** £3,657 36 months B-Max Titanium 1.0 EcoBoost Personal lease*** £4,598 36 months Eco-Sport Titanium 1.0 EcoBoost Personal lease**** £4,117 36 months Focus Titanium 1.0 EcoBoost Personal lease***** £4,580 36 months C-Max Zetec 1.6 5dr Personal lease ß £3,585 36 months Grand C-Max Zetec 1.0 EcoBoost Personal lease ßß £4,233 36 months Kuga Titanium 2.0 TDCi 2wd Personal lease ßßß £5,229 36 months Mondeo Titanium 1.6 TDCi EcoNetic Personal lease ßßßß £5,957 36 months S-Max Zetec 2.0 TDCi Personal lease ßßßßß £6,647 36 months Galaxy Zetec 2.0 TDCi Personal lease ∑ £7,238 36 months Annual mileage capped at 9,000. Excess charge per mile: * 5.71p ** 5.80p *** 5.89p **** 7.14p ***** 6.74p ß 4.93p ßß 6.47p ßßß 8.51p ßßßß 8.08p ßßßßß 5.24p ∑ 8.81p
Vauxhall Adam Jam 1.2 white Adam Glam 1.2 red Adam Slam 1.2 red Adam Rocks 1.2 red Adam Rocks Air 1.2 Adam Grand Slam 1.4 Corsa Excite 1.2 3dr Corsa LE 1.2 3dr GTC 1.4 Sri Zafira Tourer 1.8 Insignia Energy 1.8 5dr Insignia LE 1.8 5dr Insignia Sports Tourer Energy 1.4 Mokka Exclusiv 1.4 2wd
PCP PCP PCP PCP PCP PCP PCP PCP PCP HP HP HP HP HP
£2,682.36 £2,797.91 £2,668.20 £2,381.90 £2,777.45 £3,002.55 £2,679.56 £2,703.50 £4,196.00 £6,435.00 £5,344.00 £6,389.00 £6,169.00 £5,419.00
24 months 24 months 24 months 24 months 24 months 24 months 24 months 24 months 36 months 60 months 60 months 60 months 60 months 60 months
market intelligence 10-year market trends available: www.am-online.com/ami
n e w c a r r e g i s t r at i o n s
9
1 2 3 4 5 6 7 8 9 10
BranD Jeep infiniti mitsubishi lotus SsangYong mini maserati mg Porsche abarth
YtD (%) 247.65 179.01 133.38 109.59 52.98 51.40 50.00 42.46 33.92 33.33
r i ser s & fa l l er s
2015 is a good year to be franchisee for a niche brand, it seems. with the exception of Mini, all the top 10 rising brands have less than 1% market share. of course, such small share means it is relatively easy to make large gains from such a low base. nevertheless, their networks will be pleased with the achievement. less impressive are the performances of Honda, fiat, alfa romeo and suzuki. 10 9 8 7 6 5 4 3 2 1
BranD Honda Fiat alfa romeo Suzuki Bentley chrysler chevrolet mia Perodua Proton
YtD (%) -7.40 -8.07 -8.50 -11.03 -14.49 -87.39 -99.89 -100.00 -100.00 -100.00
9
16 July 2015 am-online.com
Marque
May 2015 share
Ford Vauxhall Volkswagen Audi BMW Nissan Mercedes-Benz Toyota Hyundai Peugeot Citroën Kia Škoda Renault Mini Land Rover Seat Fiat Honda Volvo Mazda Suzuki Dacia Mitsubishi Jaguar Porsche Jeep Lexus Smart Alfa Romeo MG Subaru SsangYong Abarth Maserati Infiniti Bentley Aston Martin DS Lotus Chrysler Chevrolet Mia Perodua Proton Saab Other British Other Imports Total
24,273 20,698 17,316 13,802 12,206 11,561 11,355 7,300 7,045 6,922 6,301 6,133 5,914 5,453 5,239 4,966 4,595 4,370 3,624 3,192 2,718 2,589 2,046 1,608 1,579 1,136 1,109 959 705 447 269 249 189 181 122 98 74 68 26 18 4 1 0 0 0 0 62 184 198,706
% market share
2014 % market change
% share
Year-to-date 2015 % market share
12.22 10.42 8.71 6.95 6.14 5.82 5.71 3.67 3.55 3.48 3.17 3.09 2.98 2.74 2.64 2.50 2.31 2.20 1.82 1.61 1.37 1.30 1.03 0.81 0.79 0.57 0.56 0.48 0.35 0.22 0.14 0.13 0.10 0.09 0.06 0.05 0.04 0.03 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.09
