COLUMNS: BIG MIKE ON GOOD DEEDS | BAGGOTT ON VISUALISING YOUR BUSINESS’S FUTURE
Issue 147 | June 2020 | CarDealerMag.co.uk | £6
L OS T IN N O I T A L S TRAN
WHAT JAPAN CAN TELL US ABOUT SALES DURING COVID-19
DRIVEN NISS
AN AND SUBARU’S LATES T SELF-CHARGE HYBRIDS
PLUS: A ROAD TRIP IN HONDA’S MID-ENGINED RENCE SPORTS CAR WITH A DIFFE
HELP & ADVICE
- SAFE CAR DELIVERIES - FURLOUGH FAQ - TOP TIPS FOR CASH - REOPENING PLANS
NEWS
- PENDRAGON & LOOKERS REVEAL MERGER TALKS - CAFFYNS CEO CASH GIFT - VERTU LOCKDOWN PLAN - TREVOR FINN RETURNS - USED CAR PRICE FALLS
COMING SOOOTTENN? DELAYED BUT NOT FORG
MEET THE CARS CORONAVIRUS PUT THE BRAKES ON
The UK’s Best Used Car Warranty
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Ignition.
Editorial CHIEF SUB-EDITOR John Bowman
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HEAD OF CONTENT Jack Evans
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MULTIMEDIA MANAGER Jon Reay jon@blackballmedia.co.uk Twitter: @JonReay
CONTRIBUTORS Darren Cassey, Rebecca Chaplin, Nigel Swan, Ted Welford
Finance
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10 THINGS WE’VE LEARNED IN MAY
1. You can’t overuse the word furlough 2. You CAN complete Netflix 3. Rishi Sunak is actually quite short 4. You can never have enough data 5. No one knows what’s happening to car prices 6. Everyone loves a video chat 7. Coffee pods are essential items 8. Home working is rather efficient 9. You can miss Five Guys too much 10. The internet might have a future Subscriptions £49.99 per year (UK); £69.99 (EU); £89.99 (rest of the world) You can pay by credit or debit card on our website – visit CarDealerClub.com
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Welcome.
DISRUPTION isn’t something we like in the motor trade. In normal circumstances we’d rally against, turn our noses up and carry on with what we’ve been doing in the way we’ve always been doing it. However, the coronavirus pandemic has caused such a monumental crisis for the motor trade, it has been forced to fast forward its adoption of new technology and processes faster than at any time in the history of selling cars. The pace of change is dramatic. I was asked on social media the other day whether I thought car dealers will ever go back to doing things the way they did before. Quite what was meant by ‘before’, wasn’t clear – but I staunchly believe the car trade will change quickly to cope with new operating rules now and will never look back. I think the digital dealership will be front and centre of dealer bosses’ plans. I’ve already seen dealer groups fast forward their buying online options and quickly adapt to offer home deliveries to customers who want it. Once in place, and the benefits of digital retailing have been discovered, dealers won’t go back. This month Car Dealer Magazine has been incredibly busy breaking news on our hugely popular website. After days of pestering, countless calls and a number of emails we managed to get the government to confirm to us in an official statement that they were happy for dealers to sell remotely and deliver those cars to people’s homes during the lockdown. The news exploded on our website and we received countless emails from dealers – and calls from manufacturers – thanking us for breaking the news. Up until that point – despite what the trade bodies that represent dealers and manufacturers would have you
believe – no one really knew what was allowed. The SMMT and NFDA both told us they thought the update was ‘nothing new’. That did make us wonder, then, why every single person in the trade we’d spoken to up until that point said they were waiting for the government to tell them what was allowed. Shame, that if they did know all along, that they didn’t broadcast that vital information loudly and with confidence to their members. One of those trade bodies even decided to issue a statement to its members attempting to claim the news from the government we received ‘hadn’t happened’ and ‘wasn’t official’. Of course it was, we wouldn’t have printed it if it wasn’t, and the NFDA swiftly received a call from government officials to ask them to retract their statement. I’ll never understand quite why they did that, but there’s nothing quite as queer as folk, is there?. Anyway, you’ll see the results those breaking news stories have had on our website traffic in my column. In this digital magazine we’ve added a few more features to keep you entertained, as well as all your usual favourites. Big Mike has been supersized again, there’s some new car reviews (remember those?) and a closer look at the April new car registration figures that were, surprise surprise, down. Enjoy the magazine and if we’re not covering something you want to know about, get in touch – funnily enough, we’re never normally far away from our desks!
James Baggott Founder, Car Dealer Magazine
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Feature: A pint-sized road trip
Long before lockdown we were in Japan exploring the nation’s obsession with tiny cars
Inside.
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ISSUE 147 I JUNE 2020
News, advice & features Big Story Dealer news Business news Supplier news Industry views James Baggott Big Mike James Litton Feedback The cars delayed by the crisis Kei car road trip Advice Finance
06 08 12 14 22 25 26 29 30 32 34 38 50
Road tests. Nissan Note e-Power Subaru Forester e-Boxer
Focus on. Heycar Close Brothers
Data file. Market Insight The Statistics Extra Cover with Gallagher Suppliers Guide Long-termers
Advice: Safely reopening your dealership
45 18 20 16 53 55 56 60 63 65
Advice: Getting to grips with using video
18 Driven: The hybrid tech coming to a Nissan near you CarDealerMag.co.uk | 5
Dashboard. BIG STORY
Lost in translation Japan is now feeling the full force of Covid-19 – and yet, its dealerships’ doors remain open. What lessons can we learn from our friends on the opposite side of the globe?
F
or the past six months, the world’s eyes by JON REAY have been fixed on east Asia, and not @JonReay without good reason. Having spent months battling the new invisible to stay off the streets, but ‘non-essential’ retail, enemy that first appeared on its shores, China is including department stores and car dealerships, now being looked to as an example of how life haven’t been forced – or even asked – to close. after lockdown might be. A quick check of some dealers across Japan South Korea, meanwhile, is being held up as reveals that the majority have remained open in a country that fought the virus and won – for the face of the crisis, choosing to adopt shorter now, at least. opening hours, appointment-only bookings and It’s Japan, though, that’s really worth paying increased sanitisation methods rather than shut attention to as we transition out of lockdown – down altogether. and not for the reasons that you might expect. Some businesses – particularly flagship cityHaving initially escaped coronavirus largely centre locations – have closed voluntarily, but unscathed, the country finds itself in a ‘state the number that have stoically remained open of emergency’ – a lockdown in all but name – highlight how the country is struggling to adapt with Covid-19 cases still a very real threat. As to going digital. in western countries, travel is frowned upon, large gatherings cancelled, and employees are encouraged to work from home. Car dealerships, however, have largely remained open for business – but how? The short answer is, because they simply don’t have a choice. Japan is a nation obsessed, more than most, with its economy – and understandably so. After a number of successive recessions in the past 30 years, its government is less than keen on doing anything to stall its financial system yet again. It’s likely this that’s pushed prime minister Shinzo Abe to opt for a ‘soft’ Classified platform Carsensor is one of few websites approach to lockdown: people have been asked pushing for end-to-end online used car sales 6 | CarDealerMag.co.uk
We tend to think of Japan as a high-tech, fastpaced country of the future – a land of robots, neon lights and high-speed internet. In reality though it’s a nation that’s more resistant to change than you might imagine.
‘It only takes a quick wander around a city to see that physical retail is still king.’ Unlike in the UK, US and China, e-commerce hasn’t taken the nation by storm. In 2019, only nine per cent of Japan’s retail purchases were made online, compared with 22 per cent in the UK and US. It only takes a quick wander around a Japanese city to see that physical retail is still king. One particularly decadent electronics shop in central Tokyo takes up nine levels and 24,000 square metres of floor space – it’s hard to imagine Currys PC World doing the same in the middle of London. As a result, buying something as expensive as a car online is far from the minds of Japan’s ageing population – a group which, it should also be noted, still remains fearful of the concept of online banking. It’s not just customers refusing to jump on the internet shopping bandwagon, either; companies themselves have been slow to adapt as well.
Despite all its other innovations, Japan still relies heavily on physical paperwork to get things done. Emailing documents remains a rarity too, with many still relying on – wait for it – fax machines. As for e-signatures, the like of which we’re beginning to see on car finance applications, don’t even go there. In Japan, it’s expected that important documents are literally stamped by both parties’ personalised ‘hanko’ ink seals – a tradition dating back, incredibly, to the early 1900s. What this all gives us, though, is some insight into how physical-only car sales stand up to the crisis when dealers are allowed to open their doors. The answer is… not terribly well. With the state of emergency declared, but dealers still open, new car sales fell 29 per cent in April year on year: less than locked-down nations, but still a hefty drop. There are other factors at play here of course: vehicle supply issues for one, as Japan’s car industry experienced shutdowns earlier in the year because of a lack of Chinese-made parts. Japan’s motor industry bodies, though, point the finger straight at a lack of customers willing to visit dealers in person. Japan’s Automobile Importer Association, which represents foreign manufacturers in the country, told one Japanese newspaper
the drop was ‘because the number of visitors to dealerships [had] decreased’ in the face of the pandemic. Used car sales figures are yet to be released for the month, but initial reports suggest a similar drop – although propped up slightly by increased demand for available nearly-new stock.
29%
A typical example of dealers’ attempts to reassure customers visiting their showrooms
range of cars, each with only one choice of trim level. Used car sales are similarly behind the curve, although the initial signs of a change Fall in sales for new cars in April are starting to appear. Carsensor, one of Japan’s largest classified ad Things are, however, beginning to change. platforms, is offering dealers the option to list A handful of manufacturers are introducing ‘mail order’ used cars that can be bought online online purchasing facilities – albeit within the and delivered straight to customers’ homes. confines of Japan’s red tape-riddled, rubberTake-up, however, has been low: at the time stamp systems. of writing, just 74 cars were available to Land Rover will let you reserve buy this way. any of its in-stock new vehicles and It’s perhaps too early to tell how deliver it to a nearby dealer, while Japan will adapt to the challenges Mercedes-Benz will do the same that lie before it – although the and let you fill in the majority of initial signs are there. the complicated paperwork What its situation does hint online too. at, however, is that no country Nissan is on the ball as can escape the transformation well, rolling out a service to online retail if it is to that delivers new cars survive the crisis – even one as straight to your front door. resistant to change as Japan. By European standards Like it or not, the UK will it’s still limited, though, offering only a small Japan: Land of the ...fax machine? need to take heed too. [CD] CarDealerMag.co.uk | 7
Dashboard.
Dealer news
Caffyns CEO gifted £70,000 worth of shares by his mum
CAFFYNS chief executive Simon Caffyn has been gifted shares worth £70,000 by his mother, Ann Caffyn. The shares – 25,000 of which were gifted at nil consideration – were worth £70k when handed over at a share price of 280p. Caffyns runs VW Group, Volvo, Vauxhall and Caffyns Motorstore sites across Sussex and Kent. Statements to the stock market said that following the transaction, Mrs Caffyn had a beneficial holding in the company of 33,336 ordinary shares – 1.23 per cent of the company’s ordinary shares – while Simon Caffyn’s interest was now 76,988 ordinary shares – 2.85 per cent of the issued ordinary shares.
Cambria CEO takes pay cut and reveals pain is coming
CAMBRIA say CEO Mark Lavery, pictured, has taken a 50 per cent pay cut and other board members have slashed theirs by 20 per cent, it said in its interim results. In the announcement, the dealer group said it was making plans for a return to work, but added that the closure of showrooms would have a ‘material negative impact’ on its results for the year’s second half. In the six months to February 29 – before the crisis took hold – the group saw revenue reduce to £303.1m, down from £308.3m the year before, but profit was up 14.5 per cent to £6.3m (£.5m in 2019). 8 | CarDealerMag.co.uk
Furloughed employees must return if they can when workplace is safe – or face a disciplinary DEALERS concerned some furloughed employees may stay away after the lockdown starts to ease because they’re worried about the risk of infection have the law on their side, it has been confirmed. Car Dealer Magazine was contacted by one showroom owner to say his dealership was ready to reopen, first with aftersales then with sales when given the go-ahead. However, many staff were saying they couldn’t come back, claiming it wasn’t safe out. The dealer wanted to know where he stood when
Inchcape reveals new CEO who’ll take over from Bomhard in July
INCHCAPE has appointed Duncan Tait as its new chief executive. He will take over from Stefan Bomhard on July 1. After a period of handover during June, Tait – previously on the board of Fujitsu – will take charge. He will be paid around the same as Bomhard, who is going to Imperial Brands as group CEO, but has already accepted a 20 per pay cut, announced last month for all board members and senior executives. Tait said: ‘I am very pleased to be joining Inchcape and leading the business at such a dynamic time for the automotive sector.’
staff simply said that they didn’t want to put their family at risk, as opposed to someone who was actually self-isolating. Lawgistics employment law specialist Kiril Moskovchuk told Car Dealer: ‘In this scenario, it will be a case of an unauthorised absence and a disciplinary matter.’ People have no reason to refuse to return to work, said the experts, so long as the employer follows the government’s published guidance on workplace procedures.
Trevor Finn plans industry return with used car offering
Extinction Rebellion activists vandalise Marshall dealership
FORMER Pendragon CEO Trevor Finn has revealed he will be heading back to the industry with a new proposition for the market. In a cryptic post on LinkedIn entitled ‘Life after Pendragon’, Finn writes that he has been subject to ‘post-employment restrictions’ limiting what he could do after leaving the dealer group a year ago. However, he says he has spent that time travelling the world researching and believes there is a used car proposition to take advantage of here now, adding: ‘Watch this space’. Finn left Pendragon in March 2019.
ACTIVISTS from the global environment movement Extinction Rebellion vandalised a dealership in Cambridge. A group targeted what they labelled ‘polluting industries’ in the city, with one of the businesses singled out being the Marshall Motor Group Land Rover dealership in Newmarket Road. The demonstrators spraypainted ‘No Going Back’ and ‘Let Us Breathe!’ on the showroom windows, as well as putting ‘Closed For Good’ posters on the door. Cambridgeshire Live quoted one of the activists as saying: ‘We are very careful not to break the terms of the lockdown, but if the climate crisis is allowed to continue unchallenged, the consequences for global public health will be dire – much, much worse than the current pandemic.’
Ladies’ Automotive Club adapts and grows amid crisis
A CLUB established to connect senior executive women in the automotive industry has been adapting to continue giving help and support during the crisis. Formed three years ago by Alison Ashley, left, and Tracy Ellam, right, who used to work together at ASE Global, the Ladies’ Automotive Club was holding fairly formal gettogethers during the year. The next was scheduled for the middle of May, but the Covid-19 crisis meant it wasn’t going to happen, so the club has switched to virtual meetings. An informal WhatsApp group has also been set up, debating many of the topics covered by Car Dealer. Women interested in joining can email alison.ashley@rsmuk.com or TEllam@mazepoint.com.
Vertu sells 1,500 in lockdown and reveals reopening plan
VERTU Motors has revealed that since the lockdown it has sold 825 cars to consumers and racked up 749 fleet orders. In a trading update to the stock market, the retailer said the orders remained undelivered but will be fulfilled when the government allows showrooms to restart. The update also said that an appointments-based system is likely in future. ‘Meticulous planning has been undertaken for the reopening of dealerships in a safe and socially distanced way, with strict guidelines and the use of personal protection equipment where appropriate, once restrictions are lifted.’ Directors took a 30 per cent pay cut for April and May and have waived their annual bonuses.
‘New car sales, commissions and our finance-based business model might be about to get a ginormous shake-up and one that will deal a few of us a stiff old kick in the nuts. It’s not nice, is it?’ Big Mike, p26
Redundancy consultations begin at dealer groups CAR dealer groups across the country have begun to consult staff over mass redundancies as they prepare their businesses for a return to work. Dealer group bosses told Car Dealer Magazine they could be forced to make job cuts of 20-25 per cent of their workforce. Currently, most dealers have a large proportion of their workforce on the government furlough scheme. Car Dealer Magazine has been sent a series of documents emailed to thousands of staff in different dealer groups warning of impending job cuts. One dealer group began consulting staff in midMay after a video message was sent to all employees from the CEO. We are not naming the group, which is one of the top 25 in the UK, so as not to adversely affect its relationship with suppliers and manufacturers during this difficult time. Car Dealer has also been leaked documents from four other dealer groups that are undertaking similar processes with their staff.
Pendragon confirms that it held merger talks with Lookers
PENDRAGON confirmed to the London Stock Exchange in May that it held ‘outline discussions’ with Lookers over a possible merger. The dealer group said the talks took place to ‘explore the potential benefits of a combination of the two businesses’ but said they’d now ceased. The merger would have created the largest dealer group in the UK, with a combined turnover of around £10bn. The statement said ‘Pendragon believed that such an exploration would have proved beneficial’. One Pendragon investor commented that the dealer group ‘could be interested in seeking an alternative merger elsewhere’.
Supercar dealer Romans expands specialist finance arm – and it proves a multi-million hit ROMANS International has massively expanded its specialist finance brand – and it’s already funded more than £300m-worth of supercar purchases. Elev8 Finance is an independent finance broker that caters for particularly wealthy individuals, and they’ve been using its services to buy super-exclusive cars. Initially established by Paul Jaconelli, owner of the award-winning Banstead-based luxury supercar
dealership for its own buyers, he has now opened the brokerage firm’s doors to the entire market. Elev8 Finance’s day-to-day operations are separate to those of Romans International, and it is run by highly experienced finance professional Mike McCann, who said: ‘Now feels like the right time to raise the profile of what our finance brand is striving to achieve while giving customers the right information so they can make informed decisions.’ CarDealerMag.co.uk | 9
Dashboard.
Dealer news
Total number of diesel cars on road falls for the first time
THE total number of diesel cars on UK roads has fallen for the first time since records began. Last year, there were 12.29m diesel cars licensed – a drop of 111,000 over the previous year. That’s the first decline since 1994, when Department for Transport records began. Diesel cars have fallen out of favour with buyers after a ‘demonisation’ of the fuel was started by the government. Steve Gooding, director of the RAC Foundation, said the figures hint at a ‘motoring milestone’, adding there was a possibility that the UK had hit or even passed ‘peak diesel’ as owners feared increasing restrictions on their use.
Mitsubishi offers free home delivery via virtual showroom
MITSUBISHI Motors is offering free delivery and a knockdown reservation price on vehicles to customers during the lockdown. They can browse through all the models and add specifications, as well as trading in their vehicle and arranging finance all while at home. Until June 30, they can also reserve it for £99 – down from the usual £350 – with free delivery of the new vehicle to their home and collection of their trade-in, saving another £100. Deliveries and collections are carried out by franchisees, observing all hygiene and social distancing guidelines. 10 | CarDealerMag.co.uk
Video: Volvo boss says that new contactless home delivery service is safe for customers VOLVO Cars UK boss Kristian Elvefors has told Car Dealer in an exclusive video interview that he is confident the brand’s new contactless delivery service will be safe for customers. The Swedish firm – which prides itself on its safety reputation – has launched a home delivery service for customers who are looking to buy a new car. The scheme has seen improvements made to the online car sales section of the Volvo UK website and retailers take on the cost of delivering directly to
customers’ homes. Elvefors said: ‘We are taking all precautions when it comes to safe deliveries as that is super-important. ‘We have done that closely with retailers. We are confident we can deliver safely. We are taking precautions with sanitising and covering the steering wheel, etc. We think we have done what is needed and that it will work.’ Watch the interview in full at https://youtu.be/ N4AhOpWDFEM or by clicking on the image.
DVLA says buyers can Big Motoring World go unaccompanied starts selling online on trade plates and home delivers
CUSTOMERS will be allowed to take unaccompanied test drives using a car dealer’s trade plates, the DVLA has confirmed. Dealers who hold official trade plates – and are properly insured – can let potential buyers out in their cars without having to send a salesman or dealer representative with them when the lockdown lifts. This will be welcomed by dealers worried about whether they’d be allowed to use trade plates when letting customers out unattended. However, insurers have warned dealers that they’ll need to have the right cover in place.
USED car supermarket chain Big Motoring World has started selling cars online and is to deliver them to customers’ homes for free. The group – which has sites in West Malling, pictured, Blue Bell Hill, Stratford, Enfield and Peterborough, plus a collection centre in Snodland – said every car that it has will be available for free home delivery. Initially, delivery will be within 20 miles of a branch, but the company added that this will expand to go nationwide. Big Motoring World says all cars will undergo checks and come with a seven-day test drive and money-back guarantee.
Stoneacre’s top executives waive salary for time being STONEACRE Motor Group’s top executives have announced they won’t be drawing a salary for the time being out of respect for the company’s furloughed staff. The dealership chain, which has 51 branches representing 24 franchises at 103 outlets in England and Wales, made a pre-tax profit of £17m in the year to April 30, 2019 – a rise of 25 per cent on the year before – and had been looking to expand further. However, the lockdown meant it had to furlough most of its 3,000 employees, although some sites have been kept open to honour its contract with the ambulance service and to make sure that key workers can stay mobile. Now its eightstrong top tier has elected not to take a salary until profit is generated in the new financial year as of April. The execs also praised employees who had become key workers.
Kia dealers now taking remote orders at their discretion
KIA dealers have been given the green light to take remote orders during the lockdown – but only if they want to. The showrooms are staying shut until the government says otherwise, but Kia Motors (UK) said customers could contact their local dealer to place an order, and it was down to each individual dealership’s discretion to accept them. Following government advice dealers could deliver to people’s homes – uncovered by Car Dealer Magazine – Kia acted to work with its dealers to offer the service. It is unknown if this will continue after the lockdown while social distancing is in place. It will also honour valid warranty claims for repairs unable to be carried out before their expiry.
