am - automotive management july 2015 preview

AUTOMOTIVE MANAGEMENT

www.am-online.com July 2015 £8.00

F O R D V I G N A L E / P 2 4

Mondeo is first of Ford’s‘premium’ sub-brand

ACQUIRE?Your guide to buying a new business (or making the most from selling an old one) / P33

INTEREST RATES ARE AT AN ALL-TIME LOWBANK LOANS ARE MORE FREELY AVAILABLE YOU HAVE BEEN MAKING SOLID PROFITS SO IS IT TIME TO GO OUT AND

FA C E T O FA C E / P 5 0

Hodgson Newcastle MD on why organic growth is right for his dealer group

V O L K S WA G E N / P 19

Carmaker says it is listening to dealers on targets, not dictating

S S A N G Y O N G / P 74

Tivoli SUV will play a big part in dealer recruitment drive

Be a part of the sharing community

www.am-online.com/eventsEvents

Date Event Venue

July 17 2015 AM Executive Breakfast Club Simpson’s in the Strand, London

September 15 2015 AM Digital Dealer Conference Silverstone Wing, Silverstone Circuit

October 20 2015 AM Used Car Conference St Georges Park, Burton Upon Trent

November 6 2015 AM Executive Breakfast Club Simpson’s in the Strand, London

November 10 2015 AM F&I Compliance Conference National Motorcycle Museum

February 2016 AM Executive Breakfast Club Simpson’s in the Strand, London

February 11 2016 AM Awards ICC, Birmingham

May 2016 AM Executive Breakfast Club Simpson’s in the Strand, London

The editorial teamEmail: [email protected] Website: www.am-online.comTwitter: @amchatter LinkedIn: am-online.com/linkedin

Whether you plan to acquire or exit, there is a ‘right’ way to buy and sell

Jeremy BennettAssociate editor

Tim RoseManaging editor

Stephen BriersEditor-in-chief

Danielle Bagnall Senior reporter

welcome

[email protected] am-online.com/ami/am-online.com/linkedinam-online.com @amchatter facebook.com/automotivemanagementUK

he 2015 AM100 supplement accompanying this issue of AM shows that records continue to be broken, dealer revenue and profitability have increased and the number of people working within the top 100 dealer groups has risen. With such a strong backdrop to the motor retail industry, and amid favourable

economic conditions in general, the climate is right to consider whether to grow through acquisitions or sell up and reinvest the money. Advisers in this specialist area share their thoughts on the right ways to

manage acquisitions and disposals on pages 33, 36, 41 and 45. Although their expertise varies from taxation through to employment law, you may notice a common thread – planning ahead.Planning is a focus of Hodgson Newcastle, our Face To Face dealer profile

on page 50. Yet acquisitions are not. Its owner, Steve Hodgson, has driven the group’s growth carefully, with an emphasis on delighting customers and managing debt, and he remains determined to prioritise what is right for his business, even if, occasionally, that isn’t what his manufacturers want.One manufacturer hoping it will get what it wants is Ford. It wants its

customers to stop deserting to the German premium brands. How does it hope to achieve that? By turning metropolitan dealerships into large Ford-Stores and by offering a premium, personalised experience through its Vignale sub-brand. Turn to page 24 to learn more.

o u R E x p E R T c o n T R I B u T o R S

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Silverstone,Sept 15, 2015

am-online.com July 2015 3

prof Jim SakerAs director of the centre of Automotive

management at lough-borough University’s Business School, Saker is a key figure behind the drive for manage-ment recognition and skills in the motor retail sector.

This month (p58), he explores how looking at the crowdsourced adverts of a crisp company could make your marketing more effective.

philip nothardHe is retail and consumer valuations

editor at cAP, which he joined in 2010 after two decades working in motor retail, culminating in running dealerships for european motor Hold-ings, lythgoe motor Group and Arnold clark. In this issue (p29), he suggests that not everything in the world of retail car sales is as rosy as the headline figures would suggest.

Your news

7 News digest The FCA gives dealers less than

three months to enforce GAP rules; Seat’s new brand director wants more dealers to invest in fleet business; Swansway Group is investing £12 million in several new-build sites in the North West.

Market intelligence

13 New car registrations Growth in the UK new car market is slowing, with May’s registrations of 198,706 units just a 2.4% rise over the same month last year.

14 Market shareThere has been a change in the line-up of the six brands that are in the crucial 2-3% range of UK market share.

15 Dealer profitabilityThe average UK motor dealership

4 July 2015 am-online.com

produced a marginal profit in April of £3,000, down £6,000 year-on-year.

17 Used cars Average monthly used car wholesale

values have shown their first rise since November.

Analysis

19 How Volkswagen made itself the listening brand

With an eye on the long term, Volkswagen has adapted to market changes and rapid growth by consulting its dealer network.

24 Ford gives the Mondeo some premium polish

With its new Vignale sub-brand, Ford hopes to hold on to its corporate customers and perhaps attract more by marrying high-spec cars to a premium aftersales experience.

29 Don’t believe the hype on the retail car market

CAP’s Philip Nothard says not

In this issue July 2015

50 33

41

ACQUISITIONSHOW TO GROW YOUR BUSINESS EFFECTIVELY

INTEGRATIONGETTING THE POST-ACQUISITION MIX RIGHT

HODGSON NEWCASTLE‘WE ARE NOT GOING TO BE A MANUFACTURER’S PUPPET’

everything in the retail car market is as rosy as the figures on the surface would suggest.

Insight

33 How to acquire effectively With acquisition the ‘only real route to

growth’, manufacturer approval, long-term planning and due diligence are essential to dealers’ strategies.

38 Make your franchise fit for sale

Should you decide it is time to exit, proper planning can maximise the value of your business.

41 After the acquisition Properly integrating your new

business’s staff and systems is vital to post-acquisition success.

45 Top tips before you buy or sell

Disposals and acquisitions can be complex. Motor retail business advisers share their best advice.