23,459 21,961 19,151 13,534 11,649 10,151 10,131 7,644 6,309 8,066 6,610 6,015 6,339 4,677 3,184 4,513 4,607 4,865 3,809 3,137 2,523 2,695 2,245 1,082 1,351 820 357 824 403 434 241 271 125 117 113 43 103 73 0 17 128 90 0 3 0 0 97 66 194,032
3.47 -5.75 -9.58 1.98 4.78 13.89 12.08 -4.50 11.67 -14.18 -4.67 1.96 -6.70 16.59 64.54 10.04 -0.26 -10.17 -4.86 1.75 7.73 -3.93 -8.86 48.61 16.88 38.54 210.64 16.38 74.94 3.00 11.62 -8.12 51.20 54.70 7.96 127.91 -28.16 -6.85 0.00 5.88 -96.88 -98.89 0.00 -100.00 0.00 0.00 -36.08 178.79 2.41
144,095 112,412 96,394 71,985 63,121 67,652 61,748 44,144 38,539 47,333 38,017 34,541 31,333 30,186 24,138 31,120 22,278 26,114 23,259 16,839 20,062 14,598 11,895 11,048 7,682 5,188 4,436 5,689 2,716 2,184 1,436 1,422 976 868 645 505 584 403 26 153 110 3 0 0 0 0 323 872 1,119,072
12.09 11.32 9.87 6.98 6.00 5.23 5.22 3.94 3.25 4.16 3.41 3.10 3.27 2.41 1.64 2.33 2.37 2.51 1.96 1.62 1.30 1.39 1.16 0.56 0.70 0.42 0.18 0.42 0.21 0.22 0.12 0.14 0.06 0.06 0.06 0.02 0.05 0.04 0.00 0.01 0.07 0.05 0.00 0.00 0.00 0.00 0.05 0.03
12.88 10.05 8.61 6.43 5.64 6.05 5.52 3.94 3.44 4.23 3.40 3.09 2.80 2.70 2.16 2.78 1.99 2.33 2.08 1.50 1.79 1.30 1.06 0.99 0.69 0.46 0.40 0.51 0.24 0.20 0.13 0.13 0.09 0.08 0.06 0.05 0.05 0.04 0.00 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.03 0.08
2014 change
% market
%
144,178 113,305 92,012 70,258 60,070 57,405 52,666 42,214 35,534 47,744 36,816 33,589 32,699 25,787 15,943 25,992 22,267 28,407 25,117 15,935 17,187 16,408 11,045 4,734 8,034 3,874 1,276 4,555 2,060 2,387 1,008 1,070 638 651 430 181 683 388 0 73 872 2,736 5 19 1 1 365 355 1,058,974
13.61 10.70 8.69 6.63 5.67 5.42 4.97 3.99 3.36 4.51 3.48 3.17 3.09 2.44 1.51 2.45 2.10 2.68 2.37 1.50 1.62 1.55 1.04 0.45 0.76 0.37 0.12 0.43 0.19 0.23 0.10 0.10 0.06 0.06 0.04 0.02 0.06 0.04 0.00 0.01 0.08 0.26 0.00 0.00 0.00 0.00 0.03 0.03
-0.06 -0.79 4.76 2.46 5.08 17.85 17.24 4.57 8.46 -0.86 3.26 2.83 -4.18 17.06 51.40 19.73 0.05 -8.07 -7.40 5.67 16.73 -11.03 7.70 133.38 -4.38 33.92 247.65 24.90 31.84 -8.50 42.46 32.90 52.98 33.33 50.00 179.01 -14.49 3.87 0.00 109.59 -87.39 -99.89 -100.00 -100.00 -100.00 -100.00 -11.51 145.63 5.68
sponsored by
Monthly used values show first rise since november month to £3,308. Year-on-year the average value was up 7.5%, or £231. May is typically a quieter month for the part-exchange sector, said Daren wiseman, valuations services manager at Manheim auctions. He said buyers like to keep their cards close to their chest as they wait to see what units join the market following the recent plate-change and this year the May market was affected by the general election as well as the usual bank holidays.
trade-in disposal Bca reported that its average value for dealer part-exchanges reached a record level for the second straight month, up £49 or 1.1% to £4,397. Year-on-year trade-in values were up £349, or 8.6%. at Manheim’s auction rooms, the average part-exchange value for March was down £59, or 1.8%, month-on-
U s e D c a r Va l U e t r e n D s
inflation
Fleet/leasing May 2014 May 2015 39.71
0.1%
39.90 46,225
the cPi annual inflation rate in May was 0.1%, up from -0.1% in april. the office for national statistics said the largest contributors were rises in prices for transport services, food and motor fuels.