Germany to decide on scrappage scheme at end of May
GERMANY’S government has said it will be the end of May at least before it comes to a decision on a scrappage scheme. The German chancellor, Angela Merkel, pictured, has held talks with executives from BMW, Daimler and the Volkswagen Group about help for the industry, but no decision on scrappage will be made until late May. The country’s smaller dealers were allowed to start reopening on April 20 but trade has been slow to pick up there, with one dealer telling Autohaus.de: ‘The whole thing is a catastrophe of indescribable proportions and it will stay that way for a long time. ‘People have other worries than buying cars.’
‘Dealers are desperate for information on what is happening and our user numbers have rocketed as a result. In April, we managed to clock up a year’s worth of traffic in just 30 days.’ James Baggott, p25
Lookers fraud investigation results in £4m charge MISREPRESENTED bonuses and fraudulent expenses will result in Lookers posting a one-off non-cash charge of some £4m in its 2019 results, according to a trading and operational update to the London Stock Exchange on April 24. The car dealership group announced in March that it had identified ‘potential fraudulent transactions’ in an operating division and delayed publishing its results until an as-yet-unspecified date. The investigation – carried out with Grant Thornton LLP – has found that some debtor balances in respect of bonuses had been misrepresented, as well as some fraudulent expense claims. Both will result in a circa £4m charge in the group’s 2019 financial statements. The Lookers board has also extended the investigation across all its divisions, but this has been delayed because of the coronavirus crisis. The statement says other irregularities have already been discovered and are expected to result in another charge.
Nissan could retrench from Europe after Carlos Ghosn fall-out
NISSAN could retrench from Europe to focus all its efforts on America, China and Japan, suggest reports. An operational plan is due to be announced on May 28 that will attempt to fix problems relating to ousted boss Carlos Ghosn. It has been largely loss-making in Europe for years and is aiming to grab market share in the US at the possible expense of other markets. ‘We’re rationalising operations, reprioritising and refocusing our business to plant seeds for the future,’ a source told Reuters. A Nissan spokesman said: ‘Nissan remains fully committed to strengthening our product line-up in Europe.’
Video: JLR managing director calls for scrappage scheme-style stimulus from government by July JAGUAR Land Rover boss Rawdon Glover is calling for a ‘stimulus package’ from the government to boost car sales – and he wants it in place by July. In an exclusive interview with Car Dealer Magazine, the JLR UK managing director said that a package that has a similar impact on boosting sales as a scrappage scheme could help increase new car demand. Glover told Car Dealer in a video interview that he
hoped a package from the government would be of benefit to all manufacturers. He said: ‘Without getting into too much specifics, the key thing for stimulus is it has to work across all industry. For me, it has to be wide-ranging, it has to be simple and we’d really like it to be in place – if anything was put in – by July.’ Watch the interview in full at https://youtu. be/99HYaxJiZes or by clicking on the image. CarDealerMag.co.uk | 11
Dashboard.
Business news
V-shaped recovery predicted but Bank warns of worst recession in 300 years
European data hints at what’s coming for the used car market in the UK
THE car industry’s hopes for a V-shaped recovery to the economy have been lifted by the Bank of England. In its first official outlook on the economy since the pandemic, the Bank warned that we are likely to see the worst fall in 300 years. However, Bank of England governor Andrew Bailey said that although it could take more than a year to recover, it will be steep and with ‘only limited scarring to the economy’. A steep recovery would bolster the car industry as consumers get back on their feet faster and become more confident about buying cars. There are fears, though, that a bounce in car sales following lockdown could quickly be wiped out as consumers lose their jobs and hold on to their cash.
A NEW report has revealed how countries emerging from lockdown on the continent are showing the green shoots of recovery. Business intelligence and market insights software specialist Indicata said dealers on the continent coming out of the lockdown were reviewing and repricing stock, which was helping to fuel consumer demand. It said it was evident in Sweden, Austria, the Netherlands, Germany and Denmark, but pointed out that although the trends were positive, there were as yet no strong signs that the used market would bounce back quickly. Indicata added that heavily locked-down countries had yet to see dealers begin trading and respond to a drop in consumer demand by altering their pricing strategies, with sales staying very low.
Small firms that missed £10k grant could benefit from £617m plan
Dealerships are given temporary help over aggressive rent collection
SMALL businesses that missed out on the £10,000 government grant because they weren’t on the local council’s rates list could now get the money. The Department for Business, Energy & Industrial Strategy has confirmed a new £617m scheme to support businesses in shared spaces, regular market traders and small charity properties. The business secretary Alok Sharma, pictured, and minister for regional growth and local government Simon Clarke spoke to local authorities in England on May 2 about the £617m fund. Aimed at those firms that have ‘fallen through the cracks’ with the support already announced, the new money could see businesses that pay their rates via their landlord and market traders who do not have a rates assessment get the £10,000 grant.
NEW measures are being brought in that could help dealerships facing aggressive rent collection. Business secretary Alok Sharma has announced the temporary move in a bid to protect companies that are already under strain. Instead, they will be asked to pay what they can for the duration of the pandemic. The government said that most landlords and tenants had been working well together to agree on debt obligations. However, some landlords have been using what it called ‘aggressive debt recovery tactics’, which was ‘putting tenants under undue pressure’. Now the use of statutory demands and winding-up orders are going to be temporarily banned where a company can’t pay its bills because of coronavirus, so that they don’t plunge into greater financial problems.
12 | CarDealerMag.co.uk
BMW warns of longterm threat as it posts dip in profits
Ford boss: We’ll lobby government to support the UK’s car industry FORD of Britain boss Andy Barratt has said he’ll lobby the government to support the industry in response to the coronavirus crisis. ‘This is the time to try and reach out as an industry to the government,’ he told Car Dealer Live. ‘They helped in 2008 and 2009 with a scrappage programme. Can BEIS (Department for Business, Energy & Industrial Strategy) help with a stimulus package for the industry as a whole now? ‘That’s a debate we’ll have through
Mike Hawes (SMMT chief executive) and the SMMT on behalf of the whole industry. ‘We’re looking for whatever help and assistance on the basis of the amount of people that not only we employ as an industry, through suppliers and manufacturers, but the other side of that is there are many, many businesses that rely on our cars and commercial vehicles to keep their businesses running.’ Watch the interview by clicking the image above.
Honda car production to begin again in Swindon in June
FCA to take court action over cover for business disruption
HONDA is to restart production next month in the latest move by motor manufacturers to resume work. The company announced that it had told employees and suppliers it intended recommencing operations at its plant in Swindon from June 1. Work was stopped when the lockdown began on March 23. Ford plans to restart production at a number of factories, including Dagenham and Bridgend, on May 18. Jaguar Land Rover’s Solihull factory will also begin work again on May 18, while Aston Martin has already started a phased return at its St Athan plant. Production workers at its global HQ in Gaydon will follow at a later date.
THE Financial Conduct Authority will be taking court action to sort out companies’ doubts over business interruption insurance. The regulatory body said most policies were unlikely to cover the coronavirus crisis. However, the FCA added that there were still some where the insurer was obliged to pay out – and must do so swiftly. It also wants measures to help consumers and businesses holding insurance products who are facing other issues because of Covid-19. The FCA called on insurance firms to consider whether they could be doing more for customers affected by the coronavirus crisis.
Just acall phoneaway!
BMW saw its net profit dip by 2.4 per cent to 574m euros during the first quarter of 2020 and warned the pandemic would hold the industry back ‘for quite some time to come’. The figure – equivalent to circa £497m – is down from 588m euros (circa £509m) during the same period last year, when it also had a large one-time expense stemming from an EU anti-trust case. The company is expecting its earnings to worsen during the first six months of this year. However, it added that it was still financially solid, with 19 billion euros (£16.5bn) in cash at the end of March.
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TALK TO US TODAY. frfl.co.uk/car 0115 946 6260 enquiries@frfl.co.uk
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Dashboard.
Supplier news
Survey reveals just how keen people are to buy a used car
A POLL has revealed that threequarters of used car buyers in the market now intend to buy from car dealers within three months of the lockdown lifting. A survey of 693 consumers by eBay Motors Group showed that 76 per cent of those searching for a car now will buy in the few months after restrictions are lifted. And some 17 per cent of those said they planned to buy immediately the lockdown is eased. The research – carried out among visitors to Motors.co.uk – found that those who were desperate to buy were either key workers or people who had identified a car that suited them.
Dealership visits are increasingly less likely once restrictions are lifted, according to poll A SURVEY has found that the proportion of people likely or very likely to buy without visiting a dealer has grown from 30 per cent since lockdown started to 50 per cent. The poll of 880 prospective buyers by customer acquisition specialist TLA examined how buying behaviour had changed in the five weeks of the Covid-19 crisis up to April 26. It found that more people were delaying buying a
vehicle by one to three months – up from 27 per cent to 44 per cent. However, the number of consumers looking to delay by more than three months fell for three consecutive weeks. Meanwhile, nearly four-fifths (77 per cent) of those quizzed said in the week of April 20 that they’d opt for a different brand if they were unable to buy the one that they initially wanted.
Lockdown helped push average profit down by 43 per cent
Dealers helped over online home delivery for used car sales
Bluesky Interactive launches fee-free e-sales platform
Drive Vauxhall signs up WMS Group as warranty provider
THE start of lockdown contributed to a 43 per cent profitability drop to £68,000 for the average car retailer. ASE Global reported that submissions by retailers fell by ‘an understandable 25 per cent’, with a lower number of franchises finalising their retailer results for March. It added that the preliminary results didn’t paint as complete a picture, as a large number of orders couldn’t be delivered at the end of March. Based on the data from those that did provide some, though, overall profitability fell by £50,000 against March 2019.
MOTOR finance company Startline says it is easing the way for dealers to offer online-based home delivery for used car sales. Chief executive Paul Burgess said that because finance was part of the vast majority of sales, HP and PCP had to be fast, easy to use, robust and compliant to make the online retail model work. ‘We have long offered the capability to carry out the entire task of processing finance online but, pre-lockdown, some dealers chose to maintain traditional processes,’ he said. ‘It is these retailers that we are now helping.’
AUTOMOTIVE web design and marketing agency Bluesky Interactive has launched a new vehicle purchase platform that doesn’t carry any transaction fees. AutoTransact plugs into dealers’ websites, helping with reservations, deposits, part-exchanges and full purchases all in one. Tony Hilton, the company’s operations director, said: ‘With the global situation as it is, we know that selling cars online is crucially important to our dealers.’ Caffyns Group has been one of the first digital dealers to launch with AutoTransact.
DRIVE Vauxhall has signed up the WMS Group to provide its warranties. In a statement, Drive Vauxhall joint managing directors Rob Keenan and Stuart Harrison praised the levels of service, including its 24/7 claims support and 24-hour claim payment turnaround. They said: ‘We believe we have not just found a warranty supplier but a key partner that will help our business grow tremendously.’ Drive Vauxhall, which has 15 dealerships, is one of the UK’s largest privately owned automotive retail groups.
14 | CarDealerMag.co.uk
Codeweavers tools offer extended until restrictions are lifted
Epyx and RAC garages network help key workers
Findandfundmycar says car buying still uppermost in minds
Finance channels are needed to make most of online sales
CODEWEAVERS is extending its offer of free e-commerce tools until the virus restrictions have lifted. The digital commerce services provider said that following the government’s confirmation that retailers could sell vehicles online and deliver them during the lockdown, opportunities had to be grasped to lessen the economic impact of the restrictions. Chief executive Roland Schaack said: ‘No matter how quickly the government lifts the restrictions, many – if not most – people are going to want to limit their social contact to their immediate circle of family and friends.’
EPYX and the RAC’s Approved Garages and Accredited Repairer Network have joined forces to help keep key worker fleets mobile during the crisis. The arrangement sees key workers’ broken-down fleet cars and vans recovered by RAC patrols to workshops that are open. Garages in the RAC network can join the supplier directory in epyx’s 1link Service Network platform. Gary Wrightson-Heyworth, network operations service manager, said: ‘For car and van operators delivering essential services, keeping vehicles on the road is paramount at the moment.’
ONLINE used car marketplace findandfundmycar.com says it has seen a surge in finance activity as well as increases in leads and traffic. After an initial drop at the start of the lockdown, the company – part of MotoNovo Finance – has seen sustained growth, reporting a 29 per cent increase in sales leads week on week and a 15 per cent rise in site traffic. MotoNovo chief executive Mark Standish said: ‘One of the most compelling key performance indicators is the notable increase in our site visitors engaging with our financing options, which is a sure sign of car buying interest moving through to action.’
USED car dealers wanting to make as many online sales as possible in the near future will need widespread availability of finance. That’s according to Startline Motor Finance, which says many providers had essentially shut off new business at the start of the lockdown, furloughing staff as they thought vehicle sales would be almost impossible. Chief executive Paul Burgess said it was difficult to predict the level of online sales during lockdown but they could be an important lifeline for dealers and that those handful of sales could make the difference between surviving the crisis or not.
Used car prices are stable – even rising in some regions
WMS Group founder John Colinswood’s pride as he retires
Autoweb Design offers full e-trade website as standard
Heycar sees surge as public browse for cars in lockdown
AUTOWEB Design has unveiled new online features to help groups and independent dealers adapt as smoothly as possible. The digital marketing and website design agency is making e-commerce and digital sales process features part of the standard tier on its new dealer website platform at no extra cost. Existing website customers will be upgraded free and the features will also be offered to non-website customers for the first time.
USED car marketplace heycar saw website traffic spike by 35 per cent week on week in the first two weeks of April – peaking over Easter. It emphasised that maintaining interest was key to keep a pipeline of customers for the future, and has included a ‘register interest’ button on all makes and models to help dealers. The button was introduced to the site in April and since then there has been a 40 per cent rise in users indicating their interest.
USED car prices across the country WMS Group managing director and appear to be stable during the founding partner John Colinswood coronavirus crisis, according to the has announced his retirement latest research. after a lifetime of working in the While there are some regional automotive industry. drops – down 4.3 per cent in Most of his career was spent in south central England and 1.4 the warranties sector, which led per cent in south-east England – to him co-establishing the WMS there is evidence of some prices Group as Warranty Management creeping up. Services in 2003. Colinswood said: The eBay Motors Group data has ‘I feel proud and privileged to have found that in London and Scotland founded WMS Group, and it has dealers have actually their been very rewarding to workPage with 1 Car dealer new increased strip ad Revised 4/4/18 12:01 asking prices for used cars. such great people.’
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Dashboard. ADVERTISING FEATURE
From bricks to clicks Heycar looks at what’s on the horizon for the motor trade in the coming weeks and months – and how you can prepare for it.
T
he saying ‘there are decades when nothing happens and there are weeks when decades happen’ couldn’t be more appropriate for where the car industry finds itself today. In the space of just a few weeks, car manufacturers and dealers have faced the toughest challenges ever to be thrown at them – and it has the potential to change how cars are bought and sold for good. The model that has served the motor industry and consumers well for so long – that cars, whether new or used, are retailed through franchises who invest in large, physical premises – has been upended overnight, and processes that have taken many years to implement and develop have either needed to be quickly adapted or abandoned. That chaos is now bringing much-needed innovation to the market after years of inertia and a sense of ‘Well, that’s how it’s always been done’. It’s taken a disastrous circumstance, but the industry is finally getting the kick that it should have had years ago: collecting and managing customer inquiries entirely digitally, virtual car walkarounds, phone/video appointments and delivery of sold cars the norm – a case of necessity being the mother of invention. It’s now going to be difficult to put that genie back in the bottle – but the savvier dealers are looking at the opportunities that lie ahead, as 16 | CarDealerMag.co.uk
well as dealing with the challenges. At heycar, we believe there’s always going to be a place for physical showrooms – not least because there’s a consumer demand for a physical car-buying experience. After all, buying a car should be an exciting and engaging experience. However, indicators point to a more digitalised experience, automating and transforming the more tedious parts of the process. Manufacturers have, of course, been pushing at this door for some time. There is consumer demand for truly digital car-buying experiences. We’ve seen Volvo launch test drives through Amazon Prime, Hyundai team up with Rockar and then launch its own full click-to-buy service and Mercedes-Benz add a deposit-reserve option to its recently relaunched digital showroom.
Just under a third of leads submitted on heycar in the past month were made on SUVs
And new entrants to the market – such as Tesla – have placed a focus on digital-first from the outset. Other manufacturers – such as Skoda and Renault – are offering buyers live walk-arounds
‘Feedback from owners is showing that they’re thinking more critically about car ownership.’ of cars and the chance to speak to a brand expert face to face. These are all features that customers will soon expect as part and parcel of the carbuying process. Dealers also need to be alert to consumers making changes to how they own cars, as well as how they buy them, and the potential knockon effects. Feedback from owners is showing that they’re thinking more critically about car ownership and the costs involved. And having two, three or more cars on the drive depreciating, being insured even if not used and becoming a maintenance burden has got consumers wondering whether they need to own as many cars and if they need to own a car at all. In the past month, we’ve noticed just under a third of leads submitted on heycar were made on SUVs. This suggests those people who want fewer cars are now looking for bigger ones that can cater
Adaptability is the key to recovery by KAREN HILTON Heycar Chief Commercial Officer
for multiple uses. With remote working likely to be part of the ‘new normal’ for some time, car usage will continue to be lower and families are much more likely to share cars – and be open to the idea of innovative ‘on demand’ lease options much more than before. That leaves the question – what can dealers do now? In the first instance, keep in contact with your customers. Those who aren’t in-market at the moment are concerned about basic maintenance and their cars being unused. It’s easier said than done, especially with reduced headcount, but basic advice on how to look after an unused car – from battery conditioning to looking after tyres – and simple emails or videos with practical advice will help your customers. And are you communicating with buyers in the way they want to be contacted? Services like WhatsApp were once used by just younger people, but lockdown has introduced them to a much broader audience and, as people keep in contact with family, this may now be a preferred method of contact. The same is true of video calling. Whatever happens in the very near future, one thing is clear: These are the weeks in which the next decades are being built.
DEALERS that are likely to come out the other side of this crisis fastest are those that have been able to adapt to ‘the new normal’ quickly and are building those systems and processes into their future ways of working. A large number of our dealer groups are using this time to evaluate the structure of their companies from top to bottom. For example, many of them contacted us at heycar very early on to ask for advice on setting up an inbound lead-handling centre. Dealers who are putting these support systems in place now will reap the rewards in the coming months. And what about taking the whole process online? Our consumer research suggests most people still want to touch and feel the cars they’re interested in before committing to a purchase. Therefore, for us, building an online journey means using technology to take some of the faff out of the process of buying a car. Taking those cumbersome, tedious steps (which can force people to spend anywhere from two to three hours in a showroom) out of the equation is where we could see the real, long-term value of the digital advancements made now out of necessity.
For many people, lockdown has provided them with lots of extra time to start searching for their next car. And from what we’re seeing, that increased customer interest in the market is just waiting to be unleashed and converted when these government restrictions are eased. It’s a massive opportunity for everyone in the industry to take advantage of. So where do we come in? In the last few weeks, we’ve launched a ‘Register interest for later’ button on listings to allow customers to show a sign of intent, even though there might not be anyone in the dealership to take their call now. And the initial results have been promising, with the feature already contributing to 25 per cent of the leads we’ve sent to dealers since the start of April. Our aim is to raise the bar on communication between potential buyers and dealers – and this forms a key part of it. Customers can also now create a shortlist of cars they’re interested in to review later, and once they’ve narrowed down their options and are ready to contact a dealer, their ‘Favourites’ are just one click away. Ultimately, at heycar we’re here to help our dealers get through this period any way we can and to make sure we’re all in a position to be more flexible and responsive to future customer demands.
Karen Hilton is Chief Commercial Officer at heycar. A seasoned automotive professional, she’s held senior leadership roles at high-growth start-ups Nested and carwow alongside 10 years’ experience at manufacturers including Volkswagen and BMW. CarDealerMag.co.uk | 17
Forecourt.
FIRST DRIVE
Nissan Note e-Power Nissan’s unique hybrid tech took Japan by storm and now it’s heading here. Jon Reay took to the streets of Tokyo (pre-lockdown) to see what’s what.
Powertrain
e-Power uses a three-cylinder 1.2-litre petrol paired with Leaf’s electric motor
Badges
The only way you’ll spot the difference between e-Power models and their standard equivalents
What is it? Believe it or not, you’re looking at the future of Nissan’s European product range. Do not adjust your set – it’s the second-generation Note, a car that disappeared from our shores back in 2017. It’s what’s underneath the frumpy micro-MPV body that counts, though: Nissan’s e-Power hybrid tech, which the brand confidently states will be available in European models by 2022. e-Power models have been on sale in Nissan’s home market of Japan for three years, and despite the Note’s ancient origins, adding e-Power propelled it to the position of Japan’s best-selling car in 2018 – so it must be doing something right.
What’s new? On the Note itself, not a lot. There’s a new grille and lights up front, plus a baffling array of shouty exterior colours compared with the muted selection we received in Europe. This being Japan, there’s a NISMO-badged version too with an extra 20bhp or so. It also 18 | CarDealerMag.co.uk
gets some rather red side skirts and, even more strangely, some rock-hard Recaro bucket seats. There’s even a four-wheel-drive e-Power Note – Nissan’s toe-in-the-water at building a dual-motor electrified vehicle.
