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AUTOMOTIVE MANAGEMENT
Carmaker unveils its soft, Swedish retail experience
AFTERSALES / P35
FIGHT THE FAST-FITS 14 pages of best-practice advice on defending your business from aftermarket invaders VA U X H A L L M D T I M T O Z E R / P 3 1
‘I don’t think we should be running retailers’ businesses for them’
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This year’s conference explores the 21st century workplace and looks at how it may change to meet the challenges of today, tomorrow and beyond as well as taking a closer look at the current issues and potential solutions. The one aspect which continues to set businesses apart from their competition beyond anything else is the people, making your employees the single most important asset of your company. They need to be looked after, nurtured, developed and rewarded to guarantee your on-going success. This conference explores how to attract and retain the best people with forward thinking policies, investment in training and development and ‘out-of-the-box’ ideas.
June 11 2015 – The Park Plaza Riverbank, London (Preceding the AM100 Dinner)
The Institute of the Motor Industry (IMI) and AM have produced its 10 Principles of People Management. Designed as an easy reference guide, a quick check will enable dealerships to benchmark their practices and culture to create an improved workplace which in turn will be good for business. These be referenced to throughout the course of the day.
Co-sponsors
For more information visit: www.ampeopleconference.co.uk or contact Emma-Louise Kinnaird on 01733 395133 or email emma-louise.kinnaird@bauermedia.co.uk
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Dealers must fight for every chance to win back aftersales customers growing new car market has given dealers an opportunity to rebuild their aftersales customer base. However, it has not been an easy journey. To boost the attraction of new cars, many manufacturers have been bundling free or discounted service plans into the offer, risking the erosion of dealers’ retail recovery rates. Dealers have also told us that short-cycle PCPs, such as Ford’s two-year Options plan, give few chances to earn from a service before the customer is brought back in to swap into a new model. This means franchised dealers must do all they can to retain every customer for aftersales. The past 10 years have seen fast-fit chains and independents eat into the franchised networks’ share of the UK aftersales market. If you want to fight back, our insights on page 35, 43 and 47 will help. Volvo Car UK has already started – on page 23, it reveals major changes designed to help its dealers compete better on service. n There have been some structural changes at AM. With our digital business enjoying rapid growth, Jeremy Bennett has moved to become B2B head of digital, overseeing the online side of AM plus our sister brands Fleet News and Rail. He’ll still occasionally write for us as an associate editor. Stephen Briers, Jeremy’s predecessor, is now editor-in-chief of the AM, Fleet News and Commercial Fleet brands. AM managing editor Tim Rose remains day-to-day head of the magazine.
A
Rupert pontin is head of valuations at Glass’s. with more than 29 years’ experience in the motor trade, he has worked for companies such as BcA and car Shop, as well as running his own successful independent used car business. In this issue (p28), he examines how PcPs and manufacturer pressures on volumes are raising concerns of a return to a buyers’ market.
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 (p51), he warns that dealers may need to ignore the statistics on the decline in showroom visits to build a relationship with the customer.
The editorial team Email: am@bauermedia.co.uk Website: www.am-online.com Twitter: @amchatter LinkedIn: am-online.com/linkedin
AM & IM People Con I ference B
ook tic ampeopleckoets today at: nference.co .uk Stephen Briers Editor-in-chief
Tim Rose Managing editor
Jeremy Bennett Associate editor
Danielle Bagnall Senior reporter
June 11, 2 015 am-online.com June 2015 5
In this issue June 2015
47 HOW DEALERS CAN WIN FLEET AFTERSALES BUSINESS
23 VOLVO NEW CI SHOWS A SOFTER SIDE OF THE SWEDISH BRAND
Your news
9
News digest Rockar Hyundai celebrates its 100,000th visitor; JCT600 reports record revenues of £1.025 billion; and Glass’s warns that a surge in nearly new cars indicates manufacturers are pre-registering ever larger numbers.
Market intelligence
15 16 17
Dealer profitability Dealer profits fell in March compared with a year earlier, despite an increase in registrations.
New car finance The percentage of retail new car sales financed through dealerships by FLA members reached a new high of 76.8% in the year to March.
New car registrations April’s new car market ended up 5.1% year-on-year at 185,778
6 June 2015 am-online.com
35 KNOW YOUR ENEMY: WHO’S WHO IN THE FAST-FIT SECTOR
registrations, the strongest April result in a decade.
20
28
Used cars BCA’s data for April showed the headline average value of all used cars sold at its auction centres rose by £348 to £7,872.
31
Analysis
23
Taking on the Germans with a warm welcome
The new Volvo Retail Experience corporate identity standards promise customers premium levels of personal service in the showroom and the workshop.
How pre-reg and PCPs changed the market
PCPs and manufacturer pressure on volumes are raising concerns of a return to a buyers’ market.
Tozer: ‘It really can only get better for Vauxhall’ After a year at the helm, Vauxhall UK managing director Tim Tozer says new cars, a new CI and new retail models give its dealer network a lot to look forward to in 2015.
Insight
35
Fast-fits: Know your enemy
43
10 ways dealers can take on the fast-fits
47
What can franchised dealers learn from their fast-fit rivals?
Dealers, manufacturers and suppliers tell AM how the franchised sector can win back aftersales business.
How franchised dealers can win fleet SMR work
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:
31 VAUXHALL TIM TOZER AFTER A YEAR AT THE HELM
64 FIAT 500X CROSSOVER ADDS ANOTHER PILLAR TO FIAT’S RANGE
Dealers are targeting corporate customers with services such as free collection and delivery and night-time servicing.
