AMi Market Watch contents • H1 new car registration performance • Sales per franchised outlet data and brand comparison for 2013 and historic • Sales per franchised outlet segmented into brand type (volume, i premium etc) Market Watch • Dealer group financial status report August 2013 on 2012 • AM100 spring 2013 analysis Welcome to the second issue of AMi Market Watch, a quarterly update of the major events in the car retail market, • New car launch activity this year providing insight and analysis, together with a look at the • Dealer group acquisition activity attitudes and confidence of dealers and manufacturers. • News summary The primary source of data is AM’s information portal AMi (www.am-online.com/ami) together with insight from the • New car pricing and finance offer SMMT and AM’s research and insight business Sewell’s. trends Price £250 i Market Watch Winners and losers New car in the June market Winners: Suzuki: volume growth registrations of 38.14% in June Renault: + 34.27% – Q2 2013 Ford: + 31.89% Vauxhall: + 16.57% Maserati: + 66.67% Volumes in Q2 rose 13% this year, posting the Aston Martin: + 61.67% strongest quarterly rise since Q3 2011. VW: + 14.43% UK new car registrations continued to rise across private, fleet and business sales types, although private demand has secured the most significant growth. Lotus: + 466.67% Registrations in June grew 13.4% securing a 16th successive month of growth and pushing half year volumes through the one million mark. Losers: The UK continues to buck new car market trends in some EU27 countries, with buyers returning to the market after a sustained hold-off from purchasing new vehicles, enticing finance deals and desire to switch Chrysler: down 32.26% to more fuel-efficient models driving market growth. Alfa Romeo: - 29.14% Private new car registrations grew 17.1% during the first half of 2013, 24.4% in Q2 and 21.3% in June. Strong private demand has supported volume growth in the supermini and mini segments, although MPVs Porsche: - 29.14% showed the largest growth in June, up by over a quarter. The Ford Fiesta remains the best-selling model in both the month and year-to-date. Mini: - 16.71% The growth in the supermini and mini segments has contributed to the rise in petrol-powered car Infiniti: - 57.14% registrations, although in June alternatively-fuelled cars recorded a 26.2% rise.
Year-to-date top- Growth in jobs selling models supports buyer confidence 1 Ford Fiesta • UK employment levels and 2 Ford Focus housing market have supported buyer confidence. 3 Vauxhall Corsa • Attractive finance packages 4 Vauxhall Astra have encouraged motorists to buy new cars. 5 Volkswagen Golf Industry sources suggest 6 Nissan Qashqai consumers have been enabled 7 Volkswagen Polo to buy through low interest rates and manufacturer 8 BMW 3 Series support on finance packages. 9 Peugeot 208 Source: SMMT 10 BMW 1 Series
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www.am-online.com/ami 3 i Market Watch Sales per franchised outlet
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Mitchell Group : Retail Group : 2. CEM Day : Automobiles : 2. Lookers : £36,500,000 31.2% 93.14% 3.39% £2,484,080,000 3. Pendragon : 3. Rybrook Holdings : 3. Marsh Wall : 3. Fairfield : 2.99% 3. Lookers : £2,056,600,000 £36,400,000 27.53% 91.63% 4. Mercedes-Benz Retail 4. Mercedes-Benz Retail 4. Hatfields : 24.97% 4. Motorline : 88.11% 4. Busseys : 2.94% Group : £1,494,891 Group : £13,648,000 5. Brayleys Cars : 5. Heritage 5. Westover 5. Jardine Motors Group : 5. CEM Day : £6,308,000 22.36% Automotive : 86.6% Group : 2.88% £1,327,692,000 www.am-online.com/ami 5 i Market Watch AM100 spring 2013 analysis AM’s look at the financial performance of the retail A dealer quoted in the AM100 introduction last year I Cambria acquiring County Motor Works market, focussing on the top 100 groups by said the franchised model was “on the ropes”. turnover. I JCT600 buying £200m turnover Gilder Group. So what happened to reverse the gloom, to send Total turnover: dealer groups racing out of the traps in such an I And Vertu deserves a special emphatic way? acknowledgement: it bought Dobies and sites I 2013: £40.6 billion (7% rise on 2012) from Walter C Brigg, Holiways Ford Group, Month-after-month of continuous growth in new Pendragon, Co-op and Springfield Cars. It also I 2012: £38bn (1.3% rise on 