www.motorfinanceonline.com Issue 177 / august 2019
REMOTE CONTROL HOW TELEMATICS IS SET TO SHAPE THE WAY WE BUY, DRIVE AND MAINTAIN CARS
FEATURE ANALYSIS COMMENT
Car manufacturers are As dealers sell more online, Surprising statistics about doubling down as consumer the race is on for full millennials’ attitudes, and appetite for EVs grows omnichannel adoption what they mean for dealers
MF August 177.indd 1 01/08/2019 10:46:26 contents this month
COVER STORY NEWS 14 05 / EDITOR’S LETTER 06 / DIGEST • Barclays Partner Finance withdraws from motor finance • Car dealer group Lookers under FCA investigation • Blue to collaborate with Lloyds for instant payments • Northridge signs white-label deal with SsangYong • SMMT: new car registrations drop for fourth consecutive month • Pendragon CEO to depart role • FCA launches review of credit information market • TDR Capital, BCA Marketplace agree £1.9bn acquisition • Getaround acquires Nordic firm for $12m • FCA launches consultation on customer treatment TELEMATICS • Pre-registrations return a ‘sign of difficulties’
Editor: News Desk: Publishing Assistant: Brian Cantwell +44 (0)20 7406 6538 Asena Değirmenci 24 / DATABANK +44 (0)20 7406 6705 +44 (0)20 3096 2633 Group Editorial Director: [email protected] [email protected] Ana Gyorkos Senior Reporter: +44 (0)20 7406 6707 Director of Events: Chris Lemmon [email protected] Ray Giddings +44 (0)20 7406 3723 +44 (0)20 3096 2585 Sub-editor: [email protected] [email protected] Nick Midgley Reporter: +44 (0)161 359 5829 Head of Subscriptions: Christopher Marchant [email protected] Alex Aubrey +44 (0)20 7406 6709 +44 (0)20 3096 2603 Sub-editor: [email protected] [email protected] Sophia Bell 07 Customer Services: +44 (0)20 3096 2603 or +44 (0)20 3096 2636, [email protected]
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2 | August 2019 | Motor Finance
MF August 177.indd 2 01/08/2019 10:46:29 contents august 2019
OPINION 22 / HUNTSWOOD 17 Last month, the Motor Ombudsman launched its #talk2resolve campaign, to highlight the importance of consumers speaking to motor businesses directly to resolve a complaint. Sean Kulan writes 22
FEATURES ANALYSIS COMMENT 12 / LINEDATA 20 / AUTOMOTIVE DEALERS 23 / EQUINITI Christopher Marchant was at Linedata’s With dealers increasingly selling cars Sarah Jackson, director at Equiniti Credit London event at the Sea Containers hotel and finance online, the race is on for full Services, reveals some surprising statistics complex on the River Thames, featuring talks omnichannel adoption to suit consumers, about millennials’ attitudes to credit, and from professionals in the asset management, according to Grant Thornton and Cox explores what it all means for lenders looking leasing and insurance industries Automotive. Chris Lemmon writes to target this demographic 14 / TELEMATICS 21 / BBC MONEY BOX Telematics tools and technology are rapidly Motor finance has received more mainstream becoming ubiquitous, with an accompanying media attention, with BBC Radio 4’s Money boom in car-generated data, but what are the Box programme covering concerns from the actual benefits for the motor finance industry Financial Ombudsman Service regarding and its consumers? Chris Farnell reports complaints. Chris Lemmon reports 17 / EV UPTAKE The electrification movement is beginning to 14 gain traction worldwide. Car manufacturers are doubling down on electric investment as consumer appetite for zero-emission vehicles continues to grow. Chris Lemmon writes 20 23
www.motorfinanceonline.com | 3
MF August 177.indd 3 01/08/2019 10:46:32 HEAR • NETWORK • DISCOVER • CELEBRATE Leasing Life Conference & Awards 2019 Barcelona, Spain • 28 November 2019
For its 15th edition, the Leasing Life Conference and Awards 2019 moves to Barcelona, to bring together asset finance professionals and industry disruptors in an active discussion of the key issues facing the leasing industry. This year’s Leasing Life Conference explores how Europe’s leasing industry is responding to the value chain opportunity, the role of technology in this pinnacle transformation, strategy-driven innovation and much more. Thriving in a digital age has never been more important.
Event highlights • Embracing technological transformation: creating digitised business models • From new technologies to corporate cultures: making innovation a reality • The circular economy: driving change at full speed • CEOs panel discussion and Q&A: the future of asset finance – a strategic outlook • Remaining relevant in an increasingly competitive world • Panel discussion: capitalising on data to drive industry-wide innovation
Headline Partner Gold Partner Silver Partners Bronze Partners
Exhibitors Panel Partner Cocktail Partner Table Host Badge and Lanyard Partner
For more details please contact Ray Giddings on [email protected] or call +44 (0)20 3096 2585
MF August 177.indd 4 01/08/2019 10:46:33 editor’s letter
HEAR • NETWORK • DISCOVER • CELEBRATE Editor’s letter Leasing Life Conference & Awards 2019 Barcelona, Spain • 28 November 2019 challenges from
For its 15th edition, the Leasing Life Conference and Awards 2019 moves to Barcelona, to bring different quarters together asset finance professionals and industry disruptors in an active discussion of the key Brian Cantwell, Editor issues facing the leasing industry. This year’s Leasing Life Conference explores how Europe’s leasing industry is responding to the value chain opportunity, the role of technology in this pinnacle transformation, strategy-driven innovation and much more. Thriving in a digital age has never been more important.
his month, Barclays Partner Finance customers, and the additional cost that bringing new Event highlights announced it was leaving the motor finance legislation into action can incur. • Embracing technological transformation: T market, following a strategic review. With regard to the vulnerable customers legislation, creating digitised business models While the public statement said the decision was there is a wide spectrum of possible outcomes. The FCA • From new technologies to corporate commercial and a move away from consumer motor lending said it wants vulnerable customer care to be embedded cultures: making innovation a reality within the bank, competition for funders has been growing within each firm’s culture. Businesses that fall under FCA • The circular economy: driving change at in the motor finance space for many years. Add to this the authority will need to understand what the guidance full speed faltering growth in the new car market, and the increasing means for their business and customers, and how they are • CEOs panel discussion and Q&A: the future chance of legislation following the FCA review, which could addressing the needs of vulnerable customers. of asset finance – a strategic outlook only have helped the decision-making process. While there has been significant progress in the Barclays follows Raphaels Finance, which left the car treatment of customers in recent years, the regulatory body • Remaining relevant in an increasingly finance market in May 2018. More recently, Secure Trust points out that there remain cases where firms are clearly competitive world Bank said it was moving out of the subprime finance market failing to consider the needs of vulnerable customers, • Panel discussion: capitalising on data to and into the more-prime space. which can result in harm. drive industry-wide innovation It may be that there are more market exits in the future, However, it is very difficult to define where the as developments challenge the car finance market. These boundaries of vulnerability lie – take for example our challenges come from different quarters: both market reporting on the BBC Money Box coverage of motor conditions and regulatory. finance. It used an example of a young person receiving On the one hand, the challenge from the uncertainty motor finance that they later realised they could not afford. of Brexit has had manufacturers concerned about their To what extent do the rules on affordability intersect with supply-chain costs, and additionally about the potential vulnerability? What other aspects, apart from age, factor tariffs that may be added to cars sold in the UK. Interest into vulnerability? rates remain at historic lows, and any movement in them These are questions that should be clarified by the will also add to the cost of car finance for consumers. regulator. If not, they can, unfortunately, result in Headline Partner Gold Partner Silver Partners Bronze Partners The FCA has several lines of consultation open on cases making their way to the Financial Ombudsman – different regulatory angles, most recently on vulnerable sometimes resulting in cost to the motor finance funder. <
Exhibitors Panel Partner Cocktail Partner Table Host Badge and Lanyard Partner
Get in touch with the editor at: [email protected]
For more details please contact www.motorfinanceonline.com | 5 Ray Giddings on [email protected] or call +44 (0)20 3096 2585
MF August 177.indd 5 01/08/2019 10:46:33 News | Digest
news update Barclays Partner Finance withdraws from motor finance number one in UK retail point of sale, and has a vision to continue to lead this market through further investment in new capabilities and innovation. “After a strategic review of its motor portfolio, Barclays Partner Finance has made a commercial decision to reduce its focus on motor point-of-sale finance. “Given this outcome, the business will no longer invest in the motor portfolio as a growth area, and will shortly cease to originate new business in this segment. We will continue to support colleagues as we work through this transition.” Barclays Partner Finance offered personal contract purchase and conditional sale motor loans as part of its motor finance business, with loans ranging in value from £1,500 to a maximum of £50,000. The decision comes at an already-difficult time for the motor finance industry, with registrations for new cars consistently falling this year and the results of the Financial Conduct Authority’s (FCA) review into the industry to be announced soon. Potential changes as outlined in the FCA Barclays Partner Finance has revealed plans According to Barclays, the decision was report may involve new consumer credit rules to withdraw from the motor finance market, commercial and followed an internal review to strengthen existing provisions, or a bolder following an internal strategic review. that resulted in a wider strategic shift within strategy of intervention such as banning The company has issued termination the business. difference-in-charges and similar commission notices to dealer partners in the industry In a statement, Barclays Partner Finance models, which came under heavy scrutiny in explaining its decision. said: “Barclays Partner Finance is currently the report. < Car dealer group Lookers under FCA investigation Lookers, one of the largest car dealer project will be completed and agreed the FCA in relation to this and will update groups in the UK, has announced that actions will be implemented as soon as the market further when appropriate,” the it is under investigation by the Financial possible,” said Lookers. business said in its release. Conduct Authority (FCA) for activities As a result of its own review, Lookers The FCA released its motor finance relating to sales processes between 2016 was informed by the FCA that it intended review, as part of its long-awaited report and 2019. to carry out an investigation into processes into the motor finance sector, in March. The Lookers board said it had uncovered relating to the company’s sales that took It singled out commission models as “certain matters requiring review” in its place between 1 January 2016 and 13 a concern that could lead to market 2018 annual report and accounts. It then June 2019. intervention. commissioned an independent review The FCA investigation is newly The FCA found that increasing in December 2018, which was shared commenced and no findings have yet been difference-in-charges (DiC) and reducing with the FCA. This revealed some control made, said Lookers. DiC commission arrangements provided issues in the sales process in the group’s “The FCA will reach its conclusions in strong incentives for brokers to arrange regulated activities that required attention, due course and, at this stage, the company finance at higher interest rates. Lookers said in a statement. cannot estimate what effect, if any, the The FCA found that other commission “We have invested in both our internal outcome of this investigation may have. structures provide a weaker link to the capabilities and external advice. The The company is co-operating fully with interest rate, or none at all. <
6 | August 2019 | Motor Finance
MF August 177.indd 6 01/08/2019 10:46:37 News | Digest