51 52 55
Prof Jim Saker’s view from the business school Dealers need to look beyond the statistics on showroom visits and focus on customer relationships.
AM poll
Trends show the aftermarket is in general decline, but most dealers believe their service retention has improved in the past two years.
Get the most from your service team
Best practice advice from the AM Aftersales Conference on increasing sales, boosting retention and taking on the fast-fits.
Showroom
64
Fiat 500X
Fiat hopes its crossover 500X will
widen the brand’s appeal from its city car little brother.
66
MG6
68
Suzuki S-Cross
71
Mazda3
MG is going all-out for retail with the 6 by cutting prices and boosting spec.
Social media and strong offers help to compensate for Suzuki’s limited marketing budget.
It has run well for nine months, but April was not a good month for technology on our 3.
Coming soon
74
In July’s issue – published June 26
We analyse the UK’s 100 largest franchised dealer groups in the AM100 2015 supplement; Face To Face with Hodgson Automotive MD Steve Hodgson; expert advice on effective acquisitions; and the SsangYong Tivoli reviewed.
ACFO ....................................................................47 ASE .......................................................................15 ATS Euromaster...............................................36 Auto Trader........................................................10 Black Horse................................................10, 17 Blackcircles .........................................................9 BMW Group .......................................................48 BMW Group FS...................................................9 Cambria Automobiles ....................................10 Carcraft .................................................................9 CDK Global.........................................................56 Continental Tyres.............................................43 Dealer Management Services ....................43 Emac .............................................................59, 60 FLA .......................................................................16 Ford .......................................................10, 38, 44 GardX Protection .............................................10 GForces...............................................................43 Glass’s...........................................................13, 28 Grass Roots .......................................................56 Halfords Autocentre .......................................36 HiQ.........................................................................38 Hutchings Motor Group ...................................9 ICDP......................................................................55 JCT600.................................................................10 Kernahan Service............................................59 Knights BMW ................................................... 44 Kwik Fit ...............................................................35 Lexus....................................................................45 Lookers ........................................................13, 45 Mini .......................................................................45 Mitsubishi .......................................................... 44 Moneyway ..........................................................10 Moorhouse Group ...........................................13 Motoring.co.uk ..................................................60 National Tyres and Autocare.......................36 NFDA.............................................................15, 17 Ogilvie Fleet .......................................................48 Pendragon..........................................................13 PSA Peugeot Citroën...............................10, 38 Renault ................................................................38 Rockar ...................................................................9 SMMT...................................................................17 Swansway ............................................................9 Sytner...................................................................56 TMS Volvo...........................................................27 Trend Tracker............................................35, 55 Trenton Nissan ...................................................9 Vauxhall........................................................31, 38 Vertu Motors .....................................................13 Volkswagen.................................................10, 38 Volvo .....................................................................23 Zenith Leasedrive.....................................47, 60
am-online.com June 2015 7
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
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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
JCT600
11
JCT600 reported record revenues of £1.025 billion in the year to December 31, 2014.
Pre-registrations A surge in nearly new cars in the retail market shows dealers are pre-registering larger numbers, says Glass’s.
IN BRIEF
ROCk AR
Hyundai ‘digital dealership’ on track for 1,000 sales
CAR FINANCE More consumers spend a significant amount of time researching their next mobile phone than on finding their motor finance, according to a survey from BMW Group Financial Services. Almost three-quarters (73%) of those questioned took up to two months to research finance options for their phones, compared with 60% who spent the same amount of time exploring different car finance options.
BL ACkCIRCLES
Digital car retailer Rockar Hyundai has had 100,000 visitors to its store in kent’s Bluewater Shopping Centre since opening its doors six months ago. Hyundai said the retail concept is on track to account for 1,000 registrations by the end of year. The website, www.rockar.com, has received 78,000 visitors since it launched in November. There have been 500 test drives. Simon
Dixon, chief executive and founder of Rockar, said while the average new car buyer is 56 years old, Rockar’s average customer is just 37. He said 60% of buyers were female – Rockar’s key demographic. The dealer’s data shows 95% of its customers have never owned a Hyundai before. “When looking at the success of Rockar so far, it is clear that challenging the historical
approach to car buying is the way forward,” said Dixon. Customers can complete the entire purchase process online or in store. The buying process, Rockar says, can be completed in less than five minutes. There is “no dealing or haggling”. Rockar Hyundai’s in-store team are known as ‘angels’. They are not salespeople on commission, but product experts “there to advise and lend a helping hand”.
HUTCHINgS MOTOR gROUP
CARCRAFT
Hutchings, which already represents Hyundai and Vauxhall in Pontypridd, near Cardiff, retained all staff. John Hutchings, chairman of Hutchings Motor group, said: “We are extremely pleased to have increased our Hyundai representation across the South Wales M4 corridor, after operating our existing Hyundai dealership in Treforest since 2012. “The acquisition fits very well with our long-term strategy and we are looking forward to welcoming our new colleagues into the business.” UHY Hacker Young advised on the deal.
The group has appointed Grant Thornton to deal with the administration of CC Automotive Group Limited, UK Car Group Limited and Pennine Metals A Limited; trading as The Carcraft Group. Grant Thornton said: “The group operates in a competitive market and has suffered from poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet, all of which have hindered investment. The group also has legacy PPI claims. The group is heavily loss-making, recording losses of about £8m per annum for a number of years.”
Hutchings Motor group has bought Arrow Hyundai businesses in Bridgend and Swansea.