2011) car registrations – with the retail market sold its Iveco heavy truck business. Acquisition I 2011: £37.4bn (11% rise on 2010) particularly strong compared to fleet – will have activity helped it to a 33% rise in turnover – the played a considerable element. highest in the AM10 – and a move of three A new record has been achieved in the turnover of places up the AM100 to number six. the franchised dealer groups in the UK. Based on In the middle of last year there was much talk 2012 financial returns, the total turnover for the around excessive pre-registration activity: 30% of Collectively the top 10 has seen a 10% growth in AM100 has reached £40.6 billion, exceeding the all new vehicles said CAP and KPMG put the figure turnover. It fell 12% last year. all-time high since AM’s records began in 1993 of at 5%. For the group AM11 – 20 (Listers to Renault Retail £38.6bn achieved in 2008. There are no accurate figures to end the debate, Group), traditionally seen as a hotbed of activity, What it means is that total turnover has returned but now feedback from dealers and manufacturers the situation is reversed. to the growth path it was on from 2001 until the AM has spoken to, and latest opinion from KPMG, After last year’s growth in turnover of 12%, this impact of the recession was felt with the slump in suggests the extent of pre-registrations has been year it has fallen from £5.57m to £5.47m – down total turnover the sector experienced between overstated. It is not having a demonstrable impact 1.8%. Standout performers were Listers, JCT600, 2008 and 2010, before rallying dramatically in 2011 on registrations they say. Group 1, Benfield, Ridgeway and Perrys. All with an 11% rise. Between 2008 and 2010 turnover New AM100 research shows that one of the most experienced turn-over growth. fell from £38.6bn to £33.8bn. noticeable factors in the latest research is that the Greenhous, Camden, Robins & Day and Renault From 2011 to 2012, turnover grew a modest 1.3% biggest groups have been growing. Retail Group experienced falls. Note the two and while positive there was much to be cautious In financial terms, six top 10 groups lead the manufacturer-owned groups. AM10 Mercedes- about. There was still an air of austerity, a mood of growth in turnover, Sytner by £501m, Vertu Benz Retail Group suffered the same. economic uncertainty and reluctance among the £371.7m, Arnold Clark £351m, Lookers £264.6m, banks to use the tax-payers money the Marshall £172m and Pendragon £169.3m. All have Other financial performance indicators are looked Government had given them to resume lending increased their franchised outlets. at later in this supplement, but profit before tax and activity and therefore boost confidence and kick return on sale, profit per staff member figures are start the market. Acquisitions played a significant part in this growth positive. – groups were on a spending spree. Looking at the As a result, beyond turnover, there was little to events of 2012 and 2013 to the end of May (see the What of the future? smile about. There were slight increases in news round up on page 43) there appears to be average profit before tax, but return on sale for the Since 2010, when the sector began to recover, only one month without an acquisition or best 20 groups was down, as was profit per outlet commentators said there would be a slow climb expansion by an AM100 group. year-on-year and profit per staff. out of the recession. The examples include: At a certain point in 2012 there were voices But it may come at a faster pace than originally presumed. suggesting franchised dealers’ financial health I Sytner buying Isaac Agnew (in January 2012, would continue in the relative doldrums for some but accounts in part for its significant turnover Beyond the incredible surge in performance, car time yet: statements were made directly to AM, at growth in the new AM100) sales forecasts have been reforecast upwards for events, meetings, in interviews and in polls that the year-end (fuelled by PPI refunds?), shares are I Marshall acquiring F Cross and Silver Street highlighted the growing practise of manufacturers Automotive at a five-year high, housing demand is at its look-ing to incentivise customers into showrooms highest for about three years, and faster recovery with ‘too good to miss’ finance offers at the I Group 1 buying four