Comparateur de location de voitures
Ici, Motor Finance rassemblera toutes les dernières nouvelles provenant de l’industrie en ce qui concerne l’impact du coronavirus (COVID-19):
iVendi s’attend à un «changement radical» dans la vente au détail de moteurs en ligne
Selon iVendi, les concessionnaires qui reviennent à la négociation alors que le verrouillage se desserre devraient inciter à un «changement radical» dans la vente au détail de moteurs en ligne.
James Tew, PDG d’iVendi, a déclaré qu’un abandon de l’interaction basée sur le showroom semble inévitable à moyen terme au moins, et qu’il a déjà vu une récente augmentation de l’intérêt des concessionnaires qui souhaitent améliorer leur présence en ligne.
Il a déclaré: «Le modèle de vente au détail en salle d’exposition a persisté dans l’industrie automobile pendant beaucoup plus longtemps que presque tout autre secteur, mais, à moyen terme au moins, cette image est susceptible de changer et peut-être considérablement.
«Même si le gouvernement autorise les concessionnaires à rouvrir leurs portes en juin, les consommateurs resteront probablement prudents quant à l’utilisation des salles d’exposition en nombre dans un avenir prévisible et, en vérité, un local socialement éloigné pourrait ne pas être très amusant à visiter.
«Il y a tout lieu de croire que le click-and-collect et la livraison à domicile seront les principales méthodes de négociation à la sortie du verrouillage, et que les salles d’exposition deviendront davantage des centres de traitement des demandes où les véhicules sont traités. Il y aura des ventes de véhicules en face à face, mais elles seront probablement relativement limitées. »
«Nous pensons que les conditions vont être difficiles au cours des prochains mois et probablement des années dans l’industrie automobile, mais aussi, pour nous, c’est un moment où nous pouvons prouver exactement à quel point les processus en ligne fonctionnent lorsqu’il s’agit de vendre des véhicules.»
MotoNovo voit une augmentation positive de l’activité commerciale
MotoNovo Finance a connu une forte augmentation des propositions et des activités commerciales depuis que la société a levé ses restrictions de prêt alors que les mesures de verrouillage étaient assouplies.
Au cours de la période du 11 au 15 mai, MotoNovo a vu l’activité financière revenir à environ la moitié des volumes d’avant le verrouillage. Les propositions ont augmenté de 71% d’une semaine sur l’autre, tandis que les paiements ont augmenté de 79%.
«La première semaine d’activité après notre décision de lever les restrictions de prêt a eu un impact encourageant; d’autant plus que le verrouillage était très largement en place et que les salles d’exposition étaient et doivent rester fermées », a déclaré Mark Standish, directeur général de MotoNovo.
«Ces données fournissent une indication prometteuse pour les concessionnaires en Angleterre qui souhaitent développer un service click & collect; il souligne également l’importance de la finance. D’après l’expérience des périodes économiques difficiles précédentes, nous nous attendons à voir une forte demande de financement par les concessionnaires car l’accès aux prêts non garantis est souvent plus restreint que le financement HP / PCP garanti.
«L’augmentation de l’activité de financement client sur notre site findandfundmycar.com au cours des dernières semaines témoigne de cette tendance. Diriger la disponibilité et l’abordabilité du financement sera important pour les concessionnaires qui cherchent à susciter l’intérêt des clients.
«Bien que je sois encouragé par ces premiers résultats, nous devons reconnaître que nous ne reprenons pas les affaires comme d’habitude. Il est temps que les concessionnaires réévaluent leurs modèles commerciaux pour se rapprocher et se rapprocher de leurs clients. »
Auto Trader va déployer des outils de vente au détail conviviaux
Auto Trader lance un ensemble d’outils de vente au détail pour aider les détaillants à naviguer dans les ventes pendant la période de verrouillage, y compris les options de clic et de collecte et de livraison à domicile.
À partir du 20 mai, les détaillants pourront montrer aux consommateurs via leurs annonces sur le site les mesures qu’ils ont prises pour rendre l’expérience d’achat plus sûre. Les détaillants qui offrent un service de livraison à domicile seront en mesure de présenter un indicateur indicateur correspondant et, le cas échéant, les acheteurs potentiels de voitures auront la possibilité de réserver une visualisation vidéo en direct directement avec le détaillant.
Il y aura également une section pour les mesures de sécurité Covid-19 pour indiquer si le détaillant propose des rendez-vous uniquement ou une collecte sans contact, ainsi qu’une zone de texte gratuite pour permettre aux détaillants d’informer les consommateurs sur les mesures de sécurité Cvoid-19 qu’ils ont introduites.
Karolina Edwards-Smajda, directrice des produits commerciaux chez Auto Trader, déclare: «Dans un monde où, indépendamment de ce que le gouvernement dit, les consommateurs hésitent encore à sortir, il est essentiel que nous aidions les détaillants à créer une expérience en ligne exceptionnelle pour les consommateurs.
«Tout, depuis l’expérience de navigation, jusqu’aux assurances sur le véhicule, son prix et les mesures de sécurité du détaillant sont nécessaires pour instaurer la confiance avec les consommateurs et aider les détaillants à convertir leurs ventes. Nous avons créé ces outils, pour aider à la fois le détaillant et le consommateur à générer la confiance, la transparence et, bien sûr, les ventes indispensables. Nous sommes tous vraiment déterminés à aider les détaillants à reprendre leurs activités le plus rapidement possible. »
Les nouvelles fonctionnalités sont gratuites pour tous les clients Auto Trader.
iVendi suit «l’augmentation proportionnelle» du financement des motos et des fourgonnettes
Il y a eu une augmentation proportionnelle des applications de financement de motos et de fourgonnettes, selon les données d’iVendi.
La société a indiqué qu’à ce stade de mai 2019, les motos représentaient environ 7% de toutes les applications et les camionnettes 5%. Ce chiffre est passé à 10% et 8% respectivement en glissement annuel.
«Alors que le nombre total de demandes de financement que nous voyons cette année est, comme vous vous en doutez, bien inférieur à celui d’il y a 12 mois, la proportion de demandes de motos et de camionnettes est sensiblement plus élevée», a déclaré James Tew, directeur général d’iVendi.
«La lecture évidente de ceci est que nous voyons deux tendances liées aux coronavirus se répercuter sur les chiffres. Premièrement, il existe une demande accrue de véhicules utilitaires légers destinés à être utilisés par des travailleurs clés occupant des postes de soutien importants.
«Deuxièmement, nous entendons des histoires anecdotiques de certaines personnes qui choisissent naturellement de quitter les transports en commun en raison du risque d’infection dans les trains et les bus, au lieu de passer à des alternatives. Le secteur de la moto en fait clairement partie, en particulier en ce qui concerne les cyclomoteurs et autres types de vélos de banlieue. »
Tew a ajouté qu’il y avait une probabilité raisonnable que ce changement dans les statistiques d’application financière d’iVendi se poursuive à moyen et à long terme.
«Nous allons très certainement voir un changement dans le mix de transport en raison de la situation des coronavirus. Dans l’ensemble, les gens peuvent finir par faire moins de voyages dans l’ensemble, mais être très réticents à partager leur transport avec d’autres lorsqu’ils doivent voyager.
«Il est probable que cela stimulera les ventes de voitures, en particulier les petites voitures à hayon, car les gens cherchent des moyens alternatifs de se rendre au travail, mais cela pourrait également voir la popularité de tout, des vélos et des vélos électriques aux scooters électriques et aux cyclomoteurs, augmenter. “
Aston Barclay étend son programme d’enchères en ligne
Aston Barclay a étendu son programme d’enchères en ligne sur la base des résultats d’une enquête auprès des acheteurs suite à l’adresse de verrouillage de Boris Johnson le 10 mai.
Dans l’enquête, 52% des acheteurs ont déclaré s’attendre à une forte demande de voitures d’occasion dès l’ouverture des concessionnaires, 80% prévoyant acheter jusqu’à 30 voitures d’occasion au cours du mois prochain. Ces statistiques correspondent étroitement aux schémas d’achat pré-pandémie des acheteurs. Six sur 10 ont déclaré qu’ils achèteraient des actions dans la fourchette de prix de 5 à 15 000 £, tandis que les acheteurs prévoient également que les VUS conserveront leur popularité sur le marché.
En outre, 44,9% des concessionnaires ont déclaré qu’ils achèteraient des actions en ligne une fois que le marché reviendrait à la normale, renforçant ainsi l’impact de l’achat en ligne au cours des sept premières semaines de verrouillage.
Aucun acheteur physique ne sera autorisé sur le site à inspecter le stock ou à enchérir. Même lorsque la distance sociale est relâchée, Aston Barclay envisage de ne permettre qu’un nombre restreint d’acheteurs physiques présents à chaque vente de maximiser la sécurité sur le site, une tendance qui deviendra la «nouvelle norme».
«Chaque partie de notre récent examen des activités se concentre sur ce à quoi ressemblera le nouvel avenir pour renforcer la sécurité de nos collègues, acheteurs et fournisseurs. Combinez cela avec les résultats de l’enquête auprès des acheteurs où l’industrie prévoit un marché des voitures d’occasion en bonne santé en place dès le départ, nous pensons que nous sommes en bonne position et prêts à jouer notre rôle en soutenant l’industrie à son retour au travail. » a expliqué Neil Hodson, directeur général du groupe Aston Barclay.
Close Brothers: les concessionnaires veulent un soutien gouvernemental prolongé
Selon un sondage de Close Brothers Motor Finance, six concessionnaires automobiles sur 10 souhaitent bénéficier d’un soutien prolongé grâce à des subventions et des prêts gouvernementaux.
Un mois après le début du verrouillage au Royaume-Uni, 55% des concessionnaires ont confirmé qu’ils avaient retiré plus de fonds pour rester à flot. Les entreprises étaient en difficulté, avec un impact énorme sur les employés; 47% des concessionnaires ont mis leur personnel en congé et 43% l’ont mis à pied. La moitié des concessionnaires (49%) ont signalé des problèmes d’approvisionnement en stock.
La moitié (49%) des répondants avaient indiqué aux clients qu’ils ne savaient pas comment / comment acheter une voiture pendant le verrouillage, et un quart (25%) avec les clients ne savaient pas comment récupérer une voiture qu’ils avaient déjà commandée / acceptée d’acheter.
En ce qui concerne la solution, les concessionnaires sont très désireux de voir un soutien prolongé avec des subventions et des prêts du gouvernement, avec 61% disant que cela aiderait à la reprise. Quelque 53% souhaiteraient davantage de soutien pour les constructeurs automobiles et 47% souhaitent un soutien supplémentaire pour les salaires des employés.
Au-delà de l’impact direct de Covid-19, des obstacles réglementaires plus larges persistent. 47% des concessionnaires souhaitent une réduction des tarifs d’importation et 43% réclament des modifications du calendrier de l’interdiction du diesel / essence. En février, l’interdiction des voitures à essence et diesel a été avancée de 2040 à 2035, et les concessionnaires se sont dits préoccupés à l’époque que l’ambition était trop difficile sans plus d’investissements dans les infrastructures et l’éducation.
En termes d’intérêt en ligne, 45% des concessionnaires ont signalé un intérêt accru pour les réseaux sociaux à mesure que la demande des consommateurs se déplaçait en ligne, et 31% ont saisi le verrouillage comme une opportunité pour renforcer la présence en ligne de leur concession pour soutenir les ventes actuelles et futures. Près d’un sur cinq (18%) a mis en place un service de livraison afin de répondre en toute sécurité à la demande continue.
Seán Kemple, directeur des ventes de Close Brothers Motor Finance, a déclaré: «Covid-19 a mis l’économie britannique à genoux, et avec la plupart des salles d’exposition et des bureaux fermés, l’industrie automobile a été durement touchée. Le gouvernement a déjà introduit un certain nombre de mesures, notamment des réductions des tarifs des entreprises, le régime de congé et les droits sur les carburants gelés, mais l’environnement reste indéniablement difficile.
«Il est vraiment positif de voir certains constructeurs automobiles britanniques reprendre le travail en toute sécurité, mais avec des mesures de distanciation sociale en place, la vitesse de production sera sévèrement limitée. Ceci, combiné avec la confiance des consommateurs entamée, signifie que l’avenir est incertain. Les concessionnaires travaillent dur pour trouver des moyens de soutenir leur personnel et leurs clients, et en tant que colonne vertébrale de l’industrie automobile, il est essentiel qu’ils soient correctement pris en charge. “
Les PDG européens de l’automobile discutent du plan de relance et du Green Deal
Les chefs de direction de l’ensemble de la chaîne de valeur automobile ont rencontré la Commission européenne pour discuter d’un plan de relance pour le secteur, en vue de stimuler l’économie au sens large.