Used car supermarket group Carcraft has gone into administration and ceased trading.
Online tyre retailer Blackcircles.com has been sold to Michelin for £50 million, making its founder, Mike Welch, a multi-millionaire. Welch founded the business 15 years ago at the age of 21, and developed it into a ‘click and fit’ model whereby customers buy their tyres online and select a workshop from a network of 1,350 partnering independent garages, to which the tyres are delivered for fitting.
TRENTON NISSAN Trenton Nissan in Hull has applied to build a new dealership on a greenfield site at Altyre Way in Grimsby. The site is owned by Bramall Properties. Hartwell currently represents Nissan in Grimsby.
S WA N S WAY Swansway Group has announced plans to invest £3.5million into rebuilding its Honda dealership on Queensway in Rochdale. The whole site will be redeveloped as a state-of-the-art Honda centre, but will also include a new Volkswagen van centre.
am-online.com June 2015 9
NEWS DIGEST PSA
PSA bosses have revealed how they were tackling the “incredibly disappointing” opinion dealers have of Peugeot and Citroën. The most recent National Franchised Dealers Association Dealer Attitude Survey – winter 2015 – saw dealers score both brands below average, when asked the critical question ‘how would you rate your manufacturer overall?’. They suffered the worst decline since the summer survey, alongside Škoda. “Citroën’s score of 5.1 (out of 10) is the lowest for some time and has fallen from a score in line with the average to one significantly beneath,” the NFDA said. “Peugeot’s score has for some time been beneath average, but the score of 4.9 for this survey moves them to third from bottom in the table.” Bek Hassan, Citroën Uk brand director, said: “The NFDA survey results were extremely disappointing. As a result, we’re talking about what can be done to address them. We’re putting together dealer forums to find out what the issues are, through open dialogue.” Neil Moscrop, Peugeot Uk brand director, believed one cause was the disruption of reorganisation at PSA. The two said 75% of the PSA UK network (185 Citroën dealers, 221 Peugeot) are profitable. The average return on sale is 1.2% for Citroën and 1% for Peugeot.
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
CAMBRIA AUTOMOBILES
Cambria Automobiles reported a large boost in profits and turnover for the six months to February 28, up 63.8% and 18.6% respectively on the same period a year earlier. PBT is at £3.3 million on turnover of £242.8 million, with a profit margin of 1.36% - up 39% from 0.98%. Mark Lavery, right, chief executive, said: “Cambria continues to develop its existing business and to deliver further growth through acquisitions.” He said the board was actively pursuing further acquisitions. New vehicle revenue increased by 31% to £109.4m (H1 2014: £83.5m) with total new vehicle sales up 15.6%. The new vehicle gross profit margin was 6.6% (H1 2014: 6.7%) and there was a £1.6m increase in gross profit. On a like-for-like basis, excluding the acquisition of Hadley Green Land Rover and Jaguar in Barnet, new volumes rose by 8.8%. Sale of new vehicles to private individuals was 12.7% higher year-on-year at 4,585 units, new commercial vehicle sales increased by 35.2% to 511 units, while new fleet vehicle sales increased by 36.4% to 266 units. Used vehicle sales were up 2.9% from 6,906 to 7,106 units. Used gross profit increased by 11.2% to £9.9m (H1 2014: £8.9m), with the profit per unit sold increasing by 8.3%. Aftersales revenue increased 6.2% year on year to £29m (H1 2014: £27.3m), and the related gross profit increased to £12.4m (H1 2014: £11.6m).
Bradford-based JCT600 reported record revenues of £1.025 billion in the year to December 31, 2014, an increase of 13% from the previous year’s total of £906 million.
10 June 2015 am-online.com
CHRIS SUTTON Black Horse managing director Chris Sutton is to retire this summer. Richard Jones has been appointed to replace him at Black Horse, the motor finance arm of Lloyds Bank. Jones is expected to assume the role in July, subject to FCA approval. Sutton, who will retire after a 28-year career with Lloyds, will remain within the business until October.
kEVIN BROWN Volkswagen Van Centre Birmingham has appointed Kevin Brown as its new head of business. Brown joined the St Stephens Street business as its aftersales manager last September and following his new appointment has launched a major push to become a flagship site.
D AV I D k E E N S Former Next Group finance director David Keens has been appointed to the board of automotive classifieds company Auto Trader Group. Keens has joined as a non-executive director and will also serve as its senior independent director and chairman of its audit committee. He was previously at Next, serving as group treasurer from 1986 to 1991 and group finance director from 1991 to 2015.
J C T6 0 0
Operating profit before goodwill and exceptionals rose by 14% to £23.2m in 2014, with gross margins almost static at 11.7% (11.8% in 2013). “Following our acquisitions from Gilder Group in 2013, last year was about bringing the new businesses into the JCT600 fold, and furthering our aims to grow the best car retail business, as well as being the best place to shop for a car,” said JCT600 chief executive John Tordoff. Building on significant increases in volume of new car sales in previous years, JCT600 once again outperformed the market with the company’s new car sales increasing by 12% compared with the UK average rise of 7%, and, after significant increases in recent years, the firm consolidated its used car business with growth in sales of 1% during the period.
