Philip Nothard

Agreed Umesh, after all, these are unique to everyone and if you could see some of the variance of results we/I see - you would wonder!! Every business has a different buying strategy and policy - not ignoring, not everyone buys from auctions. There is always a difference when you are buying for a sold order, rather than stock and the network is so diverse in regards dealer types and geographical locations. And we can't ignore that the auction centres are attracting 'private' buyers for personal use.

HI all, without getting into defending values or individual justification - as I am on here as a industry enthusiast and someone who is interested in supporting where possible. I/we often see these, what we call 'outliers' and need to ensure that we understand the overall market, where it was sold (location), who sold and potentially where possible - who bought it? As buyers, how often do you see these examples, and more importantly, after all the costs involved with the purchase, not forgetting the incidentals afterwards to prepare and market the vehicle - where is the retail market for these cars? Costs are not coming down, and the retail market is not becoming less competitive.....

Noticed this, it would be interesting to see the analysis by dealer type and location? :-)

Who's got wagers on the full year result in 2015......will it be the highest for a decade? Steady growth for new car registrations in July - SMMTsmmt.co.ukNew car registrations saw steady growth in July, according to the latest figures from the Society of Motor …

ALL If you had to summarise the current market in one sentence - what would you say???????? Activity? Demand? Values? Profitability?

As we know, pre-registrations are without doubt topical at the minute, as to be expected with us at the 90-day stage since March and the new-plate on the horizon for many dealers. As the sentiment from this month's survey illustrates, we are in a very diverse market, with many dealers highlighting continual pressures on margins. In excess of half of those surveyed this month reported further compression. When you begin to investigate the route cause for this tightening, it’s very clear there isn’t a simple solution as costs are increasing, along with consumer expectations and direct costs, such as buyer's fees, advertising costs, etc. Another area not clearly identified here is where the chassis profit is increasingly becoming the main area for retained margins as controls, transparency increase through finance and add-on income. What is evidently noticeable is the positive improvement in July, with a retail market that generally could be referred to as steady or even healthy, with a favourable improvement in both physical footfall and retail and consumer demand. Dealer Survey Summary: - July sees a slight rise in those respondents reporting an increase in physical footfall from 15% in June to 21% in July; whilst those feeling it has declined dropped by -3% to 48%. In a period where over the preceding two, it’s felt tough. This is positive news for those experiencing a rise in this area. - Interestingly, unlike the physical footfall, the online activity hasn’t seen the equivalent level of respondents reporting an increase, with a drop from 29% in June to 23% this month. However, the remaining majority is reporting no noticeable change, as 40% report that it is about the same. The activities for both physical and online have without doubt eased since May this year. - The pressure on retained margins doesn’t appear to be easing soon, with once again 56% reporting they have been experiencing compression again since last month and 7% feeling they have seen some improvement. The question will be whether we will see an increase on the back of September in October, as we did in April? - From the dealers' perspective, the stock availability has remained much very similar as last month with 35% reporting they feel it’s improved; whereas 44% feel they’ve seen little or no change. The question remains in many conversations around whether the increased volumes are actually the ‘right’ stock and how much this is impacting on the continual pressures on retained margins. - Even with the changes in stock availability throughout the first half of the year, the quality of stock continues to remain reasonably stable. This is illustrated with as much as 73% of those surveyed reporting they have seen little or no noticeable change, and this has maintained above 50% throughout the year. The only increase was in March where 21% felt it had worsened; this will be an area to observe in September, and whether the new plate has any influence. - Those reporting that current trade values are reflective of the market have seen a slight change this month, with those reporting they feel they are too high has increased from 49% in June to 52%. However even more intriguing is that 7% felt they were actually too low. A comment that seems to resonate with those I speak to, is that ‘little and often’ is working with values, and they don’t want to see any extreme or reactive unnecessary movements of values. - Again, as we’ve seen with the physical footfall, this month retail and consumer demand, according to 24% of those surveyed, has seen an improvement. Similarly, those reporting it has worsening has dropped from 58% in June to 51% in July. As we approach a new plate month, could we experience an improvement close to that reported in March of 66%? - This month we asked which costs are impacting on retained margins, and is it directly related to increased costs? Interestingly only 33% felt this was the reason and as much as 51% didn’t feel that was the case. Whereas much of the sentiment was relating to costs, such as buyers fees, transport and on many dealers' agendas currently – advertising costs; others felt that the fact that footfall has been tougher and the overall market competitiveness are a key driver to retained margins. Generally a mix of ‘less traffic = reduce margins’, along with increased purchase, repair and re-marketing costs in a market where stock is reasonably easy to replace, and the retail buyers are given even more choice with ever more attractive new car offers. Notwithstanding the added pressures from the amplified volumes of pre-registration vehicles in the market, resulting in compression on nearly new prices and profit opportunities. The Market Survey – for Dealers, by Dealers Why has this survey been done? This market survey has been created in response to dealers hankering for a more holistic current sentiment of the questions they ask themselves daily, so they can understand the temperament of the wider market. Who is it for? Respondents cover a very diverse sector of the automotive industry, from the larger franchise groups, supermarkets, independents, single site owner-driven operations, through to auctions and remarketing. When is it undertaken? The survey is done monthly, within a very small open window. This ensures that the responses are market relevant and current. The data in this survey is for July 2015. Get involved! If you want to be involved in next month's Dealer Survey – for Dealers, by Dealers - then please contact CAP's Black Book Editor and Retail & Consumer Specialist, Philip Nothard. philip.nothard@cap.co.uk 07702 382 025 With over 27 years’ experience in the motor trade, Philip brings an informed eye to developing industry insight and market commentary. He joined CAP Automotive in 2010 as Retail & Consumer Black Book Editor, where he was responsible for analysing pricing data and interpreting strategic trends in retail, consumer and trade markets. A widely experienced and highly successful automotive specialist, he has a wealth of knowledge gained at the most senior levels whilst working for blue-chip businesses within this sector. His experience helps him to interpret trends and raw data into contextual and meaningful insight. Philip’s career includes managing dealerships for independents, supermarkets and large PLC groups. 07702 382 025 Philip.Nothard@cap.co.uk