What’s under the bonnet? The Note e-Power gets a three-cylinder, 1.2-litre petrol engine paired with an electric motor – but before you switch off, this is a set-up different to any other currently on sale. Unlike most selfcharging hybrids – which use a petrol engine to power the wheels, and throw in a small electric motor to help at lower speeds – the Note’s wheels are 100 per cent powered by the electric motor. Its engine, then, is there purely to act as a generator – charging up a small lithium-ion battery, which in turn provides power to the super-efficient motor borrowed from the lastgeneration Nissan Leaf. Why? Nissan believes it’s a way of bringing the advantages of an EV – immediate torque,
smooth power delivery and near-silent operation – to those who don’t want to make the jump to a fully electric car just yet. What’s more, because it does without the big battery of plug-in-hybrids and EVs, it’s cheaper to make and weighs a lot less too.
What’s it like to drive? Perhaps unsurprisingly, the e-Power drives just like an EV – and that’s no bad thing. Acceleration is instant, and while it can’t realistically be described as fast, it feels effortless and smooth. When the engine does kick in – which happens relatively quickly, thanks to the Note’s tiny 1.5kWh battery – it manages not to intrude too much into the cabin. For the sake of efficiency it tries to run at a constant speed of around 2,500rpm, so there’s none of the droning or soaring revs that you find under hard acceleration
THE KNOWLEDGE Nissan Note e-Power Autech Price as tested: £17,113 (est) Engine: 1.2-litre petrol, electric motor Power: 107bhp Torque: 254Nm Max speed: N/A 0-60mph: 10.1 seconds (est) MPG: 96mpg claimed (Japan JC08 cycle) Model:
Familiar face
Nissan chose the ageing Note as a guinea pig for the new technology
TARGET BUYERS: Small families looking for an economical mini-MPV. THE RIVALS: Honda Jazz Hybrid, Toyota Yaris Hybrid.
Generator
The Note’s engine never directly powers the wheels – it exists purely to charge the 1.5kWh battery.
in CVT gearbox-equipped hybrids. Naturally, let off the accelerator and the Note immediately pops on the regenerative brakes. This was also the first car to be fitted with Nissan’s e-Pedal, letting you drive around (in theory) without using the brake pedal. Our test drive followed a pretty sedate set of roads around what felt like Tokyo’s homage to central Milton Keynes, so it’s hard to say how the e-Power set-up would take to a less urban environment. Impressively though, the Note’s trip computer suggested that – despite our decadent Western driving style – we’d managed 49.7mpg.
How does it look? As we won’t be seeing the Note itself again in Britain anytime soon, we won’t dwell too much on its styling. It’s reassuring to see that Nissan hasn’t gone over the top with exterior bits to differentiate this from the standard car, though.
KEY SELLING POINTS: 1. Quiet, smooth and refined. 2. Excellent fuel economy. 3. Cheaper than a plug-in hybrid or full EV. DEAL CLINCHER: The economical benefits of a hybrid without the punishing CVT gearbox.
What’s it like inside? Nissan has raided its EV parts bin for the Note’s interior. You get the not-unpleasant gear selector from the current-generation Leaf, and some dated monochrome displays in the instrument binnacle borrowed from the old one. Beyond that, there’s little to separate the e-Power from a standard Note – and that’s okay.
What’s the spec like? It’s not worth dwelling on the ancient Note too much here – it’s a mini-MPV from 2012 and doesn’t even get many of Nissan’s latest driverassist bits and pieces. What’s more interesting is our particular car, which has been fettled by Nissan’s in-house tuning company Autech. Aside from littering the interior with its logos and other blue highlights, Autech has beefed up the humble Note with extra chassis bracing – presumably just because it can. There are four choices of interior fabric and,
‘It’s a way of bringing the advantages of an EV to those who don’t want to make the jump to a fully electric car just yet.’ even stranger, three different options for the stitching on your leather steering wheel.
What do the press think? Autocar Japan said: ‘冷静に考えれば「なんでい ままで出なかったの？」というメカニズムを搭 載したノートe-POWER。実際に乗ってみてそ の素晴らしさが実感できた。久々にヒットの予 感のするモデルだった.’ (There were no reviews in English at the time of publication!)
What do we think? Cars designed for Japanese tastes aren’t always a huge success in Europe, but Nissan might be on to a winner with its e-Power technology. It’s better to drive than CVT-equipped hybrid rivals and just as economical. It might be a stopgap between combustion-engined cars and EVs, but it remains a likeable halfway house all the same. All that’s left is for Nissan to get a move on and slot it into one of its European models – we think it deserves to do well. CarDealerMag.co.uk | 19
Forecourt.
FIRST DRIVE
THE KNOWLEDGE
Subaru Forester e-Boxer Subaru has dipped its toes in the waters of electrification by adding an electric motor to its farmer-favourite Forester SUV – Darren Cassey checks it out. What is it? The Subaru Forester has always been a go-to of the ‘lifestyle’ sect, for those people who want something practical that could carry all the bits and bobs their outdoorsy lives require while also being capable off the beaten track. That’s still applicable here, but this new e-Boxer variant is designed to make the car more appealing to city slickers, thanks to its hybrid powertrain.
What’s new? This model is the fifth generation of Forester, and while it may look similar to its predecessor, it actually sits on the new Subaru Global Platform (or SGP). Other changes include an increase in size to make more room for passengers and their things, the latest EyeSight safety technology, plus driver facial-recognition software.
What’s under the bonnet? It’s the powertrain that’s the real story here, and at its heart is a familiar Subaru ‘boxer’ petrol engine. It’s a 2.0-litre unit paired with an electric motor that’s powered by a small lithium-ion battery. It allows for all-electric driving of up to one mile at speeds of 25mph, and Subaru says it improves fuel economy by 10 per cent versus the standard engine. The result is, well, a little underwhelming. With the 20 | CarDealerMag.co.uk
combined fuel economy figure of 34.7mpg, it’s well off the 50mpgplus of the similarly sized, similarly priced Toyota Rav4, which benefits from a bigger battery to support its petrol engine. And because it’s a CVT, when you put your foot down you get that odd sensation of zero progress despite the high engine revolutions.
What’s it like to drive? Despite the above, it’s not all doom and gloom, because the Forester is generally a decent drive. A bit of pre-planning to avoid the need for full-throttle manoeuvres and the engine is relatively quiet. The ride is great, too, thanks largely to the off-road-ready raised suspension and high-sidewall tyres. On the road, you do notice its weight in the corners, but this isn't a car that encourages you to channel Subaru rally legends of old. Take the Forester off road, though, and it’s brilliantly capable. It has the firm’s excellent symmetrical all-wheel-drive system, plus a drive mode dial that can optimise the powertrain for road driving, snow and dirt, or deep snow and mud.
How does it look? At the launch of the Forester e-Boxer, Subaru’s designers said the car wasn’t ‘styled to win beauty contests’, which is totally understandable – this car is about rugged practicality, or function over
form. That said, the Forester isn’t an unattractive car. Its boxy side profile is reminiscent of all large SUVs, while the rear lights have a cool angular design. The front end is a little fussy, but its chunky features make it look off-road-ready.
What’s it like inside? Jump in the cabin and it’s immediately clear that this isn’t a premium car, but it does a great job of balancing creature comforts with its focus on durability. There are soft-touch and premium-looking materials on show, with the worst of the cheap plastics hidden away. The infotainment system has plenty of features and is easy to use, although the graphics do look rather aftermarket. Its real USP is the space on offer, though. It feels massive inside whether you’re sitting in the front or the back, largely because of the increased wheelbase improving cabin and boot space.
What’s the spec like? Our high-spec XE Premium model had all the bells and whistles you could require of a car – automatic LED headlights, rain-sensing wipers, 18-inch alloys and sunroof. Inside are heated seats and steering wheel, dual-zone climate control, plus an eight-inch infotainment system with sat nav and Apple CarPlay, as well as Subaru’s various safety systems such as EyeSight.
Model: Forester e-Boxer Price (as tested): £38,995 Engine: 2.0-litre petrol hybrid Power: 164bhp Torque: 196Nm Max speed: 119mph 0-60mph: 11.6 seconds MPG: 34.7 (combined) Emissions: 154g/km CO2 TARGET BUYERS: People who need rugged offroad capability in a car that will still be comfortable on the school run. THE RIVALS: Toyota Rav4, Honda CR-V, Mitsubishi Outlander PHEV. KEY SELLING POINTS: 1. Off-road capability. 2. Well equipped. 3. Spacious. DEAL CLINCHER: It’s roomy and comfortable inside, as well as having great spec, with a sliver of green credentials on the side.
What do the press think? Autocar said: ‘To the majority of modern SUV buyers, there just won’t be enough otherwise to recommend it on paper. But those who do need what it can do will still likely find a way to appreciate it pretty easily.’
What do we think? The Forester is very likeable, offering a comfortable driving experience, plenty of space and loads of kit. But it’s hard to ignore that the e-Boxer's tiny battery barely improves fuel economy and doesn’t push the car into a low tax bracket. That said, if you need strong off-road capability above all else, the Forester makes a compelling case for itself.
One Central Square Cardiff, CF10 1FS www.motonovofinance.com
An open letter to the UK motor retailing community “Wherever there is change and wherever there is uncertainty there is opportunity”. Mark Cuban, American entrepreneur and investor
In 12 words, this quote summarises the approach we must embrace in re-opening used car retailing. Changes following the COVID-19 lockdown period are inevitable, but people will still want to buy cars, vans and motorcycles. I believe that dealers are positioned perfectly to deliver the buying experience, products, services and reassurance customers will seek.
The challenges
Economically and in terms of confidence, the impact of COVID-19 will continue to resonate; we should plan for a protracted period of austerity, uncertainty, economic hardship and rising unemployment.
The opportunities
The credit crunch experience is a guide to what we can expect, as people adjust their spending activities and employ a ‘cool to be frugal’ ethos. As well as the value afforded by used cars, demand may increase from people delaying a move to alternative fuel vehicles, due to their high purchase costs. Changes to work and social life could also benefit used cars sales: Ê
Social distancing will see some people switch from public transport or car sharing to using their own car.
Ê
Altered working patterns to ease commuting and social interaction will drive interest in car usage.
Ê
The lifting of lockdown and a reluctance to travel abroad will encourage UK travel.
Ê
Remote working may see people move out of urban locations to areas where car ownership is more desirable.
Car buyers will still want to see the vehicle for themselves and interact with dealership staff, so providing reassurance to customers will be crucial. Dealers will need to develop their proposition and understand distance selling regulation in order to help car buyers make an informed buying choice Ê
Bring your dealership to life online. Your ethos, history, people, capabilities and services, as well as your stock. As the move to local shopping has shown in the crisis, people don’t just want a low price; they value local service.
Ê
Offer finance. The value of the payment holiday potential that finance offers has become evident in the last few weeks. Offering finance will give you an edge, and in the coming weeks as we expand our risk-based pricing product, the appeal of dealer finance could increase even further.
Ê
Added Value Services to ‘De-Risk’ car buying. Uniquely in motor finance, we’ve continued to offer PPI services. The ability to cover life, sickness and unemployment risks saw more customers selecting this service in March and we expect this type of reassurance from PPI to remain compelling for buyers in the months ahead.
The changes
Dealers are not immune to the necessary market changes. Financial discipline is all-important, costs must be challenged and new business practices formed. Digital will be a crucial part of this change. Review your digital capabilities and distribution channels/partners to ensure the cost/value works for you, while also assessing distance selling, home delivery and click & collect options. If our team and unique product and service portfolio can help, we welcome the opportunity to do so. Yours faithfully,
Mark Standish, CEO MotoNovo Finance
MotoNovo Finance Limited. Registered in Wales under Company No 11556144. Registered Office: One Central Square, Cardiff, Wales, United Kingdom, CF10 1FS. Authorised and regulated by the Financial Conduct Authority.
Dashboard – Car Dealer Live
Industry views
It’ll be different on other side but you have to get on with it
SNOWS Group operations director Neil McCue commented on how resilient the motor trade was and said he was positive about getting back to work eventually. ‘We’ve got to roll our sleeves up and get on with it. We’ve faced many, many challenges over the last 20 years that I’ve been working in the business. It’ll be a very different business when we come back but we’ve got to get on with it, simple as that.’ McCue highlighted how hard Snows had been working to improve its online presence, with sales subsequently growing. It was also getting lots of inquiries about used cars and more deposits by the day.
Won’t give us your temperature? Sorry, we’re not going to let you into our showrooms then... PETER Vardy will use temperature checks for every person entering its dealerships when it reopens – and if they won’t take one they won’t be allowed in. Manufacturers, customers and staff will all be checked at the doors of dealerships and if their temperature is high, they wouldn’t be allowed entry either, chief executive Peter Vardy said. Other steps he is considering include sales staff
wearing masks and gloves, sitting in the back of cars during test drives, and one-way systems around his dealerships. He also revealed that the group had sold 1,000 cars during the lockdown. ‘Our sales team is getting us ready to sell online and we’ll have done 1,000 sales when we get back to work. ‘The aftersales team have been keeping NHS staff on the road with small jobs too.’
Selling older stock and halt to buying helped with finances
Green shoots starting We’ve taken more to show and shift than 1,000 orders system is on the cards during lockdown
Helping hundreds of customers with small jobs or courtesy cars
INDEPENDENT car dealers Jim Reid and Umesh Samani told how a fantastic start to the year had been hit by the Covid-19 pandemic. Samani who owns Specialist Cars of Stoke, said: ‘It was only in the last week before the shutdown that we thought we needed to stop buying. Because of that the bank balance is actually sitting healthier than it would normally in March.’ Kintore-based Reid, owner of Jim Reid Vehicle Sales, made the decision to get rid of older stock before the closure, saying: ‘You’ve got to have that liquidity in your business to pay the bills.’
HEYCAR said website traffic and leads dropped off for seven days running when the lockdown was brought in but figures started creeping up again as consumers got their heads around the new norm. Chief operating officer Karen Hilton said it was now ‘starting to see those green shoots of growth’ and Corkills MD Sally Smith said the dealership group was also beginning to see quality leads. As social distancing was likely to continue throughout this year and into 2021, the group was looking at how it could be incorporated, including a shift system, she added.
PERRYS has managed to help 350 customers with small jobs in its workshops or supplied courtesy cars in more extreme situations. MD Darren Ardron said the team had taken some deposits but had focused instead on building a bank of 1,000 leads for when it returns to work, with its call centre taking 12,000 calls. He said he was ‘hugely proud of the team because we never trained for anything like this’, adding: ‘I honestly can’t praise them enough for what’s happened in this crisis.’ Ardron told how reactive Perrys had been to customers’ new needs.
22 | CarDealerMag.co.uk
CARWOW sales director John Miele revealed that its dealer partners had reported more than 1,000 orders during the lockdown. But he stressed: ‘That means they’ve taken 1,000 deposits. It doesn’t mean they’ve delivered 1,000 cars. Customers haven’t met the dealers, they haven’t seen the cars and they don’t even know when they’ll be delivered yet.’ UK MD Athena Hubble added that configuring was down a lot at the top of the funnel but ‘at the point they’re configuring cars down to inquiry or through to purchase has remained pretty stable.’
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Pay furloughed sales staff the commission that they’re owed
Supercars still attract keen interest in spite of coronavirus crisis
It’s been difficult but the industry can get through this
Creating a look and a feel that engenders trust in customers
VINES BMW managing director Sean Kelly hit out at dealerships that were holding on to commission earned by staff in March who had since been furloughed. ‘If somebody’s entitled to that level of support then we should be doing that morally, even if financially that becomes challenging for any business . . . Needless to say, we’ve paid ours as you’d expect, but they’re legally obliged to do that.’ And he warned that disgruntled employees could well vote with their feet and take their cases to employment tribunals. Kelly said the business could manage social distancing, as it had ‘fairly big’ premises for sales, people could be put in different areas, and it could manage by appointment only.
TOM Jaconelli told of the company’s fears as the crisis began, but said it ended up surprised by how much interest there still was in supercars and performance cars, with people happy for deliveries to take place after the lockdown was lifted. And he reported that inquiry levels had risen further following the government’s confirmation that online sales and deliveries could take place during lockdown, and recent sales had included a near£1m Porsche 918 Spyder. He conceded that it was currently a buyer’s market and that they had to be prepared to negotiate, but added: ‘I don’t think there’s a need to completely do ridiculous deals and undersell cars, because I do believe there is pent-up demand.’
MIKE Brewer shared how he ‘fell in love’ with his first car, a Mini, which became his first deal – bought for £300 and sold for £800. From there he went into the trade before being headhunted by Channel 4 for Deals on Wheels. He told his story of how he started by helping out on it, ending up presenting the most-watched car show in the world. It wasn’t all positivity from Brewer, though, who is concerned how his ability to keep the doors open and staff employed may be affected by the crisis. He’s already put more than 100 employees on furlough, which he said was difficult as a business and ‘heartbreaking’, but he believes the industry can get through this.
WESSEX Garages is ramping up for new customer expectations in car dealerships, according to managing director Chris Wiseman. He explained how ‘it’s important that when a customer comes in, or our colleagues and managers, they see and feel a completely different environment. That was the key to it for me’. The measures, he said, were ‘by no means comprehensive but they’re probably over the top. My signage isn’t subtle and I don’t think it should be’. Wiseman has been in the dealership with a skeleton staff implementing the changes. He said: ‘This was about the look, the feel that customers can trust coming into the business.’
No point in rushing back to work – we need to get it right
SHERWOODS Motor Group MD Simon MacConachie said he would rather the business was costing him thousands of pounds a day than go back too soon in the current crisis. ‘The only thing worse than what we’re doing now is having to do it all again in six weeks’ time.’ When it comes to fully reopening, MacConachie said he was being extremely cautious and his top concern was ensuring his staff were comfortable at work so they could do their jobs properly. ‘I don’t want to be seen to be ruthless, I don’t want to come back to work before it’s right and I don’t want to come back to work before it’s safe,’ he said.
Why would handing over a car in part of a showroom be less safe than on the street? RENAULT Groupe UK MD Vincent Tourette said his dealers were prepared to open before the prime minister’s address to the nation on May 10. ‘Our preference will be to open part of the showroom for handovers. I don’t see why doing it would be less safe than delivering cars on the street at people’s homes.’ He and network operations director Louise O’Sullivan explained the changes they’d been implementing and some of the work that still needed
to be done. Groupe Renault has been proactive across Europe in providing a PPE pack that car dealers can buy direct from it at cost. She explained how they’d learnt from markets that were hit first by the virus. ‘Our process has four steps: gloves, masks, disinfectant and gels. ‘That’s the pack we have offered and agreed on a European level, and we will supply it at cost if they wish to have it.’ CarDealerMag.co.uk | 23
Beyond finance “I’m more like a consultant, taking time to understand the dealership so that we can add real value to their business.” Watch Aimee's video to see how: blackhorse.co.uk/beyondfinance
Aimee Winder Account Manager North East Region
A better way of doing business 24 | CarDealerMag.co.uk
Speaking out JA M E S B AG G OT T
Against our better judgment, we let the CEO have his say each month
Plan now for the business that you want to have on the other side of this
T
hey say knowledge is king, and in a digital age the data available is incredibly powerful. But what if, like me, you’d been living in an analogue past and never even realised it? Like most people, I imagined myself to be pretty techsavvy. OK, so I’m not writing code before breakfast, but I do use most social media while eating my cornflakes, am interested in online trends and enjoy using new technology. However, in the weeks since lockdown, I’ve had my eyes opened to a whole new world of digital opportunity – and I expect many car dealers will soon be following suit. Car Dealer Magazine was hit just as hard as the rest of the trade when the coronavirus forced dealers to shut their doors. Our lifeblood – the suppliers who advertise their services to you – were in similar situations. We had to urgently adjust, launching a new-look website over the course of a (long) weekend, a new daily webinar in the shape of Car Dealer Live, daily email briefings and even WhatsApp breaking news groups to share our content as it happened. The physical magazine has been halted, and until we know what things look like on the other side of the pandemic it’ll stay that way. We’ve focused our time in the past seven weeks on our digital offering. My days start early as we source content for the website and produce a daily news round-up from the business, motoring and news headlines. But what is truly driving our content is the data that’s available. We use an analytics software called GoSquared for our website, which gives me a real-time picture of the number of users on our site, how they got there, what they’re reading it on and – importantly – what they’re looking at. I’ve become obsessed with the numbers. I have it running throughout the day on the second screen on my desk, and when I’ve turned my computer off at the end of the day, I can’t stop myself dipping in and out on my mobile. So, what have we seen? Well, clearly dealers are desperate for information on what is happening and our user numbers have rocketed as a result. This time last year, we’d have been very happy with 50,000 visitors a month. In the whole of 2019, we clocked up 585k visitors, in 2018 it was 510k, and if we rewind back to 2015 it was 400k. In April of this year, we managed to clock up a year’s
worth of traffic in just 30 days, with 476k visitors heading to CarDealerMagazine.co.uk. What’s more, already this year – just four and a bit months in – we have had 1.8 MILLION visitors. And it’s still growing. Revenue for the business has dropped dramatically, as you can imagine, but I have every hope that it will come back as car dealers get back to work and so too do the suppliers who support us – hopefully seeing the benefits of being associated with those sorts of numbers on our website. I was sent a wonderful quote the other day from the CEO of Intel that really made me think. It said: ‘Bad companies are destroyed by crises; good companies survive them; great companies are improved by them.’ Have you thought about how your business will be improved when you emerge from this lockdown? We’ve written countless articles – many of which you can find within this digital magazine – about how dealers will have to adapt their businesses. From online car sales, to home deliveries, social distancing in the workplace, to appointments only – the future looks very different to the past. There are probably many car dealers out there wondering what on earth this will mean to their firms, but already we’re seeing many adapt. And if my experiences are anything to go by, the knowledge concentrating on online sales could give you may make dealers more powerful than ever before. The pace of change that some in the trade have managed to achieve in the past few weeks has been nothing short of incredible, and I am confident that when we all learn what – and I hate the phrase – the ‘new normal’ looks like, that change will accelerate across the motor trade. Buyers are going to want to do as much as they can remotely for a long time to come, and making sure you’re set up for that now with a website that fires on all cylinders is vital. Change is coming. In fact, change in a lot of cases is already here, but it’s time to embrace it. My chairman finished our last board meeting with a few well-chosen words of wisdom. They really resonated and are helping drive me forward every day. ‘Don’t plan for the business you’ll have on the other side of this,’ he said. ‘Plan for the business you want to have.’ What will yours look like?