PEOPLE NEWS
FORD VIgNALE
Ford’s new top-specification models, badged Vignale, are the manufacturer’s latest attempt to slow customer desertion to german brands. To further tempt motorists to stay, Ford is promising a more personal, premium experience from its dealerships for Vignale drivers. This will include a Vignale relationship manager as the single contact for a Vignale driver’s queries, guaranteed free collection and delivery for aftersales, free car wash every month and discrete Vignale waiting areas in the FordStores – 55 large metropolitan dealerships within Ford’s UK network – that are allowed to sell Vignale models. The roll-out starts with Vignale Mondeo in September, then S-Max next year. Kuga and Edge versions may follow. Jon Wellsman, customer services director at Ford of Britain, said Vignale is intended to retain customers, particularly corporate user-choosers, who have already had a couple of high-spec Mondeo or S-Max models and are thinking of swapping into a premium brand. These are expected to represent 70% of the take-up of the Ford Vignale Mondeo.
ASHLEY ROBSON F&I product provider GardX Protection has appointed Ashley Robson as regional account manager. Robson has more than 14 years of automotive insurance experience, and has worked previously for Mapfre Abraxas and more recently, Car Care Plan.
RICHARD COx Motor finance provider Moneyway has appointed Richard Cox as its new transformation manager. Cox joins Moneyway from The Funding Corporation (TFC), where he spent 15 years, most recently holding the position of head of operations.
market intelligence 16
17
dealer finance
the percentage of retail new car sales financed by Fla members reached a new high of 76.8% in the year to march.
the news in depth
18
new cars
growth in fleet registrations helped april to its strongest result in a decade, up 5.1% year-on-year with 185,778 registrations.
Used cars
sponsored by
Bca’s data for april showed the headline average value of all used cars sold at its auction centres rose by £348 to £7,872.
dealer profits fall despite growth in registrations average dealer made £80,000 in Q1, down from £95,000 in 2014 despite 5% rise in turnover he average UK motor dealership made a profit of just under £93,000 in March. it fell below the March 2014 figure of £96,000, said dealer performance specialist Ase. mike Jones, aSe chairman, said: “More significantly, we have seen a decline in the quarterly profit from £95,000 in 2014 to just under £80,000 in Q1 2015. this is in spite of a 5% increase in average dealer turnover. “this is tangible proof that the movement in dealer targets has resulted in a decline in profit, even though they are registering more cars than they did in 2014. Looking at new car sales, the average dealer sold the same number of vehicles in March 2015 as they did in the prior year, with a marginal decline in the quarter as a whole. this variance from the sMMt new car statistics, which show an increase of 6.8%, is tangible evidence of an increase in selfregistrations, said Jones. “we see further evidence of this
t
through dealers’ used car stocks, which increased 28% on average during March. (see Rupert pontin on ‘how pre-reg and pCps have changed the shape of the market’ on page 28). “this represents the highest overall level we have seen and a 13% increase on March last year. “this may even be understating the situation as some dealers hold self-registered cars outside used vehicle stock until they are available for sale.” the increase in stock produced a significant fall in used car return on investment despite a 7% increase in unit sales sales on the prior year. “with April looking like producing another registration increase the profitable disposal of self-registered cars is absolutely key to overall 2015 profitability,” Jones said. At the national Franchised Dealers association, head of business development louise Wallis said there are a combination of factors which have been impacting dealer profitability. “there have been general
deALeR Kpis Key ratio
net profit as % sales Overhead absorption Used: new sales expenses as % gross Sales per salesman Used vehicle stockturn (days) return on used car investment Overall labour efficiency Service gross profit % on labour Service expenses as % gross Hours per retail job card Parts gross profit Parts expenses as % growth Parts stockturn
Source: ASE
Rolling 12 months Mar 2015 1.34% 54.7% 0.88:1 63.4% 185 56 76.0% 82.2% 75.7% 58.9% 1.62 22.3% 44.2% 7.5
comments from our members that their margins on vehicles have been tighter. therefore, that has an impact on profitability. it won’t all be about volume and margins, however. the cost base has been rising with additional red tape such
Rolling 12 months Mar 2014 1.55% 57.3% 0.88:1 61.7% 202 56 81.2% 81.4% 75.9% 56.7% 1.65 22.4% 44.4% 7.7
Source: ASE
1.60% 1.55%
1.55%
3.0% 80% 1.5:1 50% 150 45 100% 100% 75% 40% 2.5 22% 40% 8.0
as FCA regulation on consumer credit. “there are also a lot of demands for showroom changes and rebuilds at the moment, which all goes to attack the bottom line of the dealers,” she said.