http://www.motortrader.com/automotive-news/carcraft-brand-acquired-ahead-relaunch-online-classified-site/ Carcraft acquired ahead of relaunch as online classified siteThe Carcraft brand has been acquired for an undisclosed sum by Reg and Louis Rix (pictured), the motor trade entrepreneurs who launched Netcars, and will be relaunched as an online used car classified business.Carcraft, the sixth largest supermarket in the Motor Trader Top 50 Independent Dealers, closed all 10 of it outlets in April with the loss of 550 jobs. The loss-making business had operated for over 60 years and had a turnover of £124m before going into administration. The Rix brothers are the co-owners of Carfinance247, the online car finance broker, but are best known as the founders of Netcars the online classified site which was sold to the RAC and rebranded as RAC Cars in 2013. Reg Rix The new owners will relaunch Carcraft as an online classified site which will adopt Netcars’ free to advertise model. “We intend to re-launch the Carcraft brand as an online used car classified business. The site will be free to advertise on for dealers nationwide and offer consumers an excellent shopping experience with an abundance of choice,” said Reg Rix, managing director. “It will support our Carfinance247 business that, through our partnerships with some of the UK’s leading lenders, gives customers the best rates of finance to match their personal circumstances and credit rating. Our acquisition follows a phenomenal year of growth for Carfinance247 and is part of our advancement strategy.” The Rix brothers are confident in the strength of the Carcraft branding despite its administrators Grant Thornton attributing part of its failure as a supermarket chain to its “poor market reputation”. “Having worked in the motor trade for many years, the Carcraft brand means a lot to us personally as well as a brand we see big potential in going forward. In its heyday Carcraft was a highly successful business and the brand name still attracts a large amount of natural web traffic. We will work hard to re-invigorate consumer confidence in the name by creating a reliable, trustworthy car classified website, delivering the same high levels of technology and service that’s helped us build the Carfinance247 name.” The Rix brothers started their car retailing career at their father’s dealership, Rix Motor Company, in Warrington, Cheshire.