47,732 £9,537 £9,719 95.92% 96.39%
Part-exchange May 2014 May 2015 87.95
House prices
+0.9%
88.74 70,715 69,744
House prices in april were up 0.9% since March, according to data from the land registry. the year-on-year increase was 5.1%, which takes the average value of houses in england and wales to £179,817.
£4,048 £4,397 95.09% 95.60%
Nearly new May 2015
Mortgages
8.62
➡
retail stock acquisition Bca’s average ex-fleet car value rose £19 from april’s record £9,700. the £9,719 average retail stock value for May was up 2%, or £182, year-on-year. Bca’s UK operations director simon Henstock said: “Demand was strong in May, with average values for fleet and dealer part-exchange continuing to rise to record levels.” Manheim’s Market analysis for May showed the average selling price of ex-fleet vehicles fell £360, or 4.7%, from april to £7,158. the average value was up £194, or 2.8%, year-on-year.
econoMic i n D i c at o r s
➡
Used car wholesale values recorded a month-on-month rise in May, the first nationwide increase after five months of decline, according to the national association of Motor auctions. the average value of all cars was £5,400, an uplift of £172 or 3.2% compared with april’s average. the average value was 0.4% or £20 below May 2014, however. May’s volume of used cars through auctions dropped by 12,109 units, or 10%, to 106,752 units, continuing a decline since March’s peak, however remaining 3% up year-on-year. the firsttime conversion rate dropped for the third consecutive month from 75% to 72.7%, which was slightly behind the 73.4% recorded during March 2014.
Year-onYear
8,591
-0.5%
£21,039 99.59% Average age (months) Average mileage Average value Sales vs CAP
manheim Fleet £ manheim Part ex £
Bca Fleet £ Bca Part ex £
10,000 9,537
9,448
9,411
9,593
9,445
9,533
9,633
9,478
9,673
9,670
9,700
9,719
Unemployment
9,126
➡
-1.1ppts
8,000 7,376
7,273
6,964
7,260
7,135
7,045
6,948
7,358
7,319
4,041
7,318
7,518 7,158
the unemployment rate for february to april 2015 was 5.5%, down from 6.6% a year earlier, according to the office for national statistics. the number of people unemployed is currently 1.81 million.
6,693
6,000
4,000
3,973
4,065
4,032
4,059
3,077
3,125
3,130
3,162
3,162
May 14
Jun 14
Jul 14
aug 14
sep 14
4,136
4,188
4,113
4,075
3,390
3,395
3,383
3,268
Dec 14
Jan 15
oct 14
nov 14
3,536
3,438
Mar 15
4,348
4,397
3,367
3,308
Pay
+2.7%
apr 15 May 15
12 months to apr 2015 11,131 1,080,600
change on previous year +16% +11%
40,398
– 18%
Source: FLA
Used cars bought on finance through dealerships apr-15 change on 3 months to change on previous year apr 2015 previous year Value of advances (£m) 1,058 +19% 3,107 +16% number of cars 101,506 +15% 299,262 +12% Used cars bought on finance by businesses through dealerships number of cars 3,080 –31% 10,436 – 1%
feb 15
4,184
➡
2,000
4,048
Home-owner house purchase lending fell in april compared with both the previous month and with april 2014, according to the council of Mortgage lenders. the number of loans advanced totalled 48,200, down 0.5% on March and down 11% on the same month in 2014.
the average weekly wage, including bonuses, from february to april, was £493, a rise of 2.7% over the same period a year earlier. excluding bonuses, wages were £462, still up by 2.7%.
am-online.com July 2015 17
Opportunities, threats and solutions in the used car market The AM conference for UK’s used car dealers
Tuesday, October 20 Hilton St Georges Park, Burton Upon Trent DE13 9PD
After six years of growth in used car values and strong profits for many dealers, the horizon remains bright for 2015, but it also brings a new set of opportunities and threats. We will place a number of them under the microscope at our event where our industry experts will provide scrutiny, insight and solutions. Some of the factors we will be exploring include: • A progressively older vehicle parc • Sourcing high quality stock which matches demand • Returning vehicles from previous PCP incentives • A new era of austerity could give rise to more cautious consumers • The impact on residual values of manufacturer new car market aspirations
Headline sponsor:
For more details, or to book visit www.usedcarconference.co.uk
SHOWROOM 77
THE CARS DRIVING YOUR BUSINESS
Suzuki S-Cross
Members of Suzuki’s dealer network are very satisfied with the brand, according to the results of an NFDA survey.
