SMTA Auto Insight – Issue 11

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CONTENTS

wendy.hennessy@smta.co.uk

WELCOME...

So, this is our last edition of 2022 and it’s been quite a year, especially for those who are members of the revolving door club, formerly known as Number Ten Downing Street! Who would have believed that despite the turmoil and sorrow of the passing of the late Queen Elizabeth II, we would have been tossed, troubled and torn by the antics of those upon whom we rely on to run the country!

Hopefully we are now entering a period of stability and with the impacts of the next major fiscal statement from the Chancellor around the corner we can only hope that his plans are met with more optimism that those of his predecessor.

Getting the politics out of the way makes it easier to reflect on the year we have had as a sector, unprecedented demands for new and used vehicles and aftersales have meant that most of our dealers have enjoyed bumper years financially, however, there are very significant challenges ahead with energy costs, cost of living demands on wages and a general skills shortage being some of the most significant at this time.

Clearly we will continue to discuss these and many more issues with the relevant Government, be that Scottish or British, however we are now seeing some early impacts of cuts in Government spending coming to the fore, support funds for the Modern Apprentice programme as currently on hold as Skills Development Scotland reviews its potential to support further applicants this year, which is totally unacceptable given the very real need to prepare the workforce for the future.

Within this magazine we have featured the recent SMTA Annual Dinner and Car Star Awards held in Glasgow, what a night! It had everything and some, we are grateful to our main sponsor Central Car Auctions and of course all the supporting sponsors, watch out for the short video highlighting the evening, and make sure you review your own businesses community activity and consider putting together and entry for next year!

As this is the last edition of the year, let me be one of the first to wish all the very best of times over the festive season and best wishes for the business year ahead.

Scottish Motor Trade Association Ltd., Palmerston House, 10 The Loan, South Queensferry EH30 9NS SMTA Ltd Tel: 0131 331 5510 | Scotsure MBI Ltd Tel: 0131 331 5512

Kind regards www.smta.co.uk

Sandy

by Philip Nothard Insight & Strategy Director, Cox Automotive

DOES ‘NORMALITY’ EXIST ANYMORE IN THE AUTOMOTIVE INDUSTRY?

Philip Nothard, Insight & Strategy Director for Cox Automotive, discusses how the automotive industry is adapting to ongoing supply and economic challenges and reveals Cox Automotive’s revised new and used forecasts.

As we near the end of another turbulent year, it’s become clear that hopes of a big recovery for new vehicle production and a return to regular supply in the used market were perhaps premature. There has been a recovery of sorts, but certainly not enough to bring about normal market conditions, and it’s likely the current challenges around production and supply will continue well into 2023 and possibly beyond.

After three years of relentless headwinds, is it time to accept that we are now in a world where ‘normality’ has ceased to exist?

At the start of the year, I predicted that the automotive industry had to get used to ‘VUCA’ - volatility, uncertainty, complexity, and ambiguity. Considering all that’s happened since – the war in Ukraine impacting supply chains and energy prices, coupled with a cost of living crisis – I believe this statement is more prudent than ever.

While we are confident prepandemic market conditions will never return, without a crystal ball,

we cannot know for sure what’s ahead of us. For now, our advice is to embrace this change, control the areas you can control, maintain strong business foundations, and implement clear long-term strategies. The market uncertainty makes it nearly impossible to plan for the short to medium-term. But continue to do the basics well, review your operations and costs and find efficiencies so that once more supply enters the market, you’ll find yourselves in a strong position.

HOW EXTERNAL PRESSURES ARE INFLUENCING UK AUTOMOTIVE

The challenges the automotive industry needs to navigate range from the immediate through to the near future, but all will have very real effects on the UK automotive market, both positive and negative.

While there is a myriad of macro issues specific to the UK economy that is affecting the automotive market, these are generally being influenced by three broader global pressures:

1) THE HANGOVER AND RECOVERY FROM COVID-19

The potential of the automotive industry continues to be held back by the Covid-19 hangover. Production line shutdowns, parts shortages and global supply chain disruption led to the mother of all headaches, and no amount of rehydration can make up for all that was lost. It’s reported that the semiconductor issue has impacted more than 400 vehicle manufacturing plants, and raw material supply shortages and rising prices continue to affect the number of vehicles produced and the margin manufacturers can make.

The result is that globally we are set to be over 40 million vehicles short over the three years since the pandemic started. It was previously predicted - or hoped - that the production of new vehicles would return to normality by the end of 2022. Now, many manufacturers indicate this won’t be the case until at least the second or third quarter of 2023.

2) THE WAR IN UKRAINE

Not only is the sector facing challenges around vehicle supply, but it now also needs to navigate through both the political and economic turbulence that is helping to drive inflation and soaring costs.

The war in Ukraine shocked the world when it began in February this year, and its effect on the automotive industry and the entire global economy has been immense. As a result, fuel and energy prices

have seen a steep incline, particularly in Europe, which relies heavily on the gas and oil that Russia controls.

Supply chains have, too, been impacted. Several major manufacturers sourced raw materials and components from businesses in both Russia and Ukraine; the conflict and resulting sanctions have had an obvious impact. All of this has inevitably influenced manufacturing costs, and most brands are passing at least a proportion of that cost onto the consumer – contributing to global inflation.

3) NEW AND AGGRESSIVE MANUFACTURERS ENTERING THE MARKET

It’s impossible to ignore China’s growing influence in most areas of the West’s economy in the last 20 years. Still, to this day, its influence in the automotive market has been relatively small, perhaps due to the abundance of recognised brands that already exist here. However, as Chinese brands continue to grow in reputation in the UK, Europe and indeed globally, it’s not a matter of if but when they will have a significant presence in terms of sales.

This could come sooner than previously thought. As Chinese brands reveal their strategies for entrance into Europe and the UK, we will see a significant shakeup of import and export market dynamics. It remains to be seen how established European and US manufacturers will react.

NEW CAR FORECASTS

Building on recent new car figures, the market factors mentioned above, and in line with previous forecasts, Cox Automotive has adjusted its new car forecasts for 2022 and 2023, with the latest projections published in the new issue of AutoFocus. Our baseline scenario sees Q4 2022 end on 329,055 registrations, a reduction of -0.5% year-on-year, while Q1 2023 is predicted to end on 435,956 registrations, a +4.4% increase yearon-year. In addition, Cox Automotive has revealed its 2023 registration forecast, with the baseline scenario seeing the year to end on 1.68 million registrations, a +9.5% increase yearon-year, but a -10% downgrade on our previous forecast.

A FAMILIAR SITUATION FOR THE USED MARKET

Used car retailers have become accustomed to the low supply, high demand market dynamics that have pummelled the used car market for close to three years now. But without a big influx of stock on the horizon, an oncoming wave of economic pressures impacting consumer purchasing power, and rising operational costs, retailers will need every trick at their disposal to navigate the coming months.

As ever, the used car market is constrained by a lack of new car supply, predominately impacting the zero to 12-month and 12 to 24-month sectors. But soon enough, we will see the same impact in the three-year-old sector too. Although there are patches of green shoots in new car supply, and the situation is

MARKET INSIGHT

undoubtedly improved compared to 2021, it remains some way off pre-pandemic levels. Moreover, any increases in supply are generally limited to specific models and derivatives.

The question remains about how much consumer demand will be weakened by the cost of living crisis, rising interest rates and inflation. It feels inevitable this will reduce consumer confidence and the willingness to purchase bigticket items such as a car, but it’s impossible to predict the extent of this impact today.

We can, however, confidently predict how these factors will impact used car values. While consumer confidence and demand will dip, it’s unlikely to be at the level that will create an oversupply of used car stock. In addition, the shortage of end-of-contract and other used vehicles entering the market, alongside continued new vehicle shortages, leads us to anticipate many of the same supply and demand dynamics we’ve seen for more than two years continue to play out for most of 2023.

This means that values, while under increased pressure, will remain at their inflated levels for some time. We are no longer seeing the dramatic prices of last year; in fact, values in most cases have plateaued.

We must never forget used vehicles are depreciating assets. Although they have risen at an exceptional rate in recent years, and in some cases, to levels close to or above the original cost of purchasing new, they will have to come down at some point. The question is when we’ll once again see seasonal depreciation, and when that does return, to what extent?

At least for now, considering that new car supply is unlikely to materially improve until the end of next year and the ongoing economic situation, residual values will remain reasonably stable until at least 2024.