For the latest motor retail industry news, visit am-online.comSign up to get AM news daily by email: am-online.com/newsletter

24FORD MONDEO VIGNALEPUTTING A PREMIUM POLISH ON THE BLUE OVAL


Alphera Financial Services ............................8

Arnold Clark .................................................7, 10

ASE ......................................7, 10, 34, 38, 41, 45

Autoclenz ............................................................63

BCA ...................................................................7, 17

BDO .......................................................................61

Caffyns ..................................................................7

CAP .......................................................................29

Deloitte ................................................................13

Drive Vauxhall ...................................................66

FCA .........................................................................7

FLA .......................................................................13

Ford of Britain ..............................................8, 24

Gtechniq ..............................................................64

Halfords.................................................................8

Hexagon ................................................................7

Hodgson Automotive ......................................50

HRC Law ......................................................41, 45

Inchcape ................................................................8

Jewelultra ..........................................................63

Manheim .............................................................17

MHA MacIntyre Hudson ........................33, 68

Motorclean .........................................................66

Napthens .....................................................41, 46

NFDA ....................................................................13

Norton Way Group ............................................8

Peugeot .................................................................8

Revive ...................................................................66

Seat .........................................................................8

SMMT ...................................................................13

SsangYong ..........................................................74

Swansway .....................................................8, 10

UHY Hacker Young ............................33, 39, 41

Vertu Motors .......................................................7

Volkswagen........................................................19

Volvo .....................................................................10

D E A L E R S A N D S U P P L I E R S I N T H I S I S S U E :

SSANGYONG TIVOLIA VITAL DRAW FOR NEW DEALERS

50 ‘Acquisition is not the way to grow our business’

Managing director Steve Hodgson believes organic growth, not loan-backed acquisition, is the right route for Hodgson Newcastle.

54 AM poll More than 40% of respondents to

our latest poll plan to acquire a dealership in the next 18 months.

58 Jim Saker’s view from the business school

Prof Jim Saker explores how a crowdsourced crisp advert could help to boost your marketing.

61 Dealers risk ‘horrendous’ non-compliance penalties

BDO’s Malcolm Thixton issued a stark warning on the consequences of failing to take FCA regulations seriously to delegates at the latest AM F&I Executive Breakfast Club.

63 Help your dealerships to clean up

Paint and upholstery protection,

valeting and SMART repair can boost customer service scores as well as your bottom line.

Showroom

74 SsangYong TivoliSsangYong says its new SUV is the right car to help it triple registrations. But does it have the right dealers?

76 Suzuki S-CrossMembers of Suzuki’s dealer network are very satisfied with the brand, according to an NFDA survey.

Coming soon

82 In August’s issue – published July 24

Progress Škoda MD Terence Byrne on Škoda coming last in the recent NFDA satisfaction ratings; how to make efficiency savings in motor retail; and the Volvo XC90 reviewed.

74


F O R D A I LY N E W S , V I S I T: a m - o n l i n e . c o m

T O g E T A M ’ S F R E E D A I LY N E W S L E T T E R , V I S I T: a m - o n l i n e . c o m / n e w s l e t t e r

F O L L O W A M O N T W I T T E R : @ a m c h a t t e r

NEWS DIGEST8 Swansway

Swansway Group is investing £12 million in new-build Honda, VW, Citroën and Fiat centres in the North West.

Seat fleet pushSeat’s new brand director wants more dealers to invest in fleet business.

10

T H E N E W S Y O U C A N ’ T A F F O R D T O H A V E M I S S E D

F C A

Dealers have less than three months to enforce gAP rulesThe Financial Conduct Authority has released its final findings on the general insurance market study on gAP sale competition, together with the rules it will be introducing.

Car dealers selling GAP insurance have until September 1 to ensure new rules on add-on sales are enforced.

These include having to provide customers with

information to help them shop around and introduce a deferral period in all cases. The product cannot be introduced and sold on the same day.

The FCA is standing by its September 1 deadline for the new rules to come into force, despite some objections during the consultation period that this didn’t give the industry enough time to implement them.

To view the rules, visit am-online.com/GAPrules.

M I N I M U M W A g ECar dealers have been warned that the maximum penalty for not paying the national minimum wage has increased from £20,000 per employer to £20,000 per employee.ASE tax manager Bett Twiggs said: “While most employers would not consider themselves [likely] to fall foul, it is easy to do so where a sales exec is on a low salary plus commission.”

V E R T UVertu Motors has added to its franchise portfolio with the acquisi-tion of MSB Škoda in Darlington.

The parent company of Bristol Street Motors has purchased the site on McMullen Road for £1.5million. It will operate as Bristol Street Motors Škoda Darlington. The current team will remain under general manager Tia Saddique.

Robert Forrester, chief executive of Vertu Motors, said: “We are continuing to develop by adding to existing franchise relationships, as well as exploring new manufac-turer partners.

“This acquisition increases the group’s total number of sales and aftersales outlets to 117, and will enable us to generate further profit-able growth for our shareholders and wider choice to our customers.”

T O P T R A C kSix dealer groups feature in the latest Sunday Times Top Track table, which ranks Britain’s top 100 private companies by sales.Arnold Clark is in 10th place in the national table, Marshalls is at number 34, JCT600 at 51, Listers 54, Greenhous at 75 and Benfield 83.

C A F F Y N S Listed dealer group Caffyns has announced revenues up 8.9% to £210 million and underlying profit before tax up 14% to £2.47m for the year to March 31, 2015.

Profit before tax rose to £11.44m from £1.57m last year.

New unit sales were up by 6.6% on a like-for-like basis in the period, while total UK new car registrations rose by 7.5%.

I N B R I E F

B C ABCA Marketplace has acquired SMA Vehicle Remar-keting, a car auction services group with centres in Edin-burgh, Kinross, Leeds, Newcastle and Birmingham, for £42 million.

The figure includes the repayment of existing debt.

SMA posted earnings of £4.7m for the year to the end of October 2014 (before interest, taxation, depreciation and amortisation), on revenue of £37.2m.