‘Already this year – just four and a bit months in – we have had 1.8 MILLION visitors. And it’s still growing.’
James Baggott is the founder of Car Dealer Magazine and chief executive officer of parent company @BaizeGroup, an automotive services provider. He now spends most of his time on Twitter @CarDealerEd and annoying the rest of us. CarDealerMag.co.uk | 25
Big Mike Our man on the inside shares his thoughts on the car business
T
So shine these good deeds in our coronavirus world
hose of you who are fans of Only Fools and Horses will no doubt cast a wry smile when I mention Uncle Albert and his ‘during the war’ stories. And right now, while we’re not at war (at least as far as we know it, providing you avoid the tinfoil hat brigade), we’re all amid our own phase of ‘during the war’ stories: tales of sacrifice, survivalism and derring-do as we as a community, a nation and a world pull together to face one of the biggest challenges we’ve ever encountered. It’d be crass to compare the Covid-19 pandemic to a full-scale war of course, for while it brings with it its own level of tragedy and despair – and let’s not lose sight of that – for a large number of people it simply involves sitting at home in front of Netflix while the government pays eight-tenths of their wages. At the same time, we don’t worry that our 21-year-old son or daughter may never get to enjoy the life ahead of them, have their legs blown off or the trauma that might bring to the rest of their family. In other words, it could be a lot worse – although I’m human enough to recognise that for those families whose lives have been irrevocably changed by the coronavirus, that’s not much of a consolation. What I have seen in recent weeks, though, has been a situation that has brought out both the best and worst in people. While greed and selfishness were the first to come to the fore, leading Britons to come up with what appears to be myriad recipes using flour, pasta and toilet roll, the less self-absorbed among us have performed
some genuine acts of kindness that have made me immensely proud to be one of them. And among them, the used car industry shines like a beacon – which should be a lesson to anyone who still believes it is packed with crooks and charlatans. I mean, sure, there are plenty of ‘characters’ about and we all love the thrill of a decent sale, a bargain purchase or a bit of creative accounting now and then, but there are also a high number of car dealers who are genuine, charming and properly helpful people. Among them is Jim Reid Cars in Aberdeenshire, which has temporarily loaned its fleet of Skoda Fabia courtesy cars to the local health authority for volunteer drivers to use delivering prescriptions and urgent blood. Then there are Nissan and MG Motor at a national level, which have donated 100 cars each to key workers to use on a temporary basis. A shout-out too for north-east Englandbased Peugeot and DS main dealer Simon Bailes for making all of its demonstrators available for NHS and pharmacy use, as well as donating its entire stock of disposable seat covers to the frontline workers – and there are many more local heroes who have all done their own bit to support the effort.
Who is Big Mike? Well, that would be telling. What we can say is he’s had more than 40 years 26 | CarDealerMag.co.uk
My own contribution was inspired by Car Dealer subscriber and regular Bangers4Ben participant Nigel Sansom, who runs an independent garage and dealership in Dorset. Within days of the severity of Covid-19 becoming apparent, Nigel had given away his company’s Peugeot 306 courtesy car to an intensive care nurse at Southampton General Hospital. And by that we mean he’d given it away free of charge, rather than just as a loaner. It may only have been a £495 part-ex-to-clear job in forecourt terms, but the context in which Nigel gave it away was a lot more than that. It was – quite possibly – a matter of life and death. I’m not quite as gregarious as our Nige, to whom I doff my Arthur Daley hat, but I am a human being. So, with no chance of selling any of my own stock in a hurry, I took to the local Facebook group to offer 20 of the cars on my forecourt to anyone who found themselves in need of one and could prove to me that they were a frontline worker and were happy to insure the car themselves. As a result, I’ve got a 1999 Rover 200 on loan to a critical care nurse at my local A&E department, a 2001 Beetle in the care of one of her colleagues and a 2005 Micra trundling its way around the local care homes delivering face shields and disposable gloves to care homes. I also lent a battered Mondeo part-exer to a local supermarket delivery driver whose normal car had conked out, but as soon as he got paid at the end of the month he phoned me up and asked if he could buy it. I was going to punt it out at the magic PX-toclear £495, but humanity got the better of my business sense and I told him it was his for £200. No, I’m not sure why, either. Perhaps I’m getting less motivated by money in my old age, or perhaps the current situation has made me realise what’s truly important in life and what isn’t? If it’s the latter, then it worries me a little about the future of our businesses. If a global pandemic has shocked people into realising what are the truly important things in life (and no matter how hard I look at it, a new-ish faux-by-four on a PCP really isn’t up there with being able to breathe, enjoying the company of friends and family, or the breathtaking beauty of a starlit sky on a clear night), then new car sales, commissions and our finance-based business model might be about to get a ginormous shake-up and one that will deal a few of us a stiff old kick in the nuts. It’s not nice, is it? It may be a bit easier for smaller independents, though, as the car sales market rebalances itself. Instead of new or nearly new cars offered on low-rate finance, the traditional used car may be about to make a comeback as people are forced to review their household budgets. And as they do, they might take stock of what’s going on in the world at large and decide
that a 10-year-old Volvo estate owned outright is a better option than a shiny new somethingorotherCross with an all-singing, alldancing infotainment system. Others, meanwhile, might just realise that an old Volvo is a nicer car than a Vauxhall Crossland X anyway and have done with it, but that’s another story. If so, then it’s good news for me, but not for those of you in glass-fronted showrooms with posh coffee machines. If you’re a good salesperson, though, you’ll adapt. People will still want things, but they might want different things. And they’ll certainly want clean things, so if you’re in the cleaning or valeting industry, expect to be suddenly rushed off your feet as soon as Boris lets us all out to play properly again. Knowing what the future holds right now is impossible, but one thing’s for sure: car dealers are made of stern stuff, and I don’t doubt for a second we’ll bounce back. We’re salespeople but we’re also human beings. So, if you want to present yourself as someone who people want to do business with in future, then take a leaf out of Nigel Sansom’s book, Jim Reid’s book or Simon Bailes’s book. These are the companies, all at different ‘levels’ within the car sales stratosphere, whose entirely selfless gestures in these challenging times will ensure that they will continue to supply local cars to local people for many years to come. People have long memories. They’ll remember the spring of 2020 for at least as long as their bailout loan or increased mortgage interest lasts, and hopefully far beyond as society shifts towards one of being more sharing, generous and respectful. At least, that’s what I hope for, even if it does mean my business takes a little while to pick up again. I’m sorry if this month’s column hasn’t been injected with my usual cheeky humour. It didn’t seem appropriate, to be honest, but there’s light at the end of the tunnel and we should all keep heading towards it by doing our bit. Look after those close to you – friends, family and customers – and once some semblance of normality comes back we can start selling cars again. Until then, stay safe, take care and I’ll see you on the other side. And this Thursday at 8pm, I’ll be on my doorstep clapping for Nigel Sansom as much as for the NHS.
‘Others, meanwhile, might just realise that an old Volvo is a nicer car than a Vauxhall Crossland X anyway and have done with it.’
in the car trade so has probably forgotten more about it than we’re likely to know. CarDealerMag.co.uk | 27
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Trader Tales JA M E S L I T TO N
Casting an experienced eye on the wide and challenging world of motor sales
Data has its place but it’s the cost versus value that can be a problem
I
’ve been supplying editorials to James and the team at Car Dealer for almost 10 years now, and although I’ve foreseen a few trends over that decade, my hot takes often cool very quickly. Never has that been more the case than with these Covid-19 times in which we find ourselves. It is a braver person than I who puts their head above the parapet to proffer bold predictions in these most perilous of times. So with that in mind, I thought I would write about one of my most favourite topics over the past 10 years: Auto Trader. Auto Trader is like the council tax of the motor trade. Most people think its rate is too expensive, it’s hard to see where your money is going and the price keeps going up. Yet despite us not having a choice with council tax, most people choose to continue with their Auto Trader subscription. To Auto Trader’s credit, the company has evolved over the past few years from a great URL with a clever search engine to a data powerhouse which, for those who understand and utilise its products correctly, could solely be used to price and remarket cars and still make a comfortable living from it. But the problem Auto Trader sometimes fails to understand is that not all used car operations are created equal. For example, when you work within a franchised dealership, your used car purchases are sometimes inhibited by new car target failure, resulting in pre-reg exercises and expensive part-exchanges acquired as you attempt to hit that elusive new car number or compulsory purchase programmes which, on the one hand, pay volume bonuses yet result in inflated purchase prices to satisfy manufacturer requirements. So, while you know that expensive part-exchange may score poorly on Auto Trader’s performance metrics, it is the final deal that unlocks a large amount of manufacturer bonus, and that cannot be added as a positive influence on their algorithm. It isn’t all plain sailing for many independents either. While they have a lot more flexibility on what they stock and from where they stock it, many people are using the same Auto Trader retail pricing and stockturn tools to help quantify the desirability. Therefore, the one five-year-old Golf DSG with 15,000 miles being sold through the UK Car Group Sale at BCA starts with – after accounting for fees and delivery – a
potentially skinnier margin than may have otherwise been the case if this data wasn’t available to ‘help’ you. Another issue for Auto Trader in its attempt to win the hearts and minds of business owners or department managers is a fundamental unwillingness to change or an appreciation of how analytics is helping to shape modern business. On Friday, I listened to an Auto Trader webinar which launched its latest performance dashboard. Instead of having separate measurements to monitor the retail viability of a car – price, potential stock turn, advert quality – these have all been rolled into one traffic-lit optical measurement expressing the desirability of your car. This is all very interesting, but the cars I suspected to be desirable are and the ones I expected to be a challenge are. Of course, there are one or two surprises, but the fact remains that all of the intelligence in the world will not deliver a buyer to your door. This is why many are unconvinced of the value of so much information in running a used car business. But there is a place for this data. I cannot imagine valuing a part-exchange now without sanity-checking CAP or Glass’s against what Auto Trader thinks it might retail for, nor would I entertain taking £1,000 off a car which was already considered by Auto Trader to be priced ‘low’. The issue I, like so many, have is the cost for all of this. Think back to the council tax analogy. The only thing that I seem to get out of my fruity council tax payment is my bins being emptied twice a week, and even then they slap nasty stickers on my bins when I dare put some orange peel in my household waste bag, and want to charge me an extra £50 a month to take my grass cuttings away. However, if the council stopped taking it altogether I might feel a bit different. Council tax, like Auto Trader, has no perception of value to the person handing over the money. Competitors such as CarGurus have been successful in stealing market share from Auto Trader by using a freemium model. They give you the basics for nothing and charge you for the additional features. If Auto Trader wants to give me unlimited listings and its data pack for six months, I might get used to it and miss it if it threatened to take it away, but alas Auto Trader wants to monetise new features from day one.
‘There are one or two surprises, but the fact remains that all of the intelligence in the world will not deliver a buyer to your door.’
James Litton is an automotive retail consultant who always has something to say about the industry he loves. CarDealerMag.co.uk | 29
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Do we need a scrappage scheme? Of course, car manufacturers will like it, because it’s basically targeted free money which helps them get closer towards their 95g/km target which it looks like they’ll miss – badly – and face a bunch of huge fines for. I think the general public will be as keen as ever to be pro-environmental in years to come after CV19, having had a taste of what it’s like during the reduced economic and transport activity. But the obvious way to achieve that is to greatly reduce the amount of those polluting activities and do something else. The mindset has changed – where before there was a ‘need’ to travel, that might be a bit diluted now too. So the desire for, eg, electric cars is kinda the same (they balance out), not bolstered by this crisis. Is it so great to continue propping up the car industry? Who loses out if the scrappage scheme is introduced? Does it really benefit consumers and the environment? Paul C I don’t think the government will be keen in the short term to introduce incentives towards new cars. They are well aware that the manufacturers have an ace up their sleeve in the form of that age-old secret – how much does the manufacturer make per unit... It’s well known the franchisee has circa 10-20% margin which they can choose to give away, but the factory margin has always been a mystery, and with the current trend to build many group models off the same chassis/platform, the margin is rumoured to be as much as 50-60% on some models, so as you can
Picture of the month
confidence is at an all-time low, the potential for massive increases in the level of unemployment, and the retired under house arrest, to name just a few of the likely issues. Who is going to be buying the cars? BMX Bandits
The team at Car Dealer have been working particularly hard this month, but arguably none reached quite the same level as resident northerner Ted Welford, who managed to turn up twice for a Zoom meeting. We have to praise finance manager Kate Gordon as well, as she also managed this, but Ted gets to feature on this page as we didn’t catch her on camera – plus she wasn’t dressed as Bono... imagine, there is plenty of scope for the new car industry to give itself a good push, and then there is the issue of manufacturers not wanting to lose their presence in most areas. awc1000 I think it will be hard in the current circumstances to see the government launching a new scrappage scheme. We have huge problems growing within the economy, consumer
We should have a VAT reduction to stimulate the savings to be spent that many have got after furlough. Not everyone is spending beyond their means and this will put money back into the economy, help manufacturing (one hopes in the UK) and hopefully create jobs. Another scrappage scheme just takes good cars to be smashed away from the very people who need them: the working class of Britain, of whom there are many. Obviously they don’t like this title but hey ho. New Year’s Revolutions If the government can afford to provide an economic stimulus in the future, I think it will either be in the form of specific help for certain sectors – for example, airlines, pubs/restaurants, performing arts. The car industry is somewhat lower down on the list and is expected to ‘get on with it themselves’ – and/or a VAT drop to 15 per cent or thereabouts to provide a more general stimulus. Worrying times ahead for franchises, I feel. I think auctions are going to undergo something of a revolution too but I’m not sure quite how it would end up. Paul C
Top tweets The car dealing world is still looking for more information about when and how showrooms can open again. Here’s what people have been saying on Twitter...
@VertuMotors
@StocktonJulian
@MOkrasa
The click and collect move today by @BorisJohnson HM Government is a major move towards getting the #automotive sector moving from part suppliers, OEMs and dealers in the UK. We have a used car handover bay classed as ‘storage’ not a showroom. Click and Collect Appointments now being booked for our 30+ lockdown sales. All COVID-19 Secure guidelines already in place. June 1st is the aim for date from what I can make of it. We are a small used car sales company and rely on main dealers part exchanges to retail. We need these to operate for a week or two before we can replace any stock.
Unfortunately I don’t think the definition of ‘essential retailer’ has changed. It’s always been clear that car showrooms should remain closed. @olliedotcom
On the grounds that you can’t run a car dealership entirely from home... seems like that was a green light. @matm295
@LtdVoldi
The optimist in me could see a very faint green light in the message for car dealers to get back to what we do best but a lot of clarity missing for the full go ahead #cardealerships
More and more of our readers are joining the debate – and it couldn’t be 30 | CarDealerMag.co.uk
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CORONAVIRUS
When will auctions reopen? When do you all think a physical auction will reopen.....not just online, but going to the auction in person and bidding? Nevillec
Between late August to mid September government-wise hopefully, although realistically maybe December in my opinion. casper
Realistically, I think they’ll only fully reopen July 4th or after, in the same category as other businesses where social distancing is more challenging. Since they can do online sort-of okay at the moment probably best to adapt to that than wait. Paulc
I don’t think they can operate properly until we get a vaccine. The last auction I went to before lockdown was a nightmare. All the cars went through the hall with their doors locked and the windows up. You couldn’t check interiors, keys, clutch, gearbox, etc. Traders were all trying not to get near each other while trying to check a car/ bid. It just really didn’t work. Mad as it sounds, I’d almost rather take my chance online and try and claim against an incorrect appraisal. I think that if auctions find they can survive just by being online and with proper appraisals/resolution they might never need us back in. BMX Bandits
I still can’t see it that early. Even when nonessential shops are allowed to reopen social distancing will still be in place. How can a tiny auction hall cater for a few hundred buyers all fighting for attention and often in groups of other friends/family/colleagues to all stand two metres apart? It’s usually as packed as a cattle market and they won’t want to limit the amount of customers allowed in. Lakeside If BCA or Manheim refused to let Joe Public in for the moment then you would have 15/20 dealers. Ideally they could restrict it to Gold Level and above. If they had a pre-approved invite system... That would cut out all the browsers and suit-and-tie trade group buyers who have just turned up because they have to prove they are working. Highlinev8
We’ve teamed up with Car Sales Memes to bring you a few of their funniest captions and slogans each month. Enjoy!
I know I bang on about this, but physical auctions have now had another nail in their coffin! They’ve always wanted us to sit at home buying, it suits them completely. I’m just amazed that auction houses have been slow to stick it on us. It will be interesting to see how bothered they are about physical auctions now they have a great opportunity like this to change everything. Metcars
Some surprises among phone calls Today, I’ve found the phone has been much busier with inquiries than it’s been in the last week or so. But what I found more significant was that I had two old customers asking ‘Do you buy cars?’. Both customers were needing to sell their cars for financial reasons. Just wondered if people were experiencing similar? BMX Bandits I have noticed on my ‘daily exercise’, where the old people’s bungalows are, that the majority have not been moved or washed in at least two months. So if anyone goes out to buy them take a foot pump, a jump pack and a hammer… Have a word with the wife
I had a similar call last week but from a van customer. He bought a Mercedes-Benz Sprinter from us about six months ago. He does rubbish and garden clearance but has not had any business for seven weeks. Nevillec Have got a few lumpy sports cars coming in SOR including a 69-plate Bentley. As for commercials, we are down a bit on renewals but it was heading this way before C19. This is partly due to the list prices of new vans increasing so much in the last 12 months. Contracts
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CarDealerMag.co.uk | 31
Feature.
DELAYED:
THE CARS CORONAVIRUS PUT THE BRAKES ON It's not just sales that have been impacted by the Covid-19 pandemic: it's halted the development of a number of new models. Here are some of the new cars that have been hit by coronavirus-related delays.
Volkswagen ID 3
The launch of the first of Volkswagen’s new electric vehicles, which use a new EV platform, has been beset by delays. The issue surrounds the software built into the car, which is said to be completely unusable. In March, the Financial Times quoted VW’s chief financial officer Frank Witter saying that the target was still an August release, though he admitted the company was 'a bit handcuffed' because of coronavirus factory closures. Couple this with engineers working hard to figure out the major software issues and the ID.3’s 2020 release date is coming increasingly under strain.
Ford Mustang Mach-E
Once all the ‘you can’t use the Mustang name for an electric SUV’ drama from enthusiasts had died down, excitement for the first of Ford’s new era of e-mobility has been growing. The Mustang Mach-E is a handsome and intriguing car, but enthusiast forums have been sharing images of a notice sent to Norwegian buyers saying their cars will not be delivered until November. In a statement, Ford said: 'We’ll have more details to share on the timing of our upcoming all-new vehicles once we have safely brought our factories and facilities back online. Final timing is not yet determined.' 32 | CarDealerMag.co.uk
Aston Martin DBX
Aston Martin’s first SUV has received rave reviews ahead of its launch, but anyone who’s put in an order might have to wait a little longer for their car to arrive. On March 30, the British company confirmed billionaire Lawrence Stroll would take over, with a rights issue raising £536m and a further £150m being made available to the company. That funding would allow the DBX to go into production, but Aston Martin’s factory in St Athan, Wales, has been shut because of the pandemic.
Ferrari - Two Models
Ferrari is being delightfully vague when it simply says it will reveal two new models in 2020. While early speculation hinted at delays forcing a 2021 release, the Italian firm has since said the models will only be delayed by three to four months. Ferrari CEO Louis Camilleri said the company looked at its bottom line to reduce costs and expenditures in 2020, and decided that it would have to delay some models, while others will arrive on time.
Maserati MC20
Another one we haven’t even seen yet, the new Maserati supercar had been scheduled to be revealed this month, but it will now not be seen until September. We know very little about the MC20, other than a hint at its silhouette in camouflaged teasers. However, Maserati says the model will see the brand ‘return to the world of racing’.
CarDealerMag.co.uk | 33
BIG
Feature.