L’Association européenne des constructeurs automobiles (ACEA) et l’Association européenne des fournisseurs automobiles (CLEPA) étaient également présentes pour s’entretenir avec Frans Timmermans, vice-président exécutif de la Commission pour le Green Deal, et Thierry Breton, commissaire chargé du marché intérieur.
Avec des fermetures d’usine prolongées à travers l’Europe, une perte de production de 2,4 millions de véhicules jusqu’à présent et des ventes de voitures en baisse de plus de 95% sur les principaux marchés de l’UE le mois dernier, l’ensemble du secteur risque de manquer de liquidités et voit ses performances menacées pendant un certain temps venir. La situation de l’industrie automobile a un effet d’entraînement important sur d’autres secteurs de l’économie.
“La priorité numéro un de l’industrie est de relancer le marché, permettant ainsi à la production de reprendre sur les sites de fabrication à travers l’UE”, a déclaré le directeur général de l’ACEA, Eric-Mark Huitema. «Compte tenu de l’effondrement quasi total des ventes, il sera crucial de stimuler fortement le marché pour permettre aux constructeurs automobiles de rouvrir complètement leurs installations de production et de maintenir les emplois.»
Lors de la réunion, l’ACEA et la CLEPA ont appelé la Commission européenne à coordonner les programmes nationaux de renouvellement de la flotte afin de garantir l’harmonisation des conditions du marché à travers le continent et de les compléter avec le budget de l’UE.
«Alors que nous travaillons à remettre les roues en marche, nous devons chercher des solutions gagnant-gagnant, répondant aux besoins environnementaux, industriels et sociétaux pressants», a déclaré Sigrid de Vries, secrétaire général de la CLEPA. «L’objectif des mesures de récupération devrait donc être double: relancer l’industrie et utiliser la gamme complète des solutions technologiques disponibles et nécessaires à la neutralité carbone. Parallèlement à des investissements dans des vecteurs et des infrastructures d’énergie renouvelable, cela propulsera le Green Deal et préservera l’emploi et l’activité industrielle en Europe. »
Manheim reprend son programme de vente aux enchères de véhicules
Manheim a repris son programme de vente aux enchères de véhicules, après des semaines de planification et de mise en œuvre des mesures de sécurité nécessaires.
Les enchères seront en ligne uniquement et présenteront une large gamme de véhicules et de modèles de plusieurs fournisseurs. Les actions seront disponibles à l’achat via des événements «acheter maintenant» et des «enchères virtuelles» via Simulcast.
Les acheteurs ne seront pas facturés les frais supplémentaires de Simulcast habituels jusqu’à nouvel ordre. Cette concession s’applique également à tous les véhicules acquis auprès de Manheim Online. Les enchères sont uniquement commerciales et vous devez être titulaire d’un compte Manheim pour participer.
Les acheteurs seront contactés après chaque vente pour organiser la collecte. La collecte doit être sur rendez-vous seulement. Un processus de transfert strict sera mis en place pour assurer la sécurité continue des membres de notre équipe et de nos clients.
Les acheteurs sont également informés que les véhicules achetés avant le verrouillage peuvent désormais être récupérés, avec le même processus de transfert strict en place. Les centres d’enchères contactent les clients pour organiser des rendez-vous de transfert.
Chris Cush, directeur des ventes aux enchères et du transport à Manheim au Royaume-Uni, a déclaré: «Nous sommes ravis de reprendre nos opérations d’enchères en ligne cette semaine. Nous avons soigneusement planifié l’activité opérationnelle requise pour soutenir chaque vente en toute sécurité, tant en termes de fonctionnement de nos équipes que de réception des véhicules qu’ils achètent par les clients.
«Nous avons mis en place un processus de fonctionnement strict qui garantit le maintien de la distance sociale et des collections gérées pour assurer la sécurité de toutes les personnes impliquées. Nous allons accélérer notre calendrier de vente dans les semaines à venir, mais pour l’instant, l’accent est mis sur la gestion prudente de l’activité afin de maintenir le bien-être et la sécurité des membres de l’équipe et des clients au premier plan de nos activités. »
Ford redémarre ses opérations dans les usines européennes
Ford a déclaré que les véhicules sortaient de nouveau des lignes de production dans des usines en Allemagne, en Roumanie et en Espagne après une suspension de production de sept semaines en réponse à la crise de Covid-19.
«Dans le cadre d’un redémarrage progressif, la production a commencé à un faible niveau et sera progressivement augmentée au cours des prochains mois avant la reprise de la production. La priorité sera initialement accordée aux commandes de véhicules vendus par les concessionnaires », a déclaré le constructeur automobile.
Des normes mondiales sur la distanciation sociale et des protocoles de santé et de sécurité sont en place dans toutes les usines pour protéger les travailleurs de retour.
Chaque jour, les employés doivent suivre un processus d’auto-évaluation du bien-être et recevoir également des «kits de soins» personnels comprenant des masques faciaux fabriqués par Ford et d’autres articles d’hygiène.
«La réponse de nos employés a été incroyable. Nos équipes ont été très proactives pour aider à soutenir leurs communautés locales à travers la crise des coronavirus et maintenant elles sont de retour à ce qu’elles font le mieux – fabriquer les véhicules qui aideront à faire bouger l’Europe à nouveau », a déclaré le chef de fabrication de Ford Europe, Dale Wishnousky.
«Nous avons surveillé la situation de très près pour nous assurer que le moment était bien choisi et que toutes les mesures étaient en place pour offrir un lieu de travail sûr et protégé.»
La reprise stop-start «définira l’héritage de Covid-19» à court terme
Selon une nouvelle analyse de Cox Automotive UK, le secteur automobile connaîtra une reprise «stop-start», le reste de 2020 ne revenant probablement à aucune version de la normalité.
Il prévient également que mai et juin ne seront pas représentatifs de la situation à plus long terme, avec une demande refoulée et une offre excédentaire initiale conduisant à une pointe à court terme des transactions avant que les pénuries d’approvisionnement ne privent le marché des actions nouvelles et d’occasion.
Des cycles de renouvellement perturbés, une confiance modérée des consommateurs, une rationalisation de la flotte et des préférences de mobilité personnelle changeantes feront un reste imprévisible de 2020.
Mais malgré l’impact inévitable sur les ventes de véhicules neufs et d’occasion, Cox Automotive ne pense pas que Covid-19 entraînera une destruction à long terme de l’économie de la même manière que la crise financière de 2007-2009.
Philip Nothard, directeur de la stratégie et des informations clients de Cox Automotive, a déclaré: «Covid-19 a créé un ensemble unique de circonstances politiques, économiques et sociales qui définiront une« nouvelle normalité ». Il est très peu probable que le secteur automobile revienne à ce que nous savions avant la pandémie, mais il y a des points positifs à découvrir.
«Notre consensus éclairé est que nous assisterons à une reprise en forme de« W »à long terme, suivant la trajectoire générale de l’économie globale, mais avec quelques écarts notables propres à notre secteur. Attendez-vous à ce que des prix inhabituels se produisent avec les déséquilibres de l’offre et de la demande.
«Le marché des véhicules neufs ne reviendra à aucune forme de normalité avant un certain temps. Il faudra du temps aux fabricants pour redémarrer les opérations, et nous ne verrons peut-être jamais la sortie revenir là où elle était avant le coronavirus pendant un certain temps. L’impact financier de Covid-19 verra inévitablement certains OEM changer de stratégie, certains projets étant complètement arrêtés et d’autres accélérés pour répondre aux nouveaux besoins des consommateurs.
«Nous verrons également la consolidation dans le secteur des concessionnaires s’accélérer à mesure que les problèmes de liquidité prennent racine pour certains, et que les consommateurs passent aux canaux numériques beaucoup plus rapidement que prévu. Les véhicules d’occasion constitueront l’opportunité de revenus dominante pour les concessionnaires et les équipementiers pour le reste de l’année.
“À plus long terme, nous pensons que plusieurs facteurs auront un impact plus important sur le secteur, notamment l’agenda de l’air pur, le travail à distance et la mobilité. Tout cela influencera la façon dont les consommateurs choisiront et utiliseront leurs véhicules. »
Startline: des solutions HP et PCP faciles à utiliser pour la vente en ligne
Paul Burgess, PDG de Startline, a déclaré qu’il fallait des solutions de location-vente et d’achat de contrats personnels rapides, faciles à utiliser, robustes et conformes pour rendre les ventes en ligne viables.
En conséquence, Startline a commencé à travailler sur les processus de financement automobile avec des concessionnaires qui ont l’intention de proposer des ventes de voitures d’occasion à domicile en ligne.
«Nous offrons depuis longtemps la capacité de mener à bien l’ensemble de la tâche de traitement du financement automobile en ligne, du point de vue de l’acheteur et du détaillant, mais, avant le verrouillage, certains concessionnaires ont choisi de maintenir les processus traditionnels.
«Ce sont ces détaillants que nous aidons maintenant. En ce qui concerne la remise des véhicules, les points de contact doivent être minimisés ou éliminés, bien sûr, y compris la signature d’un accord de financement automobile sur papier. Tout doit être en ligne pour la livraison à domicile et, si le click-and-collect est largement adopté dans un avenir proche, l’approche sera essentiellement la même. »
Burgess a déclaré que Startline avait connu une augmentation significative de l’activité des concessionnaires ces derniers jours et que beaucoup, en particulier les grands groupes de concessionnaires et les supermarchés automobiles, se préparaient à adopter des modèles de vente en ligne assez complets.
«Nous avons clairement l’intention d’essayer de faire fonctionner les ventes en ligne chez peut-être la moitié des concessionnaires avec lesquels nous avons des relations. Nous avons entrepris des recherches l’année dernière qui indiquaient que plus de la moitié des acheteurs de voitures d’occasion seraient à l’aise d’acheter et de financer en ligne, il peut donc y avoir un marché potentiel assez important mais, à ce stade, personne ne le sait.
«Cependant, il est important de garder à l’esprit que, si de nombreuses personnes sont confrontées à des difficultés financières, d’autres ont un revenu disponible, en particulier parce qu’elles ne dépensent pas pour toutes sortes de choses – des restaurants aux concerts – qui leur sont actuellement inaccessibles. .
«De plus, pour l’anecdote, il existe un nouveau groupe potentiel d’acheteurs de voitures qui souhaitent actuellement pénétrer le marché parce qu’ils ne se sentent plus à l’aise avec les transports en commun. Encore une fois, il est très difficile de dire quelle taille ce marché peut être, mais il y a certainement des possibilités. »
ALD Automotive s’associe à Karshare pour une assistance de première ligne
Les principaux employés du North Bristol NHS Trust et des hôpitaux universitaires bénéficient gratuitement d’un parc de 33 véhicules, fournis par ALD Automotive, basé à Bristol, et gérés par le biais du programme de voitures communautaires gratuites de Karshare. Les 30 voitures, deux fourgonnettes et un minibus seront utilisés pour aider les travailleurs clés à se déplacer plus en toute sécurité, à distribuer des fournitures (y compris des EPI) et à soutenir la communauté.
Tim Laver, directeur général d’ALD, a déclaré: «En tant que membres de la communauté de Bristol, nous voulions tous faire quelque chose pour aider pendant cette période de crise, et fournir des véhicules était un point de départ évident. Nous avons donc fait équipe avec Karshare pour aider à l’excellent travail qu’ils faisaient déjà dans la région de Bristol. »
Parce que les services de transport public ont été coupés et que les règles de distanciation sociale limitent le partage des ascenseurs au travail, la grande majorité des véhicules ALD seront utilisés pour aider les travailleurs clés à se rendre au travail. Les premiers véhicules ont déjà été remis au personnel travaillant au sein des deux NHS Trusts locaux, qui gèrent des hôpitaux, notamment l’hôpital Southmead, l’hôpital Cossham, le nouvel hôpital UWE Nightingale, le Bristol Royal Infirmary, le Bristol Royal Hospital for Children et le Weston General Hospital.
En raison des volumes impliqués et des niveaux élevés d’absences des chauffeurs-livreurs, les voitures ALD seront également utilisées pour transporter les fournitures essentielles aux services de santé et de soins, notamment les EPI, la nourriture et les articles de toilette.
Laver a poursuivi: «Nous sommes fiers de pouvoir aider le personnel du NHS et d’autres travailleurs clés tout au long de cette période difficile et Karshare a été d’une grande aide dans ce processus. Nous espérons que les véhicules leur faciliteront un peu la vie, leur permettant de faire leur travail vital dans les hôpitaux et dans la communauté. »
Startline: la reprise du financement automobile essentielle à la vente en ligne
Selon Startline Motor Finance, la reprise d’une large disponibilité du financement automobile sera essentielle pour les concessionnaires de voitures d’occasion qui cherchent à maximiser leurs ventes en ligne au cours des semaines et des mois à venir.