Inchcape Ford sites in the jobs market than all European countries expense of dealers’ margins. except Germany. I Lookers buying Lomond Motors Manufacturers’ targets were excessive, a one-size- fits-all approach being applied to networks – be I Arnold Clark acquiring John R Weir, Vauxhall you a plc or a locally focused group – was dealerships from Verve and others sites from beginning to show cracks and overhead absorption Moorland Motors was continuing its downward slide. Allied to this I Jemca taking over Octagon Motor Group was the lack of lender appetite already touched on here. I Peter Vardy buying three sites from Town and County and Pendragon www.am-online.com/ami 6 i Market Watch The AM100 by numbers 5 The number of new entrants At number 20 is Lloyd Motors with £9,548 Average profit per per outlet in 2011. But CEM Day is 1.7%, the same as last year. employee ahead this year of Peter Vardy, Half as many as last year. Highest Halliwell Jones and Thompson placed is predominantly premium Previous years RoS top 20 average: For the fourth year running Spire Motor Company. Sytner and brand focused Hatfields (eight Automotive has the highest return * 2012: 2.1% Lookers are the only top AM10 Jaguar and Land Rover franchises per staff member at £14,629, down groups to feature in this top 20. out of a total of 11) at number 88 * 2011: 2.7% on the previous two years (2012: with turnover of £118.9 million on £15,319 and 2011: £16,660). At number 20 is AM100 new entrant total car sales in 2012 of 3,867 units. £25.2m The average profit before Hatfields with a figure of £253,636. tax of the 10 biggest profit earners Halliwell Jones, with an average of Other new entrants are Bowker £13,226 and CEM Day at £12,516 Previous year’s performance: BMW (£114.6m), Renrod Holdings Compared to £23.1m last year, the follow Spire in the chart. I 2012: £318,470 (down 33% year- (£110m), Meridian Motor Group latest average profit before tax Only Sytner and Arnold Clark are in on-year) (Vantage) with £108.9m and Hughes figure for the top 10 groups sees an impressive 9% rise. the AM10 and in the top 20 for profit Group (£107.9m). The entry point I 2011: £477,587 per staff member group (£11,167 for the AM100 is a little over £100m. Sytner Group (number two in the and £7,277 respectively). 2,700 Total number of outlets… Blue Bell BMW has been a back AM100) has seen the highest marker in previous years and is returns (£67m), gaining the top spot The average profit per staff figure of or franchised dealerships – once more with a slight year-on- for three successive years. It has £9,548 compares to £8,144 last representing an increase of 179 or year increase in turnover from improved profits by 16% year-on- year, a 17% increase. The latest 7% from the 2012 total of 2,521. £101m to £104m. year and this year exceeded its 2011 figure is 14% down, however, on the From 2011, the number of groups 2011 average. Previous years: achievement of £63m. with in excess of 100 sites remains at five. With 238, Pendragon has the Pendragon’s year-on-year Previous years’ results: I 2012: 10 greatest number. improvement in PBT has been I 2012: £8,144 (down 27% from I 2011: 4 remarkable: a rise of 460% to Arnold Clark has grown the most 2011) £36.4m from £6.5m. It is just behind with 43 additional sites since last 2.26% The average return on sale Lookers with £36.5m, but still some I 2011: £11,113 year’s AM100, a 28% growth. (RoS) for the 20 best groups way behind Arnold Clark with £380,035 Average profit per outlet Previous year’s outlet totals: Last year’s second highest £60.5m and Sytner. Five of the top performer CEM Day is the best this 10 best performers are in the A rise of 19% year-on-year, I 2012: 2,521 (up 26 or 1%) year with a return on sale of 3.4%. AM10, eight in the AM20. CEM Day reversing a fall last year on 2011 of I 2011: 2,495 In the previous year it achieved has the lowest turnover at number 33% for the top 20 leaders by this 3.0%, beaten by Stoneacre which 54 in the AM100, but has the ninth measure. I 2010: 2,487 recorded an RoS of 3.8%. This time highest PBT and the highest RoS Stoneacre is at 16 with 1.9%. (see above). Return on sale champions CEM I 2009: 2,362 Day leads the top 20 for profit per Just below CEM Day are Westover Previous years’ PBT AM top 20 outlet at £573,455, with 20 with 2.9% (2012: 2.7%), Yeomans average: franchised