http://www.motortrader.com/automotive-news/carcraft-brand-acquired-ahead-relaunch-online-classified-site/ Carcraft acquired ahead of relaunch as online classified siteThe Carcraft brand has been acquired for an undisclosed sum by Reg and Louis Rix (pictured), the motor trade entrepreneurs who launched Netcars, and will be relaunched as an online used car classified business.Carcraft, the sixth largest supermarket in the Motor Trader Top 50 Independent Dealers, closed all 10 of it outlets in April with the loss of 550 jobs. The loss-making business had operated for over 60 years and had a turnover of £124m before going into administration. The Rix brothers are the co-owners of Carfinance247, the online car finance broker, but are best known as the founders of Netcars the online classified site which was sold to the RAC and rebranded as RAC Cars in 2013. Reg Rix The new owners will relaunch Carcraft as an online classified site which will adopt Netcars’ free to advertise model. “We intend to re-launch the Carcraft brand as an online used car classified business. The site will be free to advertise on for dealers nationwide and offer consumers an excellent shopping experience with an abundance of choice,” said Reg Rix, managing director. “It will support our Carfinance247 business that, through our partnerships with some of the UK’s leading lenders, gives customers the best rates of finance to match their personal circumstances and credit rating. Our acquisition follows a phenomenal year of growth for Carfinance247 and is part of our advancement strategy.” The Rix brothers are confident in the strength of the Carcraft branding despite its administrators Grant Thornton attributing part of its failure as a supermarket chain to its “poor market reputation”. “Having worked in the motor trade for many years, the Carcraft brand means a lot to us personally as well as a brand we see big potential in going forward. In its heyday Carcraft was a highly successful business and the brand name still attracts a large amount of natural web traffic. We will work hard to re-invigorate consumer confidence in the name by creating a reliable, trustworthy car classified website, delivering the same high levels of technology and service that’s helped us build the Carfinance247 name.” The Rix brothers started their car retailing career at their father’s dealership, Rix Motor Company, in Warrington, Cheshire.

This is certainly something I talk about a great deal and as some of the guys know, try not to 'preach' about - as all dealers are unique and there isn't one solution. I have demonstrated and discussed many times; that continual price reduction could work against selling it and each individual vehicle has a 'price'. Much is dependent on cash flow restrictions and stocking policies. I know PLCs that work on a 56-day and are looking to reduce this on the sub 12-month product, due to volatility in the current market. An example recently with a large dealer group, they couldn't understand why a fleet a buy-back Clio's weren't selling, even though they continued to reduce in price and were the cheapest in the UK by hundreds.......... the reality is that the consumers had seen them continually reduce, created caution why they were so cheap and the sales teams didn't want anything to do with them. I suggested they removed them from for a week or so, then change locations, re-image them and re-write the descriptions but most importantly put them back up in price to the average market value. GUESS WHAT - they sold...... As Umesh demonstrates time after time, the right car will sell, and can retain a reasonable margin, but if it's a volume product, with high competition and in continuous supply, then fast turn and price positioning may be the key. A Vauxhall Corsa in a popular high volume trim may turn on average every 15-days across the network; whereas something along the line of an S80 may only turn every 70-days on average across the network...therefore, how does a 60-day stocking or every 30-day repricing policy manages both these products? Always welcome a chat and more than happy to share and discuss insight and data - if it helps :-) I'm not at the coal face though....

I would suggest that the figures represent Auctions in general, not the vendors - a good point made, as the volumes through BXA from UK Car Group are without doubt rising and supplying a large proportion of the market - not forgetting the less obvious ones. There are an increasing number of dealer embarking on 'serious' direct purchase strategies - more than just adding on their adverts/website, that they buy cars.