I N
J A P A N
'Kei' cars are huge in Japan – just not literally. To explore the phenomenon, we posted Jon Reay off to sample one of the more appealing models... 34 | CarDealerMag.co.uk
PHOTOS: JON REAY
S660's looks are attention-grabbing, even in neon-lit Tokyo
Despite its dimensions, the interior is a pleasant place to be
S
mall things are big business in Japan. Hotels ‘rooms’ the size of bathtubs, bars and restaurants that seat just three customers, and even Bonsai trees: it’s a nation that seems obsessed by miniaturisation. Nowhere is that more true than Japan’s car industry, where tiny, domestic market ‘kei’ cars rule. In 2019, 34 per cent of all cars registered in Japan were of this diminutive variety. To put that in perspective, the UK’s top-selling segment – the supermini – accounts for a mere nine per cent of our total yearly sales. That figure is even more incredible when you consider the stringent guidelines kei cars have to adhere to. External dimensions can’t exceed 3.4 metres long or 1.48 metres wide – smaller than the original Ford Ka – while engines are limited to a just 660cc in capacity, and 63bhp in output. Despite that, you’ll find a baffling array of options: traditional city cars, MPVs with sliding doors, 4x4s, even pick-up trucks. Strangest of them all, though, is the car you see before you: the Honda S660. It’s a mid-engined, rear-wheel-drive, two-seat convertible that also just happens to be smaller and lighter than a Rover Metro. To really understand the S660’s raison d'être, you have to drive it in its home market – so that’s exactly what we’ve done. Our journey begins at Honda’s Tokyo headquarters, on what feels like the wettest day ever recorded. It isn’t, of course – it's not even the wettest it's been that week – but that doesn’t
S660 is dwarfed by most cars - even the dainty Mazda MX-5
stop Honda’s Japanese PR man from urging, in particularly cautious tones, to take extreme care while driving. Perhaps we’ve underestimated the performance of this S660 after all… Having slid into the driver’s seat and navigated out of Honda’s underground kei car lair, it’s time to get acquainted. Firstly, let’s cover the elephant in the room: the S660’s size. It’s hard to convey just how miniature the wee Honda really is – thanks in part to its shrunk-inthe-wash-NSX looks. Kei cars are small, you get the picture; but most make up for their squished length and width by expanding upwards. Not so the S660: at 118cm in height, it’s just a fingernail taller than a Lotus Elise. That does rather beg the question, is it even designed for humans? Luckily, those engineers at Honda are packaging wizards. Two lightly-built six-footers will slot (relatively) easily inside the S660’s tiny cabin, and Honda has thoughtfully narrowed the door cards and centre console to maximise space. Even the pedals are well spaced – as our size 11
S660's tiny engine sits behind the driver
combat boots will attest. In fact, it doesn’t take long to acclimatise to the Honda’s tiny proportions at all. After an hour behind the wheel, you begin to deliriously wonder why all the other cars on the road aren’t this size. There are plenty of reasons why you’d pick a kei car, too. Japan taxes its cars based on external dimensions, engine size and total weight. So, the smaller the car, the less cash you’ll hand over to the government. 'Kei', by the way, is short for 'keijidosha' meaning 'light vehicle'. Kei car owners also bypass some of Japan’s registration paperwork, including – bizarrely – having to prove that you own a parking space. In the interests of being thorough we’re taking the S660 on something of a mammoth (relative to its size) journey. You might think kei cars like this are relegated to pent-up cities like Tokyo, but in fact, they’re just as popular across the rest of Japan: even in its rural backwaters. To that end, we’re heading for one such backwater: Yamanakako, a modest fishing village that, apparently, has a nice view of something or other called Mount Fuji. Never heard of it... As we set off, a much-needed break in the clouds brings the opportunity to remove the S660’s modest soft top. As you’d expect, there are no fancy electronic folding arrangements here – it’s a Lotus-style affair, which is a polite way of saying that you’ll need to get out and roll it up. Storing said soft-top reveals the trade-off for the S660’s leg room: zero boot space. Honda has CarDealerMag.co.uk | 35
Feature.
‘After an hour behind the wheel, you begin to deliriously wonder why all the other cars on the road aren’t this size’ squeezed just enough room under the bonnet to stow the roof away, but once that’s filled, your shopping and takeaway ramen will be confined to the passenger seat. It’s just as well that we’re travelling light because, snaking around Tokyo’s maze-like streets, it turns out that the S660 is fabulous fun to throw around. We’ve chosen to avoid toll routes for as far as we can, and so far it’s paying off. While the expressways take the shortest, dullest route, we’re experiencing what feels like real Tokyo: its snaking underbelly, in the shadow of the giant concrete multi-lane highways that tower above. The S660 revels in every aspect of this. Its quick steering and short wheelbase make sudden changes of direction a piece of cake, and being so low to the ground, hitting even 30mph feels like risqué behaviour. Slightly unusually for Japan, which has long favoured sluggish autos and CVTs, we’ve been given a manual: and thank God for that. The S660’s turbocharged 0.66-litre doesn’t need to be worked as hard as VTEC-equipped Hondas of old, but gears in the six-speed gearbox are as short as you’d expect for a 63bhp car. It’s just as well, then, that it’s a joy to use: the stubby gearstick feels positive to engage, and more sports car-like than the S660’s budget origins 36 | CarDealerMag.co.uk
might lead you to believe. Let’s not get carried away, though: it’s no S2000, nor is it pretending to be. Controls are predominantly light and easy to engage, rather than weighty and communicative – and I know what I’d rather have while crawling through traffic in dreary Kawasaki. Which, incidentally, is exactly what we’re doing. It’s suddenly clear why the Japanese are happy to pay as much as they do for toll roads: the alternative is to sit in miles of grey urban sprawl. Still, it’s giving us the chance to explore some of the S660’s little quirks. Technically being a targa rather than a full-on convertible, the Honda gets a solid rear window – or rather, it gets three. The middle one even drops down electronically, giving you the option to hear that, er, snarling threecylinder engine over your shoulder.
Six-speed gearbox is a good'un
Curiously, you can even spec your S660 with an electronically-actuated rear spoiler, which must make this the lowest-powered car ever to be given active aerodynamics. Many, many hours later and we’re finally escaped the gridlock, as Kanagawa prefecture’s smaller towns and villages come into view. Finally the decision to skip a jaunt down the expressway is starting to pay off again: the S660’s incompressible Japanese sat nav taking us on some questionable, but ultimately gorgeous back roads. Flying along with nothing but rice paddies either side, and verdant hills up ahead, it suddenly feels like we’re in the Japan of yesteryear – a million miles from the choked cityscapes of Tokyo and Yokohama. Before long, we’ve found ourselves heading into the lush foothills of Mount Mikuni: mist overhead, the scent of the forest filling the S660’s open cabin. It’s here that the little Honda starts to feel a touch out of breath. Its 63bhp 0.66-litre, which felt quite sprightly around the streets of Shibuya and Shinjuku, suddenly feels a bit pedestrian. The steering, it must be said, isn’t inspiring much confidence on the slippery tarmac either. You soon work out how to wring its neck,
The best of the rest In the market for a strange, miniature car from Japan? Don't worry – there are plenty to choose from...
Suzuki Hustler
The fabulously-named Hustler is Suzuki's idea of an MPV crossover – and you have to admit, it's a curious thing. Incredibly, the Hustler and its thick-rimmed spectacle headlights was the ninth best-selling kei car in 2019...
Nissan Dayz
The Dayz's relatively sober looks hide some sophisticated tech, namely Nissan's ProPilot semi-autonomous systems. Fourth best selling car overall in Japan last year, it'll soon spin-off an EV version too – which may reach Europe...
though: a lesson that proved handy when overtaking a dawdling Mitsubishi Pajero that suddenly appeared out of the mist. Heading downhill once again, we arrive at Lake Yamanaka to the sight of not Mount Fuji, but two dozen hopeful Japanese tourists and their Nikons. Much to our disappointment, they don’t appear to be here for the tiny Honda – clearly they’re not aware it’s mid-engined... As Japan’s most famous symbol slowly reveals itself from the clouds, we’re left to ponder what we’ve learned about the S660 along our journey. Firstly, it’s a lot better to drive than a kei car has any right to be. Despite the draconian restrictions on power and size, it’s fun, easygoing and not unpleasant at motorway speeds either. It’s also a very well thought-out bit of packaging. Okay, so it doesn’t have a boot, but neither did the Toyota MR-2 – and that was twice the size. Perhaps the most amazing thing, though, is that it was built in the first place. Honda – one of Japan’s most sensible, financially prudent corporations – designed a mid-engined, £15,000 sports car almost from scratch, knowing it would only ever be sold in one market, and then put it into production anyway. If you needed proof that Japan loves the kei car, evidence doesn't get much stronger than that. [CD]
THE KNOWLEDGE Model: Honda S660 Price (as tested): £17,746 Engine: 0.66-litre petrol Power: 63bhp Torque: 104Nm Max speed: 87mph 0-60mph: 10+ seconds MPG: 58.1 Emissions (CO2): 112g/km
Daihatsu Move Canbus
Daihatsu is current kei car king in Japan, with more than 10 different models to chose from – including the S660-rivalling Copen. The strangest remains this VW Bus-alike, which looks enormous but only seats four.
TARGET BUYERS: City dwellers looking for topdown thrills THE RIVALS: Daihatsu Copen, Mazda MX-5 KEY SELLING POINTS: 1. Low cost of ownership 2. Good to drive 3. Appealing looks DEAL CLINCHER: If you have to have a kei car convertible, have this one
Suzuki Jimny
That's right, the Jimny is a kei car. Oh don't look so surprised... In addition to the (relatively) powerful 1.5 Jimny we're used to in Europe, Japan gets one with narrower wheel arches and pint-sized engine to fit into kei categorisation. Naturally, it's still 4WD though. CarDealerMag.co.uk | 37
Advice. BACK TO BUSINESS
All you need to know about safely reopening D
espite the date not yet 100 per cent confirmed, car dealers are busy preparing their sites for an expected reopening on June 1. Official guidelines on the steps that they should take were released by motor industry bodies on May 13, following government advice to businesses. The good news is that car dealers are now allowed to offer a click-and-collect service to customers who want to get their new cars. With guidance scattered across the internet and a glut of resources to help dealers, we’ve attempted to pull together the most frequently asked questions to help you plan for the restart. What is the most important thing to think about when reopening? You need to make sure you have a full health and safety written assessment to ensure that your business is Covid-19-secure. All car dealerships will have to complete an online Health & Safety Executive (HSE) inspection to prove that they are safe to reopen – and face random spot checks in the future to ensure that they are continuing to comply. Using the HSE’s online tools, car dealers will need to display a certificate such as the one pictured on the right that confirms the business has complied with the government’s guidance on managing the risk of Covid-19. When do we let customers know? Communication of the work you’ve done to reopen is critical, so consider producing a video and other marketing materials to let customers know what steps you’ve taken to keep them safe. Plenty of signs explaining the rules should be put up. It’s also worth calling customers ahead of them arriving so they can plan their visit. Let
them know the rules and what they can and can’t expect. Make appointments where you can so you can manage customer arrivals. How do we communicate the dealership reopening plan to staff? Clearly let staff know your plans for returning to work well in advance of reopening. Give training to all members of the team where needed so everyone is up to speed with the plans. What are the key points dealers need to consider when setting up their dealership to reopen? The guidance is plentiful here and detailed – and you’ll need to consider a mix of advice from the government and industry trade bodies.
Car dealers will need to follow advice for retail businesses and offices. The key important points to consider are:
n Those who can still work from home should
continue to do so n Assess risks in consultation with workers n Where possible, two-metre social distancing should be maintained n Manage the risk of transmission if two-metre distancing is impossible, eg, with shift patterns What about PPE? PPE guidance states it should only be used if Covid-19 transmission risk is very high. Unless the risk of transmission is very high, your risk assessment should reflect the fact that the role of PPE in providing additional protection is extremely limited. Regular handwashing for 20 seconds is seen as the best preventative measure in a standard work environment. What about setting up showrooms to reopen? There are a number of key points to think about: n Maintain two-metre social distancing at all times – put up signs to remind staff and customers about it n Mark out walkways to maintain social distancing n One-way systems should be introduced, with an entry and exit n Handshakes and elbow bumping are to be avoided n All vehicles in the showroom and the forecourt should remain locked n Screens to protect staff should be considered in customer interaction points n Desks should be placed two metres apart n Refreshments should not be served to customers n Magazines, brochures and vending machines should be removed
Information here is correct at the time of publication but in the current climate may change at any time. 38 | CarDealerMag.co.uk
n Halt other complimentary services such as
children’s play areas n Put in hand sanitisation points n Cars need to be disinfected regularly n Set up protocols for deliveries n Recommend appointments for sales and aftersales (with flexibility for emergencies) n Use electronic payments and digital signatures What about in the office section of my car dealership – what should I do there? As car dealers are a hybrid of retail and offices, you need to consider the guidance for both areas. n All staff who can work from home should continue to do so n Rotas should be put in place to reduce numbers of staff, and create teams to limit interaction n Lavatories and other areas need clear signs about social distancing n Use liquid soap and disposable paper towels instead of solid soap and hand dryers n Maximum ventilation of premises and vehicles n Desks should be two metres apart n Consider the layout to ensure social distancing can be maintained n Hold virtual meetings, not face-to-face ones n Clean any surfaces touched by many people as often as you can How do I deal with part-exchange vehicles? The guidance says you should use all digital methods available to you and follow social distancing guidelines. Some dealers are leaving part-exchanges untouched for 72 hours – a time thought long enough to allow the virus to die off, but this hasn’t been confirmed anywhere. With regards to paperwork, replace it with digital methods where possible so it can be carried out remotely. Use DVLA online processes
and, where possible, avoid sharing pens and hardcopy documents. Are test drives allowed? These will be permitted when dealerships reopen but they must be unaccompanied. Trade plates should be used, after the DVLA gave dispensation for this. Dealers must have the correct insurance cover for solo test drives. It’s unlikely to be standard so speak to your broker about it. The car will also
‘As car dealers are a hybrid of retail and offices, you need to consider the guidance for both areas.’ need to be sanitised before a customer takes it out. That means cleaning touch points inside and out, such as door handles, seats, the steering wheel, gear stick, handbrake and rear-view mirror, or use disposable protective sets as appropriate. How about click and collect? The government has given the go-ahead for this to take place in England. As a retail business, you can offer a click-and-collect service but customers can’t enter the premises, although staff can be present. Maintain social distancing at all times. Again, ensure the vehicle has been sanitised, along with the keys, and make it a contactless handover. It’s yet to be confirmed if click-and collect is being allowed in Scotland, Wales and Northern Ireland. What about in the workshop? As many car dealers have already been operating
their workshops, guidance has previously been laid out on this. However, be mindful of the points raised above and ensure it’s as hands-off as possible. For example, have a drop box for keys, restricted access and flexible hours for staff. What about negative publicity? Some consumers might react negatively to car dealers reopening – we’re already seeing a little of this online. It’s worth reminding them just how important the automotive sector is. Car dealers provide employment to more than 590,000 people and, with an annual turnover of around £200bn, represent one of the key sectors of the UK economy. There are more than 40m vehicles licensed in the UK, many of which may need servicing or replacing too. What about getting staff back from furlough who might not want to come back? The law is quite clear about this. If the workplace is safe and staff aren’t having to isolate or aren’t having to look after someone who is extremely vulnerable, they must return. They can’t simply decide that it’s too dangerous for them. There has to be a specific reason that would rightly prevent them from coming back to work, and mere anxiety isn’t one of them. As such, if they don’t come back it will be a case of an unauthorised absence and can be treated as a disciplinary matter. It would also be a breach of the duty – implied or express – to obey a lawful and reasonable instruction to return to work. However, the employer must follow the government’s published guidance on workplace procedures, because if the guidance isn’t followed, it could become a health and safety matter and might give the employee a valid excuse to refuse to work in the most serious cases.
For the latest updates, visit our website at cardealermagazine.co.uk and gov.uk/coronavirus CarDealerMag.co.uk | 39
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Advice. AFTER THE SALE...
How can I safely deliver cars during Covid-19? S
ome dealers may, of course, still prefer to deliver the newly bought vehicles – perhaps because they feel it’s safer, or maybe because the customer can’t physically come and collect their purchase. Here’s our guide on what can and can’t be done – and, importantly, how. We’re not set up for delivering cars to people’s homes – what can we do? Firstly, you need to take advice on the Consumer Contracts Regulations (formerly Distance Selling Regulations) as these are onerous and come with added rights for the car buyer, which could cause you problems in the long run. Speak to the experts at Lawgistics or your company lawyers to get the correct terms and conditions in place and procedures. Can two members of my staff take the customer’s car then drive back together? No. That would contravene social distancing regulations as your staff members would have to be in the car together after dropping the customer’s vehicle off. Trade plate movement companies we have spoken to have said they are not operating in this way because of the risks. John Deeley, managing director of Vale Fleet Solutions, said: ‘The only way at present is to deliver a vehicle on the back of a truck with one person – this way, all the social distancing and hygiene can be adhered to. Any other way, such as a delivery driver that drives the vehicle, cannot be done due to the inherent risk.’ David Godber, of ProPlaters, echoed those thoughts, adding: ‘In the world of Covid-19, the industry simply can’t use drivers or “platers”, because the minute we do so we’re putting the team in harm’s way, as the need for car sharing to
and from pick-up and drop-off locations instantly breaches social distancing requirements. ‘Public transport isn’t an option either as many customers are out of town and aren’t close to public transportation. So, overnight we had to become a vehicle transporter-only business and our fleet of Mercedes car transporters is now at full capacity.’ It’s likely businesses such as Godber’s will be very busy in the coming weeks...
‘The only way at present is to deliver a vehicle on the back of a truck with one person.’ So, cars have to be delivered on a car transporter instead? Yes, if you’re to deliver cars safely you need to hire a flat-bed truck or car transporter to get that vehicle to a customer’s home. Godber explained that his firm has had to adapt how it does that too, with drivers dedicated to a certain vehicle so there is no cross-contamination – and suggests dealers follow suit. While the government has said home deliveries of cars are fine, they need to be carried out in the safest way possible. What else do delivery drivers need to consider? Social distancing is key when the delivery driver hands over the car that has been transported to the customer’s home, as is further sanitisation. Trucks should carry PPE kits. Antibacterial wipes, hand sanitiser and access to handwashing facilities is vital, too. Godber added: ‘All exterior contact surfaces from keys to door handles and fuel filler cap should be cleaned in addition to the steering wheel, control stalks and instrument panel, both prior to loading and prior to the delivery handover too.
‘At customer locations we’re actively practising social distancing and we’re conscious the transporter drivers should take care not to share a recently occupied cabin space.’ What about customer signatures for paperwork – can they be carried out? Most delivery firms have stopped signatures during this time, instead relying on photographic evidence of handover. Godber said: ‘We have decided to do away with the requirement for signatures, instead relying on our tablet-based photographic records of each vehicle’s condition at the point of collection and delivery.’ For legal documents, a digital signature system could prove useful. Speak to your finance providers to see if they can help here. Can I charge customers for a delivery this way? You can, but that will be a commercial decision. It could be built into the price of the car or could be charged as a separate line on the invoice. However, we can’t make that decision for you. Customers are clearly price-conscious at the moment so a delivery charge may be painful – especially when the likes of online-only car dealer Cazoo do it for free. If a customer has already bought and was waiting for delivery until after the lockdown, you could let them know there is now an option for delivery, but you’d have to explain to them that it will cost them. Sounds like delivery companies will be busy... They will be, and that could cause the next issue for car dealerships – finding a delivery slot. Speak to a local delivery firm now and arrange a deal before they get swamped. Of course, if you have your own flatbed truck or transporter you’re in luck, but ensure you document clearly the health and safety policies you expect staff to follow.
Information here is correct at the time of publication but in the current climate may change at any time. For the latest updates, visit our website at cardealermagazine.co.uk and gov.uk/coronavirus CarDealerMag.co.uk | 41
Advice. DIGITAL DEALS
How can car dealers get their website ready for online sales? I
t’s the question everyone is asking: How can car dealers prepare their website for online sales to get back to business? After the government confirmed to Car Dealer Magazine on April 22 that it was happy for dealers to sell online and deliver cars to customers’ homes during lockdown, the trade’s attention is turning online. The news has already seen some shoots of activity starting to appear. Many dealers, though, are scratching their heads and wondering how they can get their websites ready for online sales. While the industry was beginning to catch on to online sales before the coronavirus crisis – or e-commerce as it’s otherwise known – it could be said that it was more of a sedate amble towards a digital future, rather than the sprint it has become now. Here we chat to the experts in e-commerce, GForces, to get some hints and tips for dealers of all shapes and sizes. Where do I start getting my website ready for online sales? It’s a big job and not one that can be done overnight. GForces says really your site needs to be able to provide ‘full end-to-end transactional functionality’. What does that mean? Well, it means dealing with finance quotes, part-exchange valuations, extras, delivery and collection details, the ability to reserve a car and more. While that may sound rather daunting – and it is – it will be worth the time and effort. GForces chief commercial officer Tim Smith told us: ‘All of these features and functionality will enable the consumer to have full autonomy over their purchase consideration, giving them the ultimate choice as to how they may wish to buy online.
