www.am-online.com October 2014 £8.00
THE FR ANCHISE GUIDE / P77
AUTOMOTIVE MANAGEMENT A N A LY S I S / P 2 3
Our annual profile of each manufacturer and what they offer dealers
THE ADD-ONS SQUEEZE IS COMING
UP T S H IS ELL E SU IN E G
Manufacturer demands and FCA pressure will change dealers’ profit models forever. Are you prepared?
FA C E T O FA C E / P 3 6
D ATA A N A LY S I S / P 47
FCA DE ADLINE / P65
Why John Clark is cautious about the market, despite his group’s record results
What dealers can learn from Amazon’s approach to upselling
Is your business ready to register for full credit compliance?
Is your F&I business secure?
The introduction of the Financial Conduct Authority (FCA) is the single biggest issue to have impacted on automotive retail in recent years after the downturn itself. The Finance and Leasing Association’s latest figures reveal that a staggering 75% of all private vehicle sales are funded through finance. Without a healthy finance business, many dealerships will struggle and even flounder. By attending the AM F&I Compliance Conference, you will: Better understand and evaluate the risk to business after the Financial Conduct Authority took responsibility for consumer finance on 1st April Hear from the FCA themselves including an evaluation of the first six months since the organisation took control of consumer finance Look at the F&I landscape further; the FCA has been undertaking an investigation of add-on products with GAP, in particular, coming under scrutiny Explore specific areas such as marketing and the evolving role of the business manager Investigate the positive aspects which the FCA’s arrival has facilitated, mainly the drive for a more honest and open way of undertaking finance business
18 November 2014 – Oxford Belfry, OX9 2JW To book your place at the AM F&I Compliance Conference visit:
www.amfandicompliance.co.uk
Headline sponsors:
Co-sponsors:
Associate sponsor:
welcome
am-online.com
am@bauermedia.co.uk
@amchatter
am-online.com/linkedin
facebook.com/automotivemanagementUK
Pressures may mean the profits from add-ons become ‘little but often’ hanges are looming that will have a marked impact on the profits franchised dealers earn from selling add-on products to their car-buying customers. Every dealer knows by now that the Financial Conduct Authority (FCA) has put showroom sales of GAP insurance under its spotlight, but what might not be so clear is the threat from interfering carmakers and smartphone-equipped consumers to the traditional profits generated by non-regulated add-ons. In an AM-online poll this month (page 54), 60% of dealers indicated they do not expect their earnings from add-on products to increase in the near future. The advice from industry consultants in our analysis piece (page 23) is that dealers may have to take less profit per product but simply sell a broader variety of them to try to make up the shortfall. Some of the UK’s franchised networks seem to understand this already – our poll results showed a third of dealers currently presents five or more ancillary products to each car buyer. Of course, to stand a chance of offering those add-ons there has to be an attractive, competitive car to sell in the first place, and some manufacturers seem to be doing this far better than others. Our 2014 Franchise Guide (starts page 77) is designed to allow you see which brands could help you to grow your business, and which might be holding it back.
C
The AM editorial team Email: am@bauermedia.co.uk Website: www.am-online.com
Jeremy Bennett Editor
ouR ExpERT conTRiBuToRs Dr Richard parkin As director of valuations and analysis, Parkin coordinates the editorial and analysis team at Glass’s. Prior to joining Glass’s in 2012, he was a strategy consultant at ernst & Young, focused on the motor industry. In this issue (p28), he asks whether free warranty or service plans might be better than giving large discounts. professor 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 (p34), he argues that motor retailers need to promote both apprenticeships and formal qualifications. Hugh Dickerson Google UK’s senior industry head of automotive and an AM Awards judge, Dickerson is responsible for developing digital brands in the UK. This month (p61), he points out online marketing opportunities for your aftersales.
Tim Rose Managing editor
am-online.com October 2014 3
In this issue October 2014
31 BOOST YOUR UPSELLING EXPERT ADVICE ON SELLING ADD-ONS
109 FACE TO FACE JOHN CLARK GROUP CHAIRMAN JOHN CLARK
Your news
7
News digest This month’s round-up includes the results of the latest NFDA Dealer Attitude Survey, HR Owen’s CEO steps down, and former F1 champion Nigel Mansell takes on a Mitsubishi franchise.
20
Economic indicators The CBI warns of slower growth ahead despite falling unemployment and low inflation.
Market intelligence
12 14 17
New car registrations A 9.4% rise in registrations meant August became the 30th consecutive month of growth.
23
Used car values Average used car values suffered a slight decline, according to NAMA, as volume reached six figures.
Finance The Funding Corporation closes its retail arm as Stoneacre gets back into sub-prime.
4 October 2014 am-online.com
Insight
31
How to increase upselling and boost your profits
34
View from the business school
36
Face to face: John Clark Motor Group
Analysis D-ON PROFIT AD
28
A changing model for add-on sales Dealers who depend on add-ons as an revenue stream face a triple challenge from regulators, manufacturers and consumers armed with online information.
Lock in car buyers Glass’s Dr Richard Parkin wonders if free service plans and warranties will replace the deposit contributions offered on PCPs.
36
RENAULT TWINGO WILL IT BE ‘THIRD TIME LUCKY’?
47
Products such as GAP insurance and warranty cover provide valuable income for a franchised dealer. Here, experts share their advice on how to sell them.
To make progress in this industry we need to promote apprenticeships and formal qualifications as a holistic package, says Prof Jim Saker.
Chairman John Clark talks about the group’s pragmatic approach to upselling and why, despite record financial results, he won’t let himself be carried away by the current strength of the car markets.