A R N O L D C L A R kThe growing success of its used car operation has contributed to the boost in turnover and profit-ability of Arnold Clark Automo-biles, helping to mitigate tightening new car margins.

The AM10 dealer has reported 2014 turnover of £3.2 billion and profit before tax of £107 million, up 12% and 26% respectively year- on-year. New car sales accounted

for only about 2% of its profit. The PCP funding method has

proved a boon in new car sales and while Arnold Clark also benefits from this phenomenon, it has also started providing the product on up to 36-month-old used cars, with finance company support.

The 2015 target for the Glasgow-based company is to sell a total of 300,000 cars. In 2014, it sold 100,000 new and 150,000 used.

Arnold Clark is one of numerous

dealers to cite margin pressure driven by increased targets, often tightened from a quarter to a month.

Managing director Eddie Hawthorne said: “Is this behaviour acceptable? No. Is it sustainable? No.

“There has to be some return for us otherwise there would be no point in the business, given the levels of investment expected,” he said.

H E x A g O N L O T U SLotus has its first dealership in London in six years, after classic and sports car dealer Hexagon regained the franchise in two locations in the capital.

The full range of Lotus models, from Elise to Exige to Evora, will now be sold from Hexagon’s East Finchley and South Kensington sites, making it the only Lotus dealer inside the M25.

Hexagon was previously a Lotus dealer between 1964 and 1976.

NEWS DIGEST T O R E A D A M ’ S D A I LY N E W S L E T T E R , V I S I T: a m - o n l i n e . c o m / n e w s l e t t e r

P E O P L E N E W S

N E I L W I L L I A M S O NFormer brand director of Seat UK Neil Williamson has been appointed chief executive of Jardine Motors. Current CEO Mark Herbert is to move to a role in Asia with parent company Jardine Matheson Group on completion of a hand-over to Williamson in July.

M A R k P I C k L E SPeugeot UK has appointed Mark Pickles as its new

marketing director. Pickles has worked across almost all areas of Peugeot since he joined the group in January 2000. Before that, he spent five years in deal-erships. He moves from his current role as UK aftersales director for the PSA Group.

A N D Y B A R R AT TFord of Britain has appointed Andy Barratt as its new

chairman and managing director, from July 1. Barratt will succeed Mark Ovenden, who has been appointed president and chief executive of Ford Sollers – the joint venture of Ford Motor Company and JSC Sollers – in Russia.

P A U L W O O D H E A DSwansway has appointed former Audi national sales manager Paul Woodhead as its new group aftersales director. Woodhead began his career as a technician and progressed through to dealer principal, before joining Volkswagen Group UK, where he worked for 18 years.

S P E N C E R H A L I LMotor finance provider Alphera Financial Services

has appointed Spencer Halil as its new director. Halil succeeds Andy Gruber, who is to leave the group after accepting a senior role with an overseas captive finance company.

N O R T O N W AY g R O U PNorton Way group is partnering kia for the first time, having been selected to operate the carmaker’s new flagship outlet in West London.

The four-floor flagship site will trade as GWR Kia and is angled towards the M4, with the top floor featuring a glass facade, showcasing Kia’s vehicles.

It will feature 3D headsets for waiting customers, a café with seating for more than 40 people, an iPad customer experience area, and near field communication (NFC) technology. One area in which NFC will be used is within the café, to send a signal to customers when their vehicle is ready after a service.

Seven service and two MoT bays are on the lower ground floor, with space to expand to 15 bays. The site will also have parking for more than 30 customers and EV charging points.

GWR Kia has been designed with sustainability in mind; featuring air source heat pumps, CHP (combined heat and power) generation, and roof-mounted solar panels.

S E ATNew Seat boss wants more dealers to invest in fleet business.

Seat’s new brand director Richard Harrison wants more of his dealers to invest in helping increase the level of corporate car busi-ness achieved by his company.

Harrison said the Milton Keynes-based subsidiary was also lending additional support to dealers who are servicing fleets, with dedicated sales and management account teams.

“At present, 16 of our total of 123 dealers make the investment that is necessary to give front-line support to our fleet ambitions and I’m encouraging others to follow their lead.

“We have between 3.55% to 4% shares of the Leon and Ibiza segments and I’ll be looking to achieve similar results in the new categories we will soon be entering.”

H A L F O R D S F I N E DA car service sting by Trading Standards officers found “multiple failings” at a Halfords Autocentre site and led to fines and costs totalling almost £47,000.

Technician Alex Tovey at the Halfords Autocentre workshop in Filton failed to spot or fix 11 of 20 defects which South Gloucestershire Trading Standards officers had rigged on a Vauxhall Astra before sending it in for a £235 service.

North Avon Magistrates Court was told all the defects should have been picked up during the major service. The failures included not checking or replenishing the brake fluid, broken or missing lightbulbs, faulty windscreen wipers, oil leaks and irregular tyre pressures.

Halfords Autocentre pleaded guilty to eight charges under consumer protection laws and was fined £32,000, plus costs of £14,862 and a £120 victim surcharge.

In its defence, it said the issues undiscovered were not “overtly dangerous” and its technician had identified two faults the trading standards engineer was not aware of.


I N C H C A P EInchcape continues to win market share in the Uk, according to its new boss.

Stefan Bomhard, the new chief executive of Inchcape, said the company is in a strong position to capitalise on favourable market conditions in the UK and acknowl-edged tougher trading in used cars.

He said UK revenue growth had been strong, “with our brand portfolio continuing the long-term trend of winning market share”.

Across all its global operations, group revenue was £2.191 billion, up by 4.1% at constant currency (0.9% below last year at actual currency). Like-for-like revenue was up 4.9% at constant currency (0.3% below last year at actual currency).

Demand for vehicles was “solid” and ahead of last year.

Aftersales activities, accounting for about 50% of the group’s gross profit, performed “well and in line with expectations, driven by the new car growth of recent years resulting in a growing one- to five-year car parc in the majority of its markets”.

Inchcape also announced that Nigel Northridge had been appointed as a senior independent director with immediate effect.