USED CAR FORECASTS

Due to a combination of the headwinds facing the sector, Cox Automotive has also adjusted its used car market forecasts for 2022 and 2023, as first seen in the latest edition of AutoFocus. As a result, our baseline scenario sees Q4 2022 end on 1.59 million used car transactions, a reduction of -3.0% year-on-year, while Q1 2023 is predicted to end on 1.76 million transactions, a -0.5% decrease yearon-year. In addition, Cox Automotive expects the baseline scenario for the full year 2023 to end on 7.07 million transactions, a +2.8% increase yearon-year, but a -5.8% downgrade on our previous forecast.

MORE INSIGHT FROM COX AUTOMOTIVE

At Cox Automotive, we are firm believers that businesses must be well informed of the market dynamics in order to make the best decisions for the future. That’s why we’re committed to bringing you the insight you need to make better business decisions through the likes of our annual Insight Report and our quarterly AutoFocus.

To keep up to date with the latest Cox Automotive insight, visit coxautoinc.eu/content

Automotive technology’s on the move. As a result technicians face more complex challenges than ever before. That’s why NGK has teamed up with market leaders OVA to bring to the Aftermarket what we believe is the most comprehensive and cost effective training platform available today. The NGK Academy. It’s training. But not as you know it.

AUTHORISED FIRMS ARE DUTY BOUND BY FCA’S CONSUMER DUTY. ARE YOU READY?

FCA HAS TOLD MOTOR RETAILERS THAT:

1. “There can be no compromise” when it comes to the technology leveraged to ensure compliance with the FCA’s new Consumer Duty

2. Appointing a “Consumer Duty Champion” is a MANDATORY action for all authorised firms

FCA’s new Consumer Duty (known as “The Duty”) sets clearer and higher standards for the culture of authorised firms and their expected conduct. It requires all firms to

1. Focus on actual outcomes experienced by consumers, and to

2. Act in a way that reflects how consumers actually behave and transact in the real world, better enabling them to access and assess information, and to act to meet their needs and financial objectives.

The Duty is a package of measures comprising a new Consumer Principle (Principle 12) that provides an overarching standard of conduct, supported by a set of Cross-cutting Rules and

THE DUTY AT A GLANCE

DO

outcomes that set clear expectations for firms’ cultures and behaviours.

You were required to prepare an Implementation Plan by 31 October 2022 which should address all the aspects of The Duty.

GOVERNANCE & CULTURE

The FCA has highlighted that it expects The Duty to change firms’ governance and culture.

Senior Managers, Certification Staff, the board of directors and a “Consumer Duty Champion” will be expected to lead this with your Conduct Rules staff and key stakeholders.

A firm’s board of directors is ultimately responsible for ensuring that The Duty is firmly embedded in their firm.

Authored by Joy & Alex Thomson

However, it must appoint a Consumer Duty Champion whose role it is to make sure that Consumer Duty is raised in all relevant discussions.

The Consumer Duty Champion should ideally be an independent non-executive director but not necessarily so in smaller firms.

The Champion would be responsible for preparing, at least annually, a report for the board to review and approve, recording an assessment as to whether the firm is delivering good outcomes for its customers in accordance with The Duty.

The FCA will expect to be provided with such a report on request supported by evidence of how the outcomes were assessed.

So - where to begin with your assessment?

In the Motor Retailer Sector TTC suggests that you identify areas affected by The Duty.

PRODUCTS:

Identify which of your products are affected by The Duty.

For the Motor Retailer Sector, these will be

● any regulated motor finance products and

● any regulated insurance products

● the typical main activities for Motor Retailers are:

● regulated credit broking and

● arranging deals in contracts of insurance

CUSTOMERS:

Identify which customers are affected by The Duty

Motor Finance customers

● This is likely to be all borrowers and potential borrowers that you provide credit-related regulated activities to.

Insurance customers

● All Consumer Customers. As well as private individuals, this could include any sole traders, business partnerships or small Limited companies buying vehicles which may be used for personal use as well as for business purposes.

FOR FURTHER INFORMATION CONTACT

TTC Consultant Stuart Macdonald: Email: stuart@thethomsonconsultancy.co.uk Mobile: 07907 465262

THE CUSTOMER JOURNEY

Identify the Customer Journey for each product you offer

For example: 1. Customer receives contact from you 2. FCA Sales Process – Status Disclosure, Demands & Needs, Product Disclosure 3. Post-sale updates and support 4. At expiry of product give any guidance required

OUTCOMES

Identify the outcomes of the Customer Journey for the products and services provided.

Consider how good outcomes can be evidenced under each aspect of the journey.

Other areas you need to review:

THE DISTRIBUTION CHAIN

Identify all parties in your Distribution Chain.

PRODUCT ASSESSMENT

Identify your role in the Distribution Chain. You are a Distributor not a Manufacturer.

PRICE & VALUE

Identify whether your pricing represents “fair value”?

STAFF & TRAINING

Training of staff will be crucial to show your business is complying with The Duty.

1. Review your Remuneration and Incentives policy

2. Update your SM&CR materials to ensure The Duty is adequately covered.

COMMUNICATION CHANNELS & SUPPORT

Identify your communication and support channels

Customer understanding is crucial!

Different channels of support need to be provided and communicated to the customer.

REVIEW YOUR POLICIES ON:

Customer Complaints

Appropriate and effective internal complaint handling procedures must be in place.

Vulnerable Customers – A key focus for FCA

When consumers are in vulnerable circumstances, it may affect the way they engage with financial services.

Financial Promotions (FCA’s name for adverts!) – These must be clear, fair and not misleading!

by Debbie McKay Commercial Director, MotoNovo Finance

Q4 –MOTONOVO USED CAR & FINANCING OUTLOOK

● Dealer demand for used stock continues to exceed supply but only marginally

● Stock prices, while broadly flat overall, see demand for EVs increasing their values v ICEs

● Loan rates are set to continue rising

Dealers are adapting to the everchanging operating landscape, with used car volumes for the year now expected to be circa 6.74M units, according to Cox Automotive. Encouragingly there is still consumer demand. In part, this is a continuation of the impact of new car shortages. There is also anecdotal evidence pointing to how people are adapting to the cost of living crisis by trading down to smaller and cheaper cars. It is a move being joined by an increased focus on EVs of all variants.

Demand for our range of stock funding options remains strong. The demand is being driven by dealers switching from other funding options, which were more costly or replacing government-backed

loans utilised by dealers during the lockdown periods. Our stocking provides clear sight of the impact of consumer demand for used cars and continuing wholesale supply limitations, with values continuing to hold up overall. As noted previously, the demand for EVs and their scarcity means their values are particularly strong, while ICEs are seeing slight declines, particularly in higher value stock.

The Bank of England has introduced successive rises to its base rate to counter rising inflation. The latest increase has seen this rate rise to 2.25% from 1.75%. It is the highest rate since November 2008. However, it is unlikely to be the last such rise, and the financial markets suggest the base rate could climb to 6%.

Upper interest rate forecasts were reined in following government changes in tax plans; however, the Governor of the Bank of England stated in a speech on October 15th that; “We will not hesitate to raise interest rates to meet the inflation target. And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August,” the likelihood of interest

rates continuing to rise rapidly is very real.

According to Moneyfacts data published at the end of September, average unsecured loan rates hit their highest in six years; more rises are widely expected. All lending forms are set to see further rate increases based on the higher costs of money that exist in the money markets.

Another pressure point in lending for all regulated firms, including dealers and brokers, will be the regulatory need to ensure any new loans are affordable for customers. After an extended low inflation and low-interest period, this step will be essential to ensure people do not over-commit themselves.

The overall conclusion is that the used vehicle market looks set to flatten in the next few weeks. As we move towards the tail-end of the year, we can expect the usual slowing in transactions. The tailwinds of low consumer confidence and rising interest rates are likely to see used car demand focus on the cost of purchase and use.

WE PROMISE HANDS ON FCA COMPLIANCE SOLUTIONS

What We Do

We demystify the FCA Rules & Regulations and guide you to solutions you can understand and work with to satisfy the Regulators requirements.

We also provide on-line and face to face training.

MONITORING & CONTROL TOOLS

We supply online Compliance Monitoring and Control Tools through our system “Compliance Manager” which also incorporates a Complaints Log and a Vulnerable Customers Log and allows Senior Management to have a helicopter view of dealership compliance activities.

PAPERLESS ONLINE SALES PROCESS

New & Used vehicle customers have grown to expect slick, online sales journeys that incorporate Showroom and Online visits through an interactive customer portal.

Digital Deal File (DDF) does exactly that!

• Documents are stored securely in Microsoft Azure

• 90% of the paper from your sales process is gone!