How integrated data can unlock untapped revenue
Dealers can reach the ‘holy grail’ of
For the latest motor retail industry news, visit am-online.com Sign up to get AM news daily by email: am-online.com/newsletter
77
THE 2014 FRANCHISE GUIDE
DEALERS AND SUPPLIERS IN THIS ISSUE: ADP Dealer Services ........................47 ASE .........................................................10 AutosOnShow......................................10 BCA.....................................................9, 14 Cambria Automobiles..........................9 Capgemini.............................................47 Carrs .........................................................9 Codeweavers.......................................65 Eastern Western Motor Group......32 Experian............................................9, 48 Firs Garage ..........................................32 FLA .....................................................9, 18 Frontline Solutions.............................65 GForces .................................................48 Halfords....................................................7 Honda........................................................9 HR Owen...............................................10
organic upselling by extracting and analysing information they already hold on a customer’s purchasing history and preferences.
52 61 65
AM Poll
The majority of dealers expect add-on profits to suffer.
View from Google
There are opportunities online to win with aftersales.
F&I
Dealers need to be ready for their regulatory ‘landing slots’ from October 1.
Showroom
106 109
BMW 2 Series Active Tourer BMW’s first MPV is a break from the brand’s tradition.
Renault Twingo The new city car that makes more space for occupants by keeping the engine at the rear.
110
Volkswagen Golf
112
Seat Ibiza
The award-winning, strong-selling hatch joins AM’s long term test fleet. We take a personal interest after Seat gets mauled in recent surveys.
John Clark Motor Group..................36 Manheim ...........................................9, 14 Mapfre Abraxas..................................68 Marks & Spencer...............................71 Marshall Motor Group.........................9 Mercedes-Benz Brooklands ..........32 MotoNovo Finance .............................18 NAMA.....................................................14 NFDA.........................................................7 Nigel Mansell..........................................7 Nissan.......................................................9 Pinewood ..............................................48 Skurrays................................................32 SMMT.....................................................12 Stoneacre..............................................18
Coming soon
77
The 2014 Franchise Guide
Our annual profile of each car manufacturer and what opportunities they offer dealers.
118
In November’s issue Star cars of the Paris Motor Show, a look at showroom design features and the technology that can support the showroom experience.
Swansway................................................7 The Funding Corporation ................17 Vantage Motor Group........................31 Vic Young..................................................7 Volvo .......................................................10
am-online.com October 2014 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
9
F O R D A I L Y N E W S , V I S I T: w w w.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: w w w.am-online.com/newsletter
10
Cambria forecast
SURVEY
IN BRIEF
Average dealer satisfaction hits two-year low, says NFDA There are suggestions that dealers’ inability to improve profits during the booming new car market may contribute to this negativity as well as increasing unhappiness at the level of investment expected in franchise standards. According to the latest biannual National Franchised Dealer Association Dealer (NFDA) Attitude Survey, when asked the overall value of their franchises on a score of 1 to 10 the average for all respondents was 6.6. This is the lowest score for this question since the summer of 2012 and was 0.6 points down on surveys taken last winter and in summer 2013. Thirteen of the 29 networks surveyed recorded below average scores for the question, with 15 scoring above average. Land Rover received the highest score, Honda the lowest. The average score for the question “how satisfied are you with the current profit return by representing your franchise?” is 6.1. This is down 0.6 points since the winter survey and lower than a year ago. “The score would suggest most dealers are fairly neutral about the profit performance of their franchise,
NIgEL MANSELL
Former Formula One world champion Nigel Mansell has acquired a Mitsubishi franchise for his car dealership in Jersey. The British motor racing legend, who won the 1992 Formula One World Championship and the 1993 CART IndyCar World Series, opened the Mitsubishi franchise on September 16 at his family-run dealership in St Helier, which will be managed by his son and managing director, Leo.
(L-R) Lance Bradley, Mitsubishi Motors UK MD, Nigel Mansell and his son, Leo
VIC YOUNg An award-winning company in the North-East has become the latest dealer to join the Mitsubishi network. Vic Young Mitsubishi opened its doors this month at the company’s site in Newcastle Road, South Shields. Young has more than 40 years’ experience in the motor trade.
O v e r a l l f r a n chi s e va lu e ABOVE AVERAGE Brand Summer ‘14 Winter ‘13 Land Rover 8.8 9.6 Mercedes 8.7 8.3 Kia 8.6 9.1 Audi 8.5 9.1 Suzuki 8.4 8.2 Mini 8.1 8.3 BMW 8.0 8.8 Lexus 7.5 6.9 Mazda 7.4 7.5 Fiat 7.4 6.9 VW 7.1 8.4 Chrysler 7.1 8.4 Jeep 7.1 7.3 Hyundai 7.0 7.6 Vauxhall 7.0 6.8
BELOW AVERAGE Brand Summer ‘14 Winter ‘13 Citroën 6.6 6.6 Jaguar 6.5 7.1 Ford 6.4 7.7 Peugeot 6.1 6.5 Mitsubishi 6.1 6.5 Alfa Romeo 5.9 3.9 Nissan 5.8 6.8 Subaru 5.8 5.9 Renault 5.5 4.0 Škoda 5.4 7.8 Seat 5.2 5.7 Toyota 5.1 6.9 Volvo 4.7 5.4 Honda 4.6 5.6 Average 6.6 7.2
and that they are not seeing the situation improve,” said Louise Wallis, NFDA head of business development. “This is a little concerning at a time of a growing new car market and suggests that registration growth is not bringing financial growth to the networks at the same rate.”
HALFORDS
S WA N S WAY Swansway Group has taken on the Jeep franchise for the first time, adding the 4x4 brand to its multi-franchise site in Chester. Jeep SUVs will be added to the Huntington site which already retails Citroën, Fiat and Abarth. Source: NFDA
Dealer opinions of the value in holding franchises have reached their lowest level for two years.