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market intelligence t h e n e w s i n d e p t h

14Market share

there has been a change in the line-up of the six brands that are above the crucial 2% Uk market share threshold.

15dealer profitability

the average Uk motor dealership produced a marginal profit in april of £3,000, down £6,000 year-on-year.

sponsored by


17Used cars

average monthly used car wholesale values have shown their first rise since november.

Growth in the UK new car market is slowing may figures show consumer-led growth in new car registrations ‘is not sustainable’

r e G i s t r at i o n s b y M a r K e t s e G M e n t

U K n e w c a r r e G i s t r at i o n s

Growth in the UK new car market is slowing, with May’s registrations of 198,706 units just a 2.4% rise over the same month last year.

that compares with year-on-year growth of 5.1% in april, 6% in March, 12% in February and 6.6% in January.

the society of Motor Manufacturers pointed out that May’s “steady” growth was still the 39th consecutive month of increases in the market.

private registrations in May totalled 91,841, a rise of 1.2%. Fleet registrations were 4.5% ahead at 100,599 units. business registrations fell 11.5% to 6,266.

year to date, private registrations are only 1.3% ahead, while fleet orders are 11.8% up.

Smmt chief executive mike Hawes said: “we anticipate a natural levelling out of the overall new car market throughout the remainder of 2015.”

David raistrick, Uk automotive leader at

Deloitte, said: “the growth in fleet sales has been key to the UK new car market maintaining this upward trend, as there has been a distinct slowing in the increase in private sales, compared to 2014.

“May’s results showed that the increase in new cars sold to private buyers over the first five months rose by only about 6,600, compared to a rise of about 57,700 for the first five months of last year. yet growth in fleet sales has increased from 40,000 cars to 58,000 cars in the same period.

“this could be the first real indication that the consumer-led growth, which kick-started the UK new car market nearly three years ago, is level-ling off and is not sustainable.

“with the UK car parc standing at around 32.6 million cars on the road, this represents over one car for every two people. this figure suggests that there is little prospect of the UK car parc increasing significantly enough to allow

for the continued rate of growth in new car sales, whilst also supporting the used car market and underpinning residual values.”

Sue robinson, nFDa director, said: “strong manufacturer deals and low-cost finance incentives offered by dealers and manufacturers during 2015 have no doubt influenced many consumers to buy.

“increase in the fleet markets shows that business confidence has returned, allowing them to invest in replacement vehicles.

“competitive pricing and strong incentives remain important if the sales trend is to continue throughout the second half of the year.”

chris Sutton, managing director of Black Horse, said: “the summer months usually show a slowdown of car sales ahead of the september plate change. however, as this month’s data shows, dealers clearly remain bullish that they will sell new cars off their forecourts.”

dealer finance for new retail cars in the year to april was at a record high for the second successive month. Figures released by the Finance & Leasing association show the share financed by its members reached 77.3%, ahead of 76.8% in the 12 months to March.

in april, point-of-sale consumer new car finance was up 11% by volume and 17% by value year-on-year. Used car finance advanced 15% by volume and 19% in value.

geraldine kilkelly, head of research and chief economist at the Fla, said: “in april, the consumer car finance market grew at its strongest rate since september. this contributed to growth of 8% in new business volumes in the first four months of the year.”

new cars bought on finance by consumers through dealerships apr-15 change on 3 months to change on 12 months to change on previous year apr 2015 previous year apr 2015 previous yearValue of advances (£m) 1,245 +17% 4,616 +14% 14,639 +14%number of cars 75,929 +11% 285,846 +8% 916,160 +9%new cars bought on finance by businesses through dealerships number of cars 52,409 +29% 134,604 +15% 498,938 +13%

a p r i L M o t o r F i n a n c e M a r K e t: n e w c a r s

business 41,318

business 45,644

200,0000 400,000 600,000 800,000 1,000,000 1,200,000

2015

2014

Source: FLA

private 528,732

private 522,098

Fleet 549,022

Fleet 491,232

F i n a n c e s tat s

MARKET INTELLIGENCE


Ford and Vauxhall continue to lead the battle for UK new car registra-tions, with extensive packages of finance products to attract or retain customers. The market leader favours personal lease, while Vauxhall features a mix of PCP and HP.

Vauxhall extended its Q2 offers to July 1 in the hope of clinching extra deals from the momentum of its marketing campaign in June. Its entry deal is a 2.9% PCP on the Adam Jam 1.2 white, which requires 24 monthly payments of £99 after a deposit of £2,682.36. The optional final payment is £6,000. Sixty-month Vauxhall HP offers include one for the Mokka Exclusiv 1.4 2wd – monthly payments of £239 after a £5,429 deposit.

The full list can be found at www.am-online.com/offers

Model Finance Deposit Term Monthly Final APR Offer type payment payment ends Ford Ka Studio 1.2 3dr Personal lease * £1,190 48 months £119 n/a n/a 30/06/15Ka Studio Connect 1.2 3dr Personal lease * £1,000 48 months £125 n/a n/a 30/06/15Ka Edge 1.2 3dr Personal lease * £1,032 48 months £129 n/a n/a 30/06/15Ka Zetec 1.2 3dr Personal lease * £945 48 months £135 n/a n/a 30/06/15Fiesta Zetec 1.25 3dr Personal lease ** £3,336 36 months £139 n/a n/a 30/06/15Fiesta Titanium 1.0 3dr Personal lease ** £3,657 36 months £159 n/a n/a 30/06/15B-Max Titanium 1.0 EcoBoost Personal lease*** £4,598 36 months £209 n/a n/a 30/06/15Eco-Sport Titanium 1.0 EcoBoost Personal lease**** £4,117 36 months £179 n/a n/a 30/06/15Focus Titanium 1.0 EcoBoost Personal lease***** £4,580 36 months £229 n/a n/a 30/06/15C-Max Zetec 1.6 5dr Personal lease ß £3,585 36 months £239 n/a n/a 30/06/15Grand C-Max Zetec 1.0 EcoBoost Personal lease ßß £4,233 36 months £249 n/a n/a 30/06/15Kuga Titanium 2.0 TDCi 2wd Personal lease ßßß £5,229 36 months £249 n/a n/a 30/06/15Mondeo Titanium 1.6 TDCi EcoNetic Personal lease ßßßß £5,957 36 months £259 n/a n/a 30/06/15S-Max Zetec 2.0 TDCi Personal lease ßßßßß £6,647 36 months £289 n/a n/a 30/06/15Galaxy Zetec 2.0 TDCi Personal lease ∑ £7,238 36 months £329 n/a n/a 30/06/15Annual mileage capped at 9,000. Excess charge per mile: * 5.71p ** 5.80p *** 5.89p **** 7.14p ***** 6.74p ß 4.93p ßß 6.47p ßßß 8.51p ßßßß 8.08p ßßßßß 5.24p ∑ 8.81p