centres with a mix of with 2.9% (2.5%) and Spire with volume brands, predominantly I 2012: £23.1m (up 1.3%) 2.6% (2.6%). Ford. It is a long way from Spire I 2011: £22.8m Audi’s achievement of £1,016,250 www.am-online.com/ami 7 i Market Watch Q2 2013: Q3 2013: New car New car launches in: launches in: April July August Mercedes-Benz E-Class Coupe and Cabriolet Dacia Logan MCV Volkswagen Golf BlueMotion Mercedes-Benz E-Class Saloon and Estate Mercedes-Benz A 45 AMG September Mitsubishi Outlander PHEV Mercedes-Benz C 63 AMG Audi S3 Sportback Edition 507 Peugeot 208 GTi Porsche 911 Turbo Peugeot 2008 Crossover Vauxhall Cascada Ford Tourneo Connect Skoda Superb Volkswagen Beetle Convertible Porsche Panamera S E-Hybrid Autumn Seat Leon SC May Qoros GQ3 Volkswagen Golf estate Dacia Sandero Stepway Kia Pro_cee’d GT and Cee’d GT BMW M6 Gran Coupe Summer Audi RS Q3 Nissan Note Jaguar F-Type June Chevrolet Stingray Audi RS6 Avant Range Rover Sport Mercedes-Benz E63 AMG & S Model Subaru Forester MG3 Mercedes-Benz SLS AMG Coupe Black Series Mercedes-Benz GL-Class Renault Captur Infiniti Q50 Maserati Quattroporte Mercedes-Benz CLA Mercedes-Benz CLA 45 AMG Citroen C3 Renault Clio Renaultsport 200 Turbo Audi A3 Saloon Volkswagen Golf GTD Suzuki SX4 Crossover Spring Citroen C4 Picasso Audi RS5 Cabriolet Chevrolet Trax Dacia Lodgy Ford Fiesta Ford Mondeo Land Rover Range Rover McLaren 12C Spider Mercedes-Benz GL-Class Peugeot 208 GTi Vauxhall Cascada www.am-online.com/ami 8 i Market Watch News watch: Key events in the second quarter of 2013 Acquisitions: single sites and holding company deals in Q2 2013 !"#$%&'(")&('*+,$-)'./0"%'1'2,%3'4567 8+,$-) 8+,$-)'*3 9+:# ;+()<+=& >&:':2,./2-"?' @3AB)CD8 E,:- 7<*:)@"#'" F(1.=:, 4:G=: +%,'<=2)71-"#"-,H' I""?'&2 3<:2/"J 3KL)M@7 I:.=)@"H'& !'.=&:/".)N+-&:-2-".'O P"%.)Q<:&?)4"-"&)3&"1$ !'&-% !FB)L3R I:.=)@"H'& !'&-% !FB)K75 P:/1:& 5=,.01&/% 5FBA)SIF P:/1:& Q1$:& TUBK)V@> I:.=)@"H'& >:-'#:.2 9:.-:/')4"-"&)3&"1$ 3&:./'W"H'&W+:.=2 I7BB)C55 X"("-: +(-.'&)>&,2-"<)Y"&-% 4"-"&<,.' >&,2-"< BS34 5BB X"("-: +(-.'&)>&,2-"<)+"1-% 4"-"&<,.' >&,2-"< BS4 5LQ X"("-: I""?'&2 9'&-1)4"-"&2 >"2-". !5AB)M8+ 9""<-". F,<<'.=:<' >"<-". >IV)MPI P:/1:& A+%="#$'<+B/?#3'*+,$-) 8+,$-) 8+,$-)'*3 >&:'"J'--)4"-"&,./ I12Z"#0')4"-"&2 I''=2 I+B\)B@> 4,-210,2%, [,<<,:#)7)I'J,2)Q:&2 3&''.%"12)3&"1$ R:Z,: Y,22:. @'.:1<- X"("-: 9" Y@)^)."-)&'-:,.'= April I Pentagon acquires Co-operative I SMMT revises forecast for new I Jardine Motors Group signs with I Perrys acquires Pomfreys Peugeot site car registration growth this year BCA in remarketing deal Vauxhall I Pendragon agrees debt I Thurlow Nunn invests in £5m I Stoneacre launches financial I Jardine reduces BMW refinancing Vauxhall centre services business representation to one site I Swansway profits on the rise in I Volvo goes after SME fleet I Meridien expands with Chrysler Q1 business Jeep in Hampshire and West Sussex I Cambria records growth in sales I March plate change sees 5.9% and profits after six months growth in new car registrations www.am-online.com/ami 9 i Market Watch May I Former Subaru executive joins I NFDA acquires majority stake in I Pendragon says Q1 was in line I Suzuki gives trade partners MG Motor UK Trusted Dealers with expectations programme a push I Lexus and Skoda claim top spots I Bowker takes on Maserati I HR Owen expects first half I Economic recession hits volume in customer satisfaction survey profits to be ahead of brands' sales per dealer - I Vertu disposes of heavy truck expectation research I Jardine Wolverhampton site business named as best Audi dealership I Pendragon partners with Seat I Ridgeway expands with Skoda I Kia appoints new sales director in the UK for the first time I Rybrook Warwick wins BMW I Volvo extends approved used car I Brindley expands with Kia I BMW confirms UK dealer global aftersales award programme to seven years network for i-brand I Sue Brownson's death I Sturgess profitable in 2012 I HPI acquisition cleared by OFT announced I Westdrive Kia invests £1m in despite "economic stagnation" I New non-executive directors showroom and workshop I Chevrolet to develop new I Land Rover dealership bought announced by Pendragon facilities financial products to support by Ridgeway Group dealers I Lookers says its dealerships I European car sales up in April I Lookers boss boosts have had excellent Q1 but year-to-date decline