• Robust audit trail of all activity in each deal file

• Cost savings on storage, printing & administration

Who We Are

Specialists in FCA Compliance within the Retail Motor Trade since regulation began in 2005, Joy & Alex Thomson developed their business by providing compliance solutions to many motor dealers throughout the UK, every single one having been referred to them by another Motor Trade client!

Joined by Neil Miller in April 2019 as an auditor, made Director in 2020, the team has since grown to include Training & Audit Specialist Consultant Stuart Macdonald.

Their combined abilities and thorough knowledge of the Retail Motor Trade, Finance, Insurance and FCA Compliance make them a one-stop-shop to handle all your firms FS Compliance needs.

For further details on the products and services we supply contact Stuart Macdonald

Email: stuart@thethomsonconsultancy.co.uk Mobile: 07907 465262

MEMBER PROFILE

KINTORE CAR SALES

SMTA How did you come to start up?

James I am completely obsessed with cars, I always have been. I hadn’t been in the motor trade for very long before I went into business myself, but my passion was valeting (detailing nowadays) and I always had great eye for the detail. So, Once I had got a good understanding of the retail side of the industry, I decided I could do this alone and started the business based on my love for properly presented cars.

SMTA How has the business grown since then?

James We enter our 11th year in 2023, It’s completely different. I was myself for the first 2 years and have now added a wonderful team. We have a service Centre so we can prepare our own vehicles and service our returning client’s cars. We have an 8-car valeting bay and a 6-car internal showroom. We have a very consistent process.

SMTA Can you run me through a typical day?

James My wife runs her own companies too, so (nowadays) I start my day off with the nursery run for our 2 boys. I will have emails and

enquiries to answer first thing. If we have stock to collect that day, I will organise that. Any sold cars that are to be collected will be arranged and confirmed. Then its advertising and social media preparation. I will have photographs to take and throughout the day new enquiries, visiting clientele and anything else that may raise its head. I liaise with the team and we are continuously busy. The days here are rapid because we are all so busy throughout.

SMTA What’s been the highlight of your business so far?

James 2 years in I employed my first employee, and it was my younger brother David. He left a very secure job to join the business. David had been in the motor trade in the service/Parts since he was 15. Getting to work with him everyday has been a personal highlight for me. A business highlight was the level of repeat clients we got post COVID who really supported the business. It showed me how highly we were regarded.

SMTA What’s the one thing your business couldn’t function without?

James Autotrader. I think it’s a love/hate situation. Its vastly expensive. In fact, our highest singular monthly expense and they seem to only care about new electric cars currently. However, we sell cars all over the UK and this is primarily helped with the exposure on Autotrader. I am on all the advertising platforms, but they are by far the best for showcasing your business.

SMTA What’s the best thing about working for yourself?

James For me it’s responsibility and the decision making. I love that side of it. Every day you learn and that’s ultimately when the business can benefit.

SMTA And the hardest part?

James Every Managing Director will say the same. It never ever stops. Christmas, Holidays, The birth of your children, any time off, on the golf course, New years day, the business never sleeps. I certainly think for the small independent you must be on your toes and its 24hours a day, 7 days a week. There have been times I wish I could just press pause, take a breath, but at the same time it’s the intensity that is addictive in the motor trade.

SMTA speaks to James Carr, owner of Kintore Car Sales

SMTA What do you wish you’d known when you first started out?

James Don’t wish the time away. The beginning was so much fun, but I was so determined to be established and to grow and expand. The first few years in my head are a blur. It was always, “Right, Next, next, next”

SMTA If you could go back and change one thing, what would it be?

James I wish I had asked my wife to join me. She has her own companies now and has been very successful in her sector. Rebecca’s well respected locally and has been recognised in the UK and internationally. She would have been superb at this, although she would have probably taken over and I’d have ended up working for her. If there’s a multiverse out there where she sells cars here I would love to see it.

SMTA How does your SMTA / Scotsure membership help?

James One of the first things I did was join the SMTA. I have been an active member since I started. We have enjoyed multiple benefits, not just in support but over the years a variety of questions have been answered. The discounts on trade items are also very welcomed and the magazine is a great touch because it’s a community in this sector.

SMTA Where will your business be in five years’ time?

James The cars I grew up loving have now shifted into the modern classic / classic car territory. We built our reputation on selling predominately sportier variants of cars so I will certainly be going further down that route. The ‘top end’ product has become vastly accessible in the last decade, and I’m intrigued by that market. I hope to complete our MOT station in the early part of next year too.

SMTA How do you maintain customer levels?

James Consistency, as a person I have my routines and this has transferred into the DNA of the business and I believe this is why we get a lot of repeat business and recommendations from existing clients.

SMTA What form does your marketing take?

James As previously mentioned, we are very active on all the main advertising listings. Social media has been a great way for branding and keeping people engaged but I think in a business sense it has had its day as its evolved. I’ve noticed more so this year that the more ‘traditional buying journey’ of clients coming for a look and wondering around the pitch is back. Footfall is up on our forecourt, and this is extremely interesting when so many industries are online based.

SMTA What is the biggest challenge in used cars?

James Currently it’s the aggressive attack from everywhere on combustion and the quick rise of EV’s. Since the Pandemic it feels like hyper speed which (to me) is a massive shame as the soul of a car is the engine. I think EV’s will hinder most independents. Also, the direction car finance has

gone. A bank can finance one of my cars on a lower rate than we can. It makes no sense when everyone has the same access to lending.

SMTA What drives you?

James I’ve a great life, a wonderful family and I work in a business that I love. I don’t see what I do as a job it’s a privilege that I get to do this every day.

SMTA What’s the most important thing you’ve learned in your career, and how have you made use of it?

James Its nice to be important, but its more important to be nice. That 17-yearold girl or boy dreaming of buying a Mercedes A-Class or BMW M Sport will possibly one day be able to buy the car. Don’t dismiss anyone as a waste of time… It’s just maybe not their time…. yet!

I appreciate everyone that makes the effort to contact the business or visit and view our cars.

The SMTA held its black-tie dinner on Thursday 27th October 2022 at the Hilton Glasgow, we played host to an audience of 330 guests from all sectors of the Scottish motor trade, the event was also attended by fellow trade associations from the rest of the UK, Southern Ireland and Brussels.

Thank you to all our guests who attended, it was great to see so many familiar faces and meet some new ones too.

Our guest speaker - polar explorer, Ann Daniels was highly entertaining, relating her stories of her time at the North and South poles - truly inspirational.

The night was a huge success, and we couldn’t run this event without the valued support of all our sponsors - thank you to Central Car Auctions who were our headline sponsor, Adesa, Automotive Compliance, Arnold Clark, Car Care Plan, EMR Metal Recycling, Marsh, Moto Novo Finance, The Pettigrew Charitable Trust, Santander Consumer Finance, Supagard, Tyres Life and Viking.

We were delighted to award a number of our members with our C.A.R Star Awards – (Community Activity Recognition) Awards recognising these members that have given up their time or funds and in doing so contributed to their local community-based projects and charities. It is always humbling to highlight these efforts and we feel that these actions deserved to be rewarded. This process just serves to display that all of our members businesses form part of the community within which they trade and sometimes it is nice to let everyone know that they are not just somewhere to buy a car or get your car repaired!

Sandy Burgess commenting on the Award winners said “On behalf of SMTA, we are delighted to be able to broadcast some of the wonderful contributions made to local charities and their respective communities by our membership, day in and day out, these awards are so diverse and well deserved it really can be quite humbling handing them out!”

Images by CFH Photography

SMTA also awarded their Skills Star award to an up-and-coming young technician – Tori-Leigh Adams. Nineteen-year-old Tori-Leigh, who has a passion for motor racing, realised from a young age that there were no young women working as mechanics and now she has qualified, gaining her Level 3 in Vehicle Maintenance & Repair and is keen to find automotive employment.

PRESIDENT’S AWARD

Lastly, our President’s Award 2022 went to Graham Clark of Anderson Clark Motor Repairs in Inverness. A worthy winner of our coveted President’s Award, Graham has been in the industry for many years and is very well respected in the Inverness area for his quality approach to everything they do as well as the huge contributions he and his team make to their community with various fund-raising exploits and efforts.

We will be featuring each of our winners in upcoming editions of this magazine!