Dealer profitability The average UK motor dealership made £3,800 in July, down from £6,400 in July 2013.
Dealer group Cambria has said its full-year results are likely to be ahead of current market forecasts.
USED CAR CONFERENCE The AM Used Car Market Conference on October 21 offers one day of expert input from a spectrum of speakers that will give dealers an all-important extra edge to make their offers stand out. Full details, including speakers and schedule, can be found at www.usedcarconference.co.uk.
Halfords has relaunched its car parts business with a same-day delivery service, with an increased range of more than 130,000 products.
FREE FCA WEBINAR
Branded as Car Parts Direct, the service will allow customers to order any product in-store, online or via the Halfords mobile app with next working day delivery or better – 66% of in-store orders will be delivered within 90 minutes. Customers can choose to have parts delivered to their nearest Halfords store for collection, or to their home or place of work, seven days a week. Car Parts Direct manager Paul Tomlinson said: “With an ageing UK car fleet stimulating demand for replacement parts, the timing is right for Halfords to reassert itself in the marketplace. “The average age of cars on UK roads is at a 30-year high, which we anticipate will drive demand for major replacement parts such as steering, suspension and clutch components. Cars around three years old sustain demand for consumable items like filters, spark plugs, brake pads and discs.”
Dealers looking for clarification on what is required to ensure they meet the Financial Conduct Authority’s rules on motor finance selling are invited to take part in a free webinar. Organised by AM, in association with Alphera Financial Services, the webinar takes place on October 9 from 11am until noon. Compliance and readiness specialists at Alphera will outline their interpretation of the FCA’s principle-based rules and answer dealers’ questions. The webinar will be chaired by AM editor Jeremy Bennett. Register to attend the webinar – and submit questions - at http://r.thought.co.uk/UQfByn.
am-online.com October 2014 7
NEWS DIGEST
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: w w w . a m - o n l i n e . c o m / n e w s l e t t e r
CAMBRIA AUTOMOBILES
Dealer group Cambria has said its full-year results are likely to be ahead of current market forecasts and it continues to “perform well”. Its trading update said: “Trading in the first 11 months of the 2013/14 financial year has been substantially ahead of the corresponding period in 2012/13. “New vehicle unit sales, excluding the recently acquired Land Rover and Jaguar business in Barnet, increased by 15.7%, outperforming the overall market, which rose by 10.6%, and margins remained strong. Used vehicle sales also performed well; unit sales were 3.2% ahead of the same period in the prior year with a gross profit per unit improvement of 5.9%. “Growth in the group’s aftersales operations also continued with a profit increase of 4.3% year-onyear.”
CARRS
Carrs Škoda has built a £1.5million site that adopts the manufacturer’s latest corporate identity. Bisset Adams, which acts as design and implementation consultants for Škoda UK, was
VA N TA g E M O T O R g R O U P
Vantage Motor group has opened its fourth Hyundai dealership in the North West, making it the biggest Hyundai dealer in the region. The newly built site at Kings Reach Business Park in Stockport, next to junction 1 of the M60 motorway, represents a £2.5 million investment and will create up to 25 jobs. It is one of the first Hyundai dealerships in the UK to showcase the brand’s new corporate identity, which features an open showroom with high ceilings and floor-to-ceiling glazing topped by a bronze fascia including a silver Hyundai logo. Currently, the Hyundai dealer network is blue, but the new design and use of bronze is intended to make it stand out. It is Hyundai’s first brand refresh in around five years.
project architects for the Carrs Škoda development, which took seven months, in North Petherton, Bridgwater. Bisset Adams said it is one of the first Škoda sites in the UK to adopt the brand’s new CI scheme being rolled out globally.
PEOPLE NEWS JAMIE CROWTHER Marshall Group has appointed Jamie Crowther, formerly MD at Peter Vardy, as operations director. He will report to Marshall chief executive Daksh Gupta and will be responsible for “driving the operational performance” of the group.
EL AINE ASHWORTH Elaine Ashworth, formerly director of the AM awardwinning Peter Vardy Academy is launching a consultancy and training business, Automotive Business Results.
PAU L H A R R I S ON Paul Harrison, the Finance and Leasing Association’s head of motor finance, is to leave the FLA after eight years to become head of finance at Auto Trader on November 24. His new role will involve direct liaison with dealers.
MICHAEL BUxTON Manheim has promoted current chief operating officer, Michael Buxton (pictured), to the role of UK chief executive.
HONDA
Honda is primed to make a strong return in new car retailing, says its dealer council chairman. David Cox, who is also managing director of Cox Motor group, said dealer confidence had been dented by a lack of new models, its “forcing of the market” and the resultant erosion of profitability. Honda’s market share is at a 10-year low and registrations are less than half their 2007 levels. But Cox said: “Given the line-up arriving in 2015 (Jazz, Civic Type R, NSX sports car and a new small SUV), it would have been easy to wait for a silver bullet. But the past couple of years have been dedicated to ensuring the underlying strength of the brand is improved. “The focus on catching up with the market on PCP is starting to bear fruit and a relentless focus on five-year service plans will make the brand unbeatable in terms of customer loyalty. Add this to the line-up rejuvenation and we have a very exciting future – but it cannot come quickly enough.”
ONLINE RESEARCH
Drivers aged between 18 and 24 are the least likely to use the internet as the first source of information before buying a car. According to research from Experian, the information services company, only one third of younger car buyers would use the internet for information, preferring instead to consult friends and family or talk to a dealership sales person. More than 1,000 UK drivers were surveyed to understand where they bought their car and why. The majority, (74%), made their car purchases through dealerships (both manufacturer and independent). One in 10 respondents purchased their current car from a private seller and only one in 20 bought their last car from a car supermarket. The survey revealed that car buyers preferred to go to a dealership because they felt it was less risky (24%), but more importantly, they could go back to the dealer if there were any problems with the car (46%). Some 20% felt dealerships offered better knowledge of the market and the vehicles.