Blue to collaborate with Lloyds for instant payments Blue Motor Finance has partnered with the knowledge that they’ll receive cleared to support SME motor dealers, following a Lloyds Bank Commercial Banking API Lab funds in their account, potentially within pilot launch in January 2019. The product, for the roll-out of instant loan payments two minutes.” which is designed to provide dealers with for traders and dealerships. Steve Everett, managing director of a simple and secure route to finance, uses The two companies are working on payments and cash management at Lloyds AI technology to enable dealers to finance a faster payments system and a direct Bank Commercial Banking, added: “At new stock on the forecourt. debit API, meaning loans agreed will the Lloyds Bank Commercial Banking Chris Jones, chief operating officer be processed in real time and paid to API Lab we’re committed to bringing the at Blue Motor Finance, said the new customers within minutes. full potential of digital to the forefront of product launch marks a critical stage in the “The instant payments system is a financial services. company’s development. landmark moment for Blue Motor Finance “We’re excited to partner with Blue “Independent dealers have historically and for the entire car finance industry,” said Motor Finance to bring this innovative had to deal with a complex and Charlie Barker, chief technology officer at instant payments service to its motor burdensome process to secure the finance Blue Motor Finance. trader customers, and create real value for they require to grow their stock,” he “For the first time, it will mean that our businesses in the car financing industry commented. “This had the dual effect of customers will be able to make critical through new API-enabled solutions.” hindering both their ability to grow their investment decisions – including at a Earlier this year, Blue Motor Finance business and reducing the choice available vehicle auction, for example – with the launched a tailored stock lending product to end customers.” < Northridge signs white-label deal with SsangYong Northridge Finance has signed an exclusive agreement with SsangYong Motors UK to provide motor finance products to customers at SsangYong’s dealer network in the UK. The deal is Northridge’s first OEM partnership and a key part of the business’s UK growth strategy, said Northridge. The white-label arrangement will trade as SsangYong Financial Services. Northridge offers a range of lending products for the dealer and intermediary market, including hire purchase, PCP, leasing and loan products. James McGee, managing director at Northridge, said: “We are delighted to have secured a partnership with the SsangYong franchise. The management in SsangYong Motors UK transacts business in the same way as Northridge, through transparency and trust. The model range has evolved OEM partnerships in the Republic of company. enormously, and to confirm the strength of Ireland, SsangYong Motors UK marks the “This important agreement allows us its products, offers a market-leading seven- first OEM scheme for our business in to offer a competitive range of retail year warranty. We see the SsangYong the UK, and is a key step in the growth finance products for our flagship Rexton, brand gaining increased traction over the strategy for the business.” the award-winning Musso, the all-new coming years, and we will play a major part Nick Laird, managing director at Korando, due in dealer showrooms in in making sure that this happens.” SsangYong Motors UK, said: “We are September, and the stylish Tivoli, which Northridge Finance is a wholly owned delighted to have appointed Northridge also had a facelift in the new year.” subsidiary of Bank of Ireland UK. after a rigorous selection process. Working In March, Northridge Finance said it Des Crowley, Bank of Ireland UK chief with Northridge, which has a similar had surpassed £1bn in lending for the executive officer said: “Northridge is a key working ethos to our own, will support first time, with gross asset finance lending growth business for Bank of Ireland UK, the growth of our business and help our reaching £1.1bn, an increase of 31% year- and is built on long-lasting motor dealer dealers fund their inventory, while giving on-year. Profit before taxation increased and broker relationships. SsangYong customers the opportunity to from £151m in 2017 to £173m, while “While the Bank already operates 13 obtain retail financing through a trusted intermediary relationships grew 10%. <
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MF August 177.indd 7 01/08/2019 10:46:38 News | Digest
SMMT: new car registrations drop for fourth consecutive month The UK new car market has seen registrations fall for a fourth consecutive month, down 4.9% year on year in June, according to the latest figures from the Society of Motor Manufacturers & Trade (SMMT). Petrol and battery electric vehicles registered growth in the month, up by 3% and 61.7% respectively, but these increases were not enough to offset the continuing decline of diesel, which fell for the 27th month in a row (-20.5%). Plug-in hybrid vehicles suffered a significant drop of 50.4% in registrations, support – to choose the new car that best on car registrations, increasing the pressure while hybrids also saw a decline of 4.7%. The meets their driving needs.” on dealers. “The delays caused by a WLTP- performance tipped the overall alternatively induced bottleneck and a tricky auction fuelled vehicle (AFV) sector into negative INDUSTRY REACTION environment mean dealers are struggling to growth for the first time since April 2017, Sue Robinson, director of the National meet the demands of their customers and which the SMMT said undermines efforts to Franchised Dealers Association (NFDA), said bottom lines alike. reduce emissions through fleet renewal of the the lack of clarity on a number of government “The weather has not helped our case: a latest ultra-low-emission vehicles. policies, including Brexit, is having a negative rainy June left buyers hesitant to hit the high “Another month of decline is worrying, but impact on private buyers and businesses alike. street, and that included big-ticket purchases the fact that sales of alternatively fuelled cars “It is important that the government like cars. As we move towards the traditional are going into reverse is a grave concern,” said addresses the negative impact the current tax summer slowdown, dealers must be sure to SMMT chief executive Mike Hawes. regime is having on company cars,” she said. focus on their digital showroom – customers “Manufacturers have invested billions “It is disappointing to see demand for looking for AFVs or specific makes and to bring these vehicles to market, but alternative-fuel vehicles decline, but it is models are using social media and forums their efforts are now being undermined by positive that the sales of pure electric vehicles more than ever, and it’s crucial that dealers confusing policies and the premature removal maintained their positive trend, despite are including this sort of outreach in their of purchase incentives,” Hawes continued. significant supply constraints. Franchised planning.” “If we are to see widespread uptake of these dealers are making significant investments James Fairclough, chief executive at AA vehicles, which are an essential part of a to be able to educate their customers Cars, said the disappointing figures are a smooth transition to zero-emission transport, and provide them with the best possible result of various factors, including the trend we need world-class, long-term incentives and experience in this developing area of the among younger consumers to move away substantial investment in infrastructure. market.” from ownership in favour of usership models. “Fleet renewal remains the quickest way to Seán Kemple, director of sales at Close “Also, the recent popularity of PCP loans address environmental concerns today, and Brothers Motor Finance, said issues in motor has injected a large number of nearly new cars consumers should have the confidence – and manufacturing and supply are taking their toll into the second-hand market, encouraging some people to buy used instead of new. This shift has been good news for the used car market, which saw sales hold steady in the first quarter of the year, with a modest drop of 0.6%. “What’s most surprising from today’s data is that the ever-so-popular AFVs have recorded a drop in sales for the first time since April 2017. Despite the fact that the UK has just become the first major economy to set a net-zero target on greenhouse gas emissions for 2050, there is ongoing confusion over low-emission zones. “Also, there is no doubt that the removal of ultra-low emission vehicle government grants Mike Hawes, SMMT Sue Robinson, NFDA has impacted the market,” said Fairclough. <
8 | August 2019 | Motor Finance
MF August 177.indd 8 01/08/2019 10:46:41 News | Digest
Pendragon chief executive to depart role The company also stated that the 2019 financial year is expected to be impacted further by “certain internal operational challenges”. According to reports from Sky News, analysts have suggested that Herbert’s departure may have been a result of differing opinions over how best to revive the car business, following a series of profit warnings. Herbert revealed that losses at the company’s Car Store division would be £25m this year, up from an £11.9m loss in 2018. Shares in Pendragon fell by 5% on news of Herbert’s departure. According to Pendragon, as a result of the change to the management team, the strategic update originally scheduled for late September will now be postponed until the appointment of a new chief executive officer is concluded. Chambers said: “The board remains fully committed to realising the long- term strategy. In the nearer term, despite Mark Herbert, chief executive officer at Last month, Pendragon published the challenging market conditions and the Pendragon, the second-largest motor results of its financial and operational costly stock reduction programme, our retailer in the UK, is to leave after only review, warning of significant losses focus will remain on taking steps to three months in the role. in the first half of FY19. The company improve the performance of the business With Herbert’s departure, chief attributes the forecast to a continued as outlined in our recent financial and operating officer Martin Casha and chief challenging market, citing the latest SMMT operational review.” financial officer Mark Willis will lead the figures which reported a decline in new As a group, Pendragon is responsible business on a day-to-day basis, reporting car registrations of 3.1% in 2019, and for some of the UK’s largest car dealers, to chair Chris Chambers. significant declines in used car valuations. including Evans Halshaw and Stratstone. < FCA launches review of credit information market The Financial Conduct Authority (FCA) has The FCA said it will report on its credit information market is not working launched a market study to examine how the preliminary conclusions on these themes well.” credit information market operates and the in spring 2020, including, if appropriate, a Christopher Woolard, executive director impact it has on consumers. discussion of potential remedies. of strategy and competition at the FCA, The FCA said the market study will focus It is not formally consulting on the terms said: “We have launched this market study on three themes: of reference, but is welcoming views on them as we have identified concerns about the • The purpose, quality and accessibility of by the end of July. coverage and quality of credit information, credit information; The FCA wrote: “Firms use credit the effectiveness of competition between • Market structure, business models and information when assessing credit risk and credit reference agencies, and the extent of competition; and affordability. Therefore, it can impact how consumer engagement. • Consumers’ engagement and likely consumers are able to access a range of “Through the study, we will seek to get a understanding of credit information and financial services, including mortgages, loans better understanding of how this vital market how it impacts their behaviour. and credit cards and, in some cases, how works and will identify remedies, where much they pay for them.” appropriate, to make it work more effectively The FCA said that in exploring these It continued: “This is significant as, for credit information users and individual themes, the market study will assess how according to the FCA Financial Lives Survey, consumers. the sector is working now and how it may nearly four in five adults hold at least one “This includes considering whether develop in the future. It will also look at how credit or loan product. vulnerable customers are disproportionately the markets for credit information work in “Furthermore, those vulnerable customers affected by the way credit information is used, some other countries, and what the UK might for whom a lender’s decision is more finely and whether any alternative approaches might learn from them. balanced are most likely to be affected if the deliver better outcomes for consumers.” <