FIRST DRIVE SSANGYONG TIVOLI – ON SALE NOW
On an off-road recruitment drive
SsangYong has urbanised its look in recent years and the Tivoli is the result
SsangYong says it has the right “We have seen car to help it triple registrations. But does it have the right dealers? much more high-profile By Danielle Bagnall dealers sangYong has a big recruitment drive ahead of it for franchised dealers, and the new Tivoli SUV will play contacting us, a central role in that expansion. “Yes, our focus is getting more dealers on board, wanting to but we want a good network,” said SsangYong chief work with us, executive Paul Williams. Some of that will come from training and developing its existing network, but some of it will come which is great” from bringing in new franchisees to replace sites that are not
S ‘
performing. Or, as Williams puts it: “Change ‘em or change ‘em.” “We are investing heavily in training and support for our dealers – we have regular training at both our sales and technology academies. Some of our training and development
74 July 2015 am-online.com
Paul Williams, SsangYong
programmes are also accredited with the Institute of the Motor Industry (IMI). We want to develop our dealers to be more competent at the day-to-day duties. Working with the dealer not only helps us, but them too. “We have seen much more high-profile dealers now contacting us, wanting to work with us, which is great.” The Korean manufacturer describes itself as a specialist SUV maker. It currently has 52 dealers in its network, with 15 authorised repairers. Its plan is to have 65 franchised dealers by the end of the year, with authorised repairers down to 12. At the end of 2016, it expects to have 78 dealers within its network, and just nine authorised repairers. Williams said it intends to do away with authorised repairers completely. SsangYong sees the new Tivoli as the start of something great for the brand. Williams said the manufacturer has stepped up its game in development. SsangYong has gone through an urbanisation in recent years. The Tivoli, is the spawn of that journey – off-road (the 4x4 version arrives in September), but urban-adapted. To drive the Tivoli and its other models – Rexton, Korando,
F O R M O R E R E V I E W S V I S I T: w w w . a m - o n l i n e . c o m / r o a d t e s t s
S P EC I F I C AT I O N
The 4x4 version of the Tivoli arrives in September
Price From £12,950 Engine 1.6-litre petrol 126bhp (tested) Performance 0-62mph 12 seconds Transmission 6-spd manual, 6-spd auto Efficiency 44.1mpg 149g/km RV 3yr/30k TBA Rivals Nissan Juke, Jeep Renegade
67
The total number of SsangYong UK sites now
87 The My Tivoli programme allows customers individualisation options
The total number it plans to have by the end of 2016
WHAT YOUR CUSTOMERS WILL READ ABOUT THE SSANGYONG TIVOLI
Korando Sports, Turismo – forward in the market, it has launched a £1 million advertising campaign (three times its budget last year), which is a significant amount of money for the Korean manufacturer. It includes a prime-time TV slot. Williams’s focus is to get cars on the road: “The more cars on the road, the fresher our badge is in buyer’s minds”. Currently, the Tivoli is available only in a 126bhp e-XGi160 petrol variant, until the 113bhp e-XDi160 diesel engine arrives in September. Both variants are Euro6-compliant. Two transmissions are available; a six-speed manual and an AISIN six-speed automatic. The petrol and diesel engines with manual transmission come with stop-start technology. The 1.6-litre petrol emits 149g/km of CO2 with start-stop (154g/km without), with the diesel achieving 109g/km with and 113g/km without. “Engine variant popularity will be evenly split we think, between the diesel and the petrol,” said Williams. The model is available in three main trim options; SE, which is available from £12,950, with grey cloth upholstery and 16” alloy wheels. EX starts from £14,600 and adds the option of diesel automatic and diesel 4x4 manual, with grey
or beige leather upholstery, 18” spiral alloy wheels, a 7” touch screen infotainment system (with MirrorLink technology), rear view camera, heated seats, front fogs, and luggage load cover. At the top of the range, the ELX starts from £16,000 and adds keyless start, front and rear parking sensors, privacy glass, auto headlamps and TomTom sat-nav. The My Tivoli programme, which offers a wide range of further choices, is available to customers requiring further individualisation. “This is a car that will really put SsangYong on the map,” said Williams. “Ultimately, it’s the customer who wins: this is a modern, safe, well-built and comprehensively equipped car, and with a price and warranty no one else can match.” Current market rivals include the Nissan Juke, which starts from £13,620, the Suzuki Vitara, which looks rather similar to the Tivoli, but its lowest starting point is £1,049 more, and the Jeep Renegade – the cheapest model available with leather seats is £21,195. SsangYong has experienced marked growth since 2012 and registrations for the brand are up 53% for the year to May on the same period a year earlier. It registered 1,542 new vehicles in 2014, according to the SMMT, but SsangYong’s prediction for 2016 is 5,500. The brand also recently opened a parts facility in The Netherlands, allowing parts to be ordered and delivered in the UK within 24 hours. As the brand recruits more dealers and starts to build and sell more cars, it plans to talk to fleet specialists with a view to building that side of the business.