RetURn on sALe s (%) 1.55%
Benchmark
1.54% 1.52%
1.51%
1.50%
1.50%
1.49% 1.47%
1.46%
1.48%
1.45%
1.42%
1.40%
1.37%
1.35% 1.34%
1.30% 1.25% 1.20%
Mar 14
Apr 14
May 14
Jun 14
Jul 14
Aug 14
sep 14
oct 14
nov 14
dec 14
Jan 15
Feb 15
Mar 15
am-online.com June 2015 15
MARkeT INTeLLIGeNCe
sponsored by
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
6
1 2 3 4 5 6 7 8 9 10
BRAND Jeep Infiniti Mitsubishi Lotus Maserati SsangYong MG Mini Subaru Porsche
YTD (%) 262.02 194.93 158.49 141.07 64.98 53.41 52.15 48.12 46.81 32.68
r i ser s & fa l l er s
Jeep remains at the top of the risers’ table for the second month running, now that the brand has real focus and impetus. its growth has slowed, however, from 280.2% at the end of March to 262% in april. infiniti, having launched its Q50, has leapt to second place, albeit its rise from 138 units to 407 is rather modest compared with Jeep’s. among the fallers, Honda’s decline of 7.85% will be halted later this year when its new Hr-V crossover arrives, and alfa romeo’s two-car range continues to struggle to keep up with the market while desperately awaiting support from its planned BMw 3 series rival. 10 9 8 7 6 5 4 3 2 1
BRAND Honda Jaguar Alfa Romeo Bentley Suzuki Chrysler Chevrolet Mia Perodua Proton
YTD (%) -7.85 -8.68 -11.06 -12.07 -12.43 -85.75 -99.92 -100.00 -100.00 -100.00
10
18 June 2015 am-online.com
Marque
April 2015 share
Ford Volkswagen Vauxhall Audi BMW Mercedes-Benz Nissan Peugeot Škoda Toyota Hyundai Citroën Kia Land Rover Renault Mini Fiat Seat Volvo Mazda Honda Dacia Suzuki Mitsubishi Porsche Jaguar Lexus Smart Jeep MG Alfa Romeo Subaru Infniti SsangYong Abarth Maserati Bentley Aston Martin Lotus Chrysler Chevrolet Mia Perodua Proton Saab Other British Other imports Total
25,018 18,690 16,538 13,264 10,891 10,082 9,844 7,498 6,688 6,634 6,628 6,458 6,143 5,549 4,140 3,938 3,695 3,525 3,056 2,614 2,471 2,320 1,819 1,470 1,322 1,151 1,044 701 605 308 299 223 175 165 159 148 103 71 47 10 0 0 0 0 0 95 179 185,778
% market share
2014 % market change
% share
Year-to-date 2015 % market share
13.47 10.06 8.90 7.14 5.86 5.43 5.30 4.04 3.60 3.57 3.57 3.48 3.31 2.99 2.23 2.12 1.99 1.90 1.64 1.41 1.33 1.25 0.98 0.79 0.71 0.62 0.56 0.38 0.33 0.17 0.16 0.12 0.09 0.09 0.09 0.08 0.06 0.04 0.03 0.01 0.00 0.00 0.00 0.00 0.00 0.05 0.10
25,843 14.62 16,590 9.38 17,052 9.64 12,958 7.33 10,484 5.93 8,736 4.94 9,446 5.34 7,245 4.10 6,053 3.42 6,838 3.87 6,122 3.46 6,028 3.41 5,966 3.37 4,381 2.48 3,454 1.95 2,992 1.69 4,760 2.69 3,637 2.06 2,889 1.63 2,177 1.23 3,043 1.72 1,979 1.12 2,193 1.24 925 0.52 914 0.52 1,209 0.68 691 0.39 367 0.21 203 0.11 221 0.12 377 0.21 129 0.07 22 0.01 84 0.05 114 0.06 130 0.07 108 0.06 58 0.03 13 0.01 154 0.09 85 0.05 0 0.00 4 0.00 0 0.00 0 0.00 66 0.04 80 0.05 176,820
-3.19 12.66 -3.01 2.36 3.88 15.41 4.21 3.49 10.49 -2.98 8.27 7.13 2.97 26.66 19.86 31.62 -22.37 -3.08 5.78 20.07 -18.80 17.23 -17.05 58.92 44.64 -4.80 51.09 91.01 198.03 39.37 -20.69 72.87 695.45 96.43 39.47 13.85 -4.63 22.41 261.54 -93.51 -100.00 0.00 -100.00 0.00 0.00 43.94 123.75 5.07
119,822 79,078 91,714 58,183 50,915 50,393 56,091 40,411 25,419 36,844 31,494 31,716 28,408 26,154 24,733 18,899 21,744 17,683 13,647 17,344 19,635 9,849 12,009 9,440 4,052 6,103 4,730 2,011 3,327 1,167 1,737 1,173 407 787 687 523 510 335 135 106 2 0 0 0 0 261 688 920,366
13.02 8.59 9.96 6.32 5.53 5.48 6.09 4.39 2.76 4.00 3.42 3.45 3.09 2.84 2.69 2.05 2.36 1.92 1.48 1.88 2.13 1.07 1.30 1.03 0.44 0.66 0.51 0.22 0.36 0.13 0.19 0.13 0.04 0.09 0.07 0.06 0.06 0.04 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.03 0.07
2014 change
% market
%
120,719 72,861 91,344 56,724 48,421 42,535 47,254 39,678 26,360 34,570 29,225 30,206 27,574 21,479 21,110 12,759 23,542 17,660 12,798 14,664 21,308 8,800 13,713 3,652 3,054 6,683 3,731 1,657 919 767 1,953 799 138 513 534 317 580 315 56 744 2,646 5 16 1 1 268 289 864,942
13.96 8.42 10.56 6.56 5.60 4.92 5.46 4.59 3.05 4.00 3.38 3.49 3.19 2.48 2.44 1.48 2.72 2.04 1.48 1.70 2.46 1.02 1.59 0.42 0.35 0.77 0.43 0.19 0.11 0.09 0.23 0.09 0.02 0.06 0.06 0.04 0.07 0.04 0.01 0.09 0.31 0.00 0.00 0.00 0.00 0.03 0.03
-0.74 8.53 0.41 2.57 5.15 18.47 18.70 1.85 -3.57 6.58 7.76 5.00 3.02 21.77 17.16 48.12 -7.64 0.13 6.63 18.28 -7.85 11.92 -12.43 158.49 32.68 -8.68 26.78 21.36 262.02 52.15 -11.06 46.81 194.93 53.41 28.65 64.98 -12.07 6.35 141.07 -85.75 -99.92 -100.00 -100.00 -100.00 -100.00 -2.61 138.06 6.41
mArKet iNtelligeNCe
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ECONOMIC I N D I C AT O R S Pay
Fleet/leasing Apr 2014 Apr 2015 39.79
+1.9%
39.74
The average weekly wage, including bonuses, between January and March, was £489, a rise of 1.9% over the same period a year earlier. Excluding bonuses, wages were up by 2.2%.