La société souligne que de nombreux fournisseurs de financement automobile avaient essentiellement fermé leurs portes à de nouvelles activités lorsque le verrouillage a commencé, laissant un grand nombre d’employés dans la conviction que les conditions actuelles rendraient les ventes de véhicules presque impossibles.
Paul Burgess, directeur général de Startline, a expliqué: «Les éclaircissements du gouvernement sur la livraison à domicile et l’adoption probable, par la suite, de modèles click-and-collect signifient que de nombreux concessionnaires qui avaient essentiellement mis leur entreprise en veilleuse cherchent maintenant à mettre un beaucoup d’efforts et de ressources dans les ventes en ligne – et pour être opérationnel dès que possible.
«Cependant, le rôle que la finance automobile doit jouer dans ce scénario n’a pas vraiment été largement discuté. La majorité des ventes de voitures sont activées par des produits tels que l’achat de location et l’achat de contrat personnel, et elles seront nécessaires pour rendre les ventes possibles.
«Pour que cela fonctionne, deux problèmes doivent être résolus: intégrer la finance automobile dans les parcours clients en ligne et garantir que les prestataires proposent actuellement des services.
«Premièrement, le concessionnaire et son panel financier doivent avoir réussi à intégrer le financement automobile dans leur parcours client en ligne. Le processus doit permettre aux financements d’être fournis de manière simple, efficace et conforme.
«Deuxièmement, leurs fournisseurs de financement automobile doivent être en mesure d’écrire de nouvelles affaires. Certains ont mis en disponibilité un grand nombre d’employés en se fondant sur l’hypothèse que le marché serait essentiellement dormant pendant la période de verrouillage. La possibilité de ventes en ligne a peut-être pris ces entreprises par surprise et elles envisagent actuellement la possibilité de se préparer à fournir au moins un service squelette. »
Startline avait choisi de rester pleinement opérationnel pendant la crise, a ajouté Paul, et avait écrit des volumes d’affaires qu’il jugeait étonnamment élevés. En outre, les investissements que la société a réalisés dans la technologie en ligne ont joué un rôle clé.
«Pour certains de nos plus grands introducteurs, par exemple, nous avons vu les transactions d’avril se dérouler à environ les deux tiers du niveau normal. Oui, les volumes globaux ont considérablement baissé, mais nous avons constaté que rester ouvert a été la bonne décision. Ce n’est pas un marché dormant.
«Bien sûr, toutes les affaires que nous avons vues ont été écrites en ligne. Il n’y a pas d’autre voie de commercialisation pour le moment, les capacités numériques ont donc été essentielles. »
Burgess a ajouté qu’il était difficile de prévoir le degré de ventes en ligne qui pourraient se produire pendant le verrouillage, mais qu’il pourrait fournir une bouée de sauvetage importante pour les entreprises de vente au détail de voitures.
“Nous pensons que, même si vous ne vendez que 10 à 20% des véhicules que vous gérez normalement, tant que vous gagnez de l’argent, cela en vaut la peine. Certes, il n’est pas impossible d’envisager des scénarios, en particulier pour les petits concessionnaires, où ces quelques ventes pourraient faire la différence entre survivre à cette crise ou autrement. »
VW s’attend à un «impact substantiel» sur les ventes du premier trimestre
Volkswagen a déclaré que la pandémie de COVID-19 avait «un impact substantiel» sur les affaires au cours des trois premiers mois de l’année.
Les livraisons ont baissé de 23% sur un an pour atteindre 2 millions de véhicules. Le chiffre d’affaires recule de 8,3% à 55,1 milliards d’euros. Le résultat opérationnel plonge de 81,4% à 0,9 milliard d’euros.
Le groupe s’attend à ce que les livraisons en 2020 soient «nettement inférieures à l’année précédente» en raison du virus.
La concurrence croissante, la volatilité des produits de base et des devises et les exigences plus strictes liées aux émissions sont également difficiles. Le chiffre d’affaires devrait également être nettement inférieur à celui de l’an dernier, le résultat d’exploitation étant «nettement inférieur à celui de l’année précédente», mais demeurant positif.
Les ventes de voitures particulières VW ont baissé de 16% au premier trimestre pour atteindre 765 000. Le volume d’Audi est tombé à 268 000 contre 305 000. Les ventes de Skoda ont baissé de 13,7% à 237 000 véhicules et Seat a baissé de 20,6% à 140 000.
Même Porsche n’était pas à l’abri des effets des virus, bien que les ventes aient chuté de 1,3% à 56 000 au premier trimestre.
Le chef des finances du groupe VW, Frank Witter, a déclaré: “Nous avons pris de nombreuses contre-mesures pour réduire les coûts et garantir la liquidité et nous continuons d’être solidement positionnés financièrement.”
Meridian s’attend à une augmentation des loyers à moyen terme après le verrouillage
Meridian Vehicle Solutions s’attend à une forte demande pour le marché de la location à moyen terme lorsque l’économie commencera sa reprise après le verrouillage.
Phil Jerome, directeur général de Meridian, a prédit que le produit était susceptible de répondre à l’humeur du temps, offrant un transport immédiat et à faible coût sans engagement à long terme.
«Nous allons presque certainement sortir du verrouillage de manière mesurée et progressive, et la confiance économique ne devrait pas être élevée. De nombreuses entreprises se méfieront de la signature de baux à long terme car il y aura tant d’inconnues économiques.
«Dans cette situation, la location à moyen terme est une solution très attrayante et nous nous attendons à ce qu’il y ait beaucoup d’intérêt dans un court laps de temps.»
Jerome a déclaré que Meridian s’attendait également à voir la demande parmi les personnes qui voulaient maximiser la distance sociale en ayant leur propre espace clos dans lequel voyager.
«Il y aura une proportion du public – et il est difficile de dire combien en ce moment – qui ont l’habitude d’utiliser des trains et des bus, mais qui seront maintenant mal à l’aise d’être si près de tant de personnes après le verrouillage.
«Ces gens vont chercher une voiture. Certains achèteront sans aucun doute un runaround bon marché mais la location à moyen terme fournit à nouveau une solution qui peut être utilisée pour les faire traverser une période de 6 à 12 mois jusqu’à ce que la situation du coronavirus soit résolue.
Ford annonce un redémarrage progressif en Europe
Les travailleurs d’usine de Ford Europe, tels que ceux-ci en Roumanie avant l’épidémie de virus, verront de nombreux changements alors que la production redémarre progressivement
Les travailleurs d’usine de Ford Europe, tels que ceux-ci en Roumanie avant l’épidémie de virus, verront de nombreux changements alors que la production redémarre progressivement
Ford a annoncé son intention de redémarrer la production dans la plupart de ses principales usines de véhicules et de moteurs d’Europe continentale à partir du 4 mai.
La fabrication reprendra à partir de ce jour par étapes dans les usines d’assemblage de véhicules de Saarlouis et d’assemblage de Cologne, ainsi que d’une usine de moteurs en Allemagne, d’assemblage de Valence en Espagne et d’usines d’assemblage et de moteurs Craiova en Roumanie.
La production redémarrera à l’usine de moteurs de Valence le 18 mai, mais il n’y a pas de dates de reprise pour les usines de moteurs de Dagenham, en Angleterre et à Bridgend, au Pays de Galles, car le Royaume-Uni est toujours en lock-out et les gouvernements central et régional doivent encore détailler une stratégie ou un calendrier de sortie.
«Nous devons nous préparer à un nouvel environnement une fois que nous aurons dépassé le pic initial de la pandémie de coronavirus en Europe, la priorité clé de notre plan de retour au travail étant la mise en œuvre des normes mondiales de Ford sur l’éloignement social et le renforcement des protocoles de santé et de sécurité sur le lieu de travail. Nos employés doivent savoir que nous prenons les mesures appropriées pour protéger leur bien-être au travail », a déclaré Stuart Rowley, président de Ford Europe.
La production commencera à un faible niveau, donnant la priorité aux commandes de véhicules clients vendus auprès des concessionnaires, et augmentera progressivement au cours des prochains mois avant de reprendre la production complète.
Les plans de production tiennent compte de la préparation des fournisseurs, des restrictions de mouvement nationales et de la réouverture des sites de vente des concessionnaires sur les marchés clés, ainsi que de la demande des clients.
Les mesures de sécurité prévues incluent l’obligation pour toute personne entrant dans une usine Ford d’utiliser un masque facial fourni par l’entreprise et un écran facial dans certains postes de fabrication et dans d’autres postes où la distanciation sociale ne peut être respectée. Toutes les personnes doivent faire contrôler la température corporelle à l’entrée avec un équipement de numérisation conforme aux réglementations et restrictions locales ou nationales. Les travailleurs doivent effectuer un processus d’auto-évaluation du bien-être quotidien pour confirmer leur aptitude et leur préparation au travail.
Les zones de travail ont été repensées pour garantir le maintien de lignes directrices appropriées en matière de distanciation sociale et un retour progressif au travail réduira la densité des employés dans les bâtiments.
L’entreprise fournira également à tous les employés une trousse de soins personnels à leur retour au travail. Ils comprennent des masques jetables, un thermomètre réutilisable et d’autres articles d’hygiène.
MotoNovo étend l’acceptation financière à 60 jours
MotoNovo Finance has extended the validity of its finance acceptances to 60 days from the usual 30 days.
The move is designed to help dealers ready themselves to take customer reservations when the car sales return to the normal collection/delivery routine.
“The lock-down has seen a huge rise in online car buyer interest on our findandfundmycar used car marketplace and we are keen to help them and their chosen dealer,” said Karl Werner, deputy chief executive at MotoNovo. “Now, car buyers can reserve their car of choice with our finance, confident that their acceptance will be valid when the lock-down period ends.
“On another positive note, we are continuing to provide finance through the lock-down for essential or key workers as defined by government guidance.”
Evolution Funding sees 290% rise in online self-service finance
Motor finance broker Evolution Funding has reported a 290% rise in customers completing end-to-end, online self-serve finance sales – transactions where consumers propose themselves online and complete a distance e-Sign journey from home.
The company’s digital signing solution lets the customer complete the transaction without ever visiting the dealership. Prior to the COVID-19 crisis, 10.75% of all deals were completed in this way. During April, that percentage has risen to 31.2%.
Chris Coverdale, Evolution group sales director, said: “This rise in self-serve finance proves the importance of enabling customers to transact online. Many of the car sales platforms are reporting a surge in online activity. Our data shows us that buyers are willing to take the leap towards self-service. Indeed, we expect this to become the norm as social distancing measures continue and consumer behaviour adapts.”
Evolution has also increased anti-fraud procedures and enhanced due diligence calls to assist dealers in transacting and delivering at a social distance.
Coverdale added: “Those dealers that are already digitally-enabled are continuing to transact, albeit at much lower volumes. The tools that dealers can add to their websites are quick and simple to implement – from eligibility checkers through to finance calculators that invite online applications and deliver instant decisions. We believe that now is the time for dealers to get digital-ready for when the upturn happens.”
Production restarts at VW Wolfsburg plant
The production of vehicles at VW’s main Wolfsburg plant in Germany has begun today, after weeks of shutdown due to the impact of the COVID-19 crisis.
The first vehicle to be produced is a Golf and VW said that production will start at 10 to 15% of capacity, increasing to around 40 percent over the following week.
The company also said a 100-point plan provides maximum health protection for employees
Ralf Brandstätter, chief operating officer of the Volkswagen Passenger Cars said: “Step-by-step resumption of production is an important signal for the workforce, dealerships, suppliers and the wider economy.”
Production began with the early shift beginning at 6:30 am CET. Initially, Golf production will recommence on a one-shift basis — with reduced capacity and longer cycle times. VW also said some 8,000 employees are returning to the production halls. Production of the Volkswagen Tiguan and Touran models as well as the SEAT Tarraco begins on Wednesday.
VW said multi-shift operation is to get underway again the following week. At the same time, some 2,600 suppliers, the majority of them located in Germany, have resumed production for Volkswagen’s main plant. Measures to protect the health of the workforce have been significantly expanded.
“Step-by-step resumption of production is an important signal for the workforce, dealerships, suppliers and the wider economy. In terms of managing the crisis, though, this is just the first step. Additional momentum is needed to stimulate demand in Germany and throughout Europe so that production volumes can be successively increased,” said Brandstätter.
Cap hpi: dealers are holding firm in lockdown
The volume of vehicle adverts increased around the turn of the month due to some attractive offers by online portals to assist their customers, according to data from cap hpi.