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MF August 177.indd 9 01/08/2019 10:46:43 News | Digest
TDR Capital, BCA Marketplace agree £1.9bn acquisition operating profits up 17.9% year-on-year to £87.6m. The company also sold over a million vehicles for the first time last year. The business enjoyed growth in all divisions, with group revenues up from £2bn in 2017 to £2.4bn in 2018. In December last year, BCA signed a two-year exclusive remarketing deal with TC Harrison Ford, in a deal that enabled around 3,500 vehicles a year to be sold in weekly sales in Derby and Peterborough. TC Harrison vehicles are offered with a BCA Assured report, and the majority of vehicles are provided with a warranted Private equity firm TDR Capital and deal was one of the largest to go from mileage and have the V5 and service BCA Marketplace have agreed a £1.9bn public to private hands in recent years. history present. valuation of the car remarketing company Following the news of the potential BCA operates vehicle defleeting, and an offer of £2.43 per share. takeover, BCA’s share price shot up from auctioning and remarketing, as well as The BCA directors have agreed £1.95 per share to £2.37. providing stock finance and software unanimously to the valuation, and the Last year, BCA saw its share price rise for dealers. It also owns retail trade-in decision to accept the acquisition was sharply following a £1.6bn bid from Apax websites We Buy Any Car in the UK and accepted by shareholders holding over Partners to acquire the company, which CarTrade2B in Germany. 44% of shares, with the directors holding BCA subsequently turned down, stating The company floated on the the rest to get the deal over the line. that the bid undervalued the company. London Stock Exchange in 2015. Its As reported in the Financial Times and The private equity investor subsequently top shareholders are Invesco Asset MF, the offer represented a 25% premium dropped its offer. Management with 22.5% of the shares, on the closing share price as of 17 June. The bid from TDR Capital comes after a Woodford Investment Management with The acquisition is being brokered by third consecutive year of strong financial 16%, and US financial services firm Capital Jefferies Banking Group, which said the results posted by BCA – with 2018 Group with 10.6%. < Getaround acquires Nordic firm for $12m US car-sharing firm Getaround has acquired to Getaround will help drive us forward in Nordic car-sharing business Nabobil for our mission to empower people to car share $12m (£9.46m). everywhere.” It is the second acquisition that the US “This is an exciting moment for our business has made in the past two months, company, made possible by the incredible the most recent being UK car-sharing work of our founders and team,” said Nabobil business Drivy, which was acquired for CEO Even Heggernes. $300m in May. “Joining Getaround, the world’s leading The car-sharing platform will operate in car-sharing platform, gives us the power to seven European countries, including Norway, invest in keyless, connected car hardware and in addition to the markets recently added grow the Nordic organisation.” through the company’s acquisition of Drivy: Heggernes and the rest of the Nabobil team France, Germany, Spain, Austria, Belgium will join Getaround to ensure continuity and the UK. in the business’s operations and oversee Founded in 2015 by Jacob Tveraabak, Sam Zaid, Getaround expansion in the region. Karl Munthe-Kaas, Christian Hager, Jenny Getaround was founded as a startup in Getaround allows consumers to share cars Sjögren, Theodor Tonum, Thomas Grøndahl 2009, and went on to receive backing from without the need to meet the car’s owner, and Chris Moen, Nabobil had a strong user investors including SoftBank. carry an access card, or co-ordinate picking base in Norway, according to Getaround, “We are excited to welcome the Nabobil up a key. The models shared range from the which added that the acquisition would allow team to Getaround,” said Getaround founder Toyota Prius to a Tesla. Nabobil to use its connected car technology, and chief executive Sam Zaid. Headquartered in San Francisco, including its six-year-old patented Connect “We are building an exceptional global Getaround has thousands of cars available technology that enables users to locate and organisation and the tremendous experience, throughout major metropolitan areas across unlock cars using a smartphone. drive and values that the Nabobil team bring the US and Europe. <
10 | August 2019 | Motor Finance
MF August 177.indd 10 01/08/2019 10:46:45 News | Digest
FCA launches consultation on customer treatment The Financial Conduct Authority (FCA) has launched a consultation on the proposed guidance for firms on the fair treatment of vulnerable customers. The guidance establishes the FCA’s principles regarding firms dealing with vulnerable customers, to ensure they are treated fairly across the financial services sector. The FCA said it wants vulnerable customer care to be embedded within each firm’s culture. Businesses that fall under FCA authority will need to understand what the guidance means for their business and customers, and how they are not doing enough to ensure that Jonathan Davidson, executive director of are addressing the needs of vulnerable consumers are treated fairly, we will take supervision for retail and authorisations at customers. action. the FCA, said: “We found that some motor While there has been significant “Firms need to take particular care to dealers are overcharging unsuspecting progress in the treatment of customers ensure that vulnerable consumers are customers over a thousand pounds in in recent years, the FCA believes there treated fairly as they may be more likely interest charges in order to obtain bigger should be more consistency across all to experience harm. The guidance should commission payouts for themselves. We financial services sectors. The regulatory drive improvements across the industry, estimate this could be costing consumers body pointed out that there remains cases improving outcomes for millions of £300m annually. This is unacceptable, and where firms are clearly failing to consider vulnerable consumers.” we will act to address harm caused by this the needs of vulnerable customers, which The guidance will be consulted on in two business model. can result in harm. stages, and the FCA is asking for comments “We also have concerns that firms may Christopher Woolard, executive director on the first stage by 4 October 2019. be failing to meet their existing obligations of strategy and competition at the FCA, The motor finance industry came under in relation to pre-contract disclosure said protecting vulnerable consumers is scrutiny for customer care earlier this and explanations, and affordability a key priority for the FCA. “We want to year, with an FCA report into the industry assessments. see firms explicitly embedding the fair highlighting “serious concerns” over “This is simply not good enough, and we treatment of vulnerable consumers into commission structures and affordability expect firms to review their operations to their culture. Where we find that firms checks. address our concerns.” < pre-registrations return a ‘sign of difficulties’ Pre-registrations are returning to the towards the end of each month. It’s yet compliant from January 2020, and all cars UK new car market, in another sign of another sign of the difficulties surrounding from January 2021. the difficulties currently surrounding the the new car market.” “There is a lot of unsold metal around industry. Pontin added: “Pre-registrations because of the new car sales fall over Members of the Vehicle Remarketing are really an indication of production the last 18 months or so, coupled with Association (VRA) were told of the growing overcapacity and disorderly marketing, stockpiling because of Brexit.” continued trend at the organisation’s July member both factors that have become part of the Pontin. “The temptation to pre-register is meeting. Speakers Mike Jones, chair at new car market in the last year or so. It is very high, and perhaps irresistible.” ASE Global, and Rupert Pontin, insight not surprising to see their return at this VRA chair Sam Watkins said the return director at Cazana, both indicated in their point.” of pre-registration was understandable. presentations that late-month registration A pre-registered car is a new vehicle “Pre-registering is a safety valve for a activity was increasing. purchased by the manufacturer or dealer new car sector that is suffering from a Jones said: “There is little question and registered in their name. The move combination of negative factors, from that pre-registrations are back. Over is done to add extra sales to quarterly or Brexit through to the decline of diesel.” the last few years, that kind of activity annual results, despite the cars remaining Watkins added: “However, it does bring had declined in a fairly dramatic fashion, on the forecourt. a degree of uncertainty to the used sector, especially with the shortages of some Pontin said the problem is likely to especially surrounding nearly-new residual models that followed WLTP. become more acute as 2019 draws to values. We expect it to be a subject that “However, that has changed. There is a close, as there is a race to dispose of grows in importance for our members into now a lot of registration activity going on non-RDE2 vehicles. New models must be 2020.” <
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MF August 177.indd 11 01/08/2019 10:46:45 feature | linedata
linedata: asset industry heads discuss digitisation and technological development
The Linedata Exchange programme is being held this year at showcases in Hong Kong, Paris, London and New York. Christopher Marchant attended the London event, at the Sea Containers hotel complex on the River Thames, which featured talks from professionals in the asset management, leasing and insurance industries
panel debate was held on how origination and portfolio-servicing platform. upon which a lender can build workflows to document digitisation and analysis Cairos allows companies to digitise automate the methodology of origination. A are driving operational excellence handwritten documents such as loan Workflows as they exist do not allow a in lending and leasing. applications. Documents can be scanned at customer to conveniently add their username It featured Thomas DeLuca, chief executive an office or uploaded by customers through or password to allow access from the bank officer at AMP Credit Technologies, Peter the web or mobile device. After conversion account. Hunt, Growcap director and former chief into digital format, they are stored in a “As workflow origination is the end goal, operating officer at Investec Asset Finance, document management solution and subject then AMP Credit can create a whole platform and David Betteley, former managing director to optimal character recognition (OCR) or solve very specific issues. If the day comes at Vauxhall Finance, senior vice-president at processing. Using OCR, scanned paper and where paper for an origination journey is Toyota financial services and global financial PDFs can be transformed into searchable data. available in data form, the system is designed services director at Jaguar Land Rover. As to what benefits Cairos might carry to plug in the data that comes through, DeLuca’s opening presentation contained for the asset finance industry, DeLuca said: stopping the technology from becoming a quote by FW Lancaster from 1978: “A “The idea of the system is to create the rails obsolete.” paperless society is rapidly approaching. The digitisation process as presented Ignoring this fact will not cause it to go away.” through technologies such as Cairos may also A photograph showing a paper filing system provide opportunities to outsource a number from the loan-origination system of an SME of processes and use the shared service bank-owned asset finance company in 2019 model. Yet when it comes to companies showed that the prediction was somewhat implementing or enhancing document ambitious in its timeframe. digitisation and analysis capability, questions “At the moment, all businesses have paper remain around the appropriate speed of statements, and whatever is produced on adoption. paper comes from an electronic system,” said Hunt said: “The asset finance market Hunt. “There are questions around whether is fairly fragmented, so there are a lot of this model can continue in its present form, organisations where there is insufficient scale or if it will have to go through some kind of to necessarily implement a number of the metamorphosis upon full digitisation.” things discussed today. AMP Credit Technologies operates “A technology framework needs to be the Credit Analysis Information and identified, in terms of what technologies Risk Operations System (Cairos), a loan- Thomas DeLuca, AMP Credit Technologies are used, how this is going to be done and