I agree, the comments and conversations this week - are that its in the main 'okay' - we are monitoring the overall market closely, with retail and consumer demand, relative to stock supplies and auction activities. See recent survey results below: Other noteworthy changes: A rise in June in those reporting an increase in footfall of 15% from 9% in May. However half are experiencing a decline – with the remaining third seeing no change. A notable change from May is that 30% are enjoying an increase in online activity, up from 18% in May. The remainder are either not seeing any change or have felt a slight slowdown.The pressure on retained margins looks to be continuing throughout June as 58% of those responding indicated they were being squeezed – an increase from 41% in May. Sentiment suggests that the increased competitiveness caused from greater volumes of available stock and costs are putting pressure on profitability. Interestingly those reporting an increase in stock availability has eased slightly from 52% to 38% in June; whereas a number felt that it had actually deteriorated over the month - from 9% to 20%. However just under half felt that there was little or no change from last month. As in May, the quality of stock remains reasonably stable, with the majority of 63% reporting no change from last month. However those experiencing a decline in quality increased by 4%.This month there is little to separate those who feel that the current trade values are reflective of the market, with 48% reporting they are and 50% feeling they are too high. What’s certain is that only 3% felt they were too low. This question is very subjective, as it is very much dependent on where they are sourcing stock and what sector into the market they are operating within. As we approach the half year stage over half the dealers feel that retail and consumer demand has eased slightly from last month. However those reporting an increase remains in double figures. Reviewing where dealers source their used car stock is without doubt very diverse, dependent on the business strategy and sector within the industry they operate in. From those surveyed, 42% of their stock was sourced via natural part-exchanges. However the remainder was split across various sources. Auctions accounted for only 21%; whereas 15% of stock purchased is now sourced via Direct Purchase or Cash for Cars processes and the other stock is from areas such as Trade-to-Trade, Manufacturer Direct sales or Direct ex-fleet. This is a question which would be useful to review again as the year progresses to observe whether this ratio changes over time. All, I'm also just circulating this month By Dealers, For Dealers Survey on the market and again, early responses are certainly very diverse. I welcome anyone to join in and be involved and if you want early sight of the results, please drop me an email and I'll add you to the circulation. Link below, it only takes a minute - very short but very current and most importantly, it's your survey! https://www.surveymonkey.com/r/HJYV9BR

Hi, I'm hoping to organise a Google Hangout over the coming weeks to discuss this, as I've had numerous conversations over recent weeks discussing this very topic and the concerns over profitability and increasing costs. Let me know if you wish to be included, and I'll ensure it circulated. This will be for the dealers and not led by myself, just the organiser and chairperson :-) philip.nothard@cap,co.uk

Lost in yesterdays budget announcements, is the changes in the car industry. 22. Road tax will be reformed and the money raised spent on the road network The road tax system will be revised to make it fairer and sustainable. From 2017, there will be a flat rate of £140 for most cars, except in the first year when tax will remain linked to the CO2 emissions that cars produce. Electric cars won’t pay any road tax at all and the most expensive cars will pay more. Existing cars won’t be affected – no one will pay more for a car that they already own. The money brought in from road tax in England will be spent on England’s roads from 2020. The government will extend the deadline for the first MOT of new cars and motorcycles from 3 years to 4 years. Interestingly, what could this cost the industry?Will it extend the renewal cycle for those consumers who change just before the MOT?Will Lease/CH companies look to increase their average contract period to 4-years?How much will it cost those who rely on MOT work for income?Does it actually cause a change to the price you would pay for a used car - 3-4 year old, as the existing MOT won't influence it?How did you view these changes?

This year is certainly turning out to be very interesting, as the dynamics change. The only question I would have, is how will it change Trusted Dealers - many of us can remember when Autotrade-Mail sold out to AT and become too commercialised?

It's a shame that to receive the correct customer service, you have to resort to such measures. No consumer classified platform, has a business without the support from the dealer network.............they are the clients!!!!

Agree, consumers/buyers receive the choice and where they search in ever increasing. There are many examples of successful businesses that don't rely on ONE consumer platform; however, as challengers have demonstrated - it's a case of getting a return on investment (cost and time). Any new challengers to the market, give both the sellers (dealers) and buyers 'choice' - which is always a good thing and not forgetting, it keeps everyone on their toes........

Interesting, when you hear statistics such as RAC having currently 100k views per month compared to Autotrader 8m. The question as always however, is how many are genuine buyers in the market, how many are dealers price comparing and the old 'car porn'? How do these numbers stack up against Motors and the others?

That's it, thanks Umesh - I thought I was going mad... Are we going? :-)

​I bet it was cold by the time he got it home....................cold Chinese okay in the morning after a night out!!

I'll be keeping an eye on your sites now :-)

Very interesting Umesh, these guys have been mentioned a few times at events recently from various keynote speakers etc. and they are one of a number US operations entering the UK from the whole process facility to a pure challenger to AT. After watching the Rockar webinar this week and how they are attempting to identify and engage with consumers, certainly question how the landscape looks long term. We can't ignore however, the various diverse solutions over recent years, that have attempted to offer buyers new ways to buy a car and failed? I'm sure depending on which sector of the market you operate within, the responses to this could certainly vary. p.s. that's definitely a little hidden gem near you - I bet you've booked your Murder Mystery night already :-)