‘It is crucial that all this functionality is “baked” into the dealer’s website platform, providing total trust and transparency for the consumer, especially when it comes to data privacy.’ So I can’t just add a ‘buy it now’ button? Not really, no. This isn’t about simply adding a ‘buy it now’ button and letting sales roll, it’s more about providing your customers with the ability to consider every aspect of their car purchase on your website. Having an account area, where your customers
‘ Consumers that want to buy online are doing so for a reason, and that typically will be because they do not want a face-to-face sales experience.’ can log in and save cars they like, and, importantly, a live chat option so that they can talk to you and your staff about anything they need to know, is key. GForces says that this is important because it allows buyers to browse at their own pace and come back at a time convenient to them to seal the deal. What’s most important to think about when it comes to online sales? While buyers will want a site that’s easy to use, loads quickly and answers their questions, GForces believes it’s the whole customer experience that’s key. Smith said: ‘Consumers that want to buy online are doing so for a reason, and that typically will be because they do not want a face-to-face
sales experience, are time-poor and just want a simple way to conclude the transaction.’ These buyers don’t want to be ‘sold’ a car, but instead want to be in control of how and when they buy. Digital buyers are different, so don’t make the mistake of selling to them in the same way as you always have done. Smith says it is important that once the deal has been done, the post-transaction element is streamlined and efficient. This means don’t send a salesperson to do the handover and get the documents signed; this is a ‘digital specialists’ role’, believes Smith. He warns as well: ‘At no point after the transaction has been completed online should it return to any form of selling to the consumer.’ What does the customer want when it comes to online sales? This is about car buying when car buyers want to do it – at a time that suits them. And to do that, dealers need to give buyers all the tools they need to complete the transaction online. Smith explains: ‘Providing clear and simple quotation calculators so buyers can align their monthly budget, giving a guaranteed partexchange valuation and allowing them to selfappraise their own vehicle, giving options in a checkout to add accessories and to also choose a preferred delivery method are all vital.’ It’s possible to build in finance application software that will provide a credit decision on the dealer website, and this is a must. Smith added: ‘This allows the consumer to control this part of the purchase, which can often be emotive and stressful.’ Do I need to worry about Distance Selling Regulations? Distance Selling Regulations (now the Consumer Contracts Regulations) are a key consideration when a consumer buys online and elects to have
Thanks to GForces for helping us put this feature together. For more information, call GForces on 42 | CarDealerMag.co.uk
the vehicle delivered to their home, without having had any face-to-face contact as part of the buying process. A dealer can ensure that they adapt their terms and conditions of online sales within these regulations so the consumer is aware of their obligations within the 14-day cancellation period. Smith said: ‘For example, excess mileage can be charged, any damage to the vehicle can render the vehicle unavailable for return, and collection fees could be levied. ‘Dealers should not shy away from a distance sale, and should have the confidence in the product that they are selling, knowing that it has been prepared to the highest of standards.’ He reminds dealers that the Consumer Contracts Regulations are there to protect both the consumer and the seller. What about car finance – how do we deal with that online? Just as it is important in your showroom, dealers need to offer easy-to-access finance solutions online. These should include PCP and HP deals and should all be contained in a calculator that clearly explains the payments and the benefits. Smith said: ‘The consumer embarks on their own self-appraisal of finance as part of the online journey, and as part of this, compliance in line with the FCA’s principles of treating customers fairly is paramount. This is achieved through clear content, signposting and terms and conditions within the website.’ It’s worth getting some expert advice on this so that you don’t get it wrong. And what about part-exchanges – how on earth do we deal with those online? It doesn’t have to be an arduous task. You can embed tools for this via a valuation provider that gives buyers a guaranteed part-exchange value.
Smith advises that this is ‘instant’. Risk can be mitigated by adapting terms and conditions to explain that poor descriptions, incorrect mileage, or issues with provenance will reduce the price offered. You’ll be surprised how fair customers are, though, says Smith. He added: ‘In reality, consumers are more honest at appraising their own vehicle, especially as they will be aware that it will be checked as part of the handover process.’
Volvo UK’s online purchase system What’s the best way to chat to customers online? Live chat is the best tool to engage with consumers online, and it needs to appear when the customers need it most. Importantly, you need to be able to man it long into the evenings when customers are shopping on your website. On that subject, when will customers be looking to buy a car on my website? You’ll find that the most common time for customers to be looking at online sales is between 7pm and midnight. But as the coronavirus situation continues, customers have more time
on their hands, so it’s a pretty even 50/50 split between office hours and after hours. While they are working out which car to buy – a period that usually takes around six to eight weeks – buyers will be researching across the web. GForces says that dealers offering a full online transaction capability are ‘effectively open 24 hours a day’. Smith said: ‘Having the ability for a consumer to buy from a dealer when their traditional facilities are closed gives them a unique advantage over their competitors that don’t. More than 50 per cent of the transactions online take place when dealers’ showrooms are closed.’ What about pictures and video – how important are they? They are vital. Creating brilliant pictures and compelling video will aid the car-buying journey. Online car buyers want to have rich content served up on your website, as there’s a very good chance they won’t want to see the vehicle in person. A good video and lots of pictures ‘give buyers confidence the vehicle is as described’, explained Smith. So which dealers are doing online sales the best that I can learn lessons from? While you might think it’s the big groups with big budgets that are getting it right in online sales, it’s actually a steady mix across the industry of those dealers who have adopted digital car sales. GForces says its clients range from multifranchise groups, single-franchise and independents, and they are all doing it well and increasing online sales. Smith added: ‘Those dealers that fully embrace online sales as part of their culture and process are proving that there is more than an appetite from consumers to buy online – it’s rapidly becoming the new way to buy a vehicle.’
0844 247 4523. Details about the firm’s NetDirector Auto-e solution can be found on the GForces website. CarDealerMag.co.uk | 43
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Advice. VIDEO
How dealers can use video during the crisis With customers less keen on leaving the house, video is vital. Here Carwow’s star Mat Watson gives dealers his top tips.
V
ideo is going to become an even more important tool for car dealerships as customers become more conscious of unnecessary contact. Editorial director of Carwow Mat Watson, who stars in the company’s YouTube videos, where they have 3.8m subscribers and more than one billion views, had some advice on Car Dealer Live for firms looking to connect with their customers from far away. 1. Send videos to keep them excited ‘Send customers video reviews, it keeps the excitement in that car they’re looking at,’ Watson said. ‘If you’ve got in stock cars you can do quick little videos so people can look round it. I do quite a lot of stuff on Instagram and I will do a one-minute real-time video walk-around of a car to let my Instagram followers take a look, and it’s a very concise overview. It takes a minute to film it and about three minutes to post it.’ 2. Practise Watson suggested that old adage that practice makes perfect, and taking time to hone your presenting skills and speed up the process will save you time in the long run.
‘Obviously I’ve practised at it, but if you are a car dealer you can practise doing that with your own car at home so when you’re back at the dealership and we’re still social distancing you’re on it, you know what you’re doing,’ he said.
‘ People will want to buy cars, but they won’t want to be coming into dealerships’ 3. Get some simple kit to improve the quality A little kit can go a long way and Watson made some suggestions on the show to quickly improve the quality of your videos. ‘Most people will film it on their phone, and that’s great but the sound will be a bit rubbish through the phone’s microphone. Buy a little mic that you can plug into your phone and you can get a really good one for £40,’ he explained. ‘Then you’re going to be a bit shaky. You can buy a gimbal for £60. If you’re a big dealership you might not want to have one for all your salespeople but once that’s set up it can be shared. It will make the video look so much better. ‘Then there’s simple editing software. I use Video
Editor, it’s a free app and you can change the aspect ratio so it’s portrait or landscape.’ 4. Use video chat to stay connected ‘We’re chatting now, we could be in a room together but we’re not, we’re online. I wouldn’t suggest using Zoom, my mum wouldn’t want to be faffing around with Zoom but she knows how to use WhatsApp,’ he said. ‘If I’m trying to explain something to her and we can’t talk face to face I’ll use WhatsApp to show her. You can do that at your dealership if you need to talk someone around a car very easily. I think there’s going to be a lot more of that because people will want to buy cars but they won’t want to be coming into dealerships. Especially older people.’ 5. Be authentic ‘The key is to be authentic,’ was Watson’s final words of wisdom. ‘Keep it simple, explain this is the car, these are the features and have a look round it. Almost as if you’re showing your friend around the car rather than trying to sell them something. Let me see around the car, that’s it. You can make errors sometimes, leave them in because it looks natural. Act natural, that’s it.’ CarDealerMag.co.uk | 45
Advice. MONEY MATTERS
12 tips for car dealers from top accountants UHY Hacker Young O
ne of the leading chartered accountants in the UK has shared its top tips for car dealerships trying to stay afloat during the coronavirus crisis. UHY Hacker Young corporate finance partner David Kendrick and audit partner Paul Daly had some top advice specifically for car dealerships and dealer groups when they appeared on Car Dealer Live. 1. Get written consent about furlough A big topic across the country is furlough, with more than nine million people now placed on the scheme that will see the government back 80 per cent of their salaries up to £2,500 a month. New guidance on the topic is coming out all the time and Daly explained that consent is required from employees. ‘The legal direction for HMRC has now been issued. One of those points is the need to get consent from the employees for furlough,’ he said. ‘Get that written confirmation. It doesn’t need to be backdated and can be done via email.’
are now causing further confusion, and Kendrick explained: ‘We’ve got to be careful that this doesn’t become a legal battle. ‘Last week there was a good feeling among dealers that commission would be paid and then this guidance was released,’ he said. ‘I think it’s very, very grey, and that’s not very helpful from a dealer perspective.
‘ Cash is king at this time, so when we’re talking to clients, having as much cash around you as possible is really good, even if there’s more cost to it in the short term.’
‘A good example of that is a client of mine who did have a good forecast and thought they were going to be OK, but the assumption they made around manufacturer bonuses coming in last week was actually slightly out of kilter. ‘Those bonuses came in a few days late, which meant they breached the overdraft facility, but because they were in regular contact with the bank and they knew what was going on, they were relaxed about it. I’m not sure things would have been the same if they didn’t have that intelligence in front of them.’
2. Keep records of the guidance you read Daly emphasised that record-keeping during this time ‘will be crucial’. ‘These things will be paid,’ he added. ‘A bit like a self-assessment, years down the line someone will look at it. ‘Because this guidance is ever-changing, keeping screenshots and records of what you use as guidance is vital.’
‘The worry we now have is that if you take a pessimistic view on this, perhaps commission shouldn’t be included. We’ve spoken to some of the larger groups, and I think a lot of them are taking the view that commission is being paid, but dealers need to be aware there is a risk.’ The problem arises because all contracts are different, so Kendrick pleaded: ‘Please share your contracts with your lawyers and get some guidance,’ he said. Not only that, he added that differences in business interruption insurance contracts also mean they’ve seen some which are covered during the Covid-19 crisis. ‘A lot don’t but some do.’
5. Work out your cash burn – not just cash flow Daly said that he had been shocked by the number of companies that don’t know the costs associated with their business when there’s no money coming in. ‘Have a sensible shortterm cashflow in place. It sounds obvious, but when I’m talking to people there’s a lot who don’t realise what their monthly cost burn is. The picture looks very different at the moment with no money coming in. You need to have a real handle on the cash burn.’
3. All contracts are different Although it was revealed that commission can be paid, that doesn’t mean all dealerships are paying it. The words ‘discretionary’ and ‘compulsory’
4. Share with your stakeholders ‘If there are concerns, they need to be shared with relevant stakeholders like banks,’ warned Daly, who said it can be tempting to stick your head in the sand but it’s never a good idea.
6. Cash is king Many businesses have learnt lessons from the 2008 financial crisis, and while Kendrick stated it was a very different situation he also said ‘those businesses
Information here is correct at the time of publication but in the current climate may change at any time. 46 | CarDealerMag.co.uk
Volvo UK’s online purchase system
that had cash in the bank were the ones who ultimately came out stronger. I think people are applying that same principle here.’ He added: ‘Actually having access to cash at the moment is important. We’ve got other groups in a strong cash position, but they’ve decided to fund as much of their used vehicle stock as they can because they want to see cash in the bank.’ 7. Get a government-backed Business Interruption Loan If you’re not someone with stacks of cash in the bank, though, Kendrick advised that ‘there is money available out there’. He said: ‘For those businesses who do feel the need to look at the loan scheme for support, we would very much encourage you to speak to your bank contacts. Certain banks seem to be a little bit more responsive than others. ‘Cash is king at this time, so when we’re talking to clients, having as much cash around you as possible is really good, even if there’s more cost to it in the short term. ‘The Business Interruption Loan certainly at the lower end is interest-free for the first 12 months, so even if you don’t necessarily need it, it’s worthwhile looking into. If it’s repaid in the first 12 months with no interest then great.’ 8. Be prepared and persistent For those businesses looking to take advantage of the government-backed loan scheme, the pair had some advice on the best ways to approach it. Firstly, Kendrick said to be prepared when
you get in touch with your bank. ‘Have the information ready that you think you’ll need. Have an idea of what your shortfall might be and be persistent.’ He explained that it appeared that those who persistently called their bank had already received their money. ‘I think those who are waiting for the bank to call and say they’ve got the money, perhaps that won’t happen because the banks are so busy,’ he said. 9. Don’t be put off – it’s getting easier Kendrick continued that ‘as time has passed, the money has become more accessible, and some of the red tape that was there in the first instance has been removed’. Daly was able to explain in more detail about those who he’d helped to apply for the loan. He said: ‘Some of these have been in the sub£45 million [category] and they’ve not had the early repayment charges with them. ‘It has been an evolving situation, and what started off as a mission impossible to get these loans is now something that is much more straightforward, albeit you do need to have this financial information.’ 10. Don’t expect the generosity to last Although banks are being as helpful as they can be and some businesses are seeing a lot of support and understanding from partners, Daly stated that taking out a Business Interruption Loan ‘is absolutely the right thing to do’ in his opinion, because this may not last in the long run. ‘While the banks are being supportive now and there’s lots of help from the stock financiers, etc, I don’t think you can assume in your business
planning that that is going to remain the case as we go into Q3 and Q4 in particular. ‘Speaking to risk contacts I’ve got at the manufacturers, that’s where they expect the real pinch point to be from a cash point of view.’ 11. Plan for the worst When talking to your bank, for support or in general updates, it’s best to look at the worst-case scenario. ‘I think those who are in front of it and have done some detailed cash flow forecasts, perhaps looking at the next three months and then rolling into a six- and 12-month forecast, are very useful,’ Kendrick said. ‘The banks probably want you to look at a worst-case scenario and then talk them through that.’ He added later in the interview: ‘It’s a brave person who thinks that when showrooms reopen, floods of customers will be coming through the door. ‘There’s cash burn when closed but there’s potentially cash burn when open.’ 12. There will be opportunities for groups with cash Although UHY Hacker Young said that the current situation had derailed transactions, which were now on pause, Kendrick explained that he had already had inquiries from businesses looking to purchase. This could be good for businesses desperate to sell, but it may even devalue those in a stronger position. ‘Ultimately, everything has a value. I’ve had a number of people get in contact asking if I’ve heard of anyone looking to sell,’ he said. ‘For businesses with cash looking to move quickly, I think there will unfortunately be a lot of opportunity.’
For the latest updates, visit our website at cardealermagazine.co.uk and gov.uk/coronavirus CarDealerMag.co.uk | 47
Advice. UPDATE
Furloughing and commission: Everything we know so far F
urloughing – or the Coronavirus Job Retention Scheme to give it its official name – has raised possibly the most questions of the current crisis. Here we bring you up to speed with it, with the help of Lawgistics. What is ‘furlough’? It’s a leave of absence. Normally it’s unpaid, but in this instance HMRC is giving grants, backed by HM Treasury, to cover 80 per cent of a person’s salary up to £2,500 a month. This also covers an employer’s National Insurance contributions and minimum autoenrolment pension scheme contributions. Anyone furloughed is still employed by their company and remains on the company payroll – it’s important to note that their job has not been made redundant. How do I put a staff member on furlough? There either has to be a clause allowing it in their employment contract or, if there isn’t one, you have to have their agreement to be furloughed. This is important, as you are essentially varying the terms of their employment contract and so need their agreement. Lawgistics has made available templated letters for both scenarios – they can be downloaded for free here. How long is the scheme running for? Until October 31, 2020. It was originally due to run until the end of June but that was open to review and the chancellor extended it on May 12. At the moment, the 80 per cent is fully covered by the Treasury, but from the start of August firms will be asked to share the cost, allowing furloughed workers to come back on a part-time basis. What’s the eligibility cut-off date? You have to have been on the company’s payroll on March 19, 2020 and were notified to HMRC on an RTI (Real-Time Information) submission on or before then. Originally, the cut-off was February 28, so this extension – announced by HM Treasury on April 15 – means that thousands more people can now be furloughed, although in practice the change
is likely to benefit more weekly-paid staff than monthly-paid. If you were made redundant or stopped working for your employer after February 28 but before March 19, you can be re-employed by them and then put on furlough. What’s the minimum length of time for furloughing staff? Three weeks. Can staff be rotated on furlough? Yes. This helps prevent untaken annual leave building up. The employees have to go back to work at the end of the period of furlough and it can be done more than once so long as it’s for the minimum of three consecutive weeks each time. How do I claim for their money under furlough? Via the government job retention scheme portal.
‘ From the start of August firms will be asked to share the cost, allowing furloughed workers to come back on a part-time basis.’ What can I pay them? You don’t have to pay them anything – it’s your choice. The Coronavirus Job Retention Scheme pays them 80 per cent of their monthly salary up to £2,500. You can, however, top that up to the full amount if you so choose. What if an employee is self-isolating or on sick leave? In these instances, they can get Statutory Sick Pay, subject to other qualifying criteria. What about employees on reduced hours? If they are working on reduced hours or for reduced pay, they aren’t eligible for the scheme. How about if they’re on unpaid leave? If they started unpaid leave after February 28, 2020, you can furlough them instead. If they started it on or before February 28, you
can only furlough them from the date on which it was agreed they would return from unpaid leave. What if they become sick while on furlough? A furloughed employee retains their statutory rights, which includes their right to Statutory Sick Pay (SSP), so if they fall ill they must be paid SSP at least. Employers have to decide whether to move them on to SSP or to keep them on furlough at their furloughed rate. If a furloughed employee is moved on to SSP, employers can’t claim for the furloughed salary and must pay SSP themselves, although they may qualify for a rebate for up to a fortnight of SSP. What is the difference between discretionary and contractual commission? There has been much debate over this, as many contracts define commission as discretionary. However, if the employer cannot choose whether to pay commission or not in a normal month, then it is hard to see how it can be discretionary, despite the wording. Most commissions are compulsory and are included, for example, as part of statutory annual leave calculations, and so should be compulsory for furlough. Employers are advised to seek legal advice if unsure. What commission can I include in pay? The government says compulsory commission based on your regular, contractual pay should be included in calculating your furlough pay. It does not, however, include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind. What do I need to make the claim as the employer? There’s a long list… You have to be registered for PAYE online, and you’ll need your UK bank account number and sort code as well as your employer PAYE scheme reference number. You’ll also have to say how many employees are being furloughed, and provide the National Insurance number and payroll or employee number (optional) for each of them. In addition, you’ll have to give each employee’s
Information here is correct at the time of publication but in the current climate may change at any time. 48 | CarDealerMag.co.uk
start and end date of the claim, the full amount you’re claiming for including employer National Insurance contributions and employer minimum pension contributions, your phone number and contact name. You’ll also be asked for one of the following: your name (or the employer’s name if you’re an agent), your Corporation Tax unique taxpayer reference, your self-assessment unique taxpayer reference, and your company registration number. In addition, you’ll need the Government Gateway user ID and password you were given when you registered for PAYE online. Can staff work for me when on furlough? Absolutely not – not even voluntarily. Nor can they do so for a linked or associated company. They can, however, undertake training, so this means apprentices can continue with their studies and furloughed staff can do online courses. The rule is that anyone on furlough can’t do anything that ‘directly generates a profit or carry out any services to or on behalf of the company’. If, however, they have more than one employer, they can still work for any employer that hasn’t put them on furlough. If more than one employer puts them on furlough, they are entitled to the 80 per cent per month – up to the £2,500 – from each one, as furlough is based on each PAYE scheme and not each individual. How about working for somebody else? You might have noticed news stories about furloughed workers being asked to become fruit and veg pickers because of a shortage of labour. Lawgistics tells us that so long as there isn’t a clause in an employee’s contract or their furlough agreement stating that they can’t work for another business, they can work for a new employer while furloughed without the furlough payment being affected. And as mentioned above, they can be furloughed from two employers. What are the penalties for making furloughed staff work? HMRC has made it very clear that employers need to keep furloughed records for five years – something that Lawgistics solicitor and legal
adviser Nona Bowkis says is a ‘big hint that retrospective audits will be undertaken’. At the very least, payments for abuses will need to be repaid in full, while hefty fines could follow for large-scale abuses. If you haven’t done so already, you should have a written agreement with your employee saying that they will not work on furlough. Bowkis added: ‘It’s important to remember that HMRC investigations work more on a “guilty until you prove your innocence” model, and so it is very important to follow the rules, be able to justify your decisions and keep those records for five years. The more evidence you have on file to prove your furloughed employees were not working, the better.’ Will there be investigations into furlough fraud? Absolutely, according to Bowkis. Given the money being paid for those on furloughed leave is already looking to be much higher than expected, HMRC is set to be heavy-handed with those who bend or break the rules. It could have software set up to automatically detect unusual claim amounts, while there are likely to be investigations if employees make claims or if the public report businesses they believe are behaving fraudulently. Random checks could also be carried out. Bowkis stressed: ‘So again, follow the rules, be able to justify your decisions and keep your records.’ I’m a company director – can I be furloughed? Yes, but only if you’re on the PAYE scheme. You can’t claim against dividends, though. What if I don’t pay my employee their commission under the furlough scheme? Employers have to pay all money claimed from HMRC to the employee. They can’t keep any back for themselves. If they do, that’s likely to lead to a fraud investigation. In a scenario where the employer doesn’t claim commission because they decided it wasn’t compulsory, then those employers could find themselves in front of an employment tribunal for an ‘unlawful deduction from wages’ claim. Employers might be able to defend such a claim by arguing that the 80 per cent payment
isn’t wages (on the basis it is a furlough payment) but that’s probably not a risk they should be taking, as otherwise it could be very costly, since by then it will be too late to claim from HMRC so the employer will have to pay it plus, potentially, compensation. How do I get them back off furlough? There is no particular practice to follow and employers will need to consider when to bring people back and talk to all of the staff, as it is likely that some will need to return before others and, in fact, some may not be needed, depending on how well the business can bounce back. What if I need to make someone redundant while they are on furlough? The normal redundancy process will need to be followed with consultations, notice period and, where entitled, redundancy pay. There is nothing in the furlough rules to prevent an employer giving notice and claiming furlough for that notice period, so it’s worth looking at this well ahead of the furlough end date. Has the government confirmed what can and can’t be included when calculating wages? All regular payments can be claimed and in most cases that will include commission, unless that commission can only be made at the discretion of the employer or client and where the employer or client was under no contractual obligation to pay. With regard to commission, employers just need to consider if there is any scenario in normal circumstances where they think they could legally not pay commission – if they can’t think of any, commission isn’t discretionary and so it is compulsory. What’s the position regarding annual leave? Furloughed employees will still accrue and are entitled to take annual leave – which must be paid in full or, where their pay rate varies, the average that they received over the past 52 weeks. If any employee asks to take a week’s holiday while on furlough and the employer agrees, the employer will have to top the pay up to 100 per cent for that week but can still claim the 80 per cent through furlough.