A NDY PA L MER Andy Palmer is leaving Nissan after 23 years to take the post of chief executive at Aston Martin. Palmer was chief planning officer, executive vicepresident and member of the executive committee at Nissan Motor Company. He will be replaced at Nissan by Philippe Klein.
ROBERT H A zELWO OD BCA has appointed Robert Hazelwood as commercial director. Hazelwood joins from Volkswagen Group UK, where he held a number of senior positions, including VW brand director and heading the VW Commercial Vehicles and Škoda brands.
am-online.com October 2014 9
AM PROMOTION
NEWS DIGEST
BY Dealers fOr Dealers…
DEALER P R O F I TA B I L I T Y
By Neil Addley, MD of Trusted Dealers, the advertising website owned by dealers & the NFDA
Just over a year ago, the NFDA took a controlling interest in Trusted Dealers. This means the NFDA can offer our members low-cost used car leads and also a consumer-facing platform to promote the benefits of buying from and maintaining a car or van at a trusted, franchised dealer. Following previous successful NFDA Driving Digital events, we are pleased to announce ‘Driving Digital 4’, which is open to existing and potential NFDA members. This will take place at 9.30am on Thursday, November 6, 2014, at the Forest of Arden Hotel in Meriden. Driving Digital is intended to help franchised dealers make the most of their online presence and improve the customer experience to gain increased sales and margin. The event will include an update of the work we have been doing to promote dealer standards and the added value of using a franchised dealer. We are pleased to confirm a strong line-up of speakers for the event, including: Andy Bruce, Lookers chief executive, will talk about the challenges and opportunities facing large dealer groups in the emerging digital landscape and give his take on what is next. Scott Sinclair, google UK industry manager, will explain the latest online car buyer behaviours and offer practical advice on how dealers can capitalise on these trends. Jim Holder, editor-in-chief, What Car? magazine, will give the motorists’ view on their relationship with franchised dealers. NFDA director Sue Robinson will host the event and outline the NFDA’s recent activity in promoting franchised dealers’ interests, the new used car and aftersales standards and the developing relationship between NFDA, Trusted Dealers and the consumer. Then I will exclusively reveal the “Ten P’s” of the digital marketing mix. We will close the meeting with a Marketing Power Panel, in which a number of digital and marketing experts will give tips, their take on digital and engage in a Q&A session with the audience. Come and join us for an enjoyable mental workout as we explore practical steps to take today as well as gaze into the crystal ball of emerging trends. ■ To book your place, email jade@trusteddealers.co.uk, call 01423 506272 or visit www.driving-digital.co.uk For more information, call 01423 506272 or email neil@trusteddealers.co.uk
10 October 2014 am-online.com
RE AD AM IN YOUR INBOx: am-online.com/newsletter
The average UK motor dealership made a profit of £3,800 in July, down from £6,400 in July 2013. Mike Jones, ASE chairman, said: “In financial terms, we have now seen the total dealership rolling 12-month profit broadly static for the past five months at around £225,000. “This would appear to be the new norm for average dealer returns and we are likely to see a continued fall in the return on sales percentage as dealers process increased registrations whilst still making the same profit levels.” While used vehicle return on investment has increased slightly during the month, ASE said it saw a rise in used car stand in values. This represents a combination of the disposal of low-value vehicles traded in during June, the general rise in used vehicle prices and more self-registered vehicles, it said. “This is a trend we will be watching closely to ensure dealers’ stock profiles aren’t skewed too much towards self-registrations.”
Aftersales has continued its steady, if very slow, improvement with another gain in labour efficiency reported during July. “August typically produces the largest loss of any month and we will be watching the results closely to gain an insight into the extent to which the current healthy registration levels are being forced with dealers counting the cost later.”
V O LV O xC 9 0
Volvo’s first all-digital car sale saw all 1,927 individually numbered, limited First Edition models of the new xC90 sell out in 47 hours. Most of the cars were reserved within one hour from the start of the sale, which ran simultaneously in 32 countries. At its peak, seven cars were sold every minute. UK customers secured 55 of the First Edition models, which will be delivered in April 2015.
HR OWEN
HR Owen has bought Bentley Hadley green from Lookers. Lookers had owned the business in High Street, Barnet, since its acquisition of the Colbornes Group in March. Under HR Owen, the dealership has been re-named Bentley Hertfordshire and has relocated to the former Hadley Green Jaguar showroom on Barnet High Street. Two weeks following the acquisition, HR Owen chief executive Joe Doyle resigned, leaving chairman Mehmet Dalman and an executive committee running the group. HR Owen has also begun trading on Sundays for the first time in its history.
AUTOSONSHOW
Dealer and fleet video service AutosOnShow has been acquired by auction and remarketing group BCA. BCA said the acquisition is a key part of its digital strategy and will broaden its customer proposition and deliver value-added services to the automotive sector. BCA also announced that it has acquired Tradeouts, a technology company behind the Tradeouts. com dealer-to-dealer online application that enables its customers to buy and sell used vehicles.
market intelligence 14
Used cars
the latest national data shows used values have taken a dip as auction volumes rise.