All, You may have noticed the 'odd' survey results being shared, and I would like to give you the opportunity to have your say and join in. I will post the results through Social Media and this forum once complete - with this being the halfway stage of the year; I will collate the year-to-date trends once June results are in. https://www.surveymonkey.com/r/HSDCC3P If you wish to be part of continuous market insight and sharing of data/intelligence, please feel free to email me philip.nothard@cap.co.uk Furthermore, if you wish to receive the previous survey results, please let me know. Many thanks in anticipation and hope you find the insight useful. Philip

Will we ever see the reality of activity in the pre-registration market, as deals are done behind the scenes and many of the numbers quoted are through 'off the record' conversations? The question about the impact on the nearly new market, raises the debate around when the so-called tactical registration vehicles are sold, how they are marketed and what they are sold for and who to? As we know, we can review the advertising platforms for the sub 12-month numbers and associate them back to increases or decrease in activity; however, why would a dealer/group advertise duplicate stock at the cost of increasing advertising spend and create an over supply scenario in the eyes of the consumers - therefore, adding pressure to potential prices achieved, etc.? This added to the increased PCP recycle that's taking place since the explosion of PCP and pressure on the dealer network to hit their monthly and annual objective. We all know of customers and dealers where deals have been done within the first 12 months of ownership on a 24-month PCP contract and in some cases 36-month agreement, dependent how attractive the incentives are................ Where will it end, and at what cost to profitability? Are you on the side, that it's a good thing as it keeps the wheels' turning and creates used cars? Or Are you on the side that it is actually closing dealers, as their targets are based on unrealistic targets, based on fictitious previous year achievements?

Thanks to everyone involved, it's always appreciated and hope you find it useful and insightful. Generally for a post new-plate month, the over-all dealer sentiment remains, in the main, positive for the retail market. Notwithstanding some easing in areas that you may expect at this time of the year around Easter, there are reports of profit margins seeing signs of recovery and stock becoming more readily available to satisfy the areas where the consumer demand continues. Although an easing from 50% respondents reporting an increase in footfall during March compared to February; this month in a post new-plate month c.30% are, nevertheless, reporting an increase and 20% experiencing no change. The on-line activity sees a little more change, with 61% reporting an increase. This would be no surprise for many when comparing the month of April with March, on the back of an Easter break. An area very much close to the hearts of many, as year-to-date the market sentiment has been focused on margin compression; 26% are still experiencing pressure and 42% seeing little or no change from March into April. The positive news in April, is that over 30% are reporting an improvement to their margins. The trend seems to be continuing as expected, as 56% report that the availability of stock is better, with below than half experiencing a worsening or no change. Although volumes of stock on the increase, approximately two-thirds of the respondents have stated the quality has continued about the same, and the remaining majority report an improvement. This raises the question around ‘what is happening with those poor quality, less desirable unsold cars?’ As expected at this time of the year, following a new plate month; the retail/consumer demand has eased with a drop from 63% in March to 30% this month experiencing an improvement on the previous month – in many ways; this is a very positive sentiment that the retail and consumer market remains buoyant. The other two-thirds split between those reporting it’s declined and those that haven’t seen a change. This month we asked whether the market is anticipating an increase the availability of stock throughout this quarter, and interesting the sentiment was marginally mixed. With the majority of 68% believing, it will and the remaining 32% not expecting to see any change in volumes. Interestingly, there are some concerns, whether it will be the right vehicles to satisfy demand and stocking profiles. The Market Survey – for Dealers, by Dealers Why has this survey been done?This market survey has been created in response to dealers hankering for a more holistic current sentiment of the questions they ask themselves daily, so they can understand the temperament of the wider market. Who is it for?Respondents cover a very diverse sector of the automotive industry, from the larger franchise groups, supermarkets, independents, single site owner-driven operations, through to auctions and remarketing. When is it undertaken?The survey is done monthly, within a very small open window. This ensures that the responses are market relevant and current. The data in this survey is for last month (April 2015). Get involved!If you want to be involved in next month's Dealer Survey – for Dealers, by Dealers - then please contact CAP's Black Book Editor and Retail & Consumer Specialist, Philip Nothard. philip.nothard@cap.co.uk 07702 382025 The results of the latest Dealer Survey for April 2015 are in... http://business.cap.co.uk/cap-extra/news/dealer-survey-april-2015

Me :-)