For the latest updates, visit our website at cardealermagazine.co.uk and gov.uk/coronavirus CarDealerMag.co.uk | 49
Finance. TEMPORARY RELIEF
Payments can be frozen for three months, says FCA T he Financial Conduct Authority has introduced a three-month payment holiday for car finance customers as a temporary measure to give relief to anyone suffering difficulties paying for their car during the coronavirus crisis. The FCA says firms should provide the freeze on car finance or lease agreements and should not ‘take steps to end the agreement or repossess the vehicle’. It adds that the car finance firms should not alter PCP or PCH agreements in a way that is unfair, for example calculating balloon payments based on a temporary depreciation in car prices due to the pandemic. The statement said: ‘The FCA expect firms to act fairly where terms are adjusted.’ If a customer wants to keep their car at the end of their PCP agreement but does not have the cash to cover the balloon payment due to the crisis, the FCA says firms should work to find ‘an appropriate solution’. It adds that there may be a potential for disparity between the balloon payment and the value of the car due to the crisis, and the FCA expects this not to lead to ‘unfair outcomes’ for customers. ‘For example, refinancing the balloon payment might not be appropriate in the circumstances,’ said the statement. Christopher Woolard, FCA interim chief executive, said: ‘We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products. ‘Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments.’ Commenting on the announcement, James Fairclough, CEO of AA Cars,
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said: ‘The millions of drivers with car finance deals will be greatly reassured to know the FCA has their back. ‘In effect, these guidelines mean that anyone who is worried about keeping up with their repayments because their income has been impacted by the Covid crisis will be entitled to a three-month payment holiday. Crucially, the FCA’s measures ensure every customer will be treated the same, whoever their lender is, and whatever type of finance plan they are on.’ Gareth Shaw, head of money at consumer champion Which?, said: ‘Many people will have been financially impacted by the coronavirus crisis, so these measures will provide some much-needed relief for those who are struggling. ‘It’s vital that consumers are given clear information about how they can access this support when it is introduced, and that anyone experiencing financial hardship is aware of the options available to help them get through the challenging months ahead.’ It came on the back of car finance firms saying they had been inundated
with calls for help from customers. Black Horse Motor Finance revealed that it had given more than 60,000 payment holidays to car finance customers, and according to the Financial Times car finance firms reported a 1,400 per cent increase in calls in the first week of the lockdown from customers concerned about making payments on their car finance. Meanwhile, the Finance and Leasing Association has said that calls to lenders were 20 to 30 times higher than usual. The SMMT says that more than 80 per cent of new car sales are on PCP, and there were fears that many people would default on their loans as the economic difficulties increased and many lost their jobs. The new FCA rules came into effect on April 27, and the regulator said that it would review them over the coming weeks, working with firms, consumer and debt advice groups, plus the government to consider what other forms of support might be needed. For the latest on all automotive matters including finance, see our website at cardealermagazine.co.uk
PUBLIC TRANSPORT
Could travel fears create new sector?
USERS of public transport who are nervous about the risk of coronavirus on buses and trains could effectively create a new sector of the used car market, says Startline Motor Finance. Chief executive Paul Burgess pointed to a recent Ipsos MORI survey of 1,066 British adults, which revealed that 61 per cent would be unsure about using public transport as they start to return to work. ‘Whether they use masks or other PPE, there is going to be a proportion of people who, understandably, are unhappy about the risks associated with using public transport over the coming months or weeks but still need to get to work. ‘Anecdotally, we are starting to hear stories of some of those people approaching dealers to instead buy cars as an alternative because it provides them with a clean, sealed, personal space in which to travel. The prime minister even mentioned cars as a preferred mode of transport.’ And Burgess pointed out that it would probably be a mistake to think that these new buyers would only be interested in vehicles at the lower end of the market too.
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Time is money BEN GARSIDE
A monthly look at the world of automotive finance and marketing
I
Some light at the end of the tunnel – if you don’t mind making changes
can’t believe it has been a month since I produced my last article – more than four weeks confined to my home with very limited time spent outdoors. The time has passed a lot quicker than I first expected. I attribute this to a few areas. Worktime has been filled productively with strategy, projects, and communications planning, making the days fly by. Most of my evenings and weekends have been spent turning my garage from a complete mess into a workable gym area, allowing me to use the space to keep myself active and healthy. I am sure there will be a lot of you doing similar things to keep busy, active and focused. The government has stated that we have now passed the peak, but as I write this we haven’t been presented with its blueprint on how, or when, we will start to see current social distancing restrictions relaxed. I do not have a crystal ball and wouldn’t like to try to predict the future on this occasion, as there are too many mitigating factors. One thing I am sure of, though, is that it will not be an on/off scenario and this may mean that we must wait a while until the car showrooms can fully open again. However, there is some light, if you are willing to adapt and make changes. In mid-April, a document was released by the BVRLA (British Vehicle Rental & Leasing Association) and FLA (Finance & Leasing Association) entitled Guidance on COVID-19 and the Movement of Vehicles. The document outlined the government’s current stance on social distancing measures and then clarified what requirements apply on vehicle and parts collections, delivery and distribution. A key area of note was: ‘Subject to observing other coronavirus/ Covid-19 precautions, the collection, delivery and distribution of vehicles and parts, including from dealerships and auction houses, remains permitted.’ The document then went on to state: ‘While the business of
vehicle sales from showrooms and the carrying on of auctions are prohibited (except for online activities), vehicles and parts may still be collected, delivered and distributed to and from customers and businesses, including in regard to the sale of vehicles and parts, especially so for key workers.’ I know a lot of dealers had been asking for clarification on these areas and I feel this document covers a lot of your questions. If any of you decide to start selling vehicles via an online process and distributing them, there are a few areas to consider – for example, you must produce policies and be aware of the rules around delivery, etc. Depending on how you go about the actual vehicle sale, the Consumer Contracts Regulations of 2014, which replaced the Distance Selling Regulations, may come into force. These regulations bring extra rules to abide by: l You must tell the customer they can cancel their order up to 14 days after their order is delivered, and the customer doesn’t have to give a reason for cancelling. l If you don’t tell the customer, they can cancel at any time in the next 12 months. If you tell them about the right to cancel during these 12 months, they have 14 days to cancel from when you told them. l You must deliver the goods within 30 days, unless you’ve agreed otherwise with the customer. So, before going down this route, I would advise reviewing the gov.uk website. However, when using a finance company such as First Response the rules are different. This is because of the point of transaction (pay-out), so if you process the business in a certain way you will not fall into distance selling agreement. Feel free to get in contact directly if you need any support or guidance on any of the areas that I have discussed.
‘It will not be an on/off scenario and this may mean that we must wait a while until the car showrooms can fully open again.’
Ben Garside is marketing manager for First Response. Call him on 07817 518739 or email ben.garside@frfl.co.uk
Just acall phoneaway!
TALK TO US TODAY. frfl.co.uk/car 0115 946 6260 enquiries@frfl.co.uk CarDealerMag.co.uk | 51
WE’RE NOT IN THE BRANCH, BUT STILL ON YOUR SIDE. A strong and secure partner when you need it most.
52 | CarDealerMag.co.uk
closemotorfinance.co.uk/dealer/covid19
Focus on. Close Brothers Motor Finance
We’re still here for dealers and customers who need us CLOSE BROTHERS MOTOR FINANCE
W: closemotorfinance.co.uk
A
lthough many dealerships may now be closed, we know that for some customers buying a new vehicle is still essential. We’re doing everything we can to help our partners sell vehicles in a way that follows the latest Government and Finance & Leasing Association (FLA) guidelines..
Our 100 Account Managers are still working remotely to support dealers • We’re keeping in regular contact with our dealer partners offering practical guidance and market insight to help them navigate restricted trading conditions as well as helping them prepare strategies for re-entering the market as and when lockdown is lifted. Our expert underwriters are still working to support those who need us • We’re still accepting proposals and paying out where dealers identify a customer who needs a vehicle at this current time, including those classified as key workers. • We’ve issued guidance to our dealer partners on how best to maintain ‘social distancing’ when proposing customers or getting paperwork signed. We’ve also been signposting Government advice to best navigate vehicle handovers within the current restrictions. We’re sharing information and advice for small-to-medium-sized business owners to help protect their future closemotorfinance.co.uk/dealer/covid19 Our dealer resource hub includes information on: - Government support for your business - Furloughing employees and what it means for businesses - How to maximise your digital footprint - Managing the wellbeing of your employees - How to place business with us during Covid-19
duration, deposit, and mileage via a calculator tool. The feature – available to all 6,000 dealers who use Showroom – enables customers who wish to apply for finance to complete an online proposal form from the comfort of their homes. • This enhancement is designed to help dealers bring the personal in-showroom car buying experience they offer into the online world at the point when the customer has expressed interest in the vehicle. • ‘Remote quote and apply’ is just one of the digital improvements to land with dealers this year. We’re continuing to work on bringing new e-commerce solutions to market in the coming weeks and months.
Our appetite for lending remains consistent • As part of a FTSE 250 company, our financial foundations remain strong. Close Brothers have a prudent and resilient business model which has served us well for many years and through a number of economic cycles. The bank remains in a strong position to continue to lend during and after this pandemic, as we have done throughout our history.
We’re launching ‘remote quote and apply’ • The enhanced functionality to our Showroom platform will enable dealers to email vehicle quotes directly to the customer following initial discussions around the vehicle and finance options. • Customers can access the quotes and the proposed terms can be adjusted, including the CarDealerMag.co.uk | 53
How quickly could you buy your first car on Cartotrade? “I started my free trial at 3pm, by 6pm I’d bought a great car from a great dealer I’d otherwise never have come across. An excellent start with a system that seems to work really well, I’m now a subscriber and look forward to buying a lot more stock this way.” Alex Green, Fountain Motors Ltd, Jan 2020
54 | CarDealerMag.co.uk
Market Insight.
...in association with ASE Global
Shares stabilise as extent of lockdown becomes apparent Drop in volume of announcements but there's a bounce in stock prices, reports Mike Jones.
A
fter the shock of March and the plunging of the motor retail sector into a lockdown-induced market crash, as well as the announcement from Lookers of the postponement of its results and the revelation of the fraud investigation, we saw much more stability in April, and even a bounce in the stock prices. This was to be expected as the market processed the impact of the lockdown and the likely implications, with many of the listed groups providing individual guidance on the actions they had taken, the implications for their business and the extent of their current cash-burn at the end of March. Company announcements The volume of announcements was much lower in April as the automotive businesses processed the effect the lockdown was having on their business and wanted to see some indication of a return to work before providing additional guidance to the market on the financial effect. Lookers had suffered a particularly turbulent March, with not only the effect of Covid-19 to process but also a delay in its results as a result of the identification of
Share price movement during April 2020
Share price movement since Jan 1, 2020
Pendragon
0.0%
-51.2%
Vertu
19.6%
-33.8%
Lookers
56.9%
-55.7%
Inchcape
15.8%
-29.0%
Cambria
4.2%
-46.0%
Caffyns
3.6%
-27.5%
Marshall
8.6%
-39.3%
Motorpoint
2.6%
-33.7%
Auto Trader
4.5%
-22.9%
FTSE 100
4.0%
-21.8%
potentially fraudulent transactions. It provided a further trading and operational update at the end of April. Trading for the first two months of 2020 showed a slight decline, with new unit sales down 4.8 per cent and used sales down by 2.6 per cent. Offsetting this slightly was aftersales, which saw growth of 0.9 per cent.
It also looks like the business made the decision to clear some of its stocks, with margins being hit primarily by an internal decision to reduce its holding of used and demonstrator inventory. From an operational standpoint, Lookers reopened 31 locations for aftersales. It also announced an update on its fraud investigation into bonus debtors and fraudulent expense claims, which is expected to cost circa £4m. This investigation was extended to the other divisions of the company, with other balance sheet accounts found not to be fully reconciled. While this hasn’t been quantified yet, it is expected to result in a one-off non-cash charge. The overall guidance is that the business will still make an underlying profit for last year, but a huge drop on the historic performance of the company. Auto Trader said it was continuing the support that it announced during March, extending its free advertising packages to customers 'while they are required to remain closed during May'. We expect a raft of operational updates in May, particularly as we start to exit the lockdown and businesses recommence operations.
Mike Jones is the chairman of dealer profitability specialist ASE Global. You can read his column here every month. CarDealerMag.co.uk | 55
Data file.
Thestatistics
| SMMT SALES DATA | THE CORONAVIRUS EFFECT
Registrations drop 97.3 per cent in April
A
pril new car registrations were down 97.3 per cent – with just 4,321 new cars purchased, according to official figures from the SMMT. The trade body is forecasting that around 1.68m new cars will be registered during the whole of 2020, which would represent a 27 per cent decline on last year – the lowest since 1992. Currently, the market is 43.4 per cent down this year. April’s decline was the steepest of modern times, and is in line with similar falls across Europe, with France 88.8 per cent down and the Italian market falling 97.5 per cent in April. Fleet orders represented the bulk of the market, taking 71.5 per cent of the market share, equivalent to 3,090 units, while private buyers registered just 871 cars – a year-on-year fall of 98.7 per cent. The Tesla Model 3 was the bestselling car – mostly due to the fact that a boatload of them arrived and could be delivered in the month – with 658 registered. The Jaguar I-Pace was second with 367 registrations and the Vauxhall Corsa third with 264. Mike Hawes, SMMT chief executive, said: ‘With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising.
‘These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector. ‘A strong new car market supports a healthy economy, and as Britain starts to plan for recovery we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.’ The SMMT also released its new car market forecast for 2020, downgrading previous expectations to just 1.68m registrations. This puts the sector on course to record its worst performance since 1992’s 1.59m units, below the levels seen during the financial crisis and 27 per cent lower than the 2.31m new cars registered in 2019. April’s fall follows a significant drop in March, which saw new car sales figures decline by 44.4 per cent. Dealerships closed on March 23 and the end of the first quarter was badly hit. Jim Holder, editorial director of What Car? magazine, said the figures for April were ‘disastrous but not unexpected’, as buying a new car was ‘as far from people’s minds as you can possibly get’. He added: ‘It’s consistent with the figures coming through from the rest of
Europe. Everything was frozen for a month.’ Seán Kemple, director of sales at Close Brothers Motor Finance, said the figures weren’t a surprise to the industry. He commented: ‘With the economy ground to a halt in light of Covid-19, new car sales have simply been put on hold. The motor industry will pick up speed, but there is a bumpy road ahead.’ James Hind, CEO of Carwow, said they had seen a 30 per cent drop in the number of consumers browsing for new cars, but nothing like the 97 per cent fall in registrations. ‘There are still people in-market for a new car,’ he said. Karen Hilton, chief commercial officer at heycar, said the figures came as no surprise but lockdown was creating a surge in interest among motorists confined to their homes, with increasing numbers browsing online and researching their next vehicle. ‘Recent data shows that we have experienced a 50 per cent increase in website traffic from March to April,’ she said. ‘Lockdown has also given people time to reflect on their way of life, and we wouldn’t be surprised to see them increasingly opting for the safety and solitude of their vehicles post-lockdown, rather than crowded buses or trains.’
SMMT sales data April/year to date
10
Top
The unlikely bunch of best sellers in April 2020 MODEL
REGS
Tesla Model 3
658
Jaguar I-Pace
367
Vauxhall Corsa
264
Vauxhall Crossland X
143
Ford Tourneo
108
Peugeot Rifter
94
Seat Leon
80
Mercedes-Benz A-Class
72
Nissan Leaf
72
Peugeot 308
67
Tesla Model 3 is best-selling car in April as EVs shine IT WAS – somewhat predictably – a dismal month for sales of new cars, but sales there still were – and the Tesla Model 3 shot to the top of the table with 658 units. April was the month where EVs shone, with the battery-electric Jaguar I-Pace second at 367 examples. Third was the Vauxhall Corsa, which 56 | CarDealerMag.co.uk
went to 264 owners, fourth was the Vauxhall Crossland X (143) while fifth was the Ford Tourneo Custom at 108. The remainder of the top 10 comprised the Peugeot Rifter (94), Seat Leon (80), Mercedes-Benz A-Class and Nissan Leaf at 72 units apiece and finally the Peugeot 308 at 67.
In contrast, March 2020 saw the VW Golf as the top seller at 7,103 units, followed by the Ford Fiesta with 6,687 examples sold, Mini (6,019), Ford Focus (5,985), Nissan Qashqai (5,907), Vauxhall Corsa (5,820), Mercedes-Benz A-Class (5,351), Kia Sportage (4,988), Tesla Model 3 (4,718) and the Range Rover Evoque (4,399).
Ford
‘Other imports’
-98% April 2020 Marque
2020
+198%
April 2019
% market share
2019
Year-to-date (YTD)
% market share
% change
2020
% market share
2019
% market share
% change -55.26
Abarth
18
0.42
212
0.13
-91.51
646
0.13
1,444
0.17
Alfa Romeo
17
0.39
240
0.15
-92.92
661
0.14
1,263
0.15
-47.66
1
0.02
8
0.00
-87.50
38
0.01
51
0.01
-25.49
136
3.15
12,454
7.73
-98.91
30,805
6.31
54,330
6.30
-43.30
4
0.09
132
0.08
-96.97
395
0.08
561
0.07
-29.59
211
4.88
10,868
6.75
-98.06
34,473
7.07
57,621
6.68
-40.17
0
0.00
1
0.00
0.00
0
0.00
4
0.00
0.00
Alpine Audi Bentley BMW Chevrolet Citroen
56
1.30
3,628
2.25
-98.46
9,208
1.89
20,764
2.41
-55.65
Dacia
16
0.37
2,060
1.28
-99.22
5,071
1.04
12,986
1.51
-60.95 -39.20
1
0.02
107
0.07
-99.07
718
0.15
1,181
0.14
Fiat
68
1.57
1,892
1.17
-96.41
6,234
1.28
12,848
1.49
-51.48
Ford
306
7.08
18,074
11.22
-98.31
44,141
9.05
85,848
9.96
-48.58
DS
7
0.16
2,912
1.81
-99.76
9,627
1.97
18,397
2.13
-47.67
64
1.48
6,468
4.02
-99.01
13,817
2.83
31,245
3.62
-55.78
Infiniti
0
0.00
37
0.02
0.00
0
0.00
130
0.02
0.00
Jaguar
396
9.16
2,607
1.62
-84.81
8,363
1.71
13,901
1.61
-39.84
7
0.16
371
0.23
-98.11
1,013
0.21
1,918
0.22
-47.18 -40.01
Honda Hyundai
Jeep Kia Land Rover Lexus
156
3.61
7,472
4.64
-97.91
22,451
4.60
37,426
4.34
79
1.83
5,688
3.53
-98.61
20,154
4.13
29,528
3.43
-31.75
6
0.14
884
0.55
-99.32
4,476
0.92
5,290
0.61
-15.39
Lotus
1
0.02
21
0.01
-95.24
34
0.01
54
0.01
-37.04
Maserati
1
0.02
94
0.06
-98.94
179
0.04
370
0.04
-51.62
11
0.25
2,033
1.26
-99.46
7,177
1.47
15,091
1.75
-52.44
256
5.92
11,739
7.29
-97.82
34,112
6.99
63,612
7.38
-46.37
MG
45
1.04
980
0.61
-95.41
5,510
1.13
3,996
0.46
37.89
Mini
38
0.88
2,502
1.55
-98.48
13,036
2.67
20,636
2.39
-36.83
Mitsubishi
34
0.79
1,063
0.66
-96.80
3,868
0.79
6,579
0.76
-41.21
Nissan
106
2.45
6,340
3.94
-98.33
23,669
4.85
35,742
4.15
-33.78
Peugeot
189
4.37
5,674
3.52
-96.67
15,242
3.12
30,916
3.59
-50.70
Mazda Mercedes-Benz
Polestar
0
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
Porsche
27
0.62
1,717
1.07
-98.43
2,782
0.57
4,132
0.48
-32.67
Renault
44
1.02
3,261
2.02
-98.65
9,952
2.04
22,291
2.59
-55.35
Seat
165
3.82
4,882
3.03
-96.62
15,834
3.25
25,517
2.96
-37.95
Skoda
177
4.10
5,680
3.53
-96.88
17,507
3.59
27,672
3.21
-36.73
Smart
22
0.51
410
0.25
-94.63
270
0.06
2,116
0.25
-87.24
SsangYong
45
1.04
113
0.07
-60.18
480
0.10
825
0.10
-41.82
1
0.02
101
0.06
-99.01
254
0.05
981
0.11
-74.11
Subaru Suzuki
5
0.12
2,027
1.26
-99.75
6,282
1.29
14,007
1.62
-55.15
Toyota
19
0.44
6,067
3.77
-99.69
27,025
5.54
38,048
4.41
-28.97
Vauxhall
479
11.09
10,639
6.61
-95.50
27,320
5.60
65,563
7.61
-58.33
Volkswagen
210
4.86
15,161
9.41
-98.61
45,305
9.29
74,680
8.66
-39.33
52
1.20
3,971
2.47
-98.69
12,157
2.49
20,175
2.34
-39.74
Volvo Other British
23
0.53
198
0.12
-88.38
637
0.13
1,028
0.12
-38.04
Other imports
822
19.02
276
0.17
197.83
6,955
1.43
1,333
0.15
421.76
-97.32
487,878
Total
4,321
161,064
862,100
-43.41 Figures supplied by SMMT
CarDealerMag.co.uk | 57
LCV news. APRIL 2020
Lockdown sees registrations drop by 86 per cent THE UK new LCV market dropped by 86.2 per cent in April as nearly all registrations stopped because of the coronavirus lockdown. According to the figures released on May 5 by the Society of Motor Manufacturers and Traders (SMMT), just 3,387 LCVs joined UK roads in April – 21,217 fewer than in the same month last year. They were largely made up of orders rushed through to meet the demand of industries
by JOHN BOWMAN john@blackballmedia.co.uk working on the front line of the coronavirus response, including fleets for the NHS, emergency services, pharmaceutical, food distribution and home delivery services, as the nation grew more reliant on these key businesses.