Retail advertised prices remained stable throughout April as retailers have chosen not to reprice their stock in the current climate. Cap hpi said It is clear that prices are not the reason consumers are not buying, and reductions could lead to an unwelcome competitive race to the bottom.
Derren Martin, head of valuations UK at cap hpi said: “A dedicated team of industry experts and data analysts continues to review all available trade and retail data and will make adjustments if the data reflects the used car market. Since lockdown began, for obvious reasons, there has simply not been sufficient trade data to represent the market accurately, so no values have moved thus far.”
Physical auction halls have been closed since the lockdown announcement. However, trade, or wholesale, sales have not stopped completely. Data from auctions and leasing companies have accounted for around 3,500 cars sold in April, but this is only about 2% of normal levels.
“While we have seen a reduction in the number of valuations requested by our customers in our Valuation Anywhere product we still see thousands every weekday. The opening of dealer showrooms, with safe distancing measures in place, and the ability to buy and sell cars is likely to be in an early part of the release of lockdown and the earlier this is, the less of an impact there will be on value movements.
“It is likely that when we come out of lockdown, cheaper cars will be proportionally more in demand, for several reasons, including prudence and a reluctance to use public transport. It is unlikely that there will be an immediate desire for more expensive used cars, although used finance offers will help stimulate this.”
Heycar reports soaring online traffic during lockdown
Used car marketplace heycar has experienced a surge of interest from ‘lockdown browsers’ who are turning to the internet to plan their next motor purchase.
Traffic on the heycar website has risen 87% since the first week of April, with used cars seeing a particular increase in interest.
However the platform notes that maintaining interest is key. Reactive measures on the heycar site to keep a pipeline of customers for the future have included a ‘register interest’ button on all makes and models, allowing heycar and the relevant dealership to keep in touch until the time is right to buy.
Since being introduced to the site at the beginning of April, there has been a 46% increase in users signalling their interest. And, according to a recent survey, almost one in five car buyers are poised to make a purchase as soon as COVID-19 lockdown is lifted.
Chief Commercial Officer at heycar, Karen Hilton, believes savvy online dealerships who take the time to nurture prospective customers in the medium term will emerge stronger from the Coronavirus crisis.
She says: “It’s so interesting to look at the numbers of people who are coming on to the heycar site at this time. The visitors, the cars they’re browsing and the numbers who are registering interest suggests a pent-up desire to buy when the time’s right.
“We might be living through extraordinary times, but the signs are there that the industry will be able to pivot back to better times later in the year. Right now, that means nurturing every possible lead and having the best possible online offering for people to find you when they are stuck at home on their laptops and phones.”
iVendi: uptick in online activity indicates first signs of a rebound
iVendi has seen an uptick in online used vehicle activity over the last seven days, pointing to the first signs of a potential rebound.
For example, web site visits to view specific used cars, vans and motor cycles during the last seven days are running at 40% compared to the average during January and February, having fallen as low as 33% at the end of March.
Online eligibility checks – which allow a customer to see their chances of being accepted for motor finance – over the last seven days are now 66% of the January-February average, compared to a low of 34%.
Also, online motor finance applications over the last seven days are now running at 54%, compared to a low of 34%.
James Tew, chief executive at iVendi, said: “While it is important to be extremely circumspect in the current situation, there has been a definite uptick in activity over the last few days. During the end of March and the beginning of April, we saw extreme lows and there are now signs of some metrics heading back towards normality.
“Certainly, a relatively large number of people are looking at cars, vans and motor cycles and checking themselves for finance eligibility, and we see those as encouraging signs, even if they are not yet translating into many sales.
“However, perhaps the key statistic is that payouts by motor finance companies are currently running at less than 5% of the January-February level, with many of them committed to only approving essential workers at the moment. With the practicalities of used vehicle dealers effectively returning to work through online sales very much a hot industry topic at the moment, this may or may not remain the norm.”
FCA confirms support for motor finance customers
The Financial Conduct Authority (FCA) has confirmed the package of measures to support motor finance customers facing payment difficulties.
Christopher Woolard, interim chief executive at the FCA, said: “We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products. Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments.”
The FCA has confirmed the following measures:
- Firms to provide a three-month payment freeze to customers who are having temporary difficulties meeting finance or leasing payments due to coronavirus. If customers are experiencing temporary payment difficulties due to coronavirus and need use of the vehicle, firms should not take steps to end the agreement or repossess the vehicle.
- Firms should not alter Personal Contract Purchase (PCP) or Personal Contract Hire (PCH) agreements in a way that is unfair. For example, firms should not try to recalculate PCP balloon payments based on a temporary depreciation of car prices caused by the coronavirus situation. The FCA expects firms to act fairly where terms are adjusted.
- Where a customer wishes to keep their vehicle at the end of their PCP agreement, but does not have the cash to cover the balloon payment due to coronavirus-related payment difficulties, firms should work with the customer to find an appropriate solution. Given the increased potential for disparity between the balloon payment and the value of the vehicle in the current climate, firms should ensure that solutions do not lead to unfair outcomes. For example, refinancing the balloon payment might not be appropriate in the circumstances.
JLR plans Europe production restart in May
Tata-owned Jaguar Land Rover (JLR) plans to gradually resume production from 18th May, starting with manufacturing plants in Solihull in the UK as well as in Slovakia and Austria.
In China, it says it is ‘beginning to see recovery in vehicle sales and customers are returning to our showrooms’. JLR’s joint venture plant in Changshu has been in operation since the middle of February.
As countries are relaxing distancing guidelines and retailers are reopening around the world, the restart of production at other plants will be confirmed in due course, the company said.
JLR also said it is developing robust protocol and guidelines to support a safe return to work. “We will adopt strict social distancing measures across our business and are currently evaluating a number of different measures to ensure we protect and reassure our workforce when they begin to return to work,” the company said.
Jaguar Land Rover also said it is doing ‘whatever it can to support its communities through the current situation. The company’s thoughts are with those directly affected by COVID-19 and with the healthcare professionals, whose role in combating this virus is appreciated by all’.
Startline: coronavirus crisis ‘an opportunity’ to bolster customer relationships
The coronavirus crisis is providing an opportunity to advance the way the motor finance sector handles customer relationships, according to Startline Motor Finance.
Paul Burgess, chief executive of Startline, said that the industry had changed substantially and positively in this respect in recent years as a result of both its own initiatives and statutory interventions, but that the lockdown situation was providing further impetus.
“Obviously, no-one wants the world to find itself in this situation with the horrible cost in terms of both lives and economic damage. However, there are positives to be found if we look hard enough. What we have really noticed about every aspect of our interactions as a business over the last few weeks has been the way in which everyone is pulling together.
“Many of the people we are talking to are experiencing difficulties – whether dealers whose businesses are essentially frozen or motor finance customers who are facing financial difficulties – but the striking thing has been how generally calm and constructive these conversations have been on all sides despite the circumstances.
“In recent years, as a sector, we have become much more adept at treating the customer fairly. The crisis provides the opportunity to move further forward from there.
“Our view is that the public in general will remember the people and the businesses that treated them fairly and with respect during the crisis – it is a watershed moment for the country – and motor finance should do the right thing.”
Burgess added that there were financial realities to be faced in both the short and longer term but that he was hopeful these could be dealt with in a pragmatic manner.
“Everyone currently faces distinct financial difficulties, from motor finance companies to dealers to motor finance customers. The full extent of these problems is not yet clear but the news is likely to be quite bad for at least some people.
“However, our hope – and our aspiration – is that we are able to handle these issues in the right spirit and that this will be recognised by our customers. Talking to other motor finance companies, we are finding signs of a similar approach.
“Clearly, there are going to times when financial realities have to be acknowledged but we very much agree with the statement the FLA has issued where it says that we need to keep motorists in their cars wherever possible. This is certainly our aim at the moment.”
Dealerweb hits 20,000 enquiries since lockdown
Dealerweb has reported that its dealers across the UK have received over 20,000 enquiries since lockdown began on 24 March.
The firm is calling for dealers to ensure they act promptly to nurture enquiries to help their businesses recover when lockdown ends.
In the week commencing 13 April dealers have seen over 5,700 enquiries and sold over 500 vehicles.
Martin Hill, chief executive of Dealerweb, said: “Dealers must act now to ensure they are nurturing fresh enquiries, which are vital to post-lockdown sales. We should consider that 20,000 new enquiries represent 5,000 vehicle sales, at a 25 per cent conversion rate. While many of the cars sold over recent weeks won’t be delivered until after lockdown it is clear that there is an underlying consumer demand that needs to be served.
“If the UK follows the buying trends we are seeing in Wuhan, China, we can expect a strong bounce when lockdown ends. Dealers in the region are seeing pent up demand and new buyers as people buy additional vehicles to avoid having to use public transport.”
The National Franchised Dealers Association (NFDA) has issued guidance to its members on online sales in the COVID-19 lockdown. It says that while showroom activity is not permitted under the government rules, online activity is and that deliveries necessary for online sales can still take place.
Dealerweb reports that since March 24 it has seen orders taken for over 600 vehicles.
Hill added: “Now is the time to start putting in place the building blocks for a successful return to trading and hitting the ground running! Clearly, we need to do it safely with a focus on our teams, customers and communities, but the customers are there for the dealers that are responsive and proactive.”
PSA Group readies Ellesmere Port for restart
PSA Group is readying its Ellesmere Port Vauxhall/Opel factory in Britain for reopening but has yet to confirm a date.
It said the plant has remained “active” and implemented a protocol of reinforced health measures. This protocol, now approved by management, has been fully audited, in order to assess its implementation.
Management has invited Unite, the union representing plant employees, to make a final review of the safety protocols, before car assembly can resume.
The protocol comprises more than 100 measures covering all the company’s activities at industrial, administrative, R&D and commercial level.
For example, the protocol – specifically developed for industrial sites – requires checking employees’ temperatures, in addition to their self-monitoring of symptoms.
The wearing of glasses on site is also supplemented by a daily individual supply of masks, and respecting safe distances between people. Measures include break areas with markings on the floor, keeping doors open (except fire doors) to avoid contact with handles, frequent cleaning of tools and work surfaces, waiting time when exchanging unprepared parts in a hand to hand environment.
“The industrial recovery schedule, which will be comprehensively discussed with Unite, has not yet been specified and will take into account the operating capacity left to companies by public authorities to exercise their commercial and industrial activities,” PSA said in a statement.
iVendi offers online vehicle sales software free-of-charge
iVendi is aiming to help coronavirus crisis-hit car retailers by supplying them with its TRANSACT product free of charge.
The software will automatically be made available to its direct dealer customer base this week and can be used to progress sales digitally as far as possible in current conditions.
James Tew, chief executive of iVendi, said that development work on the product, which was originally due for launch later this year, had been accelerated because it was believed to be highly appropriate for dealers working in the current circumstances.
He said: “We’ve already been providing quite a lot of help to dealers on an individualised basis through our account management team, listening to what they are going through, giving assistance where possible and gauging their mood.
“In opting to make TRANSACT available to all our direct dealers free of charge, we didn’t want to be seen to be doing something just for the sake of it. We had to be sure that it would offer genuine help to those who will use it.
“What we are doing is presenting them with something that incorporates our very latest technology and thinking, and which we believe is the ideal solution to enable sales to be maximised and progressed as far as possible under current restrictions.
“Our research shows that 69% of used car sales don’t happen at the advertised price. There is price negotiation, warranties are upgraded, paint protection is added and so on. TRANSACT takes account of this and provides the means for the conversations to occur digitally as well as in the showroom.”
Tew added that in terms of delivering results for dealers both during and after the crisis, a key point was that the product didn’t require the dealer to change their website because it would work highly effectively within existing online infrastructures.
“During beta testing for TRANSACT in normal market conditions in January and February, more than £10.9m of vehicles sales were concluded, which included £8.6m of finance transactions. This far exceeded our expectations and is part of the reason that we believe it will deliver for dealers hit by the crisis.”
MotoNovo Finance welcomes FCA measures
MotoNovo Finance has welcomed the proposals by the Financial Conduct Authority (FCA) to support motor finance customers during the coronavirus crisis.
Mark Standish, chief executive of MotoNovo, said: “The announcement from the FCA reaffirms the steps that we and I’m sure other motor finance lenders have taken to help customers facing an unexpected financial challenge, as a result of COVID-19 impact are on the right track. It also underlines the importance of providing support at an individual level, recognising the 3-month payment freeze that has grabbed the headlines, may not be suitable to everyone.”