I New car registrations increase shareholding continues in April I Ridgeway appoints new finance I Hyundai embarks on retention director I Strong March drives up motor I JCT600 increases profits on strategy to hit top five spot in UK retailer profitability back of new and used car sales I Snows Group adds Lotus I Manufacturers using finance boost franchise I AMi Market watch report - offers to appeal to customers quarterly update on 2013 I Citroen UK appoints new sales I Lookers boosts Scottish while increasing prices director expansion with new acquisition I Vertu's operating profits and I Joe Greenwell to chair RAC sales increase as it refines I Dealer insolvency falls in March Foundation I BCA signs a deal to purchase franchise portfolio We Buy Any Car I Infiniti appoints new regional I Caffyns increases profits I Driving.co.uk to move to cost- director covering UK following restructure I Ford Blue Service hoped to per-lead advertising structure boost dealer network's I Investigation launched into I Auction group Manheim makes customer base I Franchised workshops Pendragon auditors digital business acquisition optimistic about service growth March I Former Bentley executive I Meridian Motor Group breaks I Wessex Garages to open new I John Clark Motor Group appointed SMMT chief executive into AM100 with Sytner Hyundai dealership acquires Pendragon dealerships acquisitions I Motor retail insolvencies fall in I Renault UK dealer network I Dealer profitability on the rise in latest figures I Skoda goes back to drawing upgraded for tablet generation 2013 board with dealer fleet sales I Stoneacre Motor Group wins I Rybrook showrooms in sale and I Cambria bullish about full year programme Ford customer service award leaseback prospects I TVR sold to British company I Bolton Kia completes red cube I More consumers looking to buy I Mercedes-Benz of Gatwick showroom overhaul I Hartwell buys Hangreen Ltd, a new car in 2013 than last year moves to ‘bigger and better’ which trades under the name - research location I Toyota issues 5,000 car recall in Sky Ford at two sites UK I Renault needs to sell 75,000 I Nissan's new showroom I Swansway acknowledged as a units to be sustainable in the UK concept to be piloted in Oxford I Private demands boosts new car 'great place to work' registrations by 11% in May I Profits increase at Swansway I Startin Group acquires Showells I Chinese e6 electric cars to be Group Hyundai trialled in UK www.am-online.com/ami 10 i Market Watch Special report: Finance offers - Ownership personal contract packages New car pricing and purchase (PCP) The other strong trend with manufacturers is to link low This is without doubt the preferred monthly payments with either free finance offer analysis method of new car purchase with or fixed price servicing, thereby all manufacturers. PCP is popular Source: www.newcarpromotions.co.uk giving confidence to customers as it offers optically attractive around ownership costs. monthly payments combined with New car recommended retail I The five biggest reductions low deposits and relatively quick Dealerships are keen to promote prices continue to remain stable include: change cycles. This benefits ‘service plans’ in order to gain with circa £200 increase each customers and manufacturers customer loyalty over increasing quarter for the past 18 months. 1. Seat -12% alike as it means the average competition in the aftersales arena. Surprisingly new car prices have 2. BMW -7% customer will change into a new These plans are often discounted increased just 3% on average since car sooner. and protected against inflation late 2011. 3. Jaguar -6% offering vehicle maintenance with Manufacturers are offering strong 4. Vauxhall -4% manufacturer trained technicians Of course there are fluctuations incentives behind this product with for a manageable monthly within these average figures with 5. Volkswagen -4% an average of £1,696 deposit payment. some brands significantly contribution, monthly payments of increasing prices whilst other I In terms of vehicle segments, £289 and a term of 37 months. Aligned to servicing, extended reduce them. Vehicle types and mainstream / volume What’s more, 11 manufacturers warranties i.e. over the standard 3 model mixes also play a part in this manufacturers have remained now offer 0% APR PCP on some or years, have also been increasing