Motor Trade News Monthly Round Up November 2017

More bad news for diesel drivers amongst the stories featured in this month’s Motor Trade News Round Up, as we look what the Autumn Budget means for motor traders.

Autumn Budget

The 2017 Autumn Budget saw first-year VED rates rise for all new diesel cars sold from April 2018 onwards. The rise will apply to cars that do not meet the Real Driving Emissions Step 2 standards on emissions, but will not apply to vans or HGVs.

The reaction from the automotive sector to Chancellor of the Exchequer, Phillip Hammond’s announcement has not been favourable. Mike Hawes, the SMMT CEO, said: “Our greatest concern is the continuing mixed messages around diesel which will only deter and confuse the public further.

“Diesel buyers will not face any additional taxation for the next six months, but thereafter, will face additional charges which will undermine fleet renewal efforts, which are the best and quickest way to address air quality concerns.

“Manufacturers are investing heavily in the latest low emission technology, however, it’s unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology which takes years to develop, in just four months. This budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years.”

The Senior Forecasting Editor UK at cap hpi, Andrew Mee, said: “The changes to VED announced for April 2018 will have little impact on widespread diesel values and new car registrations. The changes to VED will typically equate to increases of around £20 for the first year and will have very little impact on diesel registrations and values. The additional one per cent diesel supplement on BIK will further encourage company car drivers to switch from diesel but the resulting fall in registrations will help to support used diesel values in the future.

“This is a Budget which reinforces some of what we have previously predicted. We still anticipate new car registrations in 2018 to follow the ongoing pattern of recent years and shift away from diesel into petrol and AFVs. We’ll also see used diesel values deflate year-on-year slightly more than petrol values. There are marked variations according to vehicle sector and this deflation is most prominent in the small vehicle sector whereas, the impact will be less pronounced in larger car sectors where diesel is strongest.”

Hammond, who has been the Chancellor of the Exchequer since 2016, also announced that £400m will be invested in national electric vehicle charging infrastructure, in addition to an extra £100m plug-in vehicle grant.

A £76m investment into retraining adults in the digital and construction sectors was also announced, however the Independent Garage Association have called for the Government to invest in the automotive sector.

Stuart James, the IGA Director, said: The Independent Garage Association welcomes the launch of the National Retraining Scheme announced by the Chancellor in today’s Autumn Budget, however we are disappointed that the major shortage of skilled workers in the automotive industry, particularly MOT testers, was not addressed.

“We urge the government to take action and encourage more people to join the automotive sector, particularly in light of the millions of pounds they have pledged to spend developing electric vehicles and driverless technology in this budget.”

Brexit

The SMMT President, Tony Walker, has called for ‘concrete progress’ on a Brexit transition period. Addressing 1,100 government representatives, industry leaders and other stakeholders at the SMMT’s annual dinner he said: “This transition should be on the current terms and, crucially, not time-limited to give industry time to adjust and secure long-term investment decisions. 

“We will never stop striving to be competitive. But we ask government to help provide the conditions in which we can compete. Like every other industry, we need certainty now.”

“After all the difficulties we have overcome, all the changes we have made and the innovations we have brought, we do not need trade barriers to be our next challenge. We are an industry with the character to overcome major obstacles. And we are working hard to maintain our competitiveness. But don’t test our character unnecessarily. In the last forty years we have succeeded. We have torn down so many barriers. Please don’t allow new ones to be erected.”

Motor Trader Summit

According to Marina Cheal, the Chief Marketing Officer at Reevo, negative reviews might not be so bad after all. Speaking at the Motor Trader Summit she said: “If you are spending £40,000 on a car over three years, we have found that reviews are incredibly important. It is one of the most complicated purchases you make with a bewildering choice. So it is important to go around and do research. People want to hear what other people have to say.

“Look at it from the customer perspective. People want to know when buying something really expensive what is the worst that is going to happen. They will want to see what other people have said. If you do not have bad reviews people will want to know what you are hiding. Consumers are savvy. If you are not comfortable about taking on negative reviews then do not take on reviews at all.

“Rich reviews drive engagement and people stay on site longer. Bad reviews are a brilliant way of showing that if something does go wrong you have credibility in how you deal with the issue. It shows you care about the customer.”

Meanwhile, the Managing Director of Coachworks Consulting, Karl Davis urged motor traders to push used PCPs, as well as highlighting the importance of the aftersales business. He said: “Car supermarkets are smashing it with used car PCPs. We have to take the high penetration of PCPs in new cars into used cars.

“We know what we should be doing but it is about getting our people to do the things they should be doing. What is a good percentage of vehicle health checks in the workshop?  80%? At this percentage one in five cars are not receiving duty of care.”

“You have to have people who value the same things. The challenge is to recruit the best people. We have to ensure our values are clear and are communicated in a clear way.”

Used Car News

It’s bad news for those in vehicle sales this month as used car values for cars aged three years old or with 60,000 miles on the clock dropped 2% according to cap hpi. Average values also dropped for cars aged six months/5,000 miles and 12 months/10,000 miles by 2.1%.

James Dower, Senior Editor of Black Book at cap hpi, said: “We can see a seasonal slide in values that reflect the slowing retail market conditions and movement mirrors last year. The higher than usual drop in nearly-new stock is attributed to the additional volumes of short-term rental business that had been written in the first half of the year entering the wholesale market.”

Digital & Social News

Facebook has come out on top in a survey which looks at which social media channel is best for car dealers. According to research by Marketing Delivery, 37.6% of 18 to 54 year-olds named Facebook as their favoured social network to follow a car dealer.

Managing Director of Marketing Delivery, Jeremy Evans, said: “There are a myriad of ways to engage with consumers through social media, but it simply isn’t cost-effective to pursue every opportunity, and dealership Marketing Managers must target their approach to maximise their return on investment, and our research highlights some important pointers.

“The overwhelming preference for Facebook in some UK regions makes it clear that many dealers are missing a trick when it comes to targeting local prospects. It should also be borne in mind that as Facebook owns Instagram, marketing initiatives can more easily be run in parallel [which is] particularly valuable when targeting younger prospective customers.”

The social network giant has now made it easier for car dealers in the UK to advertise on its platform, launching its Facebook Dynamic Ads for Autos tool in the UK.

Research conducted by Trustpilot and YouGov has found that 36% of 18-35 year-olds are willing to purchase a car online, compared to 25% overall. The survey of 1,500 drivers found that 82% of 18-35 year-olds research their next car using the Internet, with 80% saying online reviews were “fairly influential”.

Partner Director for Trustpilot, Neil Bayton said: “For those seeking to appeal to [18-35 year-olds], the message is clear: build a compelling digital experience that provides access to the buying and service experiences of others.”

“By doing so you’ll appeal, to [18-35 year-olds] on their terms as our research clearly shows this segment is ready to buy online. The winners in the industry will be those that embrace change and transformation.”

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