The value of providing a solution to each person impacted by COVID-19 was emphasised by the FCA’s interim Chief Executive Christopher Woolard, in announcing the FCA proposed measures when he noted: “We have tailored our measures to specific products. For most of these proposals, firms and consumers should consider the amount of interest which may build up, and balance this against the need for immediate temporary support. If a payment freeze isn’t in the customer’s interests, firms should offer an alternative solution, potentially including the waiving of interest and charges or rescheduling the term of the loan.’
Standish added: “We have already agreed support for circa 20,000 customers. We have also deployed an additional 122 people to our customer support teams, taking the total workforce to 288 to meet the increase in demand. These teams are primarily focused on calls and online responses, but we also have a number of digital solutions available to support customers to self-serve.
“Even with additional measures in place, the crucial importance of responding to each person that contacts us and understanding their circumstances means it will take time to respond to every person. This is far from ideal, but every person can be assured that our simple aim is to help as many people as possible to continue their car finance in a manner they can afford, minimising the financial stress they might otherwise face. It is a message we want to ensure all of our customers know and that dealers, who may be contacted by their customers can share.”
Auto Trader extends retailer support into May
Online car marketplace Auto Trader has extended its offer of free advertising to its retail customers, in light of the government’s announcement to extend business closures for another three weeks.
Nathan Coe, Auto Trader’s Chief Executive Officer, commented: “We remain committed to supporting our customers, our industry and our people. As our customers are not able to meaningfully trade, we will do what we can to support them such that when restrictions are lifted, they are able to get back to business.
“To the extent retailers are still able to engage with buyers, we are seeing plenty of activity through email, calls and text chat. Many retailers are treating these leads as a pipeline for future sales for when the market re-opens.”
FCA proposes support package for motor finance customers
The Financial Conduct Authority (FCA) has proposed a package of measures to support motor finance consumers facing payment difficulties due to COVID-19.
The FCA expects motor finance providers to offer a 3-month payment freeze to customers who are having temporary difficulties meeting finance or leasing payments due to coronavirus. If customers are experiencing temporary financial difficulties due to coronavirus, firms should not take steps to end the agreement or repossess the vehicle.
The FCA has also proposed that:
- Firms should not change customer contracts in a way that is unfair. For example, firms should not try to use temporary depreciation of car prices caused by the coronavirus situation to recalculate Personal Contract Purchase (PCP) balloon payments at the end of the term. We will expect firms to act fairly where terms are adjusted.
- Where a customer wishes to keep their vehicle at the end of their PCP agreement, but does not have the cash to cover the balloon payment due to coronavirus-related financial difficulties, firms should work with the customer to find an appropriate solution.
Christopher Woolard, interim chief executive at the FCA, said: “We are very aware of the continued struggle people are facing as a result of the pandemic. These measures build on the interventions we announced last week, and will provide much needed relief to consumers during these difficult times.
“We have tailored our measures to specific products. For most of these proposals, firms and consumers should consider the amount of interest which may build up, and balance this against the need for immediate temporary support. If a payment freeze isn’t in the customer’s interests, firms should offer an alternative solution, potentially including the waiving of interest and charges or rescheduling the term of the loan.”
The guidance includes hire purchase agreements (such as PCP agreements), conditional sale agreements or other credit agreements used to purchase a vehicle where the creditor is also the supplier (eg credit sale), as well as PCH agreements.
The proposals are intended to complement the measures already announced by the government to support consumers during the coronavirus pandemic.
The FCA is open to receiving comments on its proposals. Stakeholders are asked to respond by 5pm on Monday 20 April. The final guidance is due to be published by Friday 24 April 2020, coming into force shortly after.
ACEA publishes guidelines for re-launch of EU auto industry
The European Automobile Manufacturers’ Association has published four guiding principles for a successful re-launch of the European automotive industry.
“It is in Europe’s interest that this key strategic sector not only recovers, but also is revitalised in order to make a strong contribution to the EU’s industrial strategy, the European Green Deal as well as the continent’s global innovation leadership,” said Eric-Mark Huitema, director general of the ACEA.
The four principles are as follows:
Defining a coordinated strategy to safely relaunch vehicle production as soon as possible
The ACEA said it is vital that both manufacturers and suppliers can rapidly and simultaneously get their plants up and running across the whole supply chain and in all countries. ACEA is requesting EU-wide support for a coordinated re-start of activities and investments right along the supply chain.
“A top priority is to protect the health of all those who work in the auto sector,” said Huitema. “To that end, we need clarity on the relevant health and safety rules in each country for when production restarts.”
Stimulating market demand for all vehicle categories
Huitema: “As Europe looks to reboot its economy, it will be crucial that clean road transport and mobility are affordable for everybody across the continent. Given the fragile economic situation, however, many consumers and professional transport operators will be simply unable to purchase new vehicles.”
Therefore, fleet renewal schemes for all vehicle categories across the EU would be needed to help re-launch demand for the latest vehicle technologies.
Unblocking type approval and registrations of the latest-technology vehicles
Today’s standstill within the industry, technical services and national type approval authorities is understandably disrupting the approval or ‘homologation’ of new vehicles, meaning they cannot be sold. Similarly, if vehicle registration authorities are shuttered and cannot grant registrations, businesses and customers cannot use their new vehicles. ACEA therefore urges authorities in the EU member states to accelerate the type approval and vehicle registration process to the maximum extent possible, given the constraints currently in place.
Accelerating investment in recharging and re-fuelling infrastructure
An EU-wide network of charging and re-fuelling infrastructure will be key to ensuring that the fleet can be renewed in an environmentally-friendly way, according to ACEA.
VW to resume production ‘step by step’
Volkswagen has detailed a “step by step” resumption of passenger car production starting with Zwickau and Bratislava from 20 April and other German, Portugal, Spain, Russia, South Africa, North and South America plants from 27 April.
May will see production resumed in South Africa, Argentina, Brazil and Mexico.
Ralf Brandstaetter, COO of the Volkswagen brand, said: “With the decisions by the federal and state governments in Germany and the loosening of restrictions in other European states, conditions have been established for the gradual resumption of production.
“VW has prepared intensively for these steps over the past three weeks. In addition to developing a comprehensive catalogue of measures for the protection of our employees’ health, we have also forged ahead with the re-establishment of our supply chains.”
Short time working will continue at plants in Germany but the number of employees affected will be successively reduced in line with the resumption of production.
Production will be resumed in line with the current availability of parts, government requirements in Germany and Europe, the development of sales markets and the resulting modes of operation of the plants.
Irrespective of these developments, compliance with the stringent health protection measures for employees will be top priority.
Production and logistics chief Andreas Tostmann said: “We are providing safe workplaces and the maximum possible level of health protection with a 100-point plan. We are ensuring the economy regains momentum and cars once again leave the plants and reach our dealers and customers.”
Components operations had already started to resume production at plants in Brunswick and Kassel from 6 April, followed by plants in Salzgitter, Chemnitz and Hanover, as well as the Polish plants, from 14 April, to safeguard component supplies for vehicle production in China.
The company can also call upon experience gained with the production ramp-up at its plants in China where a large number of consistent health protection measures have been successfully implemented.
Some 32 of 33 plants in China have now returned to production and no cases of coronavirus have been reported among employees.
Cazoo offers £250 discount to NHS workers
Online used car platform Cazoo is offering a £250 discount on any vehicle to NHS workers, in response to their work during the COVID-19 outbreak.
Cazoo has reportedly seen a notable increase in demand from health workers seeking to buy a car over the past few weeks, as cars have become an essential mode of transport for many workers.
To claim their £250 discount, NHS workers must order a car via Cazoo’s website and then e-mail their NHS photo ID to email@example.com. Once the car has been delivered, Cazoo will refund the £250.
As with other online retailers, Cazoo has recently put in place measures to ensure a contactless delivery process to fully protect both its staff and customers. All vehicle handovers now take place from a safe distance with Cazoo delivery drivers wearing personal protective equipment and remaining outside the car, whilst still providing a full customer handover and explanation of all the key features of the vehicle.
Alex Chesterman, chief executive and founder of Cazoo said: “It is more important than ever that our amazing NHS heroes can get to work safely, and we are happy to try to make car buying as affordable as possible. This £250 discount to any NHS worker is our way of showing our gratitude for the remarkable work and sacrifices they are making every day. Last week, 50% of our orders came from health workers and it is only right that we support them at a time when, understandably, many are reluctant to use public transportation.”
China automotive sales fall 43% in March
New vehicle sales in China fell by over 43% to 1.43m units in March 2020 from 2.52m units in the same month of last year, according to wholesale data released by the China Association of Automobile Manufacturers (CAAM).
Last month’s sales were 4.6 times higher compared with the February 2020 total, the low point of the crisis when many parts of the country were under lockdown. February sales plunged by almost 80% year on year to a decades low of 310,000 units.
Encouraged by signs that the spread of the virus was slowing, the Chinese government began to ease restrictions on business activity in most areas of the country towards the end of February.
The government has also injected huge monetary and fiscal stimulus to help prevent the economy from collapsing while automotive specific policies have also been introduced to help the industry rebound quickly – including additional sales incentives and the suspension of restrictions on new licence plates by municipal governments.
State owned enterprises are also being encouraged to step up purchases of new energy vehicles.
Towards the end of February, vehicle manufacturers nationwide were urged to restart operations as soon as possible, while CAAM deputy secretary-general Chen Shihua said “we didn’t expect vehicle manufacturers to resume production so fast”.
The government last week said it had reduced restrictions on market access for new energy vehicle manufacturers to help the segment’s recovery. It no longer requires manufacturers to have local design and development capabilities but will impose higher aftersales standards.
First quarter vehicle sales were down by just over 42% at 3.67m units from 6.37m units in the same period of last year, according to CAAM data.
Chen suggested “the Chinese vehicle market is rebounding from the February low and is expected to return to normal in the second half of the year” while cautioning “the market is almost certain to see an overall fall over the entire year, however”.
FLA calls for urgent action to support non-bank lenders
The Finance and Leasing Association (FLA) has called on the government and the Bank of England to take urgent action to support the non-bank lending market.
Figures due to be released by the FLA next week will reveal that members provided almost £141bn of new business in the 12 months to February 2020 – representing a 2% year-on-year increase. Some £46bn of this total was provided by non-bank lenders.
Stephen Haddrill, director general of the FLA, said: “The asset, consumer and motor finance markets play a significant role in supporting businesses and households across all sectors of the economy. We have welcomed the financial support schemes that the government and Bank of England have put in place so far, but urgent action is now needed to ensure that non-bank lenders are able to continue to serve customers, both through new lending and forbearance.
“Non-bank lenders rely heavily on the capital markets and bank funding, which are essentially closed to them. Support needs to be provided to non-bank lenders to help them deal with the huge cashflow drain from forbearance, with Covid-related requests growing by more than 1000% in the week commencing 16 March, followed by a further 249% increase the following week.
“This sector needs urgent Government help to ensure that it is still in a position to lend to individuals and businesses when the current market disruption ends, because without their input, the UK’s economic recovery will be much slower.”
ACEA: 1.5m vehicles in production losses for European manufacturers
Factory shutdowns as a result of the COVID-19 crisis have resulted in lost production amounting to 1,465,415 motor vehicles to date, according to new figures published by the European Automobile Manufacturers’ Association (ACEA).
This figure – covering passenger cars, trucks, vans, buses and coaches – is up from 1.2m units compared to one week ago. The number could climb further if shutdowns are prolonged or more plants are closed, ACEA cautions. The average shutdown duration EU-wide currently stands at 18 working days.
In terms of employment, the jobs of at least 1,138,536 people working in EU auto manufacturing have been affected by these shutdowns so far (up from 1,110,107 last week). This figure only refers to people directly employed by vehicle manufacturers; the impact right across the automotive supply chain is clearly much more far-reaching.
ACEA is highlighting the impact of COVID-19 on the EU auto industry – in terms of the number of employees affected as well as lost production in units – in weekly-updated interactive maps covering the 27 EU member states and the United Kingdom.
COVID-19 ‘offers opportunities in the automotive aftermarket’
The COVID-19 pandemic impact is anticipated to lower replacement/scrappage of existing vehicles in use – making the parc last longer – and bringing an opportunity for repair and maintenance parts and components, according to research undertaken by GlobalData.
The COVID-19 pandemic is leaving a deep mark on the global automotive industry. While China may be in the process of recovery, the rest of the world is facing shutdown to combat the situation. The global impact of COVID-19, which was initially majorly on the supply-side, soon turned to the demand-side as most markets across Europe, North America and Rest of Asia witnessed lockdown.
This meant a decline in footfall in dealerships and eventually weaker demand for automotive products and related services. Customers globally have either parked or cancelled their vehicle purchase decisions as the governments emphasize ‘social distancing’.
However, a much bigger impact will be witnessed on new vehicle sales as the economic after-effects – declining wages, disposable income and employment – kick in. And the aftermarket, a profitable area for many vehicle manufacturers, will be impacted, GlobalData’s research suggests.