The list of winners 2022: Anderson Clark Motor Repairs, Inverness Your Ford Centre, Fife & East Lothian Mojo Automobile Solutions, Glasgow C D Copland, Monifieth

Highly Commended for 2022 Kilgannon Motors Assured Cars Scotland Autoecosse

MARKET INSIGHT

by Katie Plemons, Legal Advisor at Lawgistics

THE PRICE YOU PAY FOR MISLEADING ADVERTS

The Consumer Protection from Unfair Trading Regulations 2008 prohibits traders from engaging in unfair business practices which cause, or are likely to cause, the average consumer to make a different purchasing decision.

The unfair business practices are spread across five main categories including:

1. Giving false information to, or deceiving consumers before, during, and after-sale. This is known as a misleading action and includes misrepresenting the vehicle’s main characteristics, such as the service history, number of previous owners, and ULEZ compliance status.

2. Giving insufficient information, or omitting important information, which a consumer requires to make an informed decision. This is known as a misleading omission and arises when there is a failure to disclose the existence of an insurance write off marker, mileage discrepancies, and the vehicle’s mechanical condition and history.

3. Aggressive commercial practices that significantly impair, or are likely to significantly impair, the average consumer’s ability to make an informed choice. This includes using threatening or harassing behaviour to pressure a consumer to purchase a vehicle, warranty, or other associated product.

4. Failing to act in accordance with what is reasonably expected from a trader. This provides a general prohibition not to trade unfairly and arises where a trader has failed to exercise professional diligence.

5. Ban of 31 specific practices that will always be considered unfair and

prohibited in all circumstances. This includes misleading availability, such as falsely stating that a vehicle will only be available for a limited time forcing a consumer to make an immediate decision, and false endorsements or authorisations, such as dishonestly claiming to be accredited to a trade association.

Local Trading Standards are responsible for enforcing compliance with the above regulations.

Civil and criminal enforcement action can be taken against a trader who breaches the regulations and both types of action can result in a fine or up to two years of imprisonment.

As an example, a recent investigation by Hillingdon Council’s Trading Standards against Elite Automotive Ltd trading as Hilton Car Supermarket, resulted in a fine of over £58,000.

In the case, Hillingdon Council’s Trading Standards launched an investigation after a complaint was received from a consumer regarding a misleading advertisement on the ULEZ status of a vehicle.

Trading Standards’ initial investigations conducted between February to March 2020 found that five vehicles were advertised as being free from ULEZ charges when they were not.

The same consumer raised a second complaint after noticing the vehicle they had returned, due to not being ULEZ compliant, had been readvertised as being ULEZ compliant. Further investigations

found an additional 14 vehicles were inaccurately listed as being ULEZ compliant.

The action was taken against the dealership for breaches of Sections 9 (misleading actions) and 13 of the Consumer Protection from Unfair Trading Regulations 2008.

In June 2022 at Uxbridge Magistrates’ Court, the dealership admitted 12 counts of breaches of Regulations 9 & 13.

The dealership was fined £58,825 in addition to £5,358 in court costs, £1,120 in compensation, and a £190 victim surcharge.

The fine is the result of repeat breaches and is an example of the serious consequences a trader may face for doing so.

MARKET

INSIGHT by Keith Hunter, Senior Tax Manager at Thomson Cooper

EMPLOYMENT STATUS – WHEN THE WHEELS COME OFF!

The question of whether a person is an employee or is self-employed is always of great interest to HMRC. Contrary to the belief of many, employment status is not a matter of choice and is rather determined by examining the facts regarding the relationship between the individual and the person for, or to whom, the services are provided.

Despite reform being recommended, HMRC have decided that enacting legislation to define employment status fell firmly in the ‘too difficult to do’ box. In the motor industry, drivers, cleaners, valeters and (as ever) consultants will come under scrutiny from HMRC and therefore care must be exercised to ensure that such arrangements are demonstrably compliant, not least within the current subjective framework.

There are various matters to consider as set out below:

DIFFERING NATIONAL INSURANCE CONTRIBUTIONS (‘NIC’)

Where an individual is classed as self-employed, the rate of NIC is lower. This is compared with the position of an employee, where employee and employer both pay NIC. At the same time, the selfemployed can claim a tax deduction for a wider range of expenses than employees. Throw in pension contributions, annual/sick leave and potential Apprenticeship Levy charges, the cost of an employment relationship can be seen to be significantly more than one of nonemployment and why the latter arrangement may be adopted despite the facts indicating the contrary.

FACTORS TO DETERMINE STATUS

The contractual terms governing the relationship will be the starting point although HMRC look beyond this and these will be ignored if they are inconsistent with how the relationship plays out in practice. It is necessary to consider a number of factors such as who provides equipment, who bears responsibility for remedial work, who is obliged to carry out the work, what are the arrangements for holiday and sick pay and the extent of integration into the engager’s business. There

is no simple checklist to run through in order to reach a decision, even with a weighting applied. All the facts need to be collated and then the overall picture considered. As it is a subjective process, different decisions may be reached on the same facts by different evaluators.

HMRC ASSISTANCE

Surely with all this uncertainty and subjectivity HMRC are providing all parties involved sufficient guidance and tools in order to navigate the rules and obtain some piece of mind? HMRC provide the check employment status for tax (‘CEST’) tool which they advise gives their view of a worker’s employment status for tax purposes. HMRC advise they will stand by all decisions given by the tool unless they consider there to have been inaccurate information fed in and/ or if there has been a subsequent change in the contract. HMRC published figures indicating the tool fails to provide a determination in around 20% of cases whilst other criticisms include the tool not being reflective of prevailing case law on status. Engagers should therefore be cautious if choosing to rely on the tool without obtaining specialist advice.

OFF-PAYROLL

All of this also impacts on those covered by the off-payroll (IR35) rules as the same tests should be applied when determining whether they need to put an intermediary’s (most likely a personal service company) worker on the payroll. Following the reversal of the mini-budget, it will continue to be the responsibility of the end-user (those not considered ‘small’ for tax purposes) to determine if the IR35 rules apply.

WHAT IF I GET IT WRONG?

If HMRC re-categorise a selfemployed hire as an employee,

the default position (i.e. ignoring any potential contractual indemnification) is the resulting PAYE and Class 1 NIC is the responsibility of the engager. Potentially, it may be possible to negotiate an offset of any tax paid by the individual (i.e. that paid via Self-Assessment), but HMRC are under no obligation to allow that.

HMRC can broadly look back at the previous 4 years for tax and 6 years for NIC and can charge penalties of up to 100% of the tax due whilst applying interest on any overdue amounts.

WHAT NEXT?

HMRC consider that the “majority of status cases are simple and clear” and their CEST tool assists in supporting status determinations. The fact is we are still in an unclear position on the status of workers. The body of case law is continually developing in response to new ways of working and new relationships between employer and worker. Quite how a digital tool can maintain compatibility with ever evolving and nuanced tribunal decisions is hard to imagine. Unfortunately, differences in tax treatments will always lead to the distortion of commercial decisionmaking.

Given the uncertainty and complexity in this area, it is essential that you seek proper advice and ensure that the records that you keep are available for potential future scrutiny.

Keith Hunter is a Senior Tax Manager with Thomson Cooper Accountants. He specialises in personal and employment taxes and is a Chartered Tax Advisor (CTA). Keith has previous experience as an Officer with HM Revenue & Customs where he was involved in various aspects of PAYE and Self-Assessment.

www.thomsoncooper.com

LICENSED TYRE WASTE MANAGEMENT FACILITY

WE’VE DONE IT AGAIN THANKS TO YOU!

Within two months we’ve won not one, but three awards - an achievement that we are all very proud of.

Our customers voted First Response Finance as the ‘Best Car Finance Provider’ in the Consumer Credit Awards 2022 - for the second consecutive year. In addition to that, we’ve won the prestigious ‘Firm of the Year’ award!

The second recognition came from our dealer partners, who voted us ‘Finance Provider of the Year (Sub-Prime)’ in the Car Dealer Power Awards. We are honoured to have won this award 8 times!

Vans, cars, motorbikes - it doesn't matter what type of vehicle we’re financing, our award-winning service remains the same.

First Response Finance Ltd, 5 Regan Way Chetwynd Business Park, Chilwell, Nottingham, NG9 6RZ. Authorised & Regulated by the Financial Conduct Authority. Registered in England No. 03560611.

MARKET INSIGHT by Samer Cheaitou, Trainee Solicitor, Just Employment Law

PAY RISES AMIDST THE COST OF LIVING CRISIS

Rising inflation, interest rate hikes, industrial disputes, record fuel prices, skyrocketing energy bills, mortgage and rent increases, the soaring cost of the weekly shop - these are some of the headlines that we have all become accustomed to over the past few months.