12 | August 2019 | Motor Finance
MF August 177.indd 12 01/08/2019 10:46:47 feature | linedata
From this point, you start to see what incremental profit you have gained, and it is often more than the same thing you get from improving your operations.” STARTING POINT As to whether AMP Credit is helping clients to gather the old type of screen-scraping data and social media data as well as digitising hard data, DeLuca stated: “The starting point for clients is the digitised workflow, so when the proposal comes in it is captured electronically and entered into a system where the credit information is pulled, and further forms of data collection may be utilised.” L-R: Thomas DeLuca, David Betteley, Linedata moderator, Peter Hunt He added: “An issue relates to who in implementing these solutions. If there “The conclusion was anything that was exactly is going to capture the username and is a belief that data is an asset and all focus over £25,000 needed some kind of human password. If it is the broker, the applicant is is therefore on a point solution, what will oversight. So don’t run away with the idea entering his bank account details or password be solved will be in the credit decisioning that AI is going to get rid of all the credit of the dealership and it is done on the back process alone. If this occurs, digitistion has underwriters any time soon.” end. In many cases the workflows aren’t lost all the richness of the data downstream, Likewise, Hunt did not see digitisation designed for that.” so there may need to be a more holistic as having a seismic effect on the working On the question of what benefits document consideration, hence a need to go for a nature of asset finance companies. “It is a digitisation could bring to the customer, framework approach.” classic change management challenge,” he Betteley noted: “If you are a customer who According to DeLuca: “Framework is the noted. “You’re implementing change, you’re is buying something, then you will want right thing, thinking back to the picture of implementing technology improvement and the process to be as convenient as possible. Customers always start their journey online now, so with finance applications this can be don’t run away with the idea that Artificial a case of an offline to online translation. “If you start your journey online and Intelligence is going to get rid of all the then at some stage in the process have to start looking at your filing cabinet at home, credit underwriters any time soon scanning documents in and then sending them in, that’s actually a very inconvenient process. This is forcing an arduous ordeal loan origination files in a present-day SME you need to take the organisation with you. and often difficult process onto customers. asset finance company. In that case, the client That’s not a new problem. It’s something that Getting access to electronic records is has included the capture of paper documents has been going on for years and no different important because it is highly inconvenient into a document management system here than it’s ever been.” for customers to find paper, scan documents without reading and redigitising. Document Digitisation is not just about improving and send them to you.” digitisation is a tool that captures paper and costs, but speed. Many clients measure how DeLuca said: “There is a very big difference online documents, automatically extracts quickly they can onboard new customers and between a consumer loan versus a limited information from it, and analyses it for the how they can cut down on the in life cost of company. For a limited company there is a next stage of the process. Companies can get servicing. With this in mind, automating and lot of information available because it is more the framework straight, and then build the having a straightforward process could have a spread out, more diverse and less reliable digitisation in as they go.” dramatic effect. because a lot of it will exist only as paper. DeLuca noted that by using AMP Credit Document digitization and OCR could be DEVELOPMENT, DISRUPTION Technology, Standard Chartered went from hugely beneficial is this arena.” Technological development has an inevitable 2.5 man days of effort used in the onboarding A move to an online-only sphere is perhaps effect on the job market and further seminal process for a customer to less than an hour. inevitable, but certainly not as quick and economic disruption. As for how to deal with On the speed of the decisioning process, easy as predicted decades ago. The financial these considerations relating to the financial Hunt said: “That might not be the biggest sector still has to contend with a range of services sphere, Betteley said: “The type of benefit of digitisation. For SME lending, if issues, from privacy protection to cost-benefit automatic underwriting that can be done in you are looking at the ‘time to yes’, a lot of analysis. the SME area is very limited. If you are in lending is undifferentiated. That speaks to Nevertheless, this is a trend that seems the retail area, you can automate the decision being able to allow the customer to relax to be going only one way, as evidenced by making; in the SME area, it is actually much knowing they have the deal sorted and don’t systems such as Cairos and the attention to more difficult. need to go searching anywhere else. the issue from the entire leasing industry. <
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MF August 177.indd 13 01/08/2019 10:46:51 feature | telematics
telematics: benefits of the new transmission
Telematics tools and technology are rapidly becoming ubiquitous, with an accompanying boom in car-generated data, but what are the actual benefits for the motor finance industry and its consumers?Chris Farnell reports
elematics is just one front in “The unrelenting growth in connectivity is customer retention, create better experiences the ongoing Internet of Things creating an explosion of vehicle-generated for consumers, improve driver safety, and Trevolution, which forms part of the data that is increasing in both volume and bring in new revenue streams to support the gradual process of keeping us all online, all sophistication,” Barlow explains. marketplace and empower businesses to grow.” the time. Well-deployed telematics can allow finance However, while it might sound scary as a and fleet management companies to monitor catch-all term, once you get into the nuts and a car’s mileage and fuel consumption, track bolts of it you find a mix of technologies that the driver’s behaviour, and be constantly we already commonly use. aware of the car’s location. “Telematics is a general term for a range of devices that are able to transmit data security by design WHAT’S IN IT FOR FINANCE? wirelessly. In the fleet industry, this can In this day and age, any company can see the include GPS-based navigation systems, is paramount when advantages of having more visible data about vehicle tracking and even automated safety their customers. systems and insurance products, all of which working with driver As Thomas Becher, vice-president of are widely used in fleet management to business development at TomTom Telematics, improve efficiencies,” explains Rhys Harrhy, information points out: “Companies can manage these connected car product manager at ALD assets and better understand, for example, Automotive. mileage. You can see when a car is due for As Richard Barlow, CEO and founder replacement, even launch a process to inform at telematics company wejo points out, “This data has huge value for drivers, auto a customer that a car will be out of a leasing telematics is more of an evolution than a manufacturers and many different kinds contract, for instance.” revolution in terms of the ongoing trend of business. Telematics can be used to Telematics offers lower risk when it comes towards connectivity. support business decisions on how to build to issues such as vehicle damage, allowing
14 | August 2019 | Motor Finance
MF August 177.indd 14 01/08/2019 10:46:53 feature | telematics
Barlow, meanwhile, goes further still, pointing to the vast potential for innovation to which telematics and the data it provides can open the door. “Telematics is driving innovation in a number of industries. For consumer finance companies, one of the most pertinent opportunities will be in depreciation risk management.” One of the potential applications Barlow describes is a “pay as you go” finance model, whereby drivers pay for each journey. This is made possible by collaborating with mobility data specialists such as wejo to provide journey mapping. Barlow explains: “This would allow drivers to pay for what they use, instead of paying a flat fee per month for hire purchase models. “Similarly, for drivers on a flat-fee hire purchase scheme, journey insights could be Rhys Harrhy, ALD Automotive Thomas Becher, TomTom Telematics used to predict the driver’s anticipated total businesses to respond far more quickly mileage for the duration of their agreement. SHIFTING PERCEPTIONS when something happens to one of their “This would enable finance companies to vehicles. As well as streamlined maintenance improve customer experiences, for example, Of course, while businesses may see the processes, telematics can also help build by increasing monthly premium rates in appeal in being able to instantly gather a comprehensive data picture for finance the event of predicted over-use, rather than more data on their customers, the customers companies. While much of this is data that collecting fees through final charges at the themselves may have more ambivalent finance companies would normally be able to end of the hire purchase agreement.” feelings about that technology. gather over time, telematics offers an instant While it is easy to think of telematics as Becher observes that there is a significant and ongoing stream of data in real time. a development for tracking and improving split between fleet management customers and consumers when it comes to telematics, with the technology seeing higher adoption the challenge is finding or accepting the rates among B2B customers. “In the consumer space, there’s some more generic business case, rather than reluctance,” he admits. “There are privacy fears; people don’t want to share data. But just the short-term financial savings those consumers do want to use navigation services and traffic information.” While these consumers might not see the “It opens the door to predictive the use of new cars, Barlow also believes that benefit of telematics yet, Becher argues that maintenance, and more tools to better there are applications for used car finance this is due to the industry not making an manage these vehicles,” Becher notes. companies. appealing offer. Rather than being a flat-out Harrhy adds that while the improved Alongside the service history, MOT reports rejection, however, the reluctance is more to efficiencies telematics provides are certainly and HPI checks, telematics could provide do with the growing awareness consumers part of the package, they are by no means the insights into vehicle usage, for example have that their data has value, and they want be all and end all of the benefits these tools the number and typical types of journey something in return for that value. can provide. made – short trips or longer journeys – “Security and privacy are naturally at the “They can also be used for the automated thereby building trust with the driver when forefront of drivers’ minds; drivers also don’t and accurate capture of mileage data that purchasing a used vehicle on finance. want to give their data away without there meets HMRC guidelines, mitigating risks “All these solutions, however, rely on robust being a clear value exchange,” Barlow says. such as driving without a break or driving for consent management, privacy and security, all “wejo facilitates trust building by enabling long periods each day, and reducing erratic of which are at the centre of wejo’s solutions,” value-driven solutions that could, for example, driving behaviours,” he says. Barlow says. enable greater financial flexibility or empower “Other advantages of using telematics “wejo’s driver-first approach means that drivers and buyers with more knowledge in include managing prolonged instances of we are proactive and forward-thinking. We advance of purchasing a used vehicle.” engine idling, reporting quickly and easily on go considerably further than just ticking Indeed, that reluctance is already beginning CO2 output to meet CSR requirements, and boxes to comply with policies, with built-in to soften, with attitudes already changing over the ability to pinpoint vehicles when needed compliance and anonymisation frameworks the 15 years since the technology was first to allocate resource effectively.” to ensure that what’s private stays private.” introduced.