Research analyst Bakar Sadik Agwan says that global markets are expected to witness fewer new sales and slower replacement of older vehicles from the existing parc both in the private and the fleet segment making the existing parc’s replacement cycle elongated.
“This after-effect tends to have a negative impact on OEMs, but on the flip-side, it poses an opportunity in the aftermarket to generate substantial demand for replacement parts and consumables as older vehicles continue to be on road,” he says.
The announcement of three-months relaxation to passenger car and commercial vehicle owners to get their annual vehicle worthiness test (MOT) by the UK government and inclusion of auto service and repair as ‘essential’ business by the US government signifies that the production and adequate supply for replacement parts and consumables should keep going even during the crisis. Consumables and wear and tear parts are expected to be the key beneficiaries among all aftermarket parts and components.
The pre-COVID scenario of GlobalData aftermarket analysis estimates revenue growth of consumables and wear and tear parts at 5.9% and 6.3% respectively between 2018 and 2020, globally.
“The opportunity exists – maybe not immediately – as the automotive supply chain disruptions due to COVID-19 has affected both the OEM and the independent aftermarket businesses. However, the opportunity may present itself once the world enters the recovery phase of the COVID-19 crisis,” Agwan adds.
Virus clobbers Mercedes Q1 sales
Mercedes-Benz sold 477,378 cars in the first quarter of 2020, down 14.9% year on year.
The switch to battery-electric models only saw Smart plunge 78.3% to 5,863 units, while vans notched up 64,588 sales, down 14.9%.
“The pandemic developments in Europe and US and the consequences of the temporary closures of retail businesses in those markets had a significant impact on unit sales in March, Daimler said.
“2020 started well and we were able to increase sales of our core model series especially in January. The impact of the corona crisis seriously weakened our unit sales in March and we therefore did not achieve our target numbers in the first quarter,” said Marcus Breitschwerdt, head of Mercedes-Benz Vans.
Europe Q1 sales fell 15.9% to 188,963 vehicles with German volume off 8.8% to 64,332 cars.
Asia-Pacific volume was down 17.1% to 198,849 vehicles, while China sales fell 20.3% to 138,960 cars.
First quarter deliveries in North America were 78,501 vehicles. US sales were down 4.8% to 67,746 and Mercedes-Benz was the highest-selling premium brand there.
Meridian: company cars may need inspection following lockdown
Drivers will need guidance on returning laid-up company cars to the road when the coronavirus crisis ends, according to Meridian Vehicle Solutions.
Phil Jerome, managing director at the medium-term rental firm, said that some vehicles may not turn a wheel for months, depending on the length of the lockdown, and would need to be quite carefully inspected in a risk management context.
“Even if the lockdown lasts just another few weeks, there will be many, many cars out there that will not move at all during that time or just cover a handful of miles.
“This creates a risk management issue. The standard walkaround checks carried out by fleets are not really designed for vehicles that have been laid up for long periods of time. What we really need is detailed guidance for drivers so that they can check their vehicles regularly during the lockdown and also more information when it starts to be lifted.
“Issues could range from tyres that have lost pressure to flat batteries to seized brakes and more. Cars are simply not really designed to be left untouched for long periods.
“Also, it is reasonable to expect that on the days when drivers start heading back onto the roads in number, there will be a sudden and considerable demand on breakdown recovery services as drivers find that neglected cars have developed problems.”
INDICATA launches remarketing data tool
INDICATA, part of the Autorola Group, has launched Market Watch – a free information source for remarketing companies, with used market volumes and pricing data.
The platform holds data from the UK and 12 other countries, by analysing 9m used vehicle advertisements across Europe every day. It hopes to provide companies with valuable insight on market trends such as the current coronavirus pandemic.
Market Watch is available as a regular PDF hosted on the INDICATA UK country website, while access to a more comprehensive web-based market reporting tool is available to senior decision makers in the leasing, rental, OEM and dealer group sectors.
Andy Shields, INDICATA’s global business unit director, said: “Market Watch gives further support to the used car industry to help make sense of how to manage the impact of COVID-19. Our PDF and web portal provide used car decision-makers with the best real-time data to build both a short term and long-term strategy to efficiently manage used car supply and demand.”
FCA outlines coronavirus response for coming year
The Financial Conduct Authority (FCA) has set out its planned response to the coronavirus pandemic for the next year.
The regulatory body said it will be focused on ensuring that financial services businesses give people the support they need, that people avoid scams, and that financial services businesses and markets are aware of FCA expectations.
“Alongside HM Treasury and the Bank of England, the FCA has already made a series of interventions at unprecedented speed to protect consumers, firms and the markets,” said a statement. “These have ensured that customers retain access to essential banking services and are able to benefit from flexibility on mortgage and other debt payments.”
The full planned response can be read here.
Cazana launches support services website for key workers
Cazana has launched KeyworkerGarages.co.uk to provide key workers with information on the service centres that are still offering motor support services.
NHS workers, police, delivery drivers etc. in need of vehicle services can enter their postcode and the website will display the nearest service centre, including opening hours and contact details to get vehicles booked in as soon as possible.
The team at Cazana have collated the data of open service centres from their partner dealers that remain open. Cazana encourages any centres not listed to submit their details on the site and help us to keep this website up to date to give keyworkers a definitive list of locations that can help.
Cazana’s Tom Wood said: “This is a challenging time for both the automotive industry and all those who are on the front line fighting this pandemic and we wanted to do something as a team to help both the nation’s essential keyworkers and the dealer service departments remaining open. I’m massively proud of the team here at Cazana who have been collecting data and have built this new site over the past week with the intention of helping people to stay mobile during this crisis.”
PSA inks extra EUR3bn syndicated loan
PSA has signed an additional €3bn (US$3.2bn) syndicated loan in addition to the existing €3bn undrawn confirmed line of credit for a total amount of EUR6bn in the light of the coronavirus situation.
The syndicated loan has an initial maturity of 12 months with two optional three-month extensions.
“This operation reinforces our ability to face up this exceptional situation and prepare the future,” said PSA CFO, Philippe de Rovira.
“It also proves the confidence of our partner banks in the financial strength and recognised resilience of Groupe PSA.”
SMMT: new car registrations down 44.4% in March
New car registrations in the UK dropped 44.4% in March, as the coronavirus crisis causes showrooms to close, according to the Society for Motor Manufacturers and Traders.
The performance represented a steeper fall than during the 2009 financial crisis and the worst March since the late nineties when the market changed to the bi-annual plate change system. With lockdowns taking place in many European countries earlier than the UK, even more dramatic falls have been reported elsewhere, with Italy down 85%, France 72% and Spain down 69% in March.
In total, 254,684 new cars were registered in the month, with demand from private buyers and larger fleets falling by 40.4% and 47.4% respectively. Meanwhile, the numbers of petrol and diesel cars joining the road were down 49.9% and 61.9% respectively.
There was some good news for early adopters, who were able to take delivery of the latest alternatively fuelled cars before the crisis took hold in the UK. Registrations of battery electric vehicles (BEVs) rose almost three-fold in the month to 11,694 units, accounting for 4.6% of the market, while plug-in hybrids (PHEVs) grew 38%. Uptake of hybrid electric vehicles (HEVs), however, fell 7.1%.
While many car showrooms are likely to remain closed for the coming weeks, companies are still working to ensure deliveries to critical workers, and the industry is also striving to keep sufficient service and repair workshops open to maintain vehicles which are helping to deliver essential goods and services across the country.
The news comes as SMMT downgrades its interim market outlook for the year to 1.73 million registrations – a -23% decline on the previous outlook made in January and some 25% lower than the 2.31 million units registered in 2019. A further outlook will be published in April to reflect the latest conditions.
Read all of the reaction from the industry here.
COVID-19 will force auto retailers to embrace digital transformation
Early reports from most countries around the world indicate that auto sales in March have nosedived as efforts to mitigate the COVID-19 crisis begin to bite. With governments issuing stay-at-home orders, dealerships have seen customer footfall drop significantly or dry up altogether leading to markedly reduced auto sales.
We are already getting an indication of what auto sales might look like as the virus passes by seeing how dealers are approaching it in China, which is a few months ahead of the western world in terms of managing the outbreak. Geely, one of the country’s largest automakers, has already launched a no-contact car buying service – the vehicle is delivered to the customer, disinfected, and then the keys are sent separately via a drone.
However, selling vehicles isn’t as straightforward as selling other products – they tend to be expensive, require negotiation of sales agreements, and are often something a potential buyer wants to experience before they purchase. As a result, completely ‘faceless’ vehicle buying isn’t likely to take off in markets used to a more traditional way of doing things, such as the US – just look at the pushback Tesla has faced in trying to sell cars directly to customers without a dealership network.
We’re likely to see ‘halfway house’ solutions evolve, with dealers offering virtual tours of vehicles or negotiations over video calling services.
As a result, we’re likely to see ‘halfway house’ solutions evolve, with dealers offering virtual tours of vehicles or negotiations over video calling services. In the UK, a start-up from the founder of Zoopla called Cazoo, which aims to bring the simplicity of digitalretail to the used car market, managed to raise GBP100 million from investors in March despite the current market uncertainty.
One of the reasons investors were attracted to Cazoo is its focus on digital sales, which is expected to be a selling point once the pandemic comes to an end. Now more than ever, dealers must embrace new methods of selling cars to customers – especially those that allow more of the shopping and buying process to be done remotely. While we expect a relative return to normality once the pandemic passes, we also see a longer-term shift away from face-to-face sales as customers become more cautious about their interactions with others.
Stock security could be a problem for remarketing sector, says VRA
Security of used cars and vans without access to formal storage facilities could be a growing problem for the remarketing sector over the course of the coronavirus lockdown, says the Vehicle Remarketing Association.
The body said that large numbers of vehicles left largely unattended in storage could attract theft and vandalism.
Sam Watkins, chair of the VRA, explained: “Where cars and vans are being stored in large, structured facilities, it is much less of a problem, because there are going to be comprehensive security measures in place ranging from fencing to cameras as well as an ongoing human presence on the ground. Indeed, in most places of this type, security has largely been enhanced in recent weeks.
“The problems are likely to arise in smaller locations that were never designed to be left unattended for long periods of time, notably dealer forecourts and ad hoc storage compounds. Vehicles are quite vulnerable in these circumstances.
“Especially, if the lockdown experience in the UK parallels that seen in other countries, there will be some non-compliance as the weeks pass and it seems sensible to assume that there will be people leaving their homes, some with criminal intent.”
VRA members had been discussing the topic during a VRA webinar last week and Watkins said that two key aspects that needed tackling – insurance and security.
“Our initial advice for businesses using these smaller sites is to talk to your insurer. Your policy probably doesn’t cover you for vehicles that are left at a site that is essentially unattended for weeks at a time. It is possible or probable that this condition has been suspended by your insurer but you should check.
“The second is to look at security. Call your local police station and explain the circumstances and your concerns. They may be able to drive by the site every day or you might arrive at some other measure that maintains social distancing but reduces the likelihood that there is criminal activity on the site.”
US light vehicle sales in March down 39%
Light vehicle sales in the US fell nearly 39% in March compared with last year, according to industry sales data emerging today.
Data from Ward’s shows that 992,392 light vehicles were sold last month, also a sharp drop on February’s 1.4 million, according to Ward’s.
The sharp drop to US vehicle sales last month was widely expected as social distancing and lockdown measures took hold in the US in response to the COVID-19 public health emergency. Analysts say the sales trend worsened during the course of the month as the COVID-19 crisis deepened.
The seasonally adjusted annualised rate for US cars and light trucks sales was estimated at 11.4 million units, down from 16.8 million units in February, Ward’s reported.
The coronavirus crisis is causing government-induced recessions across the world, with new car sales and the automotive sector hit particularly hard.
GlobalData forecasts in its base case scenario that the US light vehicle market in 2020 will be around 14.7 million units – a drop of almost 14% on 2019’s total. The next few months are expected to be particularly weak, with a strong pick-up to vehicle sales in the third quarter forecast, as economic activity returns and population movement controls are relaxed.
NFDA calls for FCA to waive motor retailer fees
Sue Robinson, director of the National Franchised Dealers Association (NFDA), has urged the Financial Conduct Authority (FCA) to waive its fees for motor retailers, or implement a one-year deferral.
Firms such as franchised dealers groups that are regulated by the FCA pay an annual fee to be authorised to provide finance products.
In a statement, the NFDA said: “The Coronavirus outbreak is having a significant impact on the motor retail sector. Showrooms have now closed their doors for sales enquiries and/or deliveries, and, whilst repair centres may remain open to cater for essential key workers, the demand for essential service and repair services for other customers has declined as motorists make fewer journeys.