With inflation hitting 10.1% in September 2022, the pay packets of millions of workers are not going as far as they used to. This is leading to an increase in requests for pay rises in workplaces up and down the country.

The question then becomes, how should employers deal with requests from employees for a pay rise amidst the ongoing cost of living crisis?

As ever, the starting point is the contract of employment. Many employment contracts will specify that an employee’s pay will be reviewed annually and that it may be increased from time to time. Crucially, such a clause would usually state that such pay rises are at the discretion of the employer and that there is no obligation to award a pay rise.

Nevertheless, while pay rises are normally at the discretion of employers, employers are best advised to carry out any pay reviews in good faith (as opposed to treating them as mere “tick box” exercises) as

a failure to do so could in the worst case lead to constructive dismissal claims. Furthermore, if an employer has awarded a pay rise every year, then an employee may well argue that this has become an established custom and practice that has been implied into their contract.

Therefore, whilst most employees do not have a legal right to receive a pay rise, prudent employers will generally review employees’ rates of pay at least every year and will seek to act fairly and reasonably when deciding on whether they are in a position to award employees a pay rise.

This situation changes altogether if you recognise a trade union. In this case, the employer will be expected to enter into meaningful negotiations with the trade union in order to try and negotiate a mutually agreeable pay rise. Failure to do this may result in deteriorating industrial relations, or even strike action.

For many employers, the affordability of substantial pay rises in the longer term can be an issue. One way of

potentially addressing this issue might be to make a one-off cost of living payment to employees this year, either in lieu of a pay rise or alongside a more modest increase. Employers, however, should be careful to word communications about such an increase in a way that doesn’t imply it will be repeated in future years.

As employment law specialists with expertise in assisting employers with managing pay reviews and requests for pay rises, Just Employment Law can help you deal with any enquiries from employees around pay rises. If you are interested in learning more about Just Employment Law or our services, please contact us on 0141 331 5150 or enquiries@ justemploymentlaw.co.uk

GES COMPETITION WINNERS

Issue 10’s GES Competition was won by Gunn’s Garage in Tynribbie near Appin. They win a Karcher Wet n Dry cleaner for correctly answering “Karcher was founded in 1935”

The garage is situated next to the picturesque Castle Stalker and owner Duncan Gunn, pictured in the middle left, has been long-time a member of the SMTA.

O p u s I V S o n

d e m a n d R A P a n d R e m o t e S e r v i c e s e l i m i n a t e s t h e u n c e r t a i n t y o f p r o g r a m m i n g m o d u l e s y o u r s e l f , a n d a l l o w s y o u t o m o v e o n t o o t h e r v e h i c l e s w a i t i n g i n y o u r w o r k s h o pu l t i m a t e l y s a v i n g y o u t i m e a n d m o n e y .

MOTOR TRADE INSURANCE:

YOU MAY HAVE COVER, BUT ARE YOU UNDERINSURED?

As a motor trader, you’ll likely have insurance to protect against the range of risks you face. However, can you be sure you have the correct levels of cover?

The consequences of finding you’re underinsured in the event of a claim could be financially devastating for your business.

WHAT DO WE MEAN BY UNDERINSURANCE?

You have the right policies in place, but if the amount you’re insured for—the sum assured—isn’t sufficient, it may exceed the amount paid to you when you come to make a claim. In other words, you will have to make up the shortfall. Depending on the nature of your claim, the cost could be seriously high.

There are many areas of underinsurance motor traders could face. Two likely are insufficient buildings cover and an insufficient indemnity period—the length of time following the incident that your business is protected against interruption.

Picture the situation: a fire destroys your showroom, and you’re looking at a bill of £200,000 to rebuild

it. However, your property was inaccurately valued when you took out the policy, so your insurance payout is significantly lower than this amount.

Motor traders also risk inadequate indemnity periods to cover interruptions to business. For example, suppose the time it takes to rebuild your showroom is longer than the estimated 12-month period. In that case, you may be left with no income once the indemnity period ends.

HOW TO AVOID BEING UNDERINSURED

The best way to avoid being underinsured is to review the cover you have in place—especially if you make substantial alterations or investments. These changes could include showroom modifications, tool or equipment purchases, and increases in the number of vehicles you possess. Property value rises, rebuilding costs and high inflation can also impact the cover you need. Speak to your broker, who will be able to advise if your cover should be increased.

Now is the time to review your existing policies. Make sure you have an accurate idea of the cost of:

● rebuilding your business premises

● the actual value of all the vehicles in your collection; and

● tools and equipment based on the current market value.

At Marsh Commercial, our Risk Management Team are here to help ensure you’re fully insured. We can:

● Arrange and quote on a site rebuild cost assessment to check your sum insured; or

● Provide a desktop rebuild cost assessment – priced at £105 plus VAT (subject to qualifying data). This is completed by drawing on data from Google Earth, Street View, Industry Standard Quantity Surveyor Data and Building Cost Information Services from RICS. From this, we calculate a rebuild cost.

Once we have an accurate rebuild cost assessment, we can work with you to review your building insurance policies. We’ll make sure you have the right level of protection in place.

Our motor trade insurance experts are here to discuss your business insurance needs. We can help ensure your cover is right for you, leaving you to concentrate on running your business.

For more information about Marsh Commercial and how we can help your business, please email SMTA@marshcommercial.co.uk or all on 01738 494405.

MEMBER PROFILE

DICKSONS OF INVERNESS

INVERNESS sales director Jim Mackenzie has notched up 25 years with motor group Dicksons in the Highland capital – but he thinks the next chapter could be one of the industry’s most significant yet.

The former RAF man, who previously worked in Air Traffic Control as a runway controller, believes we are at an exciting time in the industry with the changeover to all-electric before 2030.

And with Dicksons ahead of the electric curve - about 20% of its Kia and MG car sales now electric compared to a UK figure of about 10% for new car sales – he anticipates increased demand well ahead of the deadline.

“It’s an exciting time in our industry as we embark on one of the most significant changes we have seen,” said Mr Mackenzie. “We have been preparing for it for some time at Dicksons, and we are well placed to see it through.

“We ensure all of our employees are fully-trained electric specialists as we anticipate greater public demand over the course of the next few years.

“I think that the all-electric side of

the business will grow rapidly to over 40% of Kia and MG Sales over the next five years. Nissan is increasing too.”

Mr Mackenzie spent 12 years in the RAF before settling down in Kirriemuir, Angus, and joining Weir Citroen, part of the John Martin Group in 1995 as a Sales Executive.

“My MD from John Martin re- located to Inverness and shortly afterwards asked me to move up North in 1997 and manage the Honda site at Dicksons,” he said.

“I spent several years managing Honda, Hyundai, Subaru and Daihatsu and then was asked to move into Nissan and sales manage all of our sites.

“During this period we changed a couple of franchises and we now have Kia, Nissan, MG and Suzuki. After a couple of years as General Sales Manager I was invited to Join the Board of Directors and have held

my current role for over 10 years.

“I have a keen interest in the marketing of the company and with the rise in digital platforms this has increased, and I still enjoy this part of the job.

“Working for a family-run business has been a great pleasure , challenging at times and often very rewarding . I am proud that we have such a great bunch of individuals who genuinely care for our customers and have remained with the company for many years.

“I would like to continue working as long as I am able to contribute to the company. Dicksons without doubt is in my blood.”

Dicksons, which has been based in Inverness since 1992, employs about 70 staff at its Telford Retail Park base.

CENTRAL CAR AUCTIONS SET TO EXPAND THROUGHOUT THE UK

Established in 1965, Central Car Auctions has been helping dealers across the UK buy and sell vehicles for over 55 years.

With thousands of vehicles available every week, customers can bid and buy stock both in person and through their live online bidding platform LiveBid – meaning it’s never been easier to grab the perfect collection for your forecourts. All vehicles £3,000 and over are NAMA-graded, so every customer can buy with confidence, knowing they are getting great value, quality, and choice. Customers looking to sell with Central Car Auctions can enjoy a wide range of benefits to ensure they get the maximum price for their vehicles, including a dedicated account manager and access to a UK-wide audience. The business has a large

portfolio of independent and franchised trade customers across the UK and has plans to expand its presence with the addition of four new locations south of the border in 2023. The first will be based in Birtley, Newcastle, which is set to be ready for business in early 2023. With the expansion of the business, Central Car Auctions has introduced an additional auction day, which launched on Tuesday 1st November, so customers have the opportunity to bid on vehicles four days every week.

With experts on hand, first-class facilities and excellent customer service, Central Car Auctions is the only auction house you need.