VauxhallAdam Jam 1.2 white PCP £2,682.36 24 months £99 £6,000 2.9% 01/07/15Adam Glam 1.2 red PCP £2,797.91 24 months £109 £7,250 2.9% 01/07/15Adam Slam 1.2 red PCP £2,668.20 24 months £149 £7,250 2.9% 01/07/15Adam Rocks 1.2 red PCP £2,381.90 24 months £129 £7,820 2.9% 01/07/15Adam Rocks Air 1.2 PCP £2,777.45 24 months £139 £8,800 2.9% 01/07/15Adam Grand Slam 1.4 PCP £3,002.55 24 months £199 £7,100 2.9% 01/07/15Corsa Excite 1.2 3dr PCP £2,679.56 24 months £139 £6,517 4.8% 01/07/15Corsa LE 1.2 3dr PCP £2,703.50 24 months £149 £7,779 4.5% 01/07/15GTC 1.4 Sri PCP £4,196.00 36 months £249 £6,930 6.9% 01/07/15Zafi ra Tourer 1.8 HP £6,435.00 60 months £239 n/a 0% 01/07/15Insignia Energy 1.8 5dr HP £5,344.00 60 months £249 n/a 0% 01/07/15Insignia LE 1.8 5dr HP £6,389.00 60 months £259 n/a 0% 01/07/15Insignia Sports Tourer Energy 1.4 HP £6,169.00 60 months £279 n/a 0% 01/07/15Mokka Exclusiv 1.4 2wd HP £5,419.00 60 months £239 n/a 0% 01/07/15

Top finance offers for retail buyersFIN A NCE OFFER S For a searchable list of manufacturers’ finance offers, go to www.am-online.com/offers

T H E T W O - P E R - C E N T C L U B

The 2% market share threshold is often seen as a key performance indicator in the UK new car market. Having a market share between 2% and 3% shows that a brand is no longer niche and is getting enough cars onto the roads to become noticed by consumers, and therefore gain more interest from dealers.

The ‘two-per-cent club’ had six members at the end of 2014. Five months into 2015, it still has six members, but there has been a change. Seat has dropped off the bottom, as its market share has slipped by 0.17ppts to 1.99% since the start of this year. However, the new entrant is its fellow Volkswagen Group brand Škoda. Škoda’s arrival is also as a result of a decline of its market share to 2.8%, from 3.05% at the close of 2014.

However, Seat and Škoda are both awaiting new model launches in the second half of the year, which should make a difference to their volume and share come the end of the year. A

revised Ibiza will ensure an uplift in activity for Seat’s network, and the new Škoda Superb will be of particular appeal to the company car sector.

By far the best performer in the two-per-cent club so far in 2015 has been Land Rover. It has made a half-percent gain in the UK, with demand strong for the Range Rover Evoque, ahead of its revisions this autumn, and for the Land Rover Discovery Sport, its new entry-level SUV, which is being marketed through a £299 monthly payment three-year PCP at present.

In contrast, Fiat has lost almost as much share in this very competitive marketplace. It’s a poor sign for a brand that has recently launched its first compact SUV, the 500X, into a rapidly growing segment and which has ambi-tions of growing registrations this year. Its fashionable 500 is also under pres-sure from new launches by Smart and Mini. Fiat needs its low- or zero-APR finance offers and PCP deposit contri-butions to work harder at winning the favour of more consumers.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Škoda Land Rover

Renault Fiat Mini Honda Seat

2015 YTD % share 2014 FY % share


10-year market trends available: www.am-online.com/amin e w c a r r e g i s t r at i o n s

May Year-to-dateMarque 2015 % market 2014 % market % 2015 % market 2014 % market % share share change share share change