“Each measure that mitigates against the severity of the impact of the Coronavirus will be vital in retaining jobs and investments. This simple yet effective measure would ease the burden on motor retailers and give them additional breathing space to meet obligations to staff and creditors.”
Ford postpones NA production restart indefinitely
Ford is delaying the restart of vehicle production at its North America plants and has put no date on a future restart. The company had been aiming to restart production April 6 at Hermosillo Assembly Plant and 14 April at several key US plants – and now has further postponed re-start dates, which will be announced later.
“The health and safety of our workforce, dealers, customers, partners and communities remains our highest priority,” said Kumar Galhotra, Ford president, North America. “We are working very closely with union leaders – especially at the UAW – to develop additional health and safety procedures aimed at helping keep our workforce safe and healthy.”
The auto industry has been heavily hit by decimated demand as result of the COVID-19 coronavirus crisis and population lockdowns that have also shut down dealerships.
Ford and others are repurposing some capacity to meet rising demand for healthcare equipment.
Ford said the Rawsonville Components Plant will restart the week of April 20 to produce the Model A-E ventilator, in collaboration with GE Healthcare, supported by paid volunteer UAW workers. The Model A-E ventilator is a basic, cost-efficient design that addresses the needs of most COVID-19 patients. Production will quickly scale up to produce 50,000 ventilators by July 4 – helping to meet the growing demand in the U.S. Approximately 500 paid volunteer UAW workers will be building these ventilators. At this time, ventilator production will be the only work being done at the Rawsonville plant.
“Today’s decision by Ford is the right decision for our members, their families and our nation,” said UAW International President Rory Gamble. “Under Vice President Gerald Kariem, the UAW Ford Department continues to work closely with our local unions and Ford to make sure that as we return to production all members are safe, and our communities are protected from this spreading pandemic.”
French car registrations down 72% in March
Car registrations in France dropped by 72% in March, due to the outbreak of coronavirus and the subsequent lockdown in the country.
This is according to the latest figures from the French motor association CCFA, which found that registrations dropped 73.4% at PSA, which owns Peugeot and Citroen. At Renault, registrations were down 71.6%.
In the first quarter of the year, registrations dropped by 34%.
ACEA: 1.1m EU auto workers affected by COVID-19 crisis
The jobs of over 1m Europeans working in automobile manufacturing are affected by factory shutdowns as a result of the COVID-19 crisis, according to data from the European Automobile Manufacturers’ Association (ACEA).
This figure only refers to those people directly employed by car, truck, van and bus manufacturers – the impact on the wider automotive supply chain is even more critical.
EU-wide production losses due to factory shutdowns amount to at least 1,231,038 motor vehicles so far. The average shutdown duration is 16 working days at the moment. Production losses are obviously set to increase if shutdowns are extended or additional plants are brought to a halt.
In total 2.6m direct manufacturing jobs are provided by the EU automotive industry, with vehicle makers operating 229 vehicle assembly and production plants across the region, according to the ACEA. The wider auto sector provides indirect and direct jobs for 13.8m people in the European Union.
“Right now, the primary concern of ACEA and all its members is to manage the immediate crisis facing the auto industry, which has essentially come to an abrupt halt – something the sector has never experienced before,” stated Eric-Mark Huitema, ACEA director general.
“Our first priority is to protect the health and jobs of the almost 14 million Europeans who work directly or indirectly in our sector.”
VW ‘cautiously optimistic’ about March sales in China
Volkswagen expects its car sales in China to quadruple in March, as sales begin to pick up with factories and showrooms reopening.
Stephan Woellenstein, head of VW’s China business, said: “We are cautiously optimistic that the worst effects of the crisis will be behind us in two to three months.
“There are more and more signs that business is recovering. By the middle of the year, we could be back to last year’s planning. Hope is returning to the Chinese market.”
Despite continued limited demand, Woellenstein said he expects vehicle sales of up to 1m in March, quadruple the figure of sold cars in February.
Automakers reach for credit lines as crisis bites
The rapid spread of COVID-19 has caught most of the auto industry on the back foot. With potential customers suddenly stuck in lockdown all around the world, some OEMs may see months without meaningful sales volume and suffer a subsequent hit to revenue and profitability. In addition, automakers are bearing the financial burden of supporting furloughed workforces and, in some cases, re-purposing factories and supply chains to provide much needed ventilators and medical equipment.
These extreme circumstances have pushed some automakers to access sizeable credit facilities to shore up their financial positions. Most recently, Japanese giant Toyota announced it was seeking a JPY1 trillion ($9 billion) line of credit from Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd. Of all the major Japanese OEMs, Toyota is the largest and has the best credit rating – Moody’s Investors Service previously held it at an A1 grade – but, with the virus placing incredible pressure on the auto industry’s earnings, it has since dropped Toyota’s grade to Aa3.
Across the Pacific, US automaker General Motors also announced it would tap its credit lines to access an additional $16 billion in funding to respond to COVID-19. The OEM will combine the credit with its cash reserves and aggressive austerity measures to ensure it remains funded during the outbreak. GM was gearing up to build ventilators with Ventec Life Systems but confusion from the Trump administration led to the project being briefly cancelled after the White House implied the machines were too expensive – GM said it would not make any profit on the machines. The President then signed an order forcing GM to build the ventilators, despite the fact it was already preparing to do so.
In Europe, Volkswagen has stated that it is currently spending around EUR2 billion ($2.2 billion) per week to remain afloat. The group’s Chief Financial Officer, Frank Witter revealed that it had access to credit lines worth around EUR20 billion ($22 billion), but that it would only use those as a matter of last resort. Witter went on to call on the European Central Bank (ECB) to begin purchasing short-term debt as quickly as possible to avoid having to take more drastic measures to keep the automaker funded.
EU passenger car market down 7.4% in first two months of 2020
In February 2020, the EU passenger car market contracted by 7.4% to 957,052 units registered. This decline was the result of a combination of factors, including changes to vehicle taxation in various EU member states (which brought registrations forward to December 2019), weakening global economic conditions and consumer uncertainty. Germany recorded the most significant drop (-10.8%), followed by Italy (-8.8%), Spain (-6.0%) and France (-2.7%).
From January to February 2020, total registrations of new cars in the European Union were 7.4% lower than in the same period the year before. So far in 2020, each of the four major EU markets faced falling demand: Germany (-9.0%), France (-7.8%), Italy (-7.3%) and Spain (-6.8%).
How COVID-19 is affecting MOT guidelines – Moneybarn
As of Monday 30 March, the Department for Transport has granted vehicle owners a six-month exemption from MOT testing. This comes in light of the current coronavirus pandemic and government-sanctioned lockdown.
The exemption will enable vital services like deliveries to continue, key workers to commute and people to get essential food and medicine.
To help you understand what this new policy means for you, vehicle finance provider Moneybarn has put together a helpful guide.
SMMT responds to Ventilator Challenge UK
Mike Hawes, chief executive of the SMMT, said: “The essential and extraordinary work of this consortium will offer a beacon of hope to our NHS and all of society, and is a shining example of how the wider automotive and other manufacturing sectors can help in this time of crisis.”
The Ventilator Challenge UK features a group of UK manufacturers which have been tasked with producing medical ventilators for the NHS to treat coronavirus patients. The consortium is led by Airbus and includes Rolls Royce, McLaren and Ford.
Hawes continued: “The entire sector stands ready to help the national effort in every way possible, from production of critical medical equipment, to supporting delivery of essential supplies, maintaining emergency service vehicles and providing transport for key workers to support the most vulnerable in our communities.”
Nigel Stein, chairman of the Automotive Council, added: “This announcement is a welcome boost for the country at this critical time and shows what can be achieved when government and industry work together. Such collaboration has helped make this vital sector globally competitive, with a highly skilled, dedicated and productive workforce that will be essential to getting the economy back on its feet once this crisis is over.”
Volkswagen urges ECB to accelerate emergency lending
Volkswagen has urged the European Central Bank to accelerate emergency lending plans to help businesses cope with the effects of the coronavirus, according to the Financial Times.
Last week, the bank announced a €750bn package of extra asset purchases to support businesses, pledging to make non-financial commercial paper “eligible for purchase” under its quantitive easing programme.
However, the scheme has not yet been launched as the ECB continues to sort the technical and legal details for companies buying non-financial commercial paper.
Frank Witter, chief financial officer of VW, said: “There is a lot of pressure on the incoming money flow. We have different diversified funding sources available, but not all of them are as liquid as they were.
“Providing funding opportunities is something essential in this crisis. The earlier, the better.”
FTA calls for Brexit transition extension
British logistics association, FTA (Freight Transport Association) is asking for an extension to the Brexit transition period as Europe remains resolutely fixed on fighting the coronavirus pandemic.
The challenges posed by the Covid-19 virus will make the effective implementation of any new legislation impossible in the short term, says the FTA.
As a result, the industry is petitioning government urgently to seek an extension to the current transition period for leaving the European Union, as well as suspending other planned domestic legislation which will impact the logistics sector.
“This is not about the relative merits of Brexit, or any trading arrangements which our industry will need to adopt,” said FTA policy director, Elizabeth de Jong. “This is purely and simply so the businesses tasked with keeping the UK’s supply chain intact can concentrate on the serious issues which the Covid-19 pandemic is placing on the industry.
“Logistics is facing unprecedented challenges, both in terms of keeping the UK economy supplied with all the goods it needs to function, as well as coping with the increased disruption to staffing levels caused by sickness and self-isolation and concerns about the viability of their businesses.
“Our first priority is always to deliver for our customers and there is simply not enough capacity available to plan the major structural changes needed to implement a successful departure from the EU, as well as the myriad other planned legislation changes on the horizon [and] dealing with unprecedented pressures caused by Covid-19.
“Logistics is a flexible industry, but such significant change cannot happen overnight, and there is simply not the capacity for planning and delivery of new legislation at present within the system.
“Covid-19 has created a once-in-a-lifetime emergency situation which needs the full attention of the whole sector – adding in a host of new legislation would place untold, unnecessary pressure on a supply chain that is already stretched. Our industry needs the support of government, not to be broken by it.”
Volkswagen extends suspension of production in Germany
Volkswagen is to extend the production suspension at its German plants for a further four days until 9 April. The suspension includes its assembly and component making plants. Volkswagen said it is responding to the ‘fall in demand on the automobile market and the challenges faced by the supply chain’ but hopes to start making vehicles again ‘soon’.
In a statement, VW said an application for an extension of short-time working for a total of 80,000 employees of Volkswagen AG has been submitted. It is planned to end short-time working with the night shift of April 9 to 10. The plants affected are Dresden, Emden, Osnabrück, Wolfsburg and Zwickau as well as the Volkswagen Commercial Vehicles plant in Hanover, the plants of Volkswagen Group Components at Brunswick, Kassel, Salzgitter, Chemnitz and Hanover and the German plants of SITECH.
At the same time, VW said it is ‘preparing intensively for the resumption of production’.
Andreas Tostmann, Member of the Volkswagen brand Board of Management responsible for Production and Logistics, said: “The health of our employees has the highest priority. We will ensure that they can return to safe workplaces when production and logistics activities are resumed. In our task force, we are working on a comprehensive package of measures.
“In this context, we are also incorporating our experience in China where almost all our plants have now resumed production and the market seems to be gradually returning to normal. To date, there has not been a single case of corona among our employees in China.”
US vehicle market ‘heading for 35.5% March decrease’
Analysts at Edmunds say that March will see a much reduced US vehicle market in the wake of the COVID-19 coronavirus crisis, with overall sales down by a forecast 35.5% and the SAAR down at a depleted 11.9 million units.
Edmunds estimates that 1,044,805 new cars and trucks will be sold in the US for an estimated seasonally adjusted annual rate (SAAR) of 11.9 million. This reflects a 35.5% decrease in sales from March 2019 and a 23.4% decrease from February 2019.
Edmunds experts note that the downturn in March will also lead to a drop in quarterly sales, forecasting that 3,546,415 new cars and trucks will be sold in the first quarter of 2020, which reflects an 11.8% decrease from the first quarter of 2019.
“The first two months of the year started off at a healthy sales pace, but the market took a dramatic turn in mid-March as more cities and states began to implement stay-at-home policies due to the coronavirus crisis, and consumers understandably shifted their focus to other things,” said Jessica Caldwell, Edmunds’ executive director of insights. “The whole world is turned upside down right now, and the auto industry is unfortunately not immune to the wide-ranging economic impacts of this unprecedented pandemic.”