17
THE nEWS In DEPTH
finance
Sub-prime business appears to be a renewed opportunity as lenders refocus their strategy.
nEW car MarkET
August registrations 9.4% ahead of 2013 72,163 new cars registered in 30th consecutive month of growth nEED TO knOW ■ 34,857 private cars registered ■ fleet sector registers 35,632 cars By Tim Rose here were 72,163 new cars registered in august, a 9.4% rise on august 2013 and the 30th consecutive month of growth. there were 34,857 new cars registered in the private market, and 35,632 in the fleet sector. Year-to-date registrations have passed 1.5 million units – up 10.1% – however the Society of motor manufacturers and traders said some levelling off is expected in the coming months. Private and fleet registrations both displayed similar increases in the month, with the former making the greater gains in the year-to-date (See graph, right). august is one of the year’s quietest months for new car registrations,
t
vOlUME SPlIT
august 2014 2013 % change Mkt share ‘14 Mkt share ‘13 Year-to-date 2014 2013 % change Mkt share ‘14 Mkt share ‘13
Total 72,163 65,937 9.4%
Total 1,532,335 1,391,788 10.1%
typically accounting for about 3% of the annual market. in comparison, September usually makes up about 18% of the year’s registrations. Mike Hawes, SMMT chief executive, said: “new car registrations reached two-and-a-half years of consecutive monthly growth in august, as confident private and fleet
r E G I S T r aT I O n S 2 0 0 7 T O D aT E ( r O l l I n G Y E a r S) v S P r E- r E c E S S I O n av E r a G E
12 October 2014 am-online.com
diesel 35,931 32,903 9.2% 49.8% 49.9% diesel 770,128 685,938 12.3% 50.3% 49.3%
Petrol 34,974 32,108 8.9% 48.5% 48.7% Petrol 734,320 687,065 6.9% 47.9% 49.4%
aFV 1,258 926 35.9% 1.7% 1.4% aFV 27,887 18,785 48.5% 1.8% 1.3%
consumers continued to snap up enticing deals on a wealth of advanced new products. “the Uk’s performance in the context of europe is particularly impressive, with growth consistently
P r I vaT E v S f l E E T/ B U S I n E S S Ov Er T HE Pa S T 30 MOnTHS
Private 34,857 31,608 10.3% 48.3% 47.9% Private 735,235 660,572 11.3% 48.0% 47.5%
Fleet 35,632 32,382 10.0% 49.4% 49.1% Fleet 726,001 671,688 8.1% 47.4% 48.3%
Business 1,674 1,947 -14.0% 2.3% 3.0% Business 71,099 59,528 19.4% 4.6% 4.3%
ahead of the rest of the eU for the past two years. “as the Uk market starts to find its natural level, we expect to see the growth level off during coming months.” increasing consumer confidence has been evident across the market, with strong growth in private, fleet and business sectors. However, the greatest surge has been in private registrations, which have grown from about 840,000 units in the year before march 2012 to 1.15 million cars in the past 12 months. attractive finance deals are a significant factor behind the growth in private demand, with consumers able to take advantage of Personal contract Purchase offers (PcPs). the Smmt also pointed out that the number of Uk citizens in employment rose by more than one million between Q1 2012 and Q1 2014, giving greater numbers of buyers the confidence to commit to new cars.
market intelligence New car registrations n E W c a r r E G I S T r aT I O n S
10 -Y E a r M a r k E T T r E n D S ava I l a B l E : w w w.am-online.com/ami
august Marque
2014
Ford Vauxhall Volkswagen audi BMW Mercedes-Benz Peugeot Citroën nissan Hyundai Škoda Kia Toyota Fiat Mini renault Seat Honda Suzuki Mazda Land rover Volvo dacia Mitsubishi Jaguar Smart Jeep Porsche alfa romeo Lexus MG Chrysler abarth Subaru Maserati SsangYong Bentley Lotus Infiniti aston Martin Chevrolet Mia Perodua Proton Saab Other British Other Imports Total
11,231 8,817 6,127 5,159 3,552 3,444 3,280 3,003 2,956 2,665 2,631 2,386 1,968 1,901 1,609 1,587 1,526 1,511 1,381 994 827 694 680 454 276 272 176 160 151 136 76 73 50 49 38 34 24 24 20 19 0 0 0 0 0 52 150 72,163
% market share 15.56 12.22 8.49 7.15 4.92 4.77 4.55 4.16 4.10 3.69 3.65 3.31 2.73 2.63 2.23 2.20 2.11 2.09 1.91 1.38 1.15 0.96 0.94 0.63 0.38 0.38 0.24 0.22 0.21 0.19 0.11 0.10 0.07 0.07 0.05 0.05 0.03 0.03 0.03 0.03 0.00 0.00 0.00 0.00 0.00 0.07 0.21
10
Year-to-date 2013 8,940 8,242 6,086 3,904 4,401 3,058 3,231 2,575 3,566 2,599 1,890 2,374 1,916 1,887 1,415 921 1,289 1,454 1,291 1,000 806 539 575 172 260 140 41 141 141 231 13 56 31 48 17 22 67 9 14 31 434 0 15 0 0 65 30 65,937
% market share 13.56 12.50 9.23 5.92 6.67 4.64 4.90 3.91 5.41 3.94 2.87 3.60 2.91 2.86 2.15 1.40 1.95 2.21 1.96 1.52 1.22 0.82 0.87 0.26 0.39 0.21 0.06 0.21 0.21 0.35 0.02 0.08 0.05 0.07 0.03 0.03 0.10 0.01 0.02 0.05 0.66 0.00 0.02 0.00 0.00 0.10 0.05
% change 25.63 6.98 0.67 32.15 -19.29 12.62 1.52 16.62 -17.11 2.54 39.21 0.51 2.71 0.74 13.71 72.31 18.39 3.92 6.97 -0.60 2.61 28.76 18.26 163.95 6.15 94.29 329.27 13.48 7.09 -41.13 484.62 30.36 61.29 2.08 123.53 54.55 -64.18 166.67 42.86 -38.71 -100.00 0.00 -100.00 0.00 0.00 -20.00 400.00 9.44
2014