Ford 24,273 12.22 23,459 12.09 3.47 144,095 12.88 144,178 13.61 -0.06Vauxhall 20,698 10.42 21,961 11.32 -5.75 112,412 10.05 113,305 10.70 -0.79Volkswagen 17,316 8.71 19,151 9.87 -9.58 96,394 8.61 92,012 8.69 4.76Audi 13,802 6.95 13,534 6.98 1.98 71,985 6.43 70,258 6.63 2.46BMW 12,206 6.14 11,649 6.00 4.78 63,121 5.64 60,070 5.67 5.08Nissan 11,561 5.82 10,151 5.23 13.89 67,652 6.05 57,405 5.42 17.85Mercedes-Benz 11,355 5.71 10,131 5.22 12.08 61,748 5.52 52,666 4.97 17.24Toyota 7,300 3.67 7,644 3.94 -4.50 44,144 3.94 42,214 3.99 4.57Hyundai 7,045 3.55 6,309 3.25 11.67 38,539 3.44 35,534 3.36 8.46Peugeot 6,922 3.48 8,066 4.16 -14.18 47,333 4.23 47,744 4.51 -0.86Citroën 6,301 3.17 6,610 3.41 -4.67 38,017 3.40 36,816 3.48 3.26Kia 6,133 3.09 6,015 3.10 1.96 34,541 3.09 33,589 3.17 2.83Škoda 5,914 2.98 6,339 3.27 -6.70 31,333 2.80 32,699 3.09 -4.18Renault 5,453 2.74 4,677 2.41 16.59 30,186 2.70 25,787 2.44 17.06Mini 5,239 2.64 3,184 1.64 64.54 24,138 2.16 15,943 1.51 51.40Land Rover 4,966 2.50 4,513 2.33 10.04 31,120 2.78 25,992 2.45 19.73Seat 4,595 2.31 4,607 2.37 -0.26 22,278 1.99 22,267 2.10 0.05Fiat 4,370 2.20 4,865 2.51 -10.17 26,114 2.33 28,407 2.68 -8.07Honda 3,624 1.82 3,809 1.96 -4.86 23,259 2.08 25,117 2.37 -7.40Volvo 3,192 1.61 3,137 1.62 1.75 16,839 1.50 15,935 1.50 5.67Mazda 2,718 1.37 2,523 1.30 7.73 20,062 1.79 17,187 1.62 16.73Suzuki 2,589 1.30 2,695 1.39 -3.93 14,598 1.30 16,408 1.55 -11.03Dacia 2,046 1.03 2,245 1.16 -8.86 11,895 1.06 11,045 1.04 7.70Mitsubishi 1,608 0.81 1,082 0.56 48.61 11,048 0.99 4,734 0.45 133.38Jaguar 1,579 0.79 1,351 0.70 16.88 7,682 0.69 8,034 0.76 -4.38Porsche 1,136 0.57 820 0.42 38.54 5,188 0.46 3,874 0.37 33.92Jeep 1,109 0.56 357 0.18 210.64 4,436 0.40 1,276 0.12 247.65Lexus 959 0.48 824 0.42 16.38 5,689 0.51 4,555 0.43 24.90Smart 705 0.35 403 0.21 74.94 2,716 0.24 2,060 0.19 31.84Alfa Romeo 447 0.22 434 0.22 3.00 2,184 0.20 2,387 0.23 -8.50MG 269 0.14 241 0.12 11.62 1,436 0.13 1,008 0.10 42.46Subaru 249 0.13 271 0.14 -8.12 1,422 0.13 1,070 0.10 32.90SsangYong 189 0.10 125 0.06 51.20 976 0.09 638 0.06 52.98Abarth 181 0.09 117 0.06 54.70 868 0.08 651 0.06 33.33Maserati 122 0.06 113 0.06 7.96 645 0.06 430 0.04 50.00Infiniti 98 0.05 43 0.02 127.91 505 0.05 181 0.02 179.01Bentley 74 0.04 103 0.05 -28.16 584 0.05 683 0.06 -14.49Aston Martin 68 0.03 73 0.04 -6.85 403 0.04 388 0.04 3.87DS 26 0.01 0 0.00 0.00 26 0.00 0 0.00 0.00Lotus 18 0.01 17 0.01 5.88 153 0.01 73 0.01 109.59Chrysler 4 0.00 128 0.07 -96.88 110 0.01 872 0.08 -87.39Chevrolet 1 0.00 90 0.05 -98.89 3 0.00 2,736 0.26 -99.89Mia 0 0.00 0 0.00 0.00 0 0.00 5 0.00 -100.00Perodua 0 0.00 3 0.00 -100.00 0 0.00 19 0.00 -100.00Proton 0 0.00 0 0.00 0.00 0 0.00 1 0.00 -100.00Saab 0 0.00 0 0.00 0.00 0 0.00 1 0.00 -100.00Other British 62 0.03 97 0.05 -36.08 323 0.03 365 0.03 -11.51Other Imports 184 0.09 66 0.03 178.79 872 0.08 355 0.03 145.63Total 198,706 194,032 2.41 1,119,072 1,058,974 5.68

market intelligence

r i s e r s & f a l l e r s2015 is a good year to be franchisee for a niche brand, it seems. with the exception of Mini, all the top 10 rising brands have less than 1% market share. of course, such small share means it is relatively easy to make large gains from such a low base. nevertheless, their networks will be pleased with the achieve-ment. less impressive are the performances of Honda, fiat, alfa romeo and suzuki.

BranD YtD (%)1 Jeep 247.652 infiniti 179.013 mitsubishi 133.384 lotus 109.595 SsangYong 52.986 mini 51.407 maserati 50.008 mg 42.469 Porsche 33.9210 abarth 33.33

BranD YtD (%)10 Honda -7.409 Fiat -8.078 alfa romeo -8.507 Suzuki -11.036 Bentley -14.495 chrysler -87.394 chevrolet -99.893 mia -100.002 Perodua -100.001 Proton -100.00

9

9

sponsored by


U s e D c a r Va l U e t r e n D s

Used cars bought on finance through dealerships apr-15 change on 3 months to change on 12 months to change on previous year apr 2015 previous year apr 2015 previous yearValue of advances (£m) 1,058 +19% 3,107 +16% 11,131 +16%number of cars 101,506 +15% 299,262 +12% 1,080,600 +11%Used cars bought on finance by businesses through dealerships number of cars 3,080 –31% 10,436 – 1% 40,398 – 18%

Used car wholesale values recorded a month-on-month rise in May, the first nationwide increase after five months of decline, according to the national association of Motor auctions.

the average value of all cars was £5,400, an uplift of £172 or 3.2% compared with april’s average. the average value was 0.4% or £20 below May 2014, however.

May’s volume of used cars through auctions dropped by 12,109 units, or 10%, to 106,752 units, continuing a decline since March’s peak, however remaining 3% up year-on-year. the first-time conversion rate dropped for the third consecutive month from 75% to 72.7%, which was slightly behind the 73.4% recorded during March 2014.

trade-in disposalBca reported that its average value for dealer part-exchanges reached a record level for the second straight month, up £49 or 1.1% to £4,397. Year-on-year trade-in values were up £349, or 8.6%.

at Manheim’s auction rooms, the average part-exchange value for March was down £59, or 1.8%, month-on-

e c o n o M i c i n D i c at o r s

96.39%

95.92%

May 2014May 2015

£9,719

£9,537

Fleet/leasing

46,22547,732

39.7139.90

95.60%

95.09%

£4,397£4,048

70,715

69,744

87.9588.74

Part-exchangeMay 2014

May 2015

Nearly new

May 2015

99.59%£21,039

8,591

8.62

Average age (months)Average mileageAverage valueSales vs CAP

month to £3,308. Year-on-year the average value was up 7.5%, or £231.