46,093 46,044 £9,624 £9,700 95.67% 96.53%
Borrowing
Part-exchange Apr 2014 Apr 2015 87.62
➡
A prediction that PCP residuals will dip 10-15% by the end of 2016, threatening early new contract sign-ups, has provoked a mixed reaction among lenders. Bill Parfitt, automotive advisory consultant for grant thornton, and former managing director and chairman of General Motors UK, was speaking at a webinar hosted by Grant Thornton. He said auction trading on three-year values may well have peaked, adding: “It looks increasingly unlikely the level of equity [in PCPs] people have so far enjoyed will be available.” Parfitt said Manheim research suggests 80% of customers expect equity in a PCP at full term, adding that manufacturers would increase their support in finance products. “Individual contracts will get longer as residuals weaken – we’re already seeing five-year terms,” he said. Julian rance, head of Paragon Car Finance, said: “Residual values will fall as used car prices soften, potentially pushing up monthly payments and making new car PCPs less competitive against used cars than at present.” Karl Werner, head of sales & marketing at motoNovo Finance, said: “PCPs are great retention products. We must not turn this value on its head by placing the customer in a position that means they become disenfranchised from their dealer.” Kirk Franks, head of national sales at Alphera Financial Services UK, said there was little concern among dealers and brokers around negative equity. Retention levels remained strong, he said.
YEAR-ONYEAR
➡
Predicted fall in residual values puts PCP retention at risk
+4.4%
88.72
Unsecured borrowing via loans and credit cards is growing at its highest rate since autumn 2010, at 4.4%, which reflects improved consumer confidence, said the British Banking Association. 219 million purchases were made using credit cards during March, with a total value of £12.7 billion.
70,018 69,548 £3,982 £4,348 93.30% 95.52% Nearly new Apr 2015
U S E D C A R VA L U E T R E N D S
Unemployment
-1.3ppts
9,014 £20,673 99.00%
The unemployment rate for the three months ending March 2015 was 5.5%, down from 6.8% a year earlier, according to the Office for National Statistics. The number of people unemployed is now 1.83 million.
Average age (months) Average mileage Average value Sales vs CAP
Shopping
➡
averaged £4,348, another record and a rise of £164 or 3.9% month-onmonth. The figure was £366 or 9.2% higher than in April 2014. Nearly-new values improved month on month for the first time this year, to £20,673. Simon Henstock, BCA’s UK operations director, said: “Despite plenty of potential distractions in the form of Easter bank holidays and the General Election, buyer demand was strong, reflecting an underlying confidence from the trade to acquire stock.”
➡
Neither Manheim nor the National Association of Motor Auctions had published their April used car market data by the time this issue of AM went to press. However, BCA’s data for April showed the headline average value of all used cars sold at its auction centres rose by £348 to £7,872. Ex-fleet cars averaged £9,700 in April, a new record and up £30 on the previous month. Average age and mileage in April was £76 or 0.7% higher than in 2014. Dealer part-exchanges at BCA in April
8.66
-2.4%
Source: BCA
£25,000 £21,502
£20,898
£21,468
£21,711
UK retail sales in April fell 2.4% on a like-for-like basis from April 2014, according to the British Retail Consortium. However, it said the figures are distorted by the inclusion of the build-up to Easter in March this year against April last year, and the three-month average, which removes that distorting effect, showed the strongest underlying growth since June.
£23,075
£22,876 £20,934
£21,168
£21,677
£21,403 £20,454
£20,000
£20,673
£20,218
Nearly-new Fleet/lease P/X
£15,000
£10,000 £9,537
£9,448
£9,411
£9,593
£9,445
£9,533
£9,633
£4,048
£3,973
£4,065
£4,032
£4,059
£4,136
£4,188
Jun 14
Jul 14
Aug 14
Sep 14
Oct 14
Nov 14
£9,478
£9,673
£9,670
£4,113
£4,075
£4,041
£4,184
Dec 14
Jan 15
Feb 15
Mar 15
£9,126
£9,700
£5,000 £3,982
Apr 14 May 14
20 June 2015 am-online.com
-0.8%
Apr 15
12 months to Mar 2015 10,964 1,067,636
Change on previous year +16% +10%
41,770
–16%
Source: FLA
Used cars bought on finance through dealerships Mar 15 Change on 3 months to Change on previous year Mar 2015 previous year Value of advances (£m) 1,108 +16% 2,994 +12% Number of cars 105,978 +11% 290,667 +8% Used cars bought on finance by businesses through dealerships Number of cars 4,583 +41% 10,576 –2%
House prices
➡
£0
£4,348
House prices in March were 0.8% down since February, according to data from the Land Registry. The year-on-year increase was 5.3%, which takes the average value of houses in England and Wales to £178,007.
Last chance to book
D I N N E R 11th June 2015, Park Plaza Riverbank, London Jeremy Vine will be the guest speaker at the AM100 dinner this year which will be held on June 11 at the Park Plaza Riverbank in London. Vine established his reputation as a smooth-talking but tough presenter on Newsnight. He now presents the lunchtime show on Radio 2, hosts Eggheads and pops up with a range of graphic wizardry whenever there’s an election. Jeremy joined the BBC as a news trainee. His first reporting assignments were on Radio 4's Today programme, covering issues as diverse as punishment beatings in Northern Ireland and sheep-racing in Dorset. He then took up the reins as a political correspondent, under John Sergeant.