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MF August 177.indd 15 01/08/2019 10:46:55 feature | telematics
“Since the introduction and wide adoption based technology company with expertise in that can be seen in the UK and across the of the smartphone, this attitude has changed cloud-based smart car data integration and globe in the automotive arena and other to one of acceptance, due to the huge benefits processing to deliver apps into the connected traditional industries, and Barlow believes to individuals that the technology has car ecosystem. telematics technology will help the industry brought,” Harrhy notes. Of course, if there is one challenge with along this route. Becher is quick to point out a number of which the car finance industry is intimately “With the introduction of cloud technology, immediately obvious benefits that telematics familiar, it is trying to adhere to a regulatory software as a service platform and 4G and can offer to the end user, including a far more environment that can often be slow to keep 5G networks, it’s not too large a step to see rapid response to problems with a vehicle. up with the circumstances of the real world. ‘driving as a service’ in which PCH and lease- “Possibly even before you recognise And that is an issue that is only exacerbated style arrangements support a wealth of choice something is wrong with your vehicle, they when new technology enters the picture. for consumers,” Barlow says. can give you a replacement car or find a “Consent is one of the key challenges that “We have already seen businesses like Zipcar workshop to get it fixed,” he says. finance companies will face when it comes to inject some new thinking into the ownership incorporating a telematics strategy into their model of vehicles; it may not replace THE TELEMATIC AGE business,” Barlow says. consumers owning vehicles outright, but the What is clear when talking to people in the “Consent is critical to building a value- market is shifting.” sector is that everyone – financiers, tech driven and secure business model that One change that both telematics and lease- companies and consumers alike – will likely utilises telematics. wejo ensures this through style arrangements could facilitate is a shift of have to undergo a period of adjustment its Adept data-exchange platform, and we responsibility for the maintenance and care before the full benefits of telematics tools can are constantly improving how we secure of a car away from the driver to the finance be appreciated. data; security by design is paramount when company. “I think the challenge even with the cost working with driver information.” “As people don’t own cars anymore, the of telematics going down is that finance But, as Harrhy points out, change is owner of the car has much more responsibility companies typically don’t see the broader coming. Once drivers understand the to keep it in good condition, manage business case for it,” Becher says. He also argues that while some businesses are taking advantage of standalone benefits such as The first wave of car finance businesses insurance or car maintenance, what they fail to see is that these services can be combined, to incorporate telematics into their with multiple departments of a business spreading the costs and the benefits of the strategy will have a unique opportunity technology between them. To thrive, businesses need to engage with the broader toolbox telematics can advantages that use of the app holds for them, accidents, manage service appointments, and provide, rather than focusing on applications. as they have with their own smartphone apps, the repair and maintenance of those vehicles,” Becher admits: “From our point of view, the and when its use becomes second nature, says Becher. challenge is finding or accepting the more the acceptance of telematics will become “If the finance company owns large generic business case, rather than just the widespread. numbers of cars, you need telematics to short-term financial savings.” “Drivers will quickly accept how the manage those assets.” Harrhy also argues that the main challenge device can automatically record data such Harrhy agrees, adding: “As consumers confronting telematics is simply getting as vehicle location, vehicle performance continue to move away from ownership to businesses to make the most of the huge and driver behaviour, and come to rely on leasing, we may see a further shift to usership- amounts of data that telematics generates, not the convenience of automatically recording based subscription models, where customers just for serving and marketing to customers, business and private miles,” Harrhy says. are prepared to pay for transport and mobility but for training staff, finding efficiencies, requirements where and when they need it.” and reaching cost reduction, safety and A NEW KIND OF OWNERSHIP That is only one possibility in an exciting, sustainability targets. One of the biggest sea changes in the but still unpredictable area of intersecting Harrhy adds. “The ‘connected car’ can car finance sector recently has been the technology and finance. mean many things to many people, but gradual shift towards PCH and lease-style Barlow is particularly excited about the for ALD Automotive it’s about creating arrangements, away from outright car opportunities for telematics and car finance new innovative products and services for ownership. The shift is also one that has firms to build partnerships that offer new and customers. The group is spearheading the obvious synergies with telematics. enhanced services. telematics movement that, today, is spreading “It is entirely possible that pay-as-you-drive “It’s a new field, and one that isn’t from the light commercial vehicle segment leasing models that require telematics and dominated by any major players yet,” Barlow to the passenger car segment, pushed by the connected car data will be developed to tap says. “The first wave of car finance businesses integration of advanced connectivity in the into the technology and offer a new way of to incorporate telematics into their strategy hardware of new vehicles.” leasing a car,” Harrhy suggests. will have a unique opportunity to deliver a To accelerate its progress, the company The move away from ownership of vehicles true differentiator in the marketplace and is partnering with Vinli, a specialist US- is part of the shift towards a service model added value to their customers.” <
16 | August 2019 | Motor Finance
MF August 177.indd 16 01/08/2019 10:46:55 feature | ev uptake
finance and usership models: a vehicle for mass ev uptake?
The electrification movement is beginning to gain traction around the world. Car manufacturers are doubling down on electric investment as consumer appetite for zero-emission vehicles continues to grow. Chris Lemmon writes he latest figures from the Society commitment to ban ICE engines by 2040 as For fleet managers, early investment in of Motor Manufacturers & Traders part of its Road to Zero Emissions policy. EVs can also be beneficial. Stéphane Renie, T(SMMT) reveal that while the UK In the meantime, a rising number of towns head of corporate responsibility at ALD new car market saw total registrations drop and cities are exploring the idea of clean Automotive, notes benefits beyond the 4.9% year on year, registrations for battery air zones, zero-emission zones and other reduction of a company’s environmental electric vehicles (EVs) were up 61.7%. environmental quality measures. footprint. Market share remains low, at 1.1%, but London recently introduced its Ultra- “Another benefit is portfolio diversification,” it has almost doubled year on year, and is Low Emission Zone (ULEZ), which will he explains. “We have a clear economic showing no signs of slowing. encompass the entire area between the North interest in diversifying our portfolio, to have Car battery technology remains in its and South Circular roads by 2021, while a fleet profile which is as attractive as possible relative infancy, reflected in the substantial Leeds and Birmingham are set to follow suit when the day comes to resell the cars on the cost disparity between EVs and their internal with similar schemes next year. used market.” combustion engine (ICE) counterparts; “As cities across the UK start to introduce Renie goes on to explain that the however changing attitudes to ownership new air quality measures, an increasing electrification process is also a learning curve may provide determined businesses and number of customers are demanding for ALD, providing it with the best possible individuals with a fast track to electric cars. ultra-low emission vehicles and demand experience for success in the future. for pure EVs is on the increase,” says Gerry “What EVs imply is a complete overhaul of GROWING APPETITE Keaney, chief executive at the British Vehicle our business model. There is not one element There has been a concerted effort in recent Rental and Leasing Association (BVRLA). of our value chain which is untouched – from years to highlight the detrimental impact “Vehicle taxation, financial incentives and price setting to consultancy capabilities to that ICE vehicles have on the environment, environmental concerns are what tend to service definition. Onboarding these vehicles most notably with the UK government drive demand for electric.” now enables us to acquire very precious
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MF August 177.indd 17 01/08/2019 10:46:56 feature | ev uptake
Gerry Keaney, BVRLA Stéphane Renie, ALD Automotive experience in the market, testing and learning Barnett stresses the importance of rather than outright cash purchases is helping as we go.” incentivising EV uptake among the corporate fleets and consumers to get their hands on market, as this will have a positive impact on EVs at an affordable rate. RISKY INVESTMENT? a wider scale. “The shift of drivers moving away from Despite the benefits, investing heavily in EVs “The role that the corporate market has to vehicle ownership to usership has been remains a tough decision for fleet managers play in creating the second-hand market in apparent for some time now, as individuals due to the continued uncertainty surrounding the UK should not be underestimated,” he and businesses realise the benefits of rental the market. states. and leasing over purchasing,” notes Keaney. According to Keaney: “When choosing to “That is where we will see the rise in the One of the primary concerns of buyers go electric, fleet managers face a number of market and the viability and positivity when choosing an EV is the uncertainty challenges, particularly around the adequate around residual values. That will come around their residual values. With the supply of suitable vehicles, range anxiety and the availability of appropriate charging infrastructure. Add to this the issue of The role that the corporate market has to additional cost and unknown residual values, and it is apparent why fleet managers face play in creating the second-hand market in some difficult decisions when it comes to electrifying their fleets.” the UK should not be underestimated Ashley Barnett, head of fleet consultancy at Lex Autolease, also notes hesitancy among businesses with company car fleets. “A lot from corporate businesses investing in EV development of battery technology rapidly of the feedback we have had back from infrastructure at their properties. reducing the price of electric models, there companies is that it is very difficult to commit “We have got that happening at Lloyds is a worry that some models could become to the investment needed without having Bank now, where we are rolling out electric obsolete in the not-too-distant future. some certainty that the government is going charging infrastructure across the whole Renie explains that it has been difficult for to put in place a tax environment that can portfolio. We will see more corporates companies to assess the residual costs of EVs, encourage change,” he explains. investing in electrification in the coming because of the lack of available information. The UK government has responded to months. The forward-thinking early adopters “The technology has seen substantial change industry recommendations, announcing this will then create the second-hand demand for and continues to evolve – meaning we do not month that all zero-emission company cars the consumer world, and also lead the way for have any significant history to observe. And will not be required to pay benefit-in-kind other corporates to follow suit.” history observation has historically been the (BIK) tax for 2020-21. The commitment main residual value-setting driver for ICE offers a further incentive to businesses and CONVENIENT PARTNERSHIP vehicles.” individuals to choose an EV as their next car, Although the cost disparity remains high Acquiring a car through finance or a and will have wider positive impact on the between EVs and their ICE counterparts, the subscription model offers customers the market as a whole. rising popularity of monthly instalment plans ability to drive an EV without that residual