May is typically a quieter month for the part-exchange sector, said Daren wiseman, valuations services manager at Manheim auctions. He said buyers like to keep their cards close to their chest as they wait to see what units join the market following the recent plate-change and this year the May market was affected by the general election as well as the usual bank holidays.

retail stock acquisitionBca’s average ex-fleet car value rose £19 from april’s record £9,700. the £9,719 average retail stock value for May was up 2%, or £182, year-on-year.

Bca’s UK operations director simon Henstock said: “Demand was strong in May, with average values for fleet and dealer part-exchange continuing to rise to record levels.”

Manheim’s Market analysis for May showed the average selling price of ex-fleet vehicles fell £360, or 4.7%, from april to £7,158. the average value was up £194, or 2.8%, year-on-year.

Monthly used values show first rise since november

Year-on-Year

inflation

House prices

Mortgages

Unemployment

Pay

0.1%

+0.9%

-0.5%

-1.1ppts

+2.7%

the cPi annual inflation rate in May was 0.1%, up from -0.1% in april. the office for national statistics said the largest contributors were rises in prices for transport services, food and motor fuels.

House prices in april were up 0.9% since March, according to data from the land registry. the year-on-year increase was 5.1%, which takes the average value of houses in england and wales to £179,817.

Home-owner house purchase lending fell in april compared with both the previous month and with april 2014, according to the council of Mortgage lenders. the number of loans advanced totalled 48,200, down 0.5% on March and down 11% on the same month in 2014.

the unemployment rate for february to april 2015 was 5.5%, down from 6.6% a year earlier, according to the office for national statistics. the number of people unemployed is currently 1.81 million.

the average weekly wage, including bonuses, from february to april, was £493, a rise of 2.7% over the same period a year earlier. excluding bonuses, wages were £462, still up by 2.7%.

➡

➡

➡➡

Source: FLA

6,964

9,537 9,448 9,4119,593 9,445 9,533 9,633

9,126

9,4789,673 9,670 9,700 9,719

7,376 7,273 7,260 7,135 7,045 6,9486,693

7,358 7,319 7,3187,518

7,158

4,048 3,973 4,065 4,032 4,059 4,136 4,188 4,113 4,075 4,0414,184 4,348 4,397

Bca Fleet £ Bca Part ex £

manheim Fleet £ manheim Part ex £

May 14 sep 14 Jan 15Jun 14 oct 14 feb 15Jul 14 nov 14 Mar 15aug 14 Dec 14 apr 15 May 15

2,000

4,000

6,000

8,000

10,000

3,077 3,125 3,130 3,162 3,1623,390 3,395 3,383 3,268

3,536 3,438 3,367 3,308

Headline sponsor:

For more details, or to book visit www.usedcarconference.co.uk

Tuesday, October 20Hilton St Georges Park, Burton Upon Trent DE13 9PD

After six years of growth in used car values and strong profits for many dealers,the horizon remains bright for 2015, but it also brings a new set of opportunitiesand threats. We will place a number of them under the microscope at our eventwhere our industry experts will provide scrutiny, insight and solutions.

Some of the factors we will be exploring include:• A progressively older vehicle parc• Sourcing high quality stock which matches demand• Returning vehicles from previous PCP incentives• A new era of austerity could give rise to more cautious consumers• The impact on residual values of manufacturer new car market aspirations

Opportunities, threats andsolutions in the used car marketThe AM conference for UK’s used car dealers

��

44

‘74 July 2015 am-online.com

On an off-road recruitment drive

“We have seen much more high-profile

dealers contacting us,

wanting to work with us,

which is great”Paul Williams,

SsangYong

SsangYong says it has the right car to help it triple registrations. But does it have the right dealers?

programmes are also accredited with the Institute of the Motor Industry (IMI). We want to develop our dealers to be more competent at the day-to-day duties. Working with the dealer not only helps us, but them too.

“We have seen much more high-profile dealers now contacting us, wanting to work with us, which is great.”

The Korean manufacturer describes itself as a specialist SUV maker. It currently has 52 dealers in its network, with 15 authorised repairers. Its plan is to have 65 franchised dealers by the end of the year, with authorised repairers down to 12.

At the end of 2016, it expects to have 78 dealers within its network, and just nine authorised repairers.

Williams said it intends to do away with authorised repairers completely.

SsangYong sees the new Tivoli as the start of something great for the brand. Williams said the manufacturer has stepped up its game in development.

SsangYong has gone through an urbanisation in recent years. The Tivoli, is the spawn of that journey – off-road (the 4x4 version arrives in September), but urban-adapted.

To drive the Tivoli and its other models – Rexton, Korando,

SsangYong has urbanised its look in recent years and the Tivoli is the result

By Danielle BagnallsangYong has a big recruitment drive ahead of it for franchised dealers, and the new Tivoli SUV will play a central role in that expansion.

“Yes, our focus is getting more dealers on board, but we want a good network,” said SsangYong chief

executive Paul Williams. Some of that will come from training and developing its existing network, but some of it will come from bringing in new franchisees to replace sites that are not performing.

Or, as Williams puts it: “Change ‘em or change ‘em.” “We are investing heavily in training and support for our

dealers – we have regular training at both our sales and tech-nology academies. Some of our training and development

S

SHOWROOM T H E C A R S D R I V I N G Y O U R B U S I N E S S

77Suzuki S-Cross

Members of Suzuki’s dealer network are very satisfied with the brand, according to the results of an NFDA survey.