One of Jeremy’s early reports was an award-winning exposé of South African police brutality, which led to twenty four officers being suspended. In a lighter vein, he was famously challenged by Jeffrey Archer to a race on Brighton beach, after remarking that the Tories had become elderly. Archer pulled out, complaining of ‘tiredness’. The AM100 publication is the annual industry guide to the 100 largest dealer groups in the country, according to their company turnover. In addition, the AM100 provides a detailed analysis of the state of the industry and looks at the key issues facing dealers and their customers.
igious gala dinner on the calendar The most Prest Headline sponsors:Headline sponsors:
Associate sponsors:Associate sponsors:
Book your table now at www.am100dinner.co.uk
or call Emma-Louise Kinnaird on 01733 395133 or email: emma-louise.kinnaird@bauermedia.co.uk
SHOWROOM 66
mg6
The design of MG’s family car may have been revamped, but the main draw for this car will be its slashed screen price.
the cars driving your business
68
suzuki s-cross
Suzuki punches above its weight as social media and strong offers help to compensate for its small marketing budget.
71
mazda3
The family hatchback has stood up well to AM’s testing for more than half a year. But now it’s had a bad month.
f i r s t d r i v e f i at 5 0 0 X – o n s a l e n o W
Will X mark the spot for Fiat’s fortunes?
fiat is aiming the 500X at older customers than the 500, particularly men
Fiat hopes its crossover 500X will widen the brand’s appeal from its city car little brother By Tim Rose iat aims to grow its new car registrations to 70,000 units in 2015 as it continues to capitalise on the draw of its 500 sub-brand. Fiat’s registrations in the UK are primarily driven by the 500, which accounts for about two thirds of annual volume, and that sub-brand has been carried over into the 500L compact MPV and now a crossover SUV, badged the 500X. “The 500X needs to create another important pillar for the brand, so we don’t rely on one car,” said elena bernardelli, fiat uK group marketing director. In 2012, the UK’s crossover car market was worth 55,000 registrations a year. By the end of 2015, it is expected to account
F
64 June 2015 am-online.com
“The 500X needs to create another important pillar for the brand, so we don’t rely on one car” mark connor, zenith leasedrive
for 180,000, so it is vital Fiat’s dealers take their share, she said. In the UK, the Fiat 500 city car has been perceived as a fashion object, so the 500X has to carry on and enhance that perception, but in a slightly more grown-up segment, she said. The model’s aim is to keep linking Fiat with the design and cool attributes, but show it’s also about technological, robust, quality cars. Bernardelli said the 500 dramatically changed Fiat’s customer base. Its core product was previously the Punto, bought by a young, mainstream audience based on its price. The customer base for the 500 is across age brackets, mainly female, and seeks lifestyle appeal and design. She hopes the 500X will also appeal to a slightly older customer, particularly men Fiat describes as “stylish adventurers”. “The customer approach to Fiat was about having the best deal, now it’s about having the best-designed car.” The 500X went on sale on April 24. Following dealers’ VIP pre-launch events with left-hand-drive demonstrators and digital marketing activity involving the magician Dynamo, Fiat received 300 customer orders ahead of launch, and 80,000 expressions of interest. Fiat’s crossover is expected to be a full margin car that
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
the 500X range is split into two styling streams, the first inspired by metropolitan lifestyle and a second, below, influenced by off-roaders
s p ec i f i c at i o n Price £14,595-£25,845 Engine 1.6-litre 109bhp, 1.4-litre turbo 138bhp, 1.6-litre diesel 119bhp; 2.0-litre diesel 138bhp Performance 0-62mph 9.8-11.5secs, top speed 112-118mph Transmission 5sp man, 6sp man, 9sp auto Efficiency 44.1-68.9mpg, 109-147g/km CO2 RV 3yr/30k 39% Rivals Ford Ecosport, Mini Countryman, Nissan Juke, Peugeot 2008, Renault Captur, Vauxhall Mokka
10,000 fiat’s projected registrations of the 500X in 2015
What your customers Will read about the fiat 500X fiat is offering higher-spec features ‘to attract c-segment customers moving down’
doesn’t need heavy discounting and will tempt some Fiat 500 owners who desire a bigger car. Fiat’s analysis of its customers’ PCP expiries shows 10% of current 500 owners are likely to choose crossover next, and the carmaker plans loyalty offers to encourage their transfer into 500X. These will account for 3,000 of its projected 10,000 500X sales in 2015. In the medium-term, Fiat wants to become a top five brand in the crossover segment, which would equate to annual 500X registrations of 14,000 to 20,000 units across the private, Motability and corporate segments. Fiat’s lead-in offer is a 36-month PCP at £199 per month after a £4,099 deposit or trade-in, or there is a 0% APR 24-month HP offer for customers who want to purchase the car outright. On Motability, the 500X will be available for a £395 advance payment. The 500X range is split into two styling streams, the first inspired by metropolitan lifestyle and available in frontwheel-drive only, and a second influenced by off-roaders and offered with all-wheel-drive and front-wheel drive powertrains. Models in the first stream are badged Pop, Pop Star
and Lounge. Models in the second stream are badged Cross and Cross Plus. These two are distinguished from the others by a higher ride height, different bumpers to improve the approach and departure angles and protective shields underneath, and they have a textured dashboard in matt grey, rather than the body-coloured dashboard of the others. They are also the only models offered with Traction+ grip control system or 4x4 transmission. Standard equipment on every 500X includes six airbags, electric parking brake, tyre pressure monitors, cruise control and steering wheel audio controls. All models except the lowest-spec Pop version come with alloy wheels, a drive mood selector, automatic climate control, rear parking sensors, start-stop, foglamps and Fiat’s Uconnect Live touchscreen media and telematics system. Top-specification Lounge and Cross Plus derivatives gain fabric and artificial leather trim, keyless start, sat-nav, bi-xenon headlamps and tinted windows. “We offer features that are more normally associated with cars in a higher market segment to attract C-segment customers moving down as well as B-segment customers,” said Kate mclaren, head of fiat brand. Engine choices from launch include 1.4-litre turbo petrol with 138bhp, 1.6-litre diesel with 119bhp, both with manual transmission, and a 2.0-litre diesel with 138bhp that comes with a nine-speed automatic gearbox as standard. Two more petrol units – a 1.6-litre 109bhp unit and a 167bhp 1.4-litre – will be added this summer, followed in autumn by a 1.3-litre diesel. Demand is predicted to be split equally between petrol and diesel variants, with the £19,095 1.6-litre diesel Popstar in front-wheel drive becoming the most popular model.