% market share 208,432 13.60 169,182 11.04 130,810 8.54 100,952 6.59 88,629 5.78 75,714 4.94 67,553 4.41 52,272 3.41 84,340 5.50 50,699 3.31 49,395 3.22 49,246 3.21 58,823 3.84 41,634 2.72 26,588 1.74 37,739 2.46 33,017 2.15 34,460 2.25 23,361 1.52 23,307 1.52 34,568 2.26 23,554 1.54 15,060 0.98 7,635 0.50 11,454 0.75 3,214 0.21 2,082 0.14 5,461 0.36 3,450 0.23 6,498 0.42 1,483 0.10 1,283 0.08 955 0.06 1,523 0.10 763 0.05 852 0.06 954 0.06 153 0.01 377 0.02 551 0.04 2,761 0.18 5 0.00 25 0.00 1 0.00 1 0.00 561 0.04 958 0.06 1,532,335
2013
% market share 197,933 14.22 159,047 11.43 121,432 8.72 88,432 6.35 78,005 5.60 65,368 4.70 66,859 4.80 51,091 3.67 74,422 5.35 46,731 3.36 39,196 2.82 45,579 3.27 55,919 4.02 35,920 2.58 29,882 2.15 23,275 1.67 26,970 1.94 35,052 2.52 20,150 1.45 18,838 1.35 34,385 2.47 19,593 1.41 8,872 0.64 5,603 0.40 10,073 0.72 3,403 0.24 1,132 0.08 4,773 0.34 3,304 0.24 5,037 0.36 169 0.01 1,607 0.12 838 0.06 1,235 0.09 211 0.02 344 0.02 794 0.06 131 0.01 280 0.02 606 0.04 7,899 0.57 0 0.00 180 0.01 15 0.00 3 0.00 568 0.04 632 0.05 1,391,788
% change 5.30 6.37 7.72 14.16 13.62 15.83 1.04 2.31 13.33 8.49 26.02 8.05 5.19 15.91 -11.02 62.14 22.42 -1.69 15.94 23.72 0.53 20.22 69.75 36.27 13.71 -5.55 83.92 14.41 4.42 29.01 777.51 -20.16 13.96 23.32 261.61 147.67 20.15 16.79 34.64 -9.08 -65.05 0.00 -86.11 -93.33 -66.67 -1.23 51.58 10.10
BIGGEST GrOWErS Y E a r T O D aT E
1 2 3 4 5 6 7 8 9 10
Brand MG Maserati SsangYong Jeep Dacia Renault Mitsubishi Infiniti Lexus Škoda
YTd (%) 777.51 261.61 147.67 83.92 69.75 62.14 36.27 34.64 29.01 26.02
The fallers are few and far between, but the likes of Honda, Smart and Mini will be pleased when their new models finally get some traction. among the risers, the success of Jeep, SsangYong and Mitsubishi shows the consumer appetite for 4x4s is not waning. for more on each carmaker, see the franchise Guide on Page 77.
Brand 10 Mia 9 Honda 8 Smart 7 Aston Martin 6 Mini 5 Chrysler 4 Chevrolet 3 Saab 2 Perodua 1 Proton
YTd (%) 0.00 -1.69 -5.55 -9.08 -11.02 -20.16 -65.05 -66.67 -86.11 -93.33
BIGGEST fa l l Er S Y E a r T O D aT E
6 am-online.com October 2014 13
The traditional model of used car sales faces a number of threats today, including changing buyer habits, the rise of digital and mobile devices and an increased need to comply with regulation.
Developing a customer-focused used car sales model Today’s customers fnd their cars online, very often between 9pm and 10pm. They are armed with more information than many salespeople and see a showroom visit merely as a fnal emotional check of a car and a dealer. So what must dealers do to address this?
The customer experience Mike Dalloz, managing director, Performance in People
Breaking the traditional dealer sales model - if we don’t redefine it, the customer will Nick King, market research director, Auto Trader
Performance in People works with some of the world’s leading brands to improve customer service, sales and customer experiences.
Digital age consumers and their buying habits are driving most of the changes in the used car sector. But are dealers ready for this?
Dalloz will explain ‘The Model of Excellence’ used by these brands to deliver the highest levels of customer service and he will outline six key behaviours that will help dealers capture and retain more used car buyers and enhance their reputation.
King will emphasise the importance of used car retailers embracing a digital strategy and will share insights from Auto Trader’s research to show them how they can engage customers and stand out in an increasingly national market.
Online strategies for Gen X & Gen Y
From gut instinct to science – the analytics of car sales
Heather Yaxley, Bournemouth University & director of the Motor Industry Public Affairs Association Generation Y consumers (born 1977-1994) are expected to buy 16% more cars in the US this year than they did in 2013, while volumes bought by Generation X-ers (born 1965-1976) are expected to increase by just 6%. A similar picture can be expected in the UK. Understanding generational buying habits can infuence used car sales. Gen Y buyers are often ‘digital natives’, often see cars as a pragmatic transport platform and are more likely to be motivated by technologies within the car and how it can support their lifestyle. Yaxley will explain how dealers can offer ‘different strokes for different folks’ online.
Tuesday 21 October
Telford International Centre, TF3 4JH
Ian Godbold, marketing & CRM director, Cambria Automobiles A successful website is not necessarily one a dealer thinks looks good, nor one with ‘bells and whistles’. It is one that works, and in a way that can be measured. Cambria’s website received national recognition as ‘best in class’ for combining customer tools, showcasing its full selection of products and services, and measuring and reacting to its customers’ online searching and buying habits. Godbold will outline how a scientifc approach can beneft used car activity.
Tickets from
ÂŁ149 +vat
Dealers need to adapt rapidly to develop a sustainable approach built around the customer. This conference will provide the latest in best practice advice and case studies from a panel of experts.