18 | August 2019 | Motor Finance
MF August 177.indd 18 01/08/2019 10:46:58 feature | ev uptake
value risk. As popularity for such services available, and the technology is now proven. many people and businesses. continues to grow concurrently with the Battery development will continue, but the “This won’t change until we have a greater popularity of EVs, the two are likely to law of diminishing returns has started to availability of pure EVs with ranges of more mutually benefit each other moving forward. apply. Range anxiety is certainly now starting than 250 miles and an improved network Andy New, national accounts director to become a thing of the past, and as more of rapid public charge points,” he argues. for Close Brothers Asset Finance’s transport charging stations come online, that will “While we wait for this to happen, the division, highlights that those consumers who continue.” government should maintain a plug-in grant are more conscious of the environment are for hybrids that have a decent zero-emission the same individuals who are more inclined CHANGING HABITS range.” to opt for new mobility services. “Therefore, A worry in the industry is that demand will Instead, it appears that the government organisations that are looking to provide this quickly outpace supply and put strains on the have reassessed its investment plans and service will definitely need to have an element available infrastructure in the UK. realigned its focus to infrastructure. Future of electric in the fleet to satisfy this demand, Keaney recognises the work the of Mobility minister Michael Ellis revealed a which in turn will increase the EV parc.” government has done to encourage £37m EV charging grant, spreading the funds innovation in the space, but concedes: “We across 12 projects dedicated to new charging MORE ASSURANCES are a long way from where we need to be. solutions for the UK. In addition to the certainty provided to Getting it right, and quickly, is a priority New says Close Brothers Asset Finance consumers through usership models, Renie should we be serious about increasing the is also seeing high levels of enquiries on the explains that there is more certainty in the EV uptake of EVs. infrastructure side through partners Raw space than there was five years ago, with rapid “There are still some notable public Energy and ChargePoint, as businesses and progress being made on battery technology, charging blackspots across the UK, and many local authorities implementation at a local range and charging times. With greater businesses are being put off by the potentially level. He also stresses the importance of assurances around the technology, companies huge costs associated with installing large- improved knowledge in the sector, stating: like ALD are more confident in taking a scale charging infrastructure at their vehicle “People are becoming more and more aware of chance on EV investment. depots. One of our rental members has the importance of moving to EVs; however, “There are two elements of assurance,” been quoted more than £100,000 to install the government does need to keep up the explains Renie. “On a car basis, the longevity charging equipment at one of its depots.” information campaign. “Also, as government moves forward with the planned introduction of LEZ and ULEZ the longevity of the battery is no longer areas, additional incentives like reduced BIK will encourage company car drivers to an issue; the lifespan of an electric vehicle demand electric options from their employer’s fleet,” New notes. at individual level is quite long OUTLOOK At the moment, EVs are costing buyers of the battery is no longer an issue; the Barnett believes that in order to achieve somewhere between £5,000 and £10,000 lifespan of an EV at individual level is quite mass uptake of EVs, there needs to be wider more than their ICE equivalents. long. The feedback we are getting on this is societal change beyond the infrastructure. He Finance and subscription models can help very positive. believes the right noises are starting to be to bridge that gap, acting as a vehicle for mass “Secondly, the technology based on lithium made after a period of uncertainty, but there EV uptake. Consumers and fleet managers ion batteries is secure. In the future, it could is more to be done. can also absorb the additional costs through indeed be replaced by other technologies such “The number of people interested in EVs more affordable monthly payments, which as solid state or even hydrogen solutions – but is growing massively,” he says. “Habits need in turn will help to drive investment in the we see that as more of a medium- to longer- to change. There is a changing demand in network and further support the mass uptake term perspective. terms of infrastructure because we are so used of EVs. “The investments being made by original to filling stations. Taking that dependency Barnett urges the industry to be bolder in equipment manufacturers and everything away from filling up on a journey relies on the coming months, ensuring there is enough that is set to be launched within the next completely changing people’s mindsets.” supply to meet the demand. “It’s ensuring 18-24 months relies on the battery electric As investment builds in the sector, prices that the right people are adopting the technology. They cannot pull investments in will inevitably fall – but now is the time to technology at the right time so the supply- 25 directions at the same time – so I believe act in order to support the expected demand and-demand curve that we have is absolutely the offer will remain concentrated on the once price parity is achieved. With this in right,” he states. current technology for a while.” mind, it was surprising to many industry “It is about getting the right people on that New agrees that the batteries currently on experts when the government recently journey as soon as we can. We need to see the market are considerably more efficient removed its grant for plug-in hybrid vehicles. continued commitment from the government than a few years ago, stating that the initial Keaney feels this was a mistake, stating that and OEMS, then as a leasing company and steep curve has already been climbed. the move undoubtedly hit demand for the a bank, we will do our bit in making sure “Vehicles with extended range are now readily vehicles which provide the most flexibility for Britain is heading in the right direction.” <
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MF August 177.indd 19 01/08/2019 10:46:58 analysis | automotive dealers
analysing the future role of the auto dealer
With dealers increasingly selling cars and finance online, the race is on for full omnichannel adoption to suit consumers, according to Grant Thornton and Cox Automotive. Chris Lemmon writes
utomotive dealers, like many other “Our analysis clearly shows it is not just a franchised dealers looking to increase businesses in the UK, are facing a case of replicating the retail experience via the profitability through efficiency improvements, A period of unprecedented market internet. Those dealers that are leading the cost savings and economies of scale. volatility. retail evolution are embracing technology to Nothard adds: “We asked dealers for their The ongoing Brexit saga and its effect on improve the customer experience and bring opinion on the future of car retail outlets consumer confidence, the faltering in the more flexibility into the car buying process.” in the next five years, and the response was diesel market, the rising popularity of electric The report points to an unprecedented consistent with the consolidation trend. vehicles and the birth of next-generation set of external variables affecting dealers, “None of the respondents anticipated a rise technologies have all affected the automotive each having an unsettling effect in the new in the number of UK dealer locations; the vast industry in different ways. car market. As a result, Cox Automotive majority (94%) expected some contraction, Industries are beginning to recognise the has observed major players refocusing their with 43% predicting a reduction of 10-15% – importance of digital channels to maximise strategies on other markets, such as used cars, far more conservative than some of the recent profitability in the modern world, with online aftersales and new services relating to the headlines on shifting industry trends.” shopping beginning to dominate sales across emerging cars-as-a-service trend. “What’s clear is that consolidation is a various industries. method of improving efficiency. The number The automotive industry has been slow on A DEEPER UNDERSTANDING of dealerships may reduce, but what will the integration of digital channels, but moves To achieve maximum investment and emerge are stronger businesses that are better are starting to be made as falling car sales profitability in the used car market, the suited to the market.” have prompted dealers to assess their offerings. report suggests that dealers will need a The report concludes that it is essential Cox Automotive’s 2019 Insight Report, in deeper analytical understanding of the trends for dealers to evolve with the needs of the collaboration with Grant Thornton, explores affecting the industry. modern consumer, focusing on digital the issues faced by dealers and their reactive “Dealers need to continue to embrace services. “Consumers want to interact with strategies. The study found that just one inventory and data analysis alongside their the automotive retail sector in a variety of in five UK dealers currently have a full own market understanding to ensure they ways – notably via a wide range of digital online sales transaction option. However it optimise working capital and achieve the best platforms,” the report reads. also revealed a growing appetite for digital stock profile for used cars,” the report reads. “Our analysis clearly shows it is not simply channels, with 60% of dealers expecting to The report also found that more than 90% a case of replicating the retail experience via offer online transaction capabilities within the of car dealers expect to see some decline the internet; those dealers that are leading the next two years. in the number of UK dealerships over the retail evolution are embracing technology to Philip Nothard, customer insight and next five years, with six in 10 respondents improve the customer experience and bring strategy director at Cox Automotive, says: predicting a fall of 10% or more. more flexibility into the car buying process. “The role of the dealer is still crucial, but we Since the global recession, Cox Automotive “The number of dealerships might reduce know that consumers want to interact with found that there has been an increase in the but what will emerge are more efficient the automotive retailer in a variety of ways – level of consolidation in the automotive businesses which are better suited to the notably via a range of digital platforms. retail market. This is particularly true among market.” <