the telegraph the fiat 500X succeeds in offering much of the charm of the 500 city car in a bigger, more practical package. and while it does have flaws, they’re generally the ones that afflict all cars of this sort. Just make sure you can live with its unsettled ride. car magazine the cabin quality is perhaps the best fiat has ever produced, and you can sense there’s been real attention paid to the engineering. the 500X trades a touch of ride comfort for keen cornering capability. the ride isn’t really uncomfortable, it’s just a bit crashy over sudden surface imperfections. fiat has taken a serious look at itself and the competition, and produced something that feels well made, neat and tidy to drive, and looks distinctively stylish.
am-online.com June 2015 65
IN JULY’S ISSUE
C O N TA C T U S
PUBLISHED JUNE 26
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
Face To Face: Hodgson Automotive Managing director Steve Hodgson explains why he devotes his energy to ensuring his Newcastle business is a top performer for all its franchises – and the benefits it enjoys as a result.
How to expand your business
First drive: SsangYong Tivoli
The financial performance of the UK’s 100 largest franchised dealer groups analysed.
ADVERTISERS’ INDEX
The Korean brand has carved a niche in big, tough, cheap SUVs. As it enters the B-segment crossover market with a sub-£13,000 price tag, should mainstream brands worry?
Continental Tyres ........................................8
Mapfre Abraxas..........................................21
Dealer Management Services ...............27
Marketing Delivery....................................45
Easi-Drive Accident Management..40/41
Marshall Motor Group .............................73
Emac .............................................................58
Mercedes-Benz UK ...................................73
Autoclenz ......................................................62
Finance & Leasing Association..............12
Moneypenny.................................................33
Autoglym Polish ........................................11
GForces ............................................39, 67, 42
Motors.co.uk ................................................53
Bluesky Interactive ...................................48
Hendy Group................................................72
Nextgear Capital UK .................................49
BMW UK........................................................34
HPI...................................................................22
Steele-Dixon & Associates......................73
British Car Auctions ..................................63
Infomedia......................................................76
Supagard .....................................................62
Call It Automotive.......................................38
Institute of the Motor Industry...............54
Symco Training ...........................................13
Car Benefit Solutions................................72
iVendi........................................................19. 52
Tracker Network Systems......................33
Chris Eastwood Automotive...................73
Lawdata.........................................................63
Trader Publishing ................................. 2, 69
Codeweavers...............................................61
Lloyds Banking Group..............................14
Vertu Motors................................................72
Contact at Once...........................................46
Manheim Retail Services.............4, 30, 37
Zype TV...................................................29, 57
74 June 2015 am-online.com
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 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
Expert business advisers in the fields of accountancy, property, taxation and funding share their tips on how franchised dealers can acquire and expand most effectively.
The AM100 2015 supplement
Contributors Simon Harris, Debbie Kirlew, Chris Lowndes, Rupert Pontin, Prof Jim Saker
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. AM is published 12 times a year by Bauer Consumer Media Ltd, registered address 1 Lincoln Court, Lincoln Road, Peterborough, PE1 2RF. Registered number 01176085. No part of the magazine may be reproduced in any form in whole or in part, without prior permission of the publisher. All material published remains the copyright of Bauer Consumer Media Ltd. We reserve the right to edit letters, copy or images submitted to the magazine without further consent. The submission of material to Bauer Media whether unsolicited or requested, is taken as permission to publish in the magazine, including any licensed editions throughout the world. Any fees paid in the UK include remuneration for any use in any other licensed editions. We cannot accept any responsibility for unsolicited manuscripts, images or materials lost or damaged in the post. Whilst every reasonable care is taken to ensure accuracy, the publisher is not responsible for any errors or omissions nor do we accept any liability for any loss or damage, howsoever caused, resulting from the use of the magazine. Printing: Headley Brothers Ltd, Kent Complaints: Bauer Consumer Media Limited is a member of the Independent Press Standards Organisation (www.ipso.co.uk) and endeavours to respond to and resolve your concerns quickly. Our Editorial Complaints Policy (including full details of how to contact us about editorial complaints and IPSO’s contact details) can be found at www.bauermediacomplaints.co.uk. Our email address for editorial complaints covered by the Editorial Complaints Policy is complaints@bauermedia.co.uk.