Registrations of new commercial vehicles less than 3.5 tonnes April 2020
Marque
2020
April 2019
% market share
2019
% market share
% change
2020
Performance year-to-date has declined by 44 per cent, with over 56,000 fewer vehicles registered than in the same period last year. The SMMT’s latest forecast expects an overall LCV market decline of 28 per cent for 2020, equivalent to a market of 263,000 units by the end of the year. Although registrations are expected to recover in 2021, the expectation is still for a 6.1 per cent decline on 2019.
Figures supplied by SMMT
Year-to-date figures % market share
2019
% market share
% change -40.56
Mercedes
1,018
30.06
2,325
9.45
-56.22
6,622
9.29
11,141
8.75
Vauxhall
416
12.28
2,225
9.04
-81.30
7,057
9.90
10,598
8.32
-33.41
Ford
390
11.51
7,761
31.54
-94.97
22,834
32.03
42,712
33.54
-46.54
Peugeot
368
10.87
2,154
8.75
-82.92
7,274
10.20
11,942
9.38
-39.09
Citroen
224
6.61
1,799
7.31
-87.55
5,639
7.91
9,627
7.56
-41.43
Nissan
200
5.90
701
2.85
-71.47
2,807
3.94
4,435
3.48
-36.71
Volkswagen
155
4.58
3,370
13.70
-95.40
6,962
9.77
14,524
11.41
-52.07 -23.78
Isuzu
142
4.19
282
1.15
-49.65
1,170
1.64
1,535
1.21
Iveco
115
3.40
240
0.98
-52.08
848
1.19
1,033
0.81
-17.91
Fiat
102
3.01
749
3.04
-86.38
1,949
2.73
3,324
2.61
-41.37 -63.12
Renault
93
2.75
1,059
4.30
-91.22
2,476
3.47
6,713
5.27
Mitsubishi
46
1.36
650
2.64
-92.92
1,496
2.10
4,590
3.60
-67.41
Renault Trucks
32
0.94
130
0.53
-75.38
354
0.50
464
0.36
-23.71
MAN
24
0.71
77
0.31
-68.83
355
0.50
349
0.27
1.72
Isuzu Trucks
23
0.68
79
0.32
-70.89
278
0.39
276
0.22
0.72
LDV
23
0.68
49
0.20
-53.06
235
0.33
137
0.11
71.53
Toyota
7
0.21
730
2.97
-99.04
2,395
3.36
3,140
2.47
-23.73 -16.52
Land Rover
5
0.15
141
0.57
-96.45
379
0.53
454
0.36
Fuso
3
0.09
14
0.06
-78.57
57
0.08
69
0.05
-17.39
SsangYong
1
0.03
61
0.25
-98.36
107
0.15
238
0.19
-55.04
0
0.00
8
0.03
0.00
0
0.00
46
0.04
0.00
3,387
100.00
24,604
100.00
-86.23
71,294
100.00
127,347
100.00
-44.02
Hyundai Total
Registrations of new commercial vehicles 3.5 tonnes to 6.0 tonnes April 2020 Marque
2020
April 2019
% market share
2019
Figures supplied by SMMT
Year-to-date figures
% market share
% change
2020
% market share
2019
% market share
% change -34.70
Peugeot
124
40.26
177
30.62
-29.94
461
21.23
706
29.19
Mercedes
112
36.36
99
17.13
13.13
613
28.24
552
22.82
11.05
Fiat
44
14.29
170
29.41
-74.12
449
20.68
681
28.15
-34.07
13
4.22
3
0.52
333.33
53
2.44
17
0.70
211.76
Ford
7
2.27
12
2.08
-41.67
426
19.62
81
3.35
425.93
Citroen
7
2.27
16
2.77
-56.25
84
3.87
43
1.78
95.35
Isuzu Trucks
1
0.32
3
0.52
-66.67
2
0.09
7
0.29
-71.43 -79.25
Volkswagen
Iveco
0
0.00
53
9.17
0.00
44
2.03
212
8.76
MAN
0
0.00
5
0.87
0.00
24
1.11
17
0.70
41.18
Other imports
0
0.00
0
0.00
0.00
10
0.46
0
0.00
0.00
Vauxhall
0
0.00
28
4.84
0.00
3
0.14
71
2.94
-95.77
Renault
0
0.00
11
1.90
0.00
2
0.09
28
1.16
-92.86
Renault Trucks Total
58 | CarDealerMag.co.uk
0
0.00
1
0.17
0.00
0
0.00
4
0.17
0.00
308
100.00
578
100.00
-46.71
2,171
100.00
2,419
100.00
-10.25
FIRST DRIVE
Ford Transit Connect Sport
THE KNOWLEDGE
Sporty vans are becoming increasingly popular, but is the Ford Transit Connect Sport one to consider? Ted Welford finds out. What is it? The word ‘sport’ clashes somewhat with the idea of a van – however, increasingly drivers and buyers aren’t viewing them as a tool but as a vehicle they actually want to be proud of and spend time in. And right at the helm of this is Ford with its ‘Sport’ line-up. It’s particularly apparent on the larger and best-selling Transit Custom, but also on the smaller Transit Connect being tested here. So can Ford successfully mix usability with the fun factor? What’s new? The past couple of years have been busy for Ford’s van division, with the manufacturer revamping and refreshing its entire commercial vehicle line-up – including the Transit Connect. But it’s the Sport that’s the crème de la crème of the Transit Connect world – offering cooler looks that make it rule the van catwalk (or the builders’ merchant car park). Changes to it include matt-black sports stripes, 16-inch alloys plus silver and orange accents, as well as extra standard kit. What’s under the bonnet? The first thing that we need to get out of the way is that this is a ‘Sport’ van in name only. Think of it as the AMG-Line of the van world. So, rather than finding a punchy
2.0-litre unit pushing out 200bhp under the bonnet, instead there’s a 1.5-litre diesel unit. That said, with 118bhp and 270Nm of torque on tap, it still has a kick to it, and it’s also the most powerful iteration of this engine. Power is sent to the front wheels via a superb six-speed manual transmission. It also scores on the efficiency front, with Ford claiming up to 61.4mpg and CO2 emissions of 130g/km. What’s it like to drive? While ‘Sport’ might not equate to any dynamic tweaks, jump behind the wheel and you’ll realise that Ford didn’t need to do anything different to this version, as the Transport Connect is excellent to drive. Not just by van standards, either, but compared to cars, too. The engine delivers all the punch you would ever realistically demand, although it does have a few flat spots through the rev band that require you to drop down a gear. But in terms of handling, no van in the Connect’s class can even get close to it. The steering has plenty of feel to it, it doesn’t roll through the corners as much as you might expect, and – most surprising for a van – it’s fun too. What does it look like? It’s ridiculous the effect that something as simple as a pair of racing stripes can have on the look
of a vehicle, but it really helps to transform the appearance of this compact van. Additional pinstriping also features on both sides of the van, while grey 16-inch alloy wheels add some sportier appeal. In short, if you’re wanting one of the most visually appealing vans on sale today, the Transit Connect Sport is one to go for. What’s it like inside? The interior of the Transit Connect Sport really doesn’t look too dissimilar upfront to that of the Fiesta, with a clear layout and easyto-read dials. Sport versions also benefit from part leather, too. Elsewhere, the interior feels well built and reassuringly sturdy. It also scores on the practicality front, and is available in two bodylengths (L1 and L2). A single sliding door is wide enough to load a Euro-pallet, while various bulkhead options are offered, depending on what you’re using it for. What’s the spec like? Sitting at the top of the Transit Connect Sport, this is a model that looks rather pricey next to lesser grades. On the plus side, you do get plenty of kit as standard to help justify the price. On top of the sporty extras, it features keyless start, cruise control plus dual-zone climate control, and truly leaves you wanting for very little.
Ford Transit Connect Sport 1.5 TDCI 120 SWB Price (as tested): £23,528.36 (excl VAT) Engine: 1.5-litre turbocharged diesel Power: 118bhp Torque: 270Nm Max speed: N/A 0-60mph: N/A MPG (combined): 53.3-61.4 Emissions: 130g/km CO2 Model:
TARGET BUYERS: Builders looking for a fun small van. THE RIVALS: Volkswagen Caddy, Citroen Berlingo, Vauxhall Combo. KEY SELLING POINTS: 1. Sporty looks. 2. Plenty of standard kit. 3. Range-topping version. DEAL CLINCHER: The bragging rights when you see a non-Sport Transit Connect.
What do we think? If such a thing exists, the Transit Connect Sport is a van you can buy with your heart rather than your head. But do you want one? It’s probably a resounding yes. Given the Transit Connect is already the best van in its class to drive, it makes perfect sense to give it a sportier look, and easily makes it one of the most appealing vans on sale today. CarDealerMag.co.uk | 59
Extra Cover.
...in association with Gallagher
Gearing up for customers taking solo test drives Leon Bosch,shares his insight on unaccompanied demonstration use, plus what dealers need to consider and the potential risks
I
f anything, the lockdown has certainly challenged us all to try to conduct our business in new ways, using new methods. In our article last month, we looked at the rise in distance selling in the automotive sector. We are now exploring other ideas, one being to allow more ‘unaccompanied demonstration’ test drives, to protect both our sales people as well as the customer. With this in mind, it was welcome news that the DVLA is temporarily allowing unaccompanied demonstration use to take place using trade plates, to promote the safety aspect, preventing the further spread of Covid-19. That said, whilst the DVLA has allowed this, recent posts on car dealer forums have suggested that many might not know that their motor trade insurance policy does not cover unaccompanied demonstration use as standard, but it can be considered by your insurer (as an extension to the policy), so it is best to contact your insurance broker to check this for you to ensure you remain covered should you wish to conduct these in the near future to promote sales. You will also need to bear in mind that whilst the DVLA still expects the garage/dealer owners to do everything in their remit to prevent the trade plates being stolen, similar considerations need to be considered about the vehicle itself, in
that insurers will expect similar measures to be in place given the increased vehicle theft exposure. So you need to bear some of the following points in mind when inquiring about unaccompanied demonstration cover with your insurance broker: • Insurers will consider each inquiry on their merit so be prepared to share your proposed process, risk control measures, etc, that you will put in place to help mitigate the risk and prevent the theft of the vehicles, etc. • Insurers may apply additional terms to the policy specific to this cover – including things such as a theft exclusion, increased excesses, etc. • Insurers may apply additional premiums given the increased exposure of having unknown customers driving your vehicles. Furthermore, should your insurer agree to extend your motor trade policy to include unaccompanied demonstration cover, there will be other requirements that you will need to adhere to in order to maintain the cover. Based on prior experience, some of these requirements are highlighted below, but may be adapted for the current situation: • Driver’s licence checks: Always inspect the
driver’s physical licence before agreeing to it – never accept photocopies. o Confirm the information by asking them to obtain a ‘driving licence code’ that will allow you read-only access to their driving record – they’re available at https://www.gov.uk/view-
driving-licence
• Only allow an unaccompanied demonstration if the driver: o is between 25 and 70 years of age o has held a full British driving licence, valid for the vehicle in question, for at least one year (some ask for three years) o has not been involved in more than one collision or other motoring incident for at least three years o has no convictions under the Road Traffic Act and has fewer than six penalty points o is not awaiting prosecution for any criminal offence (except for parking or speed offences, unless there is more than one) • The driver should also verify their identity with at least one other document with photo ID in addition to their driving licence, such as a passport – again, the original is preferable. • The driver should allow you to hold on to
Leon Bosch is the managing director of the automotive practice at commercial insurance broker and risk management specialist Gallagher. 60 | CarDealerMag.co.uk
Always make sure that you’re able to inspect the customer’s physical licence before allowing them to go on an unaccompanied test drive
either their current vehicle’s keys or (where this is not possible) their original documents as security • Keep a record of all the information gathered about unaccompanied demonstrations for six months or, if a claim is made, the period that relevant insurers specify • Before allowing the prospective purchaser to drive the vehicle alone, give them a demonstration, observing social distancing, so that you can get them familiarised with the vehicle controls and any security devices. As an alternative, there are daily-rated insurance providers out there that you can use independently from your main motor trade insurance policy, which can provide you with the cover you require to carry out unaccompanied demonstrations. Gallagher has access to specialist insurers who are able to offer this cover, subject to the usual acceptance criteria. These insurance solutions are fully digital and integrated with the MIB and have systems that can carry out all the licence checks (mentioned above) electronically for you – making it less cumbersome compared with the standard process your motor trade insurers would insist on.
The Driver & Vehicle Licensing Agency is temporarily allowing solo test drives In these challenging times a specialist insurance broker can identify potential areas and types of insurance that your motor trade business could consider reviewing to help reduce costs. The Gallagher Automotive Insurance Team has been helping to protect businesses across the UK for more than 50 years – from independent
repairers and small family firms to the largest franchise dealerships – so please get in touch if you would like us to review your insurance. Would you like to talk? For more information, please get in touch with the Gallagher Automotive Team. Call 0800 612 2284 or email automotive_enquiries@
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. It reflects our understanding as at 5/5/2020, but you will recognise that matters concerning Covid-19 are fast changing across the world. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. Gallagher accepts no liability for any inaccuracy, omission or mistake in this note, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein. No third party to whom this is passed can rely on it. Should you require advice about your specific insurance arrangements or specific claim circumstances, please get in touch with the Automotive Team at Gallagher. Arthur J. Gallagher Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55, Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909
CarDealerMag.co.uk | 61
Gallagher Automotive Specialist Insurance for the Motor Trade Experience is key - and you need a specialist insurance broker who’ll take the time to understand the specific needs of your motor trade operation.
ARTUK435108998 GST-236330647
The Gallagher Automotive Insurance Team has been helping to protect businesses across the UK for over 50 years - from independent repairers and small family firms to the largest franchise dealerships.
Arthur J. Gallagher Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55, Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909. FP1451–2019 Exp. 13/12/2020. 62 | CarDealerMag.co.uk
Get in touch to discover how we can help your business. Would you like to talk? T: +44 (0) 800 612 2284 E: automotive_enquiries@ajg.com www.ajg.com/uk
Suppliers guide
LOOKING FOR A MOTOR TRADE SUPPLIER? YOU CAN FIND THE DETAILS OF SELECTED COMPANIES HERE Auctions & Trade-To-Trade Sales
Finance
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Warranty Providers
BCA
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W: bca.co.uk T: 0344 875 3480 E: customerservices@bca.com Info: BCA’s remarketing programmes deliver volume, choice and availability for buyers, and speed, efficiency and marketleading returns for sellers.
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Data
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W: mobil.co.uk T: 0800 0857 420 Info: Whether using Mobil 1™ or Mobil Super™, Mobil™ engine oils meet or exceed the latest standards of the oil industry and vehicle manufacturers.
Car Care Plan
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Ben
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Haswent
W: realworldanalytics.com T: 0808 1890 617 E: auto@realworldanalytics.com Info: We are a SaaS-based data analytics solution provider for multi-site dealers. Our business intelligence tools help customers make faster and better decisions.
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W: firstresponsefinance.co.uk T: 0115 946 6317 E: marketing@frfl.co.uk Info: First Response is an awardwinning UK finance company providing simple financial solutions. Get in touch and let us help increase your profits.
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W: oncuecomms.com T: 023 9252 2434 Info: We are a leading provider of PR, video and events services to the automotive industry. The PR team has a proven track record of securing high-value, big-impact media coverage.
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W: werecruitauto.co.uk T: 01603 550041 Info: Permanent recruitment – here to assist businesses within the automotive sector find the best fit for their company in terms of skillset, experience and culture.
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W: metatrak.co.uk T: 020 8867 2340 E: enquiries@metatrak.co.uk Info: Total vehicle security. Clever tracking technology, advanced immobilisation, 24/7 monitoring and an easy-to-use app. Security. Connectivity. Peace of mind.
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W: Your website address T: 023 9252 2434 (that’s us!) E: sales@blackballmedia.co.uk Info: The Suppliers Guide lets dealers find the companies they need to help them with their business. Make sure you’re here. Contact us via the above number.
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W: Your website address T: 023 9252 2434 (that’s us!) E: sales@blackballmedia.co.uk Info: The Suppliers Guide lets dealers find the companies they need to help them with their business. Make sure you’re here. Contact us via the above number.
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To have your details included email sales@blackballmedia.co.uk and ask for Suppliers Guide listings CarDealerMag.co.uk | 63
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Long-termers. LATEST FROM THE FLEET...
SsangYong Korando Plenty of motorway driving pre-lockdown has exposed some weaknesses with our new South Korean SUV... by TED WELFORD @TedWelford
I
t could only happen to me that less than a month after picking up my first long-term car, we’re in a position where it can’t even be used. But before the coronavirus restrictions, the Korando saw quite a lot of use – not least the 300mile trek from the sunny south coast to Yorkshire, where I’m currently residing. Before this, I was quite taken by the SsangYong and it was impressing me in plenty of ways. For starters, I really like the way it looks, with a particular highlight being the cool rear LED lights. It’s just a shame you don’t see them very often, as even when you unlock the car, it’s only the headlights that turn on and not the rear lights – something I find quite bizarre. The level of kit on it is also superb, with the digital instrument cluster still being a highlight – just as it was when I first picked it up. Previously, most of the driving I did was just pottering around town – hardly where an SUVlike model should excel, but the Korando works rather well in this backdrop. But sadly, as I discovered on the long jaunt to Yorkshire, an extended bit of motorway driving doesn’t play to this car’s strengths. That’s for two main reasons – the cruise control and its thirst for fuel. I’ll cover the latter first. In the three years that I’ve lived in Portsmouth and travelled to North Yorkshire to visit family, it’s the first time that I ever thought a car wouldn’t be able to make it on a full tank of fuel. Sure enough, a petrol stop was needed. It’s hardly an inconvenience, but the fact the Korando struggles to be able to cover more than 300 miles on a single tank of juice – especially on a longdistance journey – is poor. Its 50-litre fuel tank isn’t the biggest, but it’s not really an excuse. In terms of fuel economy, it works out at averaging about 28mpg – something that’d be acceptable from a sports car but not a mid-size crossover on a steady run. While the roof and bike racks that are fitted won’t help matters, it still shouldn’t be this thirsty. My second gripe is with the cruise control. It’s something I’m now rather lazily reliant on for long journeys, as it just takes all the strain out of driving. Unlike other vehicles, the Korando has a
Ted’s a fan of the Korando’s smart looks and LED rear lights; its drinking habit less so...
THE KNOWLEDGE Model: SsangYong Korando Ultimate Price (as tested): £27,995 Engine: 1.5-litre turbocharged petrol Power: 161bhp Torque: 280Nm 0-60mph: 11.8 seconds Top speed: 117mph Fuel economy: 39.8mpg Emissions: 162g/km CO2 Mileage: 1,224 THIS MONTH’S HIGHLIGHT: Enjoying the view of the surprisingly pretty (but motionless) Korando from inside the house... standard cruise control system, which is meant to hold the car at a set speed, rather than an adaptive one, which alters the speed depending on the traffic in front. And after three years in this job, the Korando’s system is, annoyingly, the worst I’ve come across. The SsangYong just doesn’t seem to be able to stick at a set speed – randomly accelerating, only to brake a second later. It happens even on flat and straight bits of road. Of course, the counterargument is ‘well, don’t use it then’, which is very true, but what’s the point of having it if you can’t use it? However, although I’m not driving on motorways, I’m able to stare out of the window at the Korando, which is just gathering dust now. While it’s not really being used, I’m going to have a good flick through its many touchscreen menus, as I’m adamant there is still plenty to discover. It’s also going to have a well-needed clean. Hopefully, this will show the Korando off a bit better than motorway driving has… CarDealerMag.co.uk | 65
TALK TO US TODAY. frfl.co.uk/car 0115 946 6260 enquiries@frfl.co.uk Registered Office: First Response Finance Ltd, Chetwynd Business Park, 5 Regan Way, Chilwell, Nottingham, NG9 6RZ. Registered in England No. 03560611. Authorised and regulated by the Financial Conduct Authority ref no. 309356.