20 | August 2019 | Motor Finance
MF August 177.indd 20 01/08/2019 10:46:58 analysis | bbc money box
bbc money box debate covers motor finance affordability
Motor finance has received more mainstream media attention, with BBC Radio 4’s Money Box programme covering concerns from the FoS regarding complaints. Chris Lemmon reports
BC Radio 4’s Money Box show Dally added that three-quarters of “It doesn’t mean that perfection is always spoke with Adrian Dally, head complaints about motor finance were about achievable. We always want to improve Bof motor finance at the Finance the car and not about the finance. standards, especially in dealerships where and Leasing Association (FLA), to debate “Because motor finance has become more these conversations take place. Standards figures from the Financial Ombudsman popular over the years, therefore it follows are going up; we are supporting the new Service (FoS) concerning alleged rising complaints within the motor finance market. Because motor finance has become more According to Money Box, which had received figures from the FoS, complaints popular, it follows that complaints about the loans secured to buy cars have trebled in the last five years. In the last year, about the car have increased as well the number of complaints rose by more than 50% from 5,805 to almost 9,000, said the FoS. Complaints ranged from the quality of that complaints about the car have increased rules from the Financial Conduct Authority the car received, a lack of information on the as well – that is what the ombudsman is (FCA), and that is what are members are now loan, and being sold cars on finance plans saying,” Dally noted. complying with,” said Dally. that they cannot afford. “Motor finance for used cars has gone up “The number of people defaulting on loans Dally suggested that the number of in single-figure percentage points, and for is very low – it hovers around the 1% mark – complaints represent a very small proportion new cars it is about the same. Data from our and the Bank of England and the FCA have of the overall motor finance market, and members shows that complaints about the car looked at this and noted that defaults in that three-quarters of complaints are have not changed in proportion, that’s about motor finance are lower than other forms of concerned with the vehicle rather than the three-quarters. We would dispute what the consumer credit.” accompanying finance. Ombudsman is saying there.” The industry came under scrutiny from the Stuart Masson, editor of thecarexpert.co.uk, FCA earlier this year in a report published said the complaints received by the Financial EXCEPTIONAL EXAMPLES in March. The paper raised concerns around Ombudsman were “the tip of the iceberg”, as The show spoke to one member of the public, dealer commission structures and firms falling many complaints would not generally get that whose daughter, Victoria, was sold an Audi short of affordability assessment requirements. far. He said: “We have seen increases in the A1 for £329 per month while she was a first “This is simply not good enough, and number of people complaining about their year university student with a part-time job. we expect firms to review their operations finance and not understanding the loans they Victoria will have paid more than £20,000 to address our concerns,” said Jonathan are taking out. When you start looking across for the car when the loan contract concludes Davidson, executive director of supervision the industry, it is clear that is happening to after five years, and claimed that no for retail and authorisations at the FCA. more than just one or two people.” affordability checks were carried out prior to The FCA said in the report that it will be However, Dally disagreed with Masson, the purchase of the vehicle. following up with firms that had failed to stating that the number of complaints in Dally argued that cases such as this one are reach the required standard of care. Policy motor finance have in fact not gone up “very much the exception”, with affordability intervention is expected to be introduced next because of underlying complexity with the and responsible lending central to lenders in year, in a move to a more consumer-centric headline figure. the motor finance space. model of clarity and safety. <
www.motorfinanceonline.com | 21
MF August 177.indd 21 01/08/2019 10:46:58 comment | huntswood
#talk2resolve: communication to avoid escalation
Last month, the Motor Ombudsman launched its #talk2resolve campaign, which aimed to highlight the importance of consumers speaking to motor businesses directly to resolve a complaint, before involving an alternative dispute-resolution provider. Sean Kulan, consumer credit sector lead at Huntswood, writes Sean Kulan, Huntswood
ather than following the usual To remedy this and strengthen trust, motor avoids systemic failures, and ensures that complaints process and reporting businesses must commit to communicating company operations are always improving. R issues to providers, the Motor simply and transparently at all stages of the The goal is this: no repeated complaints for Ombudsman has found that customers customer journey. If they do, customers will known reasons. often escalate problems straight to it, feel more confident in approaching their As well as identifying common themes, bypassing the provider entirely. provider with an issue or question, leading businesses will want to assess whether their At the heart of the #talk2resolve campaign to better customer outcomes and continuing handling of complaints is fair and, if anything, is a call for better, two-way communication loyalty. Perhaps most importantly, this will could have been done differently. and transparency between motor businesses also allow more chances for firms to learn They will also want to analyse the number and their customers – a lesson that can be from their mistakes. and nature of complaints that are being applied across the whole gamut of the motor For many motor firms, shifting to a escalated to the Motor Ombudsman. These customer journey. customer-centric model requires them to rates should then be compared to the industry If customers take the recommended steps evaluate and change their company culture, average. Each firm will have its own view on and contact their providers instead of the which can be a daunting and challenging task, what ombudsman referral rate is satisfactory, relevant ombudsman, more cases would be but certainly worthwhile in the long run. but it goes without saying the lower this is, resolved without the need for costly and the better. This information should then be time-consuming legal action. This would ANALYSING THE PROCESS used to inform internal processes so firms can be a welcome change of pace for the Motor Motor businesses should also consider other improve the customer experience and further Ombudsman, for customers and for the ways it can reduce the number of customer reduce complaints. industry in general. complaints that are arising, and the number that proceed to the Motor Ombudsman. A ROADMAP TO SUCCESS IT’S SIMPLE: COMMUNICATE One way to do this is to analyse the As well as avoiding the financial and The #talk2resolve project is particularly timely, complaints caseload and look for common reputational damage that comes with coinciding as it does with the FCA’s recent themes that appear to be causing spikes in escalated complaints, companies that foster publication of its report scrutinising the customer interactions. This is the beginning good, transparent communication, eliminate motor finance sector. of thorough root cause analysis (RCA), and repeat issues and focus on improving the If conversations between customers and for it to be effective, companies need to have customer journey will be rewarded with providers have not been clear, open and sufficiently granular management information strengthened relationships. honest from the beginning, consumers may on the complaint caseload. As #talk2resolve has highlighted, not know what rights they have and what RCA is the process of looking at all communication works both ways. If providers the formal complaints process is. More complaints and identifying the underlying demonstrate they are doing everything in significantly, customers may have lost faith reasons – the root causes – that contribute to their power to communicate clearly from that the provider has their best interest at a problem or an event. Once the root cause the very beginning, customers will in turn heart, believing complaints will only be is found, companies can devise solutions to feel more able to have an open dialogue dealt with justly if they seek independent correct or eliminate that issue. This prevents should any difficulty arise and seek a solution mediation. future occurrences of the initial problem, without outside mediation. <
22 | August 2019 | Motor Finance
MF August 177.indd 22 01/08/2019 10:47:00 comment | equiniti
millennial myth busting: what do they really want from lenders?
Sarah Jackson, director at Equiniti Credit Services, reveals some surprising statistics about millennials’ attitudes to credit, and explores what it all means for lenders targeting this demographic