Products, processes and people The traditional proft model in the used car market is under threat. Customers armed with mobile devices and price comparison websites are supported by increased consumer regulation and used cars face an increased risk of commoditisation. The challenges are clear, but how do car retailers turn threat to opportunity?
FCA regulation and used cars MotoNovo The Financial Conduct Authority (FCA) has changed the regulatory framework for fnance and insurance (F & I ) products and the watchdog estimates that 20% of the businesses it covers may withdraw from offering credit. Dealers need to develop processes and controls to be compliant with the new rules and change their F&I sales models to provide the ‘good consumer outcomes’ the FCA demands. MotoNovo will go through the changes and innovations it feels dealers need to develop and implement with a special emphasis on fnance as a marketing tool to drive sales.
Unlock the secrets of your DMS to create a better customer experience The dealership management system (DMS) can and should be the engine of a modern dealership, managing all your information and helping to drive customer relations and sales activities. In an age where differences in the communication preferences and needs of consumer groups are more pronounced than ever, the DMS can positively affect how a dealership manages its customer contact. This session will share how dealers can release their DMS’ potential and access tools that many may be unaware of.
Creating a holistic customer experience before and after a sale – online, on the phone and in the showroom Neil Pursell, managing director, Martec Europe This session will look at the importance of placing the customer at the centre of a dealer’s used car approach and of engaging sales, aftersales and marketing to increase sales, customer satisfaction and retention. Using its extensive experience in retail and leisure, Martec works to help dealers enhance their customer focus, before, during and after sales by encouraging teamwork within the showroom.
Improving stock management – the ‘time to cash’ Dealers need a used stock range that refects their market positioning, but ideally want this inventory to be ‘on stock’ for as little time as possible. The challenges include; a large range of high-value, yet depreciating assets; the need to offer part-exchange facilities; and the time and cost of preparing vehicles ready to retail. The fast-moving consumer goods (FMCG) sector can teach automotive retailing some key lessons about purchasing, the use of technology, stock management and marketing that can help dealers improve their ‘time to cash’.
10 ways to maximise the value of used car buyers – customer lifetime value (LTV)and retention Louise Wallis, National Franchised Dealers Association The NFDA will present 10 top ideas that dealers can adapt to maximise the value of used car buyers. In an era where the hunt is always on for the next ‘big idea,’ this session will share a combination of new and proven initiatives that have worked effectively in some of the UK’s largest dealer groups.
Who should attend?
Why attend? ■ ■ ■
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Identify new retail strategies Acquire new skills and best practice techniques Discover how to increase profitability in key business areas Find out about current and future trends and how to exploit them
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Gain a better understanding of consumer buying behaviours and attitudes Transform the way you manage your customer relationships Uncover how to use future regulation to your advantage
Those with strategic responsibility for used car sales in the showroom and those responsible for digital strategies and manufacturer and supplier partners. ■
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Chairmen, chief executives, general managers Dealer principals Managing directors Sales directors
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Operational managers Aftersales directors and managers Manufacturers: Dealer development directors/ managers and franchised operational executives
For more details, or to book visit www.usedcarconference.co.uk
SHOWROOM 109
renault twingo
The French brand has put the engine at the rear of its latest city car to provide more interior space despite its smaller dimensions.
the Cars drivinG your Business
110
volkswagen Golf
It has won awards and notched up thousands of sales, and now the seventh generation Golf has joined AM’s long-term test fleet.
112
seat ibiza
After Seat dealers and the Seat franchise itself get a mauling in recent studies, we get a chance to live the customer experience.
First drive Bmw 2 series aCtive tourer – on sale septemBer 27
BMW’s brand breakaway
the 2 series active tourer is Bmw’s first front-wheel drive car in decades
BMW’s first people carrier is a departure for the brand and an attempt to attract new custom By Tim Rose he arrival of the 2 Series Active Tourer is as mouldbreaking for BMW as its i3 electric car, launched earlier this year. While the i3 is far more technologically advanced, the 2 Series Active Tourer is the first car in decades to depart from the BMW brand’s association with rear-wheel drive and longitudinally mounted engines. It is also the premium brand’s first people-carrier. Until this month, I had never heard a BMW executive talk proudly about a new model’s cup holders, storage bins or sliding rear seat. But now those car buyers concerned with such things, who may have had a Renault Scenic or a Volk-
T
106 October 2014 am-online.com
“We can’t rely on people coming into the dealership. We have to put the car in front of people”
swagen Golf SV on their consideration list, have a compelling reason to visit their local BMW showroom. With a PCP finance offer starting at about £300 a month and strong residual values, this model range, which starts at £21,345, could pinch custom from the mainstream brands as well as its premium rival, the Mercedes-Benz B-Class. Bmw product manager alex morgan said the crucial target customers for the 2 Series Active Tourer include ‘empty nesters’, who desire a premium car that can transport their grandchildren. This customer bracket values aspects such as comfort and practicality. Small families are another key market to capture and Morgan suggested a smaller target could be independent professionals, such as photographers, who need space for their kit. Marketing is already under way, with a heavy experiential focus. “We can’t rely on people coming into the dealership. We have to put the car in front of people,” Morgan said. In August, the car was displayed at high-footfall English
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
Bmw hopes three-quarters of sales will bring new customers into the brand
Price £21,345-£30,900 Engine 218i 1.5-litre, 135bhp; 218d 2.0-litre: 148bhp Performance 0-62 mph 8.9-9.2 secs, top speed 124-127 mph Transmission 6sp man, 6sp auto, 8sp auto Efficiency 57.6-68.9mpg, 109-115g/km CO2 RV 3yr/30k TBC Rivals Ford C-Max, Mercedes-Benz B-Class, VW Golf SV
what your Customers will Be readinG aBout the 2 series aCtive tourer