F I R S T D R I V E S S A N G Y O N G T I V O L I – O N S A L E N O W


SPECIFICATIONPrice From £12,950Engine 1.6-litre petrol 126bhp (tested)Performance 0-62mph 12 secondsTransmission 6-spd manual, 6-spd autoEfficiency 44.1mpg 149g/kmRV 3yr/30k TBARivals Nissan Juke, Jeep Renegade

AUTO TRADERInoffensive styling, loads of space and superb kit go a fair way to compensating for average performance, a bouncy ride and high CO2 – but it has all its rivals beaten on price. Definitely worth a look.

THE TELEGRAPHIt’s surprisingly roomy for a car less than 4.2m long and 1.6m high – certainly big enough for a family of four – and there’s a commendably spacious boot, which will be split-level in upper-trim models.

CAR BUYERThe Tivoli isn’t the last word in build quality or fuel economy, but it handles neatly, offers lots of cabin space and looks good. We expect buyers choosing it will still be motivated primarily by value for money and it’s certainly worth considering if this is more important to you than a fashion-able badge.

Korando Sports, Turismo – forward in the market, it has launched a £1 million advertising campaign (three times its budget last year), which is a significant amount of money for the Korean manufacturer. It includes a prime-time TV slot.

Williams’s focus is to get cars on the road: “The more cars on the road, the fresher our badge is in buyer’s minds”.

Currently, the Tivoli is available only in a 126bhp e-XGi160 petrol variant, until the 113bhp e-XDi160 diesel engine arrives in September. Both variants are Euro6-compliant.

Two transmissions are available; a six-speed manual and an AISIN six-speed automatic.

The petrol and diesel engines with manual transmission come with stop-start technology. The 1.6-litre petrol emits 149g/km of CO2 with start-stop (154g/km without), with the diesel achieving 109g/km with and 113g/km without .

“Engine variant popularity will be evenly split we think, between the diesel and the petrol,” said Williams.

The model is available in three main trim options; SE, which is available from £12,950, with grey cloth upholstery and 16” alloy wheels. EX starts from £14,600 and adds the option of diesel automatic and diesel 4x4 manual, with grey

The 4x4 version of the Tivoli arrives in September

The My Tivoli programme allows customers individualisation options

WHAT YOUR CUSTOMERS WILL READ ABOUT THE

SSANGYONG TIVOLI

or beige leather upholstery, 18” spiral alloy wheels, a 7” touch screen infotainment system (with MirrorLink tech-nology), rear view camera, heated seats, front fogs, and luggage load cover.

At the top of the range, the ELX starts from £16,000 and adds keyless start, front and rear parking sensors, privacy glass, auto headlamps and TomTom sat-nav.

The My Tivoli programme, which offers a wide range of further choices, is available to customers requiring further individualisation.

“This is a car that will really put SsangYong on the map,” said Williams.

“Ultimately, it’s the customer who wins: this is a modern, safe, well-built and comprehensively equipped car, and with a price and warranty no one else can match.”

Current market rivals include the Nissan Juke, which starts from £13,620, the Suzuki Vitara, which looks rather similar to the Tivoli, but its lowest starting point is £1,049 more, and the Jeep Renegade – the cheapest model avail-able with leather seats is £21,195.

SsangYong has experienced marked growth since 2012 and registrations for the brand are up 53% for the year to May on the same period a year earlier. It registered 1,542 new vehicles in 2014, according to the SMMT, but SsangYong’s prediction for 2016 is 5,500.

The brand also recently opened a parts facility in The Netherlands, allowing parts to be ordered and delivered in the UK within 24 hours.

As the brand recruits more dealers and starts to build and sell more cars, it plans to talk to fleet specialists with a view to building that side of the business.

67The total number of SsangYong UK sites now

87The total number it plans to have by the end of 2016

F O R M O R E R E V I E W S V I S I T: w w w . a m - o n l i n e . c o m / r o a d t e s t s


IN AUGUST’S ISSUE PUBLISHED JULY 24 AM, Media House, Lynch Wood,

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C O N TA C T U S

A D V E R T I S E R S ’ I N D E X

ASE ..........................................................34/48

Autoclenz .....................................................72

Barclaycard Loans .....................................30

BCA ..........................................................72/78

Call It Automotive.......................................52

CAP Network ...............................................18

CDK Global ............................................42/70

Chris Eastwood Automotive ...................80

Dealer Management Services ...............66

Finance & Leasing Association ..............32

Flagpole Express .......................................47

GForces .........................................................55

Infomedia ......................................................84

Institute Of The Motor Industry .............60

iVendi ..........................................................9/54

JCT600 ..........................................................79

Jewelultra ..............................................62/64

Lawdata .........................................................73

Listers Group Recruitment .....................81

Lloyd Motors ................................................79

Lloyds Banking Group ..............................12

Manheim Retail Services ...............2/11/23

Mapfre Abraxas ............................................6

MHA Macintyre Hudson ...........................68

Motors.co.uk ................................................26

Pro-Driver ....................................................67

Really Good Domains ................................35

Ridgeway Group .........................................80

Smart Insurance Services ......................59

SMC Ford ......................................................81

Steele-Dixon & Associates ....................80

Supagard ................................................65/73

Symco Training ...........................................10

Total Telephone Solutions .................56/81

Tracker Network ........................................47

Trader Publishing ......................................76

UHY Hacker Young Manchester ............40

Vertu Motors .........................................78/80

This new seven-seat SUV is a premium-grade game-changer for the Volvo network.

We examine how franchised dealers have refined their businesses and gain expert input on how to make further savings in motor retail.

Kia Motors UK chief executive Paul Philpott explains how the brand is progressing towards its ‘Vision 100’ of 100,000 sales in 2020.

In the name of efficiency

Kia’s eyes on the 100,000 sales prize

Face To Face: Progress Škoda

First drive: Volvo XC90

Managing director Terence Byrne shares his thoughts on Škoda coming last in the recent National Franchised Dealers Association satisfaction ratings, and tells of his plans to expand his business slowly to retain its current processes and values.

am - automotive management july 2015 preview

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