SMTA Monthly Bulletin November 2022

Arnold Clark will push ahead with plans for four new used car remarketing centres in 2023, despite pressure from the stock shortages impacting the sector.

Chief executive Eddie Hawthorne told AM earlier this year that the AM100’s second-placed car retail group by turnover planned to grow an auctions business after completing the acquisition of Glasgow’s Central Car Auctions business.

The UK’s used car market fell for the second consecutive quarter this year, declining -12.2% over the three months of July to September, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). Some 1,785,447 vehicles changed hands, the first time that quarter three transactions have dipped below two million since 2015, as semiconductor shortages impacted supply of stock. In the year to date, sales are now down -9.7% to 5,319,482.

Used battery electric vehicle (BEV) sales bucked the trend, however, with Q3 reflecting growth in the electrified new car market as activity rose 44.1% to 16,775 transactions, adding up to 48,032 in the year to date.

The market for used hybrid electric vehicles (HEVs) also grew, up 2.5% in the quarter with 41,479 cars finding new owners, taking the yearly total so far to 119,722. Plug-in hybrid (PHEV) transactions, meanwhile, fell -5.8% to 13,899 in Q3, though they remain up 7.1% since January at 44,724.

Read the full article at smmt.co.uk

And the intention to grow the business, which would remarket some of the vehicles acquired through its Sell My Car online car buying platform as part of its offering, remains despite sharing the sector’s growing struggles to acquire stock.

“The plan remains the same,” Hawthorne told AM today (November 22). “We’re probably going to open four new sites in 2023, based on the central model.

“In terms of the plan for the business there is a struggle to get supply – as there is in the whole sector – but with used car values remaining buoyant, it’s still a really good opportunity for us.”

In May Hawthorne has reported an “excellent” 2021 financial performance with revenues up 25% to £4.7 billion (2020: £3.8bn) as profit before tax rose 68% to £263 million (2020: £156.5m).

Hawthorne told AM that Arnold Clark was looking on-track to deliver its second-best financial year ever, despite the market headwinds of reduced stock, soaring energy prices and inflation in double figures.

Read the full article at AM Online

DRIVERS ARE NOW KEEPING CARS LONGER DUE TO COSTOF-LIVINGCRISIS AND INFLATIONARY PRESSURES

Almost a third of motorists are now planning on keeping their current vehicle for longer due to the cost-of-living crisis, new research has suggested.

A poll by Close Brothers Motor Finance revealed that 32 per cent of drivers now expect to keep their car for longer than previously thought.

More than one in ten (11 per cent) of those surveyed also said they have sacrificed the vehicle they wanted in favour of a cheaper car, in news that could worry dealers.

Furthermore, a further nine per cent said they

would consider buying a motorbike instead of a car in order to save on travel costs.

Elsewhere, 11 per cent of people said they were exploring finance options in order to be able to afford their preferred car.

When asked where they’d turn to help spread the cost of a car purchase, almost a quarter of all consumers (24 per cent) would look to specialist finance providers, while 17 per cent would use a bank loan and nine per cent would use ‘buy now, pay later’.

There was also a handful of respondents (four per cent) that said they would borrow from

friends and family.

On the other side of the fence, nearly all dealers (88 per cent) believe that the cost of living crisis has influenced consumers to be more cautious about buying vehicles.

Two thirds of dealers (66 per cent) said that their customers are buying cheaper vehicles, while 52 per cent said they were cutting back on additional optional extras.

full article at CarDealer Magazine

EV ROAD TAX PLAN PROMPTS ALMOST 40% OF MOTORISTS TO RECONSIDER PURCHASE

Almost 40% of car buyers are reconsidering the purchase of a zero-emissions electric vehicle (EV) after the Chancellor of the Exchequer announced plans to make them eligible for VED road tax.

Research carried out by Insight Advantage for eBay Motors Group revealed the impact of a further additional financial burden at a time when a cost-of-living crisis and the prospect of the UK’s longest ever recession is prompting most households to hunt down savings.

While nearly a quarter (23%) of car buyers said the introduction of a VED charge

from April 2025, announced in last week’s Autumn Statement, will make no difference to their plans to buy an EV, 37% said the announcement is either making them reconsider or drop their plans to go electric.

According to the eBay Motor Group data, a further 16% said they plan to carry on but will buy cars priced under £40,000 to avoid the Expensive Car Supplement, also applied for the first time on EVs from April 2025.

Emphasising the perception, the cost incentives attached to EVs ownership are on the wane, it also found that 18% of buyers are more concerned about the rising cost of

charging than the imposition of VED.

When specifically asked how cost of living concerns would impact their next car purchase, regardless of fuel type, the top three concerns expressed were: the UK economy now going into recession; the cost of energy bills; and the impact of inflation on goods and services.

Read the full article at AM Online

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IMI ANALYSIS FINDS MOTOR TRADE SALARIES ARE RISING RECORD NUMBER OF JOB POSTINGS DRIVES UP ADVERTISED WAGES

The latest Automotive Job Postings Briefing from the Institute of the Motor Industry (IMI) has found that the recent 20-year high vacancy rate has led to increased demand and greater salaries on offer.

The current vacancy rate (number of vacancies per 100 employees) for Motor Trades is 3.8, representing 20,000 vacancies – slightly below the national rate of 4.1% for all industries. The rate rose rapidly during 2021 and remained at record levels into 2022, although the rates have dipped slightly in the past two months. With the industry striving to fill these vacancies, it is unsurprising that the IMI has seen significant increases in the number of job advertisements in the past 12 months.

Whilst all roles have seen higher numbers of job posts and escalated salaries advertised, the most significant increases have been seen in posts seeking vehicle technicians, vehicle and parts salespersons and tyre, exhaust and windscreen fitters:

y Vehicle Technicians are seeing the largest salary percentage increase in the last six months, with average advertised salaries rising by 5.5%, to

an average of £34,500. There are now 70% more job posts for this role than in September 2019

y Tyre, exhaust and windscreen fitters have seen the largest salary increases over the three-year period, growing by 21.3% to an average of £26,600, and the number of jobs advertised is now 45% higher than the same period last year

y Job postings for vehicle and parts salespersons have dropped slightly in the past 2 months but remain 34% up on the last year. Salaries in this role are now 11.5% higher than three years ago

“At the IMI, we keep a close eye on automotive industry data to help us understand what’s really going on in our sector,” commented Steve Nash, CEO of the IMI. “It has been very encouraging to see the steady growth in salaries being offered for automotive professionals. In the past our analysis has highlighted a salary premium

for job posts specifically requesting EV skills. However, this year the high levels of vacancies are across the board, and the urgent need to address the issue, means that all salaries have increased. Vehicle technician salaries are now at the same level as salaries advertised for EV job roles.

“Whilst over inflated salary expectations can put pressure on employers, it is extremely positive for individuals, especially during the ongoing cost-of-living crisis. As an industry body one of the most common issues our members raise is how the sector can attract talent and minimise churn. With this challenge in mind, it is encouraging to see the industry evolving and salaries rising to reflect the talent and value of motor trade professionals.”

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