CECRA GENERAL ASSEMBLY UPDATE 2022

CECRA held their General Assembly in September 2022 which was organised during their Connect Europe event in Barcelona. CECRA has now a new Board lead by our new president Peter Daeninck and the CECRA board of directors including’ SMTA’s Chief Executive Sandy Burgess.

#CONNECTEUROPE

During the 2-day conference held on 15 and 16 September 2022 in Barcelona, a general bitter feeling amongst dealers was felt as they consider being cast aside and mistrusted by their manufacturer(s). Dealers complained they were not integrated nor informed about the OEM’s strategic plans.

Speculation started and the most plausible evolution would be OEMs rolling out agency distribution models. If this would be the direction we are heading towards, CECRA requests manufacturers’ agency contracts to comply to all the legal obligations of that distribution model and not including clauses from other distribution models to their advantage. From an economical point of view, manufacturers should not ‘offer’ such kind of contracts to their partners if they know that the proposed business model is not viable. We have issued a press release stating that dealers should not sign contracts containing non-genuine agency clauses as they are not in conformity with the competition rules.

LOBBYING ACTIVITIES

ACCESS TO DATA & CONNECTIVITY

Data Act & Sectoral Specific approach (Type approval Regulation)

As already reported in detail in our previous editions, the Commission adopted end February its Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on harmonised rules on fair

access to and use of data (Data Act). The Regulation aims to ensure fairness in the allocation of value from data among actors in the data economy and to foster access to and use of data. Besides these general provisions, CECRA, together with other mobility and aftermarket stakeholders, urged the Commission to initiate a sector specific legislation on accessing in-vehicle data, functions & resources..

EU REGULATORY FRAMEWORK

VBER – Commission Regulation (EU) 2022/720 to categories of vertical agreements and concerted practices

Last May, the European Commission adopted the new Vertical Block Exemption Regulation (VBER) Commission Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices and its Supplementary Guidelines on vertical restraints in agreements for the sale of motor vehicles providing guidance on the interpretation of the VBER.

These vertical provisions apply to franchise networks in general. For the automotive sector, it regulates new car sales franchises. The new VBER entered into force on the 1st of June 2022 and will expire on the 31st of May 2034.

After having sent its contributions to the Commission’s on-line questionnaires, permitting the Commission to gather

feedback from the market, CECRA’s main concerns have been heard and are integrated in the new rules.

What were CECRA’s main concerns?

Exchange of information in case of ‘dual distribution’

‘Dual distribution’ refers to the scenario where a supplier sells goods or services not only at the upstream level, but also at the downstream level, thereby competing with its independent distributors. Dual distribution has become more prominent in the last few years, as online sales facilitate direct sales by suppliers. Dual distribution was exempted under the previous VBER. However, during the review process, the Commission observed horizontal concerns when the supplier offers goods and services in direct competition with its own distributors.

Exchange of Information

The new VBER introduces in Article 2(5) a two-limb test, according to which the exchange of information in dual distribution is exempted only when it is both: (i) directly related to the implementation of the vertical agreement and (ii) necessary to improve the production or distribution of the contract goods or services.

To provide guidance on how this test will apply in practice, the Commission included in the new Vertical Guidelines a nonexhaustive list of examples of information that either may fulfil or are unlikely to fulfil the two conditions set out in Article 2(5). The new Vertical Guidelines also provide examples of precautionary measures that parties can take to minimise the risk that the information exchange will raise competition concerns.

Point 99 of the Guidelines specifies examples of information that may improve the production or distribution of the contract goods or services. Point 100 gives examples of information that is unlikely to fulfil these conditions.

a) Information exchange that may improve production and distribution (in the safe harbour), i.e. technical information; logistic information, customer preferences and feedback, price and marketing information and performance-related aggregated information.

b) Information that is unlikely to fulfil these conditions (not in the safe harbour), i.e. information linked to future prices, offerings, prices on deals which are not

closed/delivered yet, information relating to identified end users (unless it is necessary to enable to satisfy the end user’s requirements; unless it is necessary to grant special conditions (e.g. loyalty scheme); unless it is necessary to provide pre-or after sales services (e.g. guarantee services); unless it is necessary to implement or monitor selective or exclusive distribution system under which particular end users are allocated to a certain supplier/buyer); information relating to goods sold by a distributor under its own brand name unless the manufacturer is also producer of those own-brand goods.

Dual pricing

Dual pricing (i.e. the practice in which a supplier asks different wholesale prices for online and offline sales by the same distributor) is allowed under the new Vertical Guidelines, subject to several limiting principles. In particular, the difference in the wholesale price for online and offline sales must be reasonably related to differences in costs or investments between the online and offline sales channels and must not (i) aim to prevent the buyer’s effective use of the internet by making selling online unprofitable or financially unsustainable, or (ii) limit the quantity of products made available to the buyer for sale online. Regards the method of implementation of dual pricing, the new Vertical Guidelines allow parties to agree to a system they deem appropriate and do not impose a requirement to carry out complex cost calculations.

Hybrid sales platforms

Article 2 (6) of the new VBER excludes from the block exemption vertical agreements relating to the provision of online intermediation services (‘OIS’) where the OIS provider (the platform) also sells goods or services in competition with the firms to which it provides intermediation services (namely where it has a hybrid function). In the automotive sector, this provision is aimed at the supplier who hosts the sales of its network on its website. This supplier will therefore not benefit from the exemption of the new regulation. In concrete terms, a manufacturer will no longer be able to manage a website when it sells goods or services directly in competition with the companies to which it provides intermediation services if it wants to continue to benefit from the exemption.

Agency Status

An agent is a legal or natural person entrusted with the power to negotiate and/

or conclude contracts on behalf of another person (the principal), either in the agent’s own name or in the name of the principal, for the purchase of goods or services by the principal, or the sale of goods or services supplied by the principal. An agent is considered as genuine when it bears no significant financial or commercial risks. In such cases, the agent does not act as an independent economic operator, and therefore the agency agreement falls outside the scope of Article 101(1) TFEU.

The Vertical Guidelines provide a framework for agency status. It details the costs that must be reimbursed to the agent: the Guidelines (points 23 to 45) make the recognition of the status of agent within the meaning of competition law conditional on the agent not having to bear all the costs specific to the contracts concluded and/or negotiated by the agent, the costs relating to the investments specific to the market as well as the risks relating to other activities carried out on the same product market when this independent activity is required by the supplier (or in the case of assumption of costs that it remains absolutely insignificant).

National dealer protection laws

Whilst, the VBER 2022/720 is applicable to all the EU Member States, some national EU countries have specific laws protecting dealer agreements. This is the case in Belgium, Luxembourg, Austria and recently a law has been voted in Italy. Switzerland has a dealer protection law based upon the prior BER. As regard the Netherlands, it is not entirely clear whether the franchising law is applicable to dealers. It is up to the Dutch Court to decide. This will be followed up.

We urge all our members (national associations or European Dealer Councils) to keep us informed about all developments in the contracts between OEMs. In order to defend the interests of dealers and repairers, CECRA needs to receive this information as soon as possible. The next meeting of ECD (European Car Dealers) and CIV (Commercial and Industrial Vehicles) divisions will deal with these developments.

FROM VIRTUAL TO REALITY

When most people think about the first step in motor racing they tend to think go-karting, however, there is another starting point for lots of racing drivers these days and it begins at home. Sim-racing has become ever popular as the technology has improved and made it more and more realistic. During the pandemic even Formula 1 drivers who were stuck at home took to sim racing to keep themselves sharp and provide some entertainment.

We have a success story in Scotland, a driver who started out by winning the Scottish Motor Racing Club E-sports on stage at the SMRC Awards in Glasgow back in 2019. Fast forward to 2022 and he has become the SMTA Scottish C1 Cup Champion. SMRC’s Glenn Alcock chats to Sam to find out about his remarkable story:-

G.A. Sam, thanks for taking the time to talk to us and congratulations on your Championship Victory. Can you tell us about where your passion for motorsport originates from?

S.C. Thanks Glenn, it is great to hear from you. The truth is that I have always been obsessed with cars, my mum said it was clear from as early as 6 months, I had a soft car plush that I would play with non-stop. My first memory that I can think of is when I was very little, I was in my room playing with some kind of action man rally car, my mum came upstairs and turned my telly on for me. It was a round of the 2003 (I think) World Rally Championship in Sweden with Petter Solberg behind the wheel of his Subaru, I remember seeing footage from the helicopter chasing him through the stage, the way the car looked, sounded and the attitude of the car as it moved around at speed with the driver charging into the relative unknown, it was awesome!