for example if the trend in the most stable with their pricing all of their products whilst only 3 giving customers more confidence market is towards introducing whilst premium brands have were taking this approach 12 in purchasing a new car. Once a smaller, more affordable vehicles, increased their pricing by a months ago. tactic of budget manufacturers to this will have the effect of bringing minimum of 6% (except for instil confidence, 7 brands now average prices down. BMW who reduced theirs). The Finance offers – offer warranties on new cars over 3 traditional budget brands of years. Recent trends include: Kia, Hyundai and Chevrolet hire purchase I 15 manufacturers increasing have seen price increases of between 3% and 5% as they For people who prefer to own their About the author prices over the past 12 months car outright (after paying off the strive to improve their brand www.newcarpromotions.co.uk is whilst eight have reduced loan) there is HP. Whilst the same image and bring improved an independent website operated prices number of manufacturers offer 0% product to market. by In Market Solutions Ltd. We APR HP as PCP this trend is I The most aggressive brand in compare the advertised new car declining from 14 just 6 months cutting prices is Seat with their Cash offers and offers of 24 brands covering over ago. July 2013 range costing 12% customer savings 96% of the UK market. Data less than the same period last Average monthly HP payments are collected is used to drive the year (before discounts / The past 12 months has seen competitive at £238 and this is comparison function of the website incentives) vehicle manufacturers becoming reducing. helping over 5,500 new car buyers increasingly focused on finance per month save time and effort in I Surprisingly, Seat’s sister Also reducing is the amount of and ownership packages with less searching manufacturer websites. brand Skoda has seen the deposit required on 0% APR HP. largest increase in pricing with cash discounts offered. As well as assisting new car buyers, we can provide data for 13% over the same period. The average cash discount has Previously a customer would have manufacturers and dealers to Some of this can be explained reduced in the past year by 11% to had to put 50% deposit down to assist in planning new car by the introduction of new £1,584 and significantly less than gain this offer but this has reduced marketing activities. Contact Nick vehicles into the larger the £1,935 being offered just six significantly in the last six months. segments such as Rapid, Philips for details: months ago. However, this has been achieved Octavia, Superb and Superb E: nick.phillips@ Less manufacturers are now through simply increasing the term Estate. inmarketsolutions.co.uk offering cash discounts than at any of these loans with the average 0% APR HP deal now running over 47 I The top five biggest increases time in the past 18 months. T: 07930 333909 are: months in duration. 1. Skoda +13% Manufacturers are far less likely to assist with the deposit on HP as 2. Mazda +11% they are keen that customers take 3. Mercedes-Benz +10% PCP and look to change their car more regularly. 4. Mini +9% 5. Land Rover +9% www.am-online.com/ami 11 i Helping you drive growth, improve profits and identify investment opportunities For the first time detailed information on 200 franchised dealer groups and vehicle manufacturers operating in the UK has been compiled by Automotive Management's new intelligence division AMi to create an essential strategic planning and business tool for dealers, manufacturers, suppliers and investors. Constantly updated, AMi gives you the information to compare, benchmark and identify growth strategies by region, brand and individual dealer or manufacturer with information at your fingertips. AMi's wealth of data also means we can deliver market reports and bespoke research. AMi enables you to: • Monitor the UK’s most dynamic dealers • Identify the fastest growing dealers • Assess brand relationships • Benchmark performance • Access dealer health checks • Assess risk and identify opportunities • Track dealer group activity. AMi is available on subscription. To find out more download our digital brochure: www.am-online.com/AMI digital brochure.pdf or call Julie Howard on 01733 468141 or email [email protected]. Website: www.am-online.com/ami