Motor Trade Monthly Round Up June 2016 News

Good News

Used car sales volumes in the first quarter of 2016 soared 13% in comparison to 2015, making it the biggest increase on record. A report commissioned by the Society of Motor Manufacturers and Traders has revealed the UK is the most competitive country for servicing cars, and is set to overtake France as the third largest motoring aftermarket in Europe, by 2022. SMMT Chief Executive, Mike Hawes, said: “The UK’s aftermarket is one of the most competitive in the world and plays a critical role in keeping Britain’s 30 million-plus cars roadworthy. Robust competition and a strong independent sector have helped reduce the cost of vehicle ownership in the UK and provided greater choice to consumers. For this growth to be sustained, however, the sector must stay abreast of evolving vehicle technologies and changing mobility patterns.”

Brexit

However, following the recent referendum result, a survey of dealers carried out by Cap HPI has found that 49% of dealers expect Brexit to have a negative impact on the new car market, with just 10% saying it will have a positive impact. 29% surveyed predicted a negative impact on used car sales. What exactly will happen, nobody knows, but we’re all waiting with our fingers crossed that it has a positive impact on the UK motor trade.

Recalls

Toyota are recalling 35,000 cars in the UK as part of a 1.43 million worldwide recall. A possible fault in the side airbags has forced Toyota to recall 34,135 Toyota Prius, Auris and Lexus CT200h cars, manufactured between October 2008 and August 2012. A survey from HPI has revealed that a whopping 83% of people ignore recall issues, by not asking sellers of vehicles if the manufacturer had issued a recall notice for the vehicle. CAP HPI Consumer and Retail Editor, Philip Nothard, said: “With one in 10 unrepaired recalled vehicles still on the UK’s roads, and trading in the used car arena, safety must be paramount for buyers looking to invest in their next set of wheels. However, the good news is manufacturers offer an unlimited time for repairs, meaning second and third owners can still get a recalled vehicle fixed free of charge. Indeed, the UK’s automotive industry boasts one of the highest recall and repair success rates across the world, exceeding 90% following a recall campaign.”

Interesting News

Three time Formula 1 champion, Lewis Hamilton, has revealed his desire to design a road car, and is reportedly in talks with Mercedes-AMG boss Tobias Moers. Research undertaken by the AA has revealed the worst MOT failure rates in the country, with Dundee taking the top spot - find our full feature on this story in our news section. Analysis by Go Ultra Low suggests electric vehicles could dominate new car sales as early as 2027. Head of Go Ultra Low, Poppy Welch, said: “The huge interest in electric vehicles and their subsequent rapid rise in uptake has been spectacular so far, with more than 60,000 EVs registered in the past five years. These rises are just the start of the electric revolution as Go Ultra Low analysis suggests that electric vehicles could dominate the new car market as early as 2027.”

Dealership News

MG Motor UK plan to expand its dealer network by the end of 2017 adding over 30 sites. Matthew Cheyne, Head of Sales and Marketing said: “We currently have 78 dealers, 15 more than last year, and plan to have 90 by the end of 2016 and between 100 and 110 by the end of next year; although recruitment is increasingly difficult with big groups snapping up smaller ones.” Meanwhile, Jadine Motors Group has purchased Colliers’ Land Rover, Honda and Mazda dealerships in Erdington, Birmingham and Jaguar in Tamworth, increasing its presence in the West Midlands. Neil Williamson, CEO of Jardine Motors Group said: “This is a great acquisition as we combine Colliers Group’s family business values with our cutting edge retail experience. This new business will help drive forward our ambitious growth plans for 2016. We look forward to welcoming our new colleagues from Colliers Group into the Jardine family.”

Things You Should Know

The National Franchised Dealers Association’s Trusted Dealers website is launching a marketing campaign targeting the over-50 market in a bid to boost sales and increase brand awareness for dealers. Trusted Dealers Managing Director, Neil Addley, said: “Trusted Dealers counts some of the biggest franchised dealers in the country amongst its members and this new campaign will showcase cars from these dealers on a very targeted platform, to the people who are most likely to buy. Over 50s are the most likely to buy from a franchised dealer, valuing the benefits of buying knowing there are no nasty surprises.” Fleet Assist has launched a courtesy car programme for its independent garage service network. Joint Managing Director, Mike Smith said: “We believe our new courtesy car programme will prove to be extremely popular as it is clear that offering the service to independent service outlets is essential to their long term business success.”

Need To Know

The RAC have said the entry point in the used car market could be as high as £2,000 because of the Consumer Rights Act 2015. RAC’s Director of Corporate and Independent Dealers, Sean Kent, said: "We are not saying that all cars priced below £2,000 are of poor quality or that dealers operating in that sector are not operating with customer interests at heart. But what we are hearing increasingly from independent dealers is that the cost of acquiring a car and selling it to the standards required by the Consumer Rights Act is difficult to achieve for much below this figure. It is not a hard and fast rule but it is definitely a trend that we are increasingly seeing across the market and chimes with other recent reports that small franchise dealers have abandoned the sub-£1,500 sector.”