illennials, a generation of digital This likely explains why over half (58%) of natives that grew up amid the millennials would only consider borrowing Mfastest period of technological from well-known or previously used lenders. change in history are, according to new independent research, the age group least A HELPING HAND likely to borrow from alternative digital For lenders, this is both a problem and a huge lenders. opportunity. With many millennials now in According to Equiniti Credit Service’s latest their mid-30s, their collective buying power UK research report A three-part harmony: is set to increase substantially over the next how regulation, data and CX are evolving decade, making this an increasingly lucrative consumer attitudes to credit, despite millennial target market. borrowing increasing annually by a healthy That this knowledge gap exists is a chance 8%, three-fifths of this age group will still for the smartest non-traditional credit only consider borrowing from a traditional, providers to differentiate themselves as well-established lender, or one that they had genuine and credible sources of information dealt with before. Sarah Jackson, Equiniti and guidance for these nervy borrowers. CUSTOMER INEXPERIENCE A great user experience (UX) will THAT’S WEIRD undoubtedly help, but will need to be far Right. Particularly when it is clear that The story, as usual, lies in the data. Although more than a facility for fast and convenient alternative lending is gaining traction across 70% of UK consumers are comfortable access to credit. This notion is given further other age groups and showing strong overall completing loan application processes weight by the same report which indicates growth of 15% in 2018. digitally, this figure drops to 57% for that one in seven applicants cite clarity of The same report revealed that some 62% of millennials specifically. the product’s documentation as the most all UK consumers would consider alternative Considering this age group’s well- important factor when deciding between sources of credit – i.e. a non-bank, such as a documented digital literacy, this can only be lenders. Persuasive and confidence-inspiring retailer or car finance provider – the next time chalked up to financial inexperience. Older UX goes far beyond origination – it must they apply for a loan. While consideration generations have not only had more time to resonate throughout the entire loan lifecycle. does not equal action, the figures about take- become comfortable with the credit processes To successfully target millennials, this means up also support the trend: over a quarter of involved with a loan application, but most balancing investment in a slick digital user consumers who borrowed over £1,000 in the have also had more opportunity. interface and the development of clear and last year did, in fact, use an alternative lender External factors play a big part here simple documentation. over a traditional high street bank. too. House prices are such that for many Since this group values one-to-one So, while non-traditional lenders are not millennials, unlike previous generations, the guidance, the contact centre will be a key yet competing with banks in loan volumes, prospect of buying a house and applying for battleground for business. Here, engaging a they have certainly established themselves a mortgage at a relatively young age does not specialist outsourcing partner may well be the within the market. Which begs a question: even feature on the radar. As such, this group way to go. These providers are trained and if both millennial borrowing and alternative has less exposure to credit processes. skilled in supporting the kind of dialogue lending are on the up, why is there a Financial inexperience creates a need that younger generations need to confidently disconnect between the two? for more careful guidance and reassurance. apply for credit. <
www.motorfinanceonline.com | 23
MF August 177.indd 23 01/08/2019 10:47:00 databank
used car values Car product sold unit market performance – May 2019
Up to 1 year old 1-3 years old 3-5 years old % of Price vs % of Price vs % of Price vs Ave. Ave. Ave. Ave. Ave. Ave. Body type CAP previous CAP previous CAP previous age sold (£) age sold (£) age sold (£) Clean month (%) clean month (%) Clean month (%) Saloon (2.0 or less) 8.13 7,128 100.85 103.52 26.37 16,632 96.04 99.94 44.49 11,129 96.08 96.94 Saloon (greater than 2.0) 8.57 34,303 102.76 97.49 26.53 20,900 95.46 99.34 46.36 14,048 96.65 101.23 Hatch (2.0 or less) 8.86 17,587 98.83 96.24 25.19 10,764 94.61 102.67 44.81 7,632 93.46 99.64
Hatch (greater than 2.0) 8.78 33,297 103.17 102.11 27.42 19,134 97.26 92.79 46.51 15,697 97.24 99.48
Mini MPV (2.0 or less) 9.13 14,215 94.73 94.08 23.55 11,314 93.10 96.23 43.76 8,041 89.51 101.07
Large MPV (greater than 2.0) 6.66 22,100 138.56 46.43 23.57 28,743 95.36 131.93 44.39 16,148 93.06 100.57
Estate 8.01 23,740 102.22 91.77 26.43 15,524 95.04 100.67 45.04 9,868 94.33 98.42
4x4 8.39 30,601 102.30 100.60 23.62 25,378 96.55 106.48 43.74 15,233 94.58 96.69
Coupés 8.45 27,574 101.69 97.29 26.95 20,234 97.50 100.99 44.53 14,603 96.94 100.47
Roadsters 4.75 32,500 117.97 76.56 26.31 23.475 103.77 89.79 47.35 13,183 98.92 93.94
Convertibles 8.74 26,887 106.24 108.67 26.24 20,499 99.46 109.79 44.68 14,134 100.94 99.20 analysis Car product sold unit market performance – June 2018 BCA’s Pulse Report shows that average £ used car values increased in May, with the 8000 average value of £9,262 just slightly ahead 7500 of April’s figure. 7000 6500 The two bank holidays and half- term break created the usual seasonal 6000 impact on demand, however even with 5500 these distractions, year-on-year values 5000 continued to climb for fleet & lease, dealer 4500 part-exchange and nearly-new vehicles. 4000
Jul 18 The market has been moving through May 18 Jun 18 Aug 18 Sep 18 Oct 18 Nov 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 some typical pricing realignment during April and May and, whilst these seasonal Source: Manheim Remarketing adjustments are to be expected, the incredibly buoyant market experienced during 2018 may have created some Manheim reports a double-digit increase in fleet unrealistic expectations. volumes month-on-month. Fleet & lease values averaged £11,370 at BCA in May 2019, ahead by £407 (3.7%) compared to a year ago. The retained value against original MRP (Manufacturers Retail Price) was down a percentage point at 42.4% when 76.0% 3.8% 1.9% 2.9% compared to 2018. UK unemployment UK employment rate UK CPI UK RPI rate Dealer part-exchange values continued to rise at BCA, with May 2019 showing Base rate a £159 increase year-on-year, equivalent to a 3% uplift and a marginal increase of 0.75% April’s average value. ▼ ▼ Demand at BCA for nearly-new vehicles -13( 3) -2 ( 3) June Consumer Confidence Index June Consumer Confidence Index continued into May, with values averaging (Large purchases) £21,579, up by £1,549 (7.6%) compared (source: Gfk NOP) (source: GfK NOP) to a year ago.
24 | August 2019 | Motor Finance
MF August 177.indd 24 01/08/2019 10:47:01 databank
europe focus Vehicle registrations from the largest EU countries by volume (data supplied by ACEA)
Country June 2019 June 2018 % Change Jan-Jun 2019 Jan-Jun 2018 % Change
Germany 325, 231 341,308 -4.7 1,849,000 1,839,031 +0.5
Italy 230,964 252,216 -8.4 1,166,442 1,188,150 -1.8
UK 223,421 234,945 -4.9 1,269,245 1,313,994 -3.4
France 171,626 175,273 -2.1 1,082,197 1,121,649 -3.5
Spain 130, 519 142,397 -8.3 692,472 734,671 -5.7
EU Total 1,446,183 1,569,363 -7.8 8,183,562 8,449,689 -3.1
June personal loan rates
Supplier Interest rate Comments
John Lewis Customers must be a UK resident and have an annual 2.9% Finance income £10,000. Applicants must be aged 18 or over and have an M&S Bank 2.9% annual income £10,000. Customers must be aged between 18 and 74 and Admiral 2.9% have an annual income of £10,000.
Clydesdale Bank 3.0% Applicants must be aged 18 or over.
Tesco Bank 3.0% Customers must be aged between 18 and 74.
Yorkshire Bank 3.0% Applicants must be aged 18 or over.
Customers must be an existing AA member and a AA 3.1% permanent UK resident for three years. New customers must be aged between 21 and 70 and AA 3.2% have an annual income of £12,000. Customers must aged between 21 and 70 amd have Post Office Money 3.2% an annual income of £12,000. Customers must be aged 18 or over and have an HSBC UK 3.3% annual income of £10,000. Rates apply to an £8,500 loan, repayable over four years Source: moneysupermarket.com FLA Vehicle Recovery Scheme (with HPI Crushwatch) Top 5 marques recovered, June Most expensive models recovered, june
Make Quantity Value Make Model Police Force Value
BMW 157 £1,797,135 Lamborghini Aventador Greater Manchester Police £174,000
Mercedes-Benz 141 £2,083,150 Lamborghini Unknown Police Scotland £172,500
Vauxhall 130 £529,835 Lamborghini Aventador Cheshire Constabulary £135,500
Ford 128 £800,550 Aston martin Vantage Metropolitan Police - Perivale £114,300
Volkswagen 107 £1,016,935 Land Rover Range Rover Kent Police £90,200
police force of the month june recovery update Metropolitan Total HPI Crushwatch enquiries 10,401 Total finance hits 1,167 value of vehicles seized Value of finance hits £11,286,360
£3,030,290 HPI Crushwatch is an online service that aims to help lenders reclaim vehicles with outstanding finance before they are crushed.
www.motorfinanceonline.com | 25
MF August 177.indd 25 01/08/2019 10:47:01 databank
motor finance statistics (FLA) analysis Cars bought on finance by consumers through dealerships The Finance & Leasing Association (FLA) show that point of sale (POS) % change 3 months % change 12 months % change May 2019 on prev. to May on prev. to May on prev. consumer car finance new business year 2019 year 2019 year volumes fell by 3% in May compared NEW CARS with the same month in the previous Value of advances (£m) 1,591 -1 6,494 -3 19,362 0 year.
Number of cars 74,762 -4 311,710 -5 944,785 -3 Geraldine Kilkelly, Head of Research and Chief Economist, said: used CARS “The POS consumer car finance Value of advances (£m) 1,563 0 4,822 +4 17,968 +8 market reported new business volumes Number of cars 128,712 -3 393,417 +1 1,467,835 +3 of almost 1.1 million in the first five months of 2019, only 1% lower than in Cars bought on finance by businesses the same period in 2018.” % change 3 months % change 12 months % change “We continue to expect broadly May 2019 on prev. to May on prev. to May on prev. year 2019 year 2019 year stable new business volumes in 2019 as NEW CARS a whole. Consumer confidence about their own personal finances remains Number of cars 39,135 -2 126,309 -3 397,772 -10 relatively strong, supported by a resilient used CARS labour market and low interest rate Number of cars 4,426 +13 15,207 -3 60,384 +4 environment.”
Share of consumer car purchases financed at Percentage point change the dealership in the from previous year 90.0% past 12 months -0.1 Motor industry statistics (SMMT) analysis UK new car registrations declined new car registrations by vehicle type for a fourth consecutive month in June, with year-on-year demand falling by Market share Market share June 2019 June 2018 % Change Jun 2019 (%) Jun 2018 (%) -4.9% to 223,421 units. Diesel 58,982 74,232 -20.5 26.4 31.6 Mike Hawes, SMMT Chief Executive, Petrol 149,360 144,945 +3.0 66.9 61.7 said, “Another month of decline is worrying but the fact that sales of BEV 2,461 1,522 +61.7 1.1 0.6 alternatively fuelled cars are going PHEV 2,268 4,571 -50.4 1.0 1.9 into reverse is a grave concern. HEV 8,585 9,006 -4.7 3.8 3.8 Manufacturers have invested billions to MHEV petrol 828 149 +455.7 0.4 0.1 bring these vehicles to market but their Total 223,421 234,945 -4.9 efforts are now being undermined by confusing policies and the premature market shares by brand – TOP 10 June best selling removal of purchase incentives. If we Market share Market share are to see widespread uptake of these Brand June sales Trend models Jun 2019 (%) Jun 2018 (%) vehicles, which are an essential part of
Ford 22,049 ▼ 9.87 9.51 Fiesta 7,507 a smooth transition to zero emission transport, we need world-class, Volkswagen 20,474 ▼ 9.16 9.88 Corsa 5,614 long-term incentives and substantial BMW 19,985 ▼ 8.94 9.78 MINI 5,535 investment in infrastructure. Fleet Vauxhall 15,540 ▼ 6.96 7.75 Golf 5,473 renewal remains the quickest way Mercedes-Benz 14,947 ▲ 6.69 6.35 Focus 5,450 to address environmental concerns Audi 14,208 ▼ 6.36 6.18 Qashqai 5,333 today and consumers should have the confidence – and support – to choose Toyota 11,398 ▲ 5.10 4.13 Yaris 4,954 the new car that best meets their Nissan 9,247 ▲ 4.14 3.68 Polo 4,952 driving needs, whatever the technology, MINI 8,662 ▲ 3.88 3.48 1 Series 4,465 secure in the knowledge that it is safer Kia 8,527 ▼ 3.82 3.90 A-Class 3,953 and cleaner than ever before.”
26 | August 2019 | Motor Finance
MF August 177.indd 26 01/08/2019 10:47:04 MF August 177.indd 27 01/08/2019 10:47:05 MF August 177.indd 28 01/08/2019 10:47:08