Cabin equipment, even on the entry-level trim, is extensive
Heritage properties, while at Camp Bestival, the familyorientated festival in Dorset, it featured in a BMW picnic area. A test-drive initiative was also conducted at Longleat Safari Park and BMW dealers have been displaying at county shows. A digital campaign may be followed by TV exposure later. Demonstrators are already going out to fleet and leasing companies. BMW UK has relatively modest sales expectations – about 5,000 units annually, split equally between private buyers and company car drivers – because this is unknown territory for the brand. “There is probably much more potential for this car, but because it is new to us we are being quite conservative,” Morgan said. He hopes three-quarters of sales will be bringing new customers into the BMW brand. This month’s launch line-up comprises two powertrain variants: the 218i turbocharged three-cylinder 1.5-litre petrol and the 218d 2.0-litre turbodiesel. Both drive superbly, with
plenty of overtaking power available, although the steering response lacks the immediacy and directness enjoyed by most BMWs. The 218d will appeal to company car drivers thanks to its 109g/km CO2 emissions and 68.9mpg efficiency. From November, more variants will join the range: 220i and 225i petrol units and 216d and 220d units, with all-wheel drive available for the highest-powered models. Equipment on the entry SE trim includes rear parking sensors, DAB radio, Bluetooth, a 6.5in colour screen, dualzone climate control and keyless start. For a £1,250 premium, buyers get Sport specification with 17in alloys, sports seats and upgraded trim and upholstery, while a £2,000 premium gets a Luxury specification with leather upholstery, wood trim and chrome exterior details. The range-topping M Sport trim, available from November for a £3,000 premium, boasts 18in alloys, leather upholstery, M Sport stiffer suspension, runflat tyres and aluminium interior trim. A range of options, including head-up display, adaptive LED headlamps, active cruise control and park assist, give BMW dealers’ product geniuses plenty of technology to talk about. Compared with established rivals such as the Renault Scénic and Ford C-Max, the 2 Series Active Tourer feels slightly lacking in absolute practicality and comfort. But the BMW badge and its crucial premium quality mean many buyers will forgive that.
what Car? if you’re in the market for an mpv because space and practicality are paramount, then there are better choices. the Citroën C4 picasso is bigger inside, quite a bit more versatile, and cheaper. it’s also worth bearing in mind that the Golf sv is equally spacious, even sharper to drive with a more flexible engine, and is cheaper. it also comes similarly well equipped to the Bmw, although the boot in the 2 series is better designed than in the sv – and easier to manhandle into different configurations. however, if you just need more space than a family hatchback and want an mpv that remains good to drive, is refined and cheap to run, the active tourer is definitely worth considering. daily teleGraph Good first attempt at a front-drive Bmw that ticks most of the boxes for buyers in this sector, while not actually doing anything better than the nonpremium alternatives.
am-online.com October 2014 107
IN NOVEMBER’S ISSUE
C O N TA C T U S
PUBLISHED OCTOBER 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 Jeremy Bennett 01733 468261 Managing editor Tim Rose 01733 468266 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 Hugh Dickerson, Debbie Kirlew, Jonathan Mitchell, Dr Richard Parkin, Prof Jim Saker, Richard Yarrow AM advertising Commercial director Sarah Crown 01733 366466 Group advertisement manager Sheryl Graham 01733 366467 Project managers Leanne Patterson 01733 468332 Kerry Unwin 01733 468327 Angela Price Lucy Peacock 01733 468338 Account managers Julie Howard 01733 468141 Sara Donald 01733 366474 Richard Kerr 01733 366473 Kelly Crown 01733 366364 Recruitment enquiries Richard Kerr 01733 366473
Dealership design We examine whether the role of the physical showroom is changing in line with contemporary consumer behaviour, with analysis of what the design requirements and features of new generation showrooms could be and how they might make the best impact on the customer experience.
Property problems
Automotive property experts advise dealers how to overcome the challenges of planning and completing showroom refurbishments and relocations.
Technology and the showroom experience
The Paris Motor Show A look at the newest cars that will provide your sales opportunities in the months ahead.
How dealerships can use modern technology, from Wi-Fi and tablet PCs to interactive screens, to engage and entice showroom visitors.
ADVERTISERS’ INDEX Adria Concessionaires........... 102-103 Alphera Financial Services .............46 Armchair Answercall........................49 ASE ........................................................29 Autoclenz ............................................104 Barclays Partner Finance........2 & 73 Blacks Outdoor Retail .......................25 Blue Sky Interactive ..........................35
118 October 2014 am-online.com
British Car Auctions...............33 & 105 Car Care Plan .....................................69 Chris Eastwood Automotive .........113 Codeweavers .......................................97 DFSK................................................ 82-83 DSG Financial Services.............. 66-67 FISC.........................................................70 Fiat ...................................................86-87 FMG.......................................................116 GForces ..........................78-79 & 98-99 IMI..........................................................111 iVendi......................................................30
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 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
Jardine Motors Group.....................115 Kawasaki...............................................97 Lawdata...............................................104 Lloyds Banking Group ......................16 MG .................................................... 90-91 Manheim Retail Services........15 &21 Mapfre Abraxas..........................8 & 64 Marsh Finance.....................................49 Mercedes-Benz.................................113 MHA MacIntyre Hudson ............ 50-51 Northridge Finance............................22 Paragon Automotive ......................108
Pentana Solutions ..............................35 RAB.........................................................11 Revive Auto Innovations .................119 SsangYong ......................................94-95 Supagard ........................... 74-75 & 105 Symco Training....................................52 Tracker Network Systems ................6 Trader Publishing.............39/41/43/44 ........................................................&53-60 Trusted Dealers ..................................10 Volkswagen Financial Services ...117 Wms Group ..........................................62