G.A. How did you get started in Sim Racing? How realistic is it and do you think the skills are transferable?

S.C. I started off like most kids, with an Xbox or PlayStation and a controller, I eventually got myself a wheel for the console. But I wanted something more realistic than Gran Turismo, so one day I plugged my wheel into the family PC and download a game called LFS. From then on, I stuck with PC games. After this I slowly started to upgrade my setup with things like load cell pedals and a better wheelbase. Sim racing is really impressive when it comes to realism; most tracks are laser now a days and as a result, the sims provide a millimetre realistic representation and it’s the same story for the cars. I believe the skills I’ve learned from sim racing where massively transferable and helped me endlessly. By the end of the first test in the C1 I felt pretty comfortable. The biggest benefit I would say has been car control and the racing knowledge I have picked up over the years of sim racing. The car control was massively helpful as we run skinny tires on the C1’s so they can move around a lot, especially in the wet, knowing how the car would react and feel on the edge of grip or how to save a spin gave me confidence in my abilities early on.

G.A. You hear of people spending a lot on Sim Rigs –how important is it to have the best equipment?

S.C. I don’t think the best equipment always translates to speed in the simulator. I have a very basic setup, I run a single 24” Monitor with a wheel stand and a belt driven wheel, the most expensive part of my setup (besides the PC) was my pedals. In fact, some of the fastest

Above left: Sam competing at the SMRC E-sports final in 2019. Right: Sam racing at Knockhill in the SMTA sponsored C1 Cup.

Below: Sam on the podium proudly holding a winner’s trophy – one of three he won in 2022.

Images courtesy of Jim Moir © Jim Moir 2022

people I have come across in Sim Racing have been using a laptop screen and a Logitech G27 (A good, but very old and cheap wheel now). Obviously having a triple screen setup would help with consistency as you can see into the corner more but now you can get ultra-wide monitors that do the same thing. These kinds of set-ups are a lot more immersive and I know if I was running one I’d definitely be sim racing more!

G.A. You were immediately fast when you actually started racing in 2021 in the Scottish C1 Cup, how big a part did your sim racing background play in that?

S.C. It was a massive reason I was able to jump in the car and be comfortable, knowing what to do if the car got sideways was really helpful as these things often do. The race craft I learned from sim racing was useful for making logical moves and knowing what to do so I could work my way through the pack and not end up losing time battling lap after lap with the same car.

G.A. What was the thing that you found the most different when actually racing compared to sim racing?

S.C. The first time I hopped in the real car I felt like I had gained another sense, the feeling you get of the car moving around underneath you. This is something you don’t get in the sim so at first, it was a little scary, but since I knew logically how the car would react to my inputs, I felt the car grip up and could find the sweet spot for the tyres to work, it was amazing. The other big difference is if you crash in sim racing you just hit the reset button, but do it in the real thing and it is far more costly!

G.A. Winning the championship was a major achievement – especially so early on in your car racing career. You beat double champion Ross Dunn and 2019 Champion Finlay Brunton to the title – how hard was it competing against these guys?

S.C. Both Ross Dunn and Finlay Burton are top gents both on and off the track. We all keep it clean and fair so the racing is normally nose to tail. I knew they had experience and wanted another championship. Outside of the car I usually struggle with confidence and self-belief but as soon as I have my helmet on, I know what I need to do and think about nothing but being as quick as possible on the track. It was a really tough battle all year long, every battle was really enjoyable with them and we could always trust each other to race really close.

G.A. The SMTA Scottish C1 Cup has been a revelation – what would you say makes it such a good championship to start out in?

S.C. The low cost is amazing. The field is also very level and extremely competitive with large grids at every round. The reliability of these cars and the racing provided

really leaves you with no better place to start in Scotland.

G.A. What are your plans for the future regarding racing? Will you defend your crown in the SMTA Scottish C1 Cup or are you looking to move on to another series?

S.C. I’d really like to move up to a Mini next year, in the sim I have mostly driven on semi-slicks or slicks so I’d like to see how much of my skills are transferable in a faster car on a tyre type that I have more sim experience with.

G.A. (IF DEFENDING IN C1 CUP) – Will you be running the number 1 as Champion on your car or sticking with the number 68? Is there any special significance to that number for you?

S.C. If I do defend the title, I would keep 68. 6 is a lucky number from when I was younger and although slightly cheesy, 8 is an eternal shape and it symbolises my love for everything with wheels!

G.A. You never win a championship all by yourself, who are the people behind the scenes that you’d like to thank for their support?

S.C. Firstly I’d like to thank everyone at the SMRC for giving me this opportunity and providing me with the car, it has been a dream come true to go from sim to reality, something I never thought would be possible and something I will never forget. I would like to thank the Minimax team and the mechanics for keeping the car running perfectly the past two seasons - these guys are amazing! I would also like to thank Magma Fabrication for coming onboard this season as a sponsor as well; any fabrication work we needed done, always got done quickly and to a high standard. I’d like to thank all my family and friends that came and supported me, it was great seeing them as I whizzed around the track! I’d also like to thank my uncle Mark, who over the past two seasons came to every single round and basically became my driver coach, knowing he was trackside really pushed me on to get the results.

G.A. Sam, thanks for giving the SMTA an insight into your remarkable journey from sim racer to real world champion. We wish you all the best for the future and look forward to following your progress.

If you would like to participate in the SMTA Scottish C1 Cup Championship in 2023 or any other SMRC Championship you can download the SMRC Go Race Guide at smrc.co.uk

HYBRID BATTERY COOLING FAN INOPERATIVE OR POOR OUTPUTTOYOTA PRIUS, 2004 – 2009

ISSUE

The hybrid battery cooling fan inoperative or poor output.

POSSIBLE FAULTS

Battery pack getting hot. Fault codes P0A82 or P0A84, battery cooling fan control.

CAUSE

Most common cause is the cooling fan becoming blocked by a build-up of dirt and dust.

Inspect the battery cooling fan for clogging, remove the boot flooring and rightside trim panel, to gain access to the fan module, remove and inspect, clean or replace, as necessary.

TECH INSIGHT

Welcome to Tech Insight created with the support of the IVS 360 OEM-Trained Master Technicians at OPUS IVS to whom we are very grateful.

Here we highlight some of the more common recent faults that our partners have come across in their workshops and of course provide you with the appropriate fixes.

We are always reviewing our content and please feel free to get in touch if you feel that there is something you would like to see in future editions of SMTA AutoINSIGHT.

ACTION

Once the fan has been cleaned or replaced, refit the fan and trunking. (but not the boot trim and floor)

Clear the fault codes and test the cooling fan with the DrivePro tool, by activating the fan and making sure the fan is running.

If the fan is not operating, the wiring will need to be tested.

The wiring for the fan is as follows.

• Engine bay fuse box fuse BATT FAN 10A grey wire to battery blower relay.

• Battery blower relay switched ground from battery ECM pin B11 10 brown wire.

• Battery blower relay live to fan light green wire.

• Fan ground from battery ECM pin B11 9 violet wire.

Or fan ground from battery blower motor controller pin 4 violet wire.

• Battery blower motor controller pin 2 yellow wire from battery ECU pin B11 24.

• Battery blower motor controller pin 1 white/black wire ground.

• Battery blower motor controller pin 3 light green wire live from battery blower relay.

The cooling fan wiring goes through a connector, which suffers from water damage causing high resistance. Due to water ingress from the tailgate hinge area, or rear washer system.

There is a new entry filter screen to fit over the grid where the system draws in air. Right rear seat side panel. This filter should stop the fan getting blocked again and is easier to clean.

Figure A, shows a blocked fan. Figure B, shows a cleaned fan.

Shown in green, the possible damaged connector and control relay.

AFFECTED VEHICLES

Dacia Sandero 2 (2012 - 2020) | All variants

SYMPTOMS

Fuse 6 blows in the interior fuse box. Items listed do not work or stop working when the fuse blows:

• Speed limiter/cruise control switch

• Front and rear electric windows

• Door locking/hazard switch

• A/C control panel

• Side lights

• Number plate lights

MAKE/MODEL

SYMPTOMS

Multiple warning lights displayed on the Instrument Panel Cluster (DIM) Engine does not start (no crank).

A quick test report may produce no communication fault codes.

LOCATION

The first thing to check is if the vehicle battery is OK.

If the battery is OK, proceed to check the large grey multi-plug (84/404) at the driver’s side inner A-pillar. The contacts here become enlarged and this results in a poor connection.