AUTO TRADER Inoffensive styling, loads of space and superb kit go a fair way to compensating for average performance, a bouncy ride and high CO2 – but it has all its rivals beaten on price. Definitely worth a look. THE TELEGRAPH It’s surprisingly roomy for a car less than 4.2m long and 1.6m high – certainly big enough for a family of four – and there’s a commendably spacious boot, which will be split-level in upper-trim models. CAR BUYER The Tivoli isn’t the last word in build quality or fuel economy, but it handles neatly, offers lots of cabin space and looks good. We expect buyers choosing it will still be motivated primarily by value for money and it’s certainly worth considering if this is more important to you than a fashionable badge.
am-online.com July 2015 75
C O N TA C T U S
IN AUGUST’S ISSUE PUBLISHED JULY 24
AM, Media House, Lynch Wood, Peterborough PE2 6EA Email: AM@bauermedia.co.uk If you or someone you know are aged 16-24 and are interested in work experience opportunities at Bauer Media, go to www.gothinkbig.co.uk Editor-in-chief Stephen Briers 01733 468024 Managing editor Tim Rose 01733 468266 Associate editor Jeremy Bennett 01733 468261 Senior reporter Danielle Bagnall 01733 468343 Industry editor Tony Willard AM production Head of publishing Luke Neal 01733 468262 Production editor Finbarr O’Reilly 01733 468267 Designer Erika Small 01733 468312 Contributors Chris Lowndes, Philip Nothard, Prof Jim Saker, Richard Yarrow
Face To Face: Progress Škoda
AM advertising Commercial director Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Head of project management Leanne Patterson 01733 468332 Project managers Kerry Unwin 01733 468327 Angela Price 01733 468338 Lucy Peacock 01733 468338 Account managers Sara Donald 01733 366474 Richard Kerr 01733 366473 Kelly Crown 01733 366364 Recruitment enquiries Richard Kerr 01733 366473
Managing director Terence Byrne shares his thoughts on Škoda coming last in the recent National Franchised Dealers Association satisfaction ratings, and tells of his plans to expand his business slowly to retain its current processes and values.
In the name of efficiency
AM publishing Managing director Tim Lucas 01733 468340 Office manager Vicky Meadows 01733 468319 Group managing director Rob Munro-Hall Chief executive officer Paul Keenan
We examine how franchised dealers have refined their businesses and gain expert input on how to make further savings in motor retail.
Kia’s eyes on the 100,000 sales prize Kia Motors UK chief executive Paul Philpott explains how the brand is progressing towards its ‘Vision 100’ of 100,000 sales in 2020.
ADVERTISERS’ INDEX
Subscriptions 01635 588494. Annual UK subscription £99, two years £168, three years £238. Overseas one year/12 issues £149, two years £253, three years £358.
First drive: Volvo XC90 This new seven-seat SUV is a premium-grade game-changer for the Volvo network.
Flagpole Express.......................................47
Motors.co.uk ................................................26
GForces .........................................................55
Pro-Driver ....................................................67
Infomedia......................................................84
Really Good Domains................................35
Institute Of The Motor Industry.............60
Ridgeway Group .........................................80
ASE .......................................................... 34/48
iVendi..........................................................9/54
Smart Insurance Services ......................59
Autoclenz .....................................................72
JCT600 ..........................................................79
SMC Ford ......................................................81
Barclaycard Loans.....................................30
Jewelultra ..............................................62/64
Steele-Dixon & Associates ....................80
BCA ..........................................................72/78
Lawdata.........................................................73
Supagard................................................65/73
Call It Automotive.......................................52
Listers Group Recruitment.....................81
Symco Training ...........................................10
CAP Network...............................................18
Lloyd Motors................................................79
Total Telephone Solutions.................56/81
CDK Global ............................................42/70
Lloyds Banking Group..............................12
Tracker Network........................................47
Chris Eastwood Automotive...................80
Manheim Retail Services...............2/11/23
Trader Publishing ......................................76
Dealer Management Services ...............66
Mapfre Abraxas............................................6
UHY Hacker Young Manchester ............40
Finance & Leasing Association..............32
MHA Macintyre Hudson...........................68
Vertu Motors......................................... 78/80
82 July 2015 am-online.com
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