REPAIR

The large 22 pin grey plug (84/404) has 4 Drive CAN wires, pins 1 WH/BU and 2 WH (pair), and pins 6 WH/BU and 5 WH (pair), these are linked in the wiring loom and are part of the same CAN line.

The pins often have issues, check all pins, and replace as required. New repair pins are available from your Volvo dealer, and we recommend using Gold pins.

• Loom plug 84/404

• Receptacle housing pin part number 30772665

• Tab housing pin part number 30772666

POSSIBLE

REPAIR STEPS

MAJOR BOOST FOR SCOTS 4X4 ALLTERRAIN EV NOW ON THE MOVE TOWARDS GLOBAL SALES OPPORTUNITIES –STARTING IN THE

USA

A major sales and leasing opportunity for Scotland’s groundbreaking Munro all-electric 4x4 off-roader could see upwards of 3,000 vehicles built and shipped State-side over the next 3 years. A deal has been struck between Glasgow-based Munro Vehicles and Wyre -an all-electric vehicle sales and leasing specialist that’s targeting major industries and utilities throughout the US.

Vehicle production will start at a purpose built factory in East Kilbride at the end of this year ready for shipment in 2023. The first fifty units will be delivered next year, with 500 in 2024 and 2,500 in 2025.

Scotland’s only other mainstream car manufacturing stopped in 1981 when the Chrysler plant at Linwood in Renfrewshire ceased production.

The Munro 4x4 EV, seen by some as Scotland’s the answer to the famous American ‘Humvee’, is being targeted by Wyre to customers in major US utility companies, oil field operators in Texas, farmers in Florida, forestry businesses in Canada and the gold mines of Nevada.

Munro’s CEO Russ Peterson said: “North America is a key growth market for Munro, and we’re pleased to be able to partner with Wyre to realise our ambitions ahead of our original timeline. We’re dedicating half of our 2023 production to left-hand-drive vehicles developed specifically for the US market, which Wyre will deliver to customers throughout the year.

“This opportunity demonstrates that Munro Vehicles has the potential to be a global player in the automotive industry, with a product that is clearly desirable around the world. These vehicles and their owners will also feedback valuable data to our team as we develop our product further.

This is just the beginning!”

Wyre is spearheading what could be world-wide opportunities for East Kilbride-based 4x4 EV specialists

Munro and their unique all-terrain electric vehicle. Wyre has State-wide connections in all the major industrial sectors using off-road vehicles.

Munro Vehicles and Wyre have signed an agreement that secures exclusive rights for the sale, leasing and distribution of the Scottish-built EV in the US and Canada.

This collaboration is seen as significant for Wyre as it establishes, what UK managing director

Rebecca Hansen says is “a new and substantially important foothold” for its operations in the UK and US electric vehicle sales and leasing markets.

She said: “We see the Munro 4x4 EV as a serious and compelling opportunity for a wide range of our customers across the USA and one which will see us go from an initial order book of 50 vehicles next year

around 2,500 in 2025.”

Such orders will mean a huge scalingup of production in Munro’s East Kilbride assembly plant and comes 42 years after the last passenger car was built in Scotland – at the Chrysler Linwood plant.

Ms Hansen added: “One particular customer market we have / are targeting in the States is the huge electric utility sector where companies need to show their customers that they are taking the provision of EVs seriously in their own fleets. Oil and gas industry customers are also on our radar.

“The price point of the Munro vehicle at around £75,000 (US$ 88,500) is compelling!

“The Munro is a great multi-purpose vehicle, and one that has a great future and we are delighted we have the opportunity to make it a big success in the United States. Just as important, it is further step in establishing Wyre as market leaders in what we do.”

She added: “This an important win for us. The US is a massive market for this type of serious off-roader which Munro Vehicles intend to service by establishing facilities in the States.

“The UK’s electric car salary sacrifice scheme could be easily introduced into the USA and we are now in discussions with a number of companies and organisations to help them bring this forward through lobbying for new US tax regulations. When we explain that a salary boost scheme can save 40% or more on a new electric vehicle, people get interested!”

Ms Hansen confirmed that Wyre is in discussion with international shipping companies on future transport of vehicles to the USA.

Munro’s design, development and manufacturing operations were

originally set up by two entrepreneurs, Russ Peterson & Ross Anderson at their base in the Dalmarnock area of Glasgow. They recently opened an assembly operation in nearby East Kilbride ready for full scale production to begin.

“This is a fully electric 4x4 utility vehicle with exceptional off-road capabilities, designed to carry personnel and equipment across difficult terrain” said Ross Anderson, Co-Founder Munro Vehicles.

Munro Vehicles aims to fill a gap in the market for a back-to-basics electric off-roader. Once the production line is at full capacity, Munro expects to meet demand of up to 5,000 vehicles per year by 2030. It is expected that eventually, should sales exceed factory capacity in Glasgow, some CKD (completely knocked down) vehicle kits could be shipped to the States for assembly.

Jen Walls, director of the influential Electric Vehicle Association Scotland, said: “This sales and leasing opportunity in the USA is a tremendous achievement and shows that the level of innovative thinking by these two entrepreneurs is exactly what we wish to see here in Scotland.

“The Munro 4x4 is a truly unique concept, bringing together the latest EV and off-road technologies. It’s simply an amazing vehicle and I’m sure the company can look forward to a high level of world sales success.”

*Wyre owns the disruptive EV leasing and management platform www.

TryWyre.Com

by Colin Gleghorn Managing Director, Autotech Training

WHY MOT DATA COMPLACENCY DOESN’T EQUAL COMPLIANCE

In the last year, over 140 garages saw their MOT accreditation removed and 20 faced prosecutionstestament to the DVSA’s clampdown on MOT fraud.

After the difficulties following the Covid crisis, which saw the DVSA support the industry with it’s ‘Beat the Rush’ campaign, the focus shifted to cracking down on MOT fraud in a bid to catch out errant testers. Consequently, garage owners, particularly those who manage multiple sites, need to ensure that they keep up to date with their MOT data.

Not doing so could be detrimental to the future of a business with the prospect of losing millions of pounds and potential closure.

We recently worked with a family run vehicle dealership with 8 sites who narrowly avoided the closure of their 100-year-old business due to a rogue MOT tester. They were first alerted to the seriousness of the situation when they received a disciplinary action letter from the DVSA, which stated that they were facing a five year companywide ban – with a possible loss of over £7.5 million.

There were several red flags which the MOT testing station should have recognised had they been checking their MOT data accurately. If spotted immediately, they would have had time to respond and alert the DVSA, negating any serious action.

Acting on behalf of the company, we investigated and compiled evidence in response to the DVSA’s claims. As a result of this intervention and support, which included MOT Test

Centre Management course, the company avoided a full closure. While their ability to trade remained, the company certainly didn’t walk away unscathed by the experience, and they received a five year suspended sentence.

This demonstrates the importance of checking MOT data and keeping on top of all the information. Above all else, an MOT testing station needs to remain compliant. Becoming complacent is not an option and MOT tester data needs to be regularly reviewed.

GET THE RIGHT STRUCTURE IN PLACE

To manage and safeguard this process having the right people in place is imperative. In the case of the family business we supported, their issues were exacerbated due to the lack of Site Manager (SM) the absence of which carries penalties.

Having a fully qualified SM, responsible for managing the day-to-day testing activities at an individual site, while overseeing tester activity, training and reporting, is a mandatory requirement.

Consequently, a garage owner or manager needs to question whether they have this structure in place, if there are multiple sites involved then they need a Site Manager installed within each premises with the relevant training and qualifications to

interpret the MOT data and maintain MOT test standards and procedures.

As the automotive industry continues to evolve, training is essential to ensure that a technician has the right skills to service and repair the 32 million vehicles which are on the road today. The MOT test makes sure that these vehicles remain safe and roadworthy and while having the right technical skill set is imperative, ensuring that every test is carried out legally and within the parameters set by the DVSA is of equal importance.

Therefore, Site Manager (SM) training – such as an IMI Level 3 Award in MOT Test Centre Management - should be just as high a priority as technical training.

ARE YOUR TECHNICIANS EV READY?

WE OFFER A COMPLETE SOLUTION FOR ALL YOUR ELECTRIC/HYBRID, MOT AND TECHNICAL TRAINING NEEDS.

www.autotechtraining.co.uk

We provide the highest quality training courses to workshops and individuals in the UK's aftermarket, many of which can be delivered on-site.

• Electric/Hybrid Vehicle (Levels 1-4), including Heavy Vehicle MOT Manager

• MOT Tester

This is one of the many reasons why Textar is trusted by vehicle manufacturers, distributors and workshops worldwide.