Edmunds analysts note that the nationwide shutdown of auto manufacturing facilities and limited inventory mean that automakers aren’t currently pressured to offer attractive incentives on new vehicles, but that will likely change as the COVID-19 crisis continues to evolve.
“Automakers can count on capturing some deferred demand once we get past the worst of this pandemic, but since they’ll be competing with so many other companies for consumer spending at that point, they’re really going to need to create incentives to spur some sales,” said Caldwell.
“Things might look a bit bleak as automakers are taking a hit right now across the board, but the massive stimulus package deal that was just announced is an encouraging update. History has shown us that this industry can survive through almost any financial or natural disaster, and we’re confident that they’re going to come out of this tough period on the other side.”
Some analysts say that sales over the past week are more than 80% down in areas of the US in stay-at-home mode.
MG Motor UK supplies 100 EVs to NHS agencies
MG Motor UK is supplying up to 100 fully-electric MG ZS cars to NHS agencies across the UK for use by NHS staff, as the government intensifies the battle against COVID-19.
The cars will be supplied via MG’s nationwide dealer network for up to six months, completely free of charge, to support the national effort to overcome COVID-19. By providing additional transport capacity with low running costs to the NHS, MG and its dealers are doing their bit to support the national effort in these unprecedented times.
The first six cars have already been supplied to Lancashire and South Cumbria NHS Trust by MG dealer Chorley Group.
Daniel Gregorious, head of sales and marketing at MG Motor UK, said: “As a proud British brand, MG is more than just a car manufacturer. Together with our dealer network, we want to do our bit to help the country to come through this uncertain time.
“By providing 100 electric cars to our NHS heroes, we hope that we will help to keep healthcare moving so that as many people as possible can receive the support they need. It’s also our way of saying thank you to those selfless people who work so hard to keep us all safe.”
Aston Martin suspends operations at UK manufacturing sites
Aston Martin has temporarily suspended all manufacturing at its UK plants in line with the latest UK government instructions on the fight against COVID-19.
“The business has taken this difficult but appropriate action in its determination to fully support the UK government’s measures on slowing the spread of COVID-19 and, crucially, to protect the health and safety of its workforce, its suppliers, and their families,” the luxury sportscar maker said in a statement.
“The period of manufacturing suspension is initially planned to Monday 20 April 2020, however, the business will continue to review the situation and will look to resume operations as soon as it is reasonable to do so.”
Aston Martin Lagonda president and Group CEO, Andy Palmer, said: “It is our responsibility to ensure we do all we can to support the government’s efforts in slowing the spread of COVID-19 over the coming weeks and, with the health of our amazing workforce front and centre of our minds, we have taken the tough decision to temporarily suspend operations at our sites around the UK.
“I hope and believe that our national fight against this dreadful virus will be successful and, as soon as we have the ability, we will, of course, return to normal operations. In the meantime, I would like to wish everyone associated with this great company good luck, and good health.”
Medium-term rentals ‘remain consistent’ heading into lockdown
Demand for medium-term rental stayed consistent in the days leading up to the coronavirus lockdown and there are already signs that future bookings will continue to be made during the crisis, according to Meridian Vehicle Solutions.
Phil Jerome, managing director of Meridian, said that the situation was creating what he described as a “two-speed fleet economy” where some sectors were seeing considerably-increased demand while others had effectively closed down.
“The parts of the economy that are staying open are very busy, whether that be food retailers or workers directly involved in the fight against coronavirus. There is a need for immediate transport for some people and we are helping to satisfy that.
“On the other hand, there are many parts of the industry that have effectively closed for business, and new orders have fallen to almost zero in those sectors.
“It’s very much a two-speed fleet economy but the fact that we remain relatively optimistic means that, even in the last few days, we have ordered almost 100 additional cars for our fleet. We’re expecting ongoing demand.”
Jerome added that because car rental was classified as an exempt business, it remained effectively the only form of vehicle provision available to many private and public organisations while car dealerships remained closed.
“There are reports that daily rental levels have increased for some suppliers in recent weeks. While that is a different market to ours, what we can say is that we are seeing consistent demand and are still taking orders.
“The main issue that we face is that, because the majority of our cars are delivered new from dealers, whether we can get them all safely processed and sent out but we are dealing with this on a case-by-case basis.”
INDICATA analyses impact of COVID-19 on automotive industry
As COVID-19 looks set to stay and affect the global automotive industry for a sustained period of time, INDICATA has published a report on the extent of impact and offers advice on how different sectors can survive.
For leasing companies, INDICATA said the challenge will be to manage the current volatility in the market while respecting the fact that there may be no short-term recovery in RVs. The report noted that in 2008/09 many leasing companies extended contract and ran on vehicles.
“With the risk that used vehicle prices are suppressed for an extended period of time, an immediate run on vehicles may not be ideal. Even so, vehicles will still need to be remarketed over the downturn.”
heycar: online demand remains strong among car buyers
There is still strong online interest from UK car buyers, despite the coronavirus lockdown, according to heycar.
According to the online car marketplace, dealers should be pivoting to accommodate digital customers, continuing to make sales now or maintaining interest for when the outbreak has passed.
Data from heycar, which has more than 3,500 dealerships nationwide using it, shows that in the weeks leading up to the start of the crisis, a strong pipeline of customer leads had been established.
And heycar chief commercial officer, Karen Hilton, believes it is the nurturing of these prospective customers in the medium term that will be key to the industry emerging from the coronavirus crisis in the best shape possible.
Hilton said: “Everyone knows inbound leads are going to continue to drop as the government has implemented further measures to halt the spread of the virus and keep our community safe.
“However, this situation WILL change and when it does dealers must be ready to build again. That’s why it is particularly interesting to look at the numbers of people continuing to show interest in changing their cars. This suggests there are good pipelines of existing customers to nurture and develop in order to tide dealers over the next few months.
“Our site data shows that before the start of the initial government measures on social distancing, demand in the market was still showing normal seasonal increases. Top of the funnel site traffic and car views were at seasonal highs and these are still high now as people spend more time at home and online.”
The numbers using heycar’s onsite ‘value my car’ tool have also remained strong since the introduction of social distancing, indicating that people are still planning for a car change – as long as it is safe to do so.
Manheim suspends all physical auction programmes
Manheim UK, part of Cox Automotive UK, has immediately suspended all of its physical auction programmes to comply the with latest Government restrictions on business (issued 23 March 2020). They will remain closed whilst these Government restrictions are in place.
All other Cox Automotive UK physical locations are also in the process of being closed, with only a security presence remaining on site thereafter. The planned auctions on Simulcast for today (Tuesday 24e) will not go ahead whilst we make the preparations for closure.
Customers are advised that Manheim UK sites will only accept arrivals today and the removal of any purchased and paid for vehicles needs to take place immediately. We will not charge buyers for storage for vehicles remaining on site during any lockdown period (currently expected to last at least 3 weeks).
Martin Forbes, chief executive of Cox Automotive UK, said: “The government’s instructions are very clear. We are legally and morally obliged to cease auctions with immediate effect. The health and well-being of our employees as well as our customers and business partners are top priority. We are working closely with customers and supporting them as much as possible during this challenging time. Together we will get through this.”
FCA to produce protective face masks
Fiat Chrysler Automobiles (FCA) says it manufacturing and donating more than one million protective face masks for emergency workers per month.
Production capacity is being installed this week and the company will start manufacturing face masks in the coming weeks with initial distribution across the United States, Canada and Mexico.
The face masks are to be donated by FCA to police, EMTs and firefighters, as well as to workers in hospitals and health care clinics. This action is the first of a multifaceted global program being developed by the company through applying manufacturing, supply chain and engineering expertise to support the global fight against the Coronavirus pandemic.
Commenting on this initiative, FCA CEO Mike Manley said: “Protecting our first responders and health care workers has never been more important. In addition to the support we are giving to increase the production of ventilators, we canvassed our contacts across the healthcare industry and it was very clear that there is an urgent and critical need for face masks. We’ve marshalled the resources of the FCA Group to focus immediately on installing production capacity for making masks and supporting those most in need on the front line of this pandemic.”
FCA will be working through national, regional and city authorities to ensure that the donated face masks are being directed to the people and facilities in the most immediate need. The company will disclose further actions related to the fight against the Coronavirus in the coming days.
Lookers temporarily closes UK dealership network
Car dealership group Lookers has announced it will be temporarily closing all of its trading locations in the UK until further notice.
In a statement, the company said: “The board is incredibly grateful to our brilliant employees who have been working hard to continue to serve our customers and the community safely in difficult circumstances.
“However, the board has carefully considered the impact of COVID-19 and the current advice of the UK Government. The board’s priority is to support the welfare of our colleagues and customers and to play our part in the national effort to reduce the further spread of the virus.
“Over the past 48 hours it has become clear that maintaining safe social distancing measures whilst continuing to operate car dealerships has become increasingly difficult.
“Against this background and with the support of our OEM brand partners, the group is temporarily closing all of its trading locations with immediate effect. This decision has not been taken lightly, however, the board is clear that the priority during these unprecedented times is the safety and welfare of our people and our customers.”
Chief executive Mark Raban added: “On behalf of everyone at Lookers, our first thoughts are for those impacted by the virus and their families. The group’s key priority is to protect its employees and customers and do everything possible to prevent the further spread of the virus. I want to particularly thank our colleagues and our OEM partners for their decisive support during this challenging time.”
FleetCheck add coronavirus symptoms to fit-to-drive declaration
FleetCheck has added coronavirus symptoms to the fit-to-drive declaration included in its Vehicle Inspection app.
The Vehicle Inspection app is designed to increase fleet safety for cars, vans, HGVs, buses and coaches and is widely used, having been used to complete 2m checks.
Peter Golding, managing director at FleetCheck, said: “The fit-to-drive declaration is an essential part of the app as well as fundamental fleet risk management itself. It means that a driver is making a declaration each day that they consider themselves OK to work.
“Clearly, when we’re all dealing with something as contagious as coronavirus, this takes on a whole new dimension, especially as many of the fleets still working on a daily basis are home delivery companies that are dealing with the public.
“The new, coronavirus-based declaration that we have written and made available to our customers provides a simple and easy reminder for drivers of the symptoms that they are likely to be experiencing if infected.
“Last week, as an example, 170,000 checks were undertaken using the app so it is no exaggeration to say that the fit-to-drive declaration could help to play a useful part in stopping the spread of the virus among and by drivers.”
Shutdowns ‘to cost European auto industry £29bn’
Sweeping announcements by the region’s automakers mean that over one million vehicles will be lost from production in the period up to the week beginning 27 April, according to GlobalData estimates.
The COVID-19 coronavirus is cutting a swathe through the economic and social fabric of the world and bringing incalculable human cost. Indeed, it is presenting an economic crisis few expected to see again in their lifetimes after the 2007/8 global financial crisis.
Once again, the automotive sector, as one of the most powerful economic multipliers, is at the forefront of the economic crisis. Hardly an hour has gone by in the past few days without an announcement by an automaker that it was stopping production. A multitude of reasons are given for the stoppages – be it supply chain disruption, softening demand or a need to protect the safety of workforces – but all have the coronavirus pandemic at their core. Thus far, 95 out of 103 light vehicle production plants in Europe have announced production stoppages to some degree.
The cost of the stoppages to the OEMs and their suppliers is huge, but what sort of numbers are we looking at?
Taking GlobalData’s latest European light vehicle production forecast sheds some light on this question. According to our assessment, in the six-week period from the beginning of March to 26 April over 1.3m light vehicles will be removed from production. That’s the equivalent of what four average-sized car plants would expect to manufacture in a year. Or taking the average value of a new car at some £22,000 it amounts to £29.3bn in lost revenues.
These are just the short term costs to the industry over a six week period. This crisis is a negative sum game across all industrial and consumer sectors and walks of life and the numbers could be set to become a whole lot worse before they become any better.
VW chief: expect plant closures to be extended
Volkswagen Group chief executive Herbert Diess has warned that VW Group temporary plant closures will likely last longer than the periods so far announced.
In a LinkedIn post, Diess noted that most of VW Group’s factories in Europe have said they will close for close for two or three weeks. But he warned that it is “likely that the measures will take longer. The spread of the virus is unlikely to have stopped in several weeks. So we have to be prepared to live with the threat for a long time – until effective medication or vaccination becomes available.”
Some health sector experts have warned that a COVID-19 vaccination ready for widespread use could be a year away, although tests for the coronavirus anti-bodies and immunity could be available sooner.
Diess also said that Volkswagen is working closely with government ministries and administrations. At the beginning of the outbreak, it said it had donated protective masks to China and that it is “building up production capacity for protective masks in China and helping to support the German health care system with temperature measuring devices, respiratory masks, disinfectants and diagnostic devices”.
“We are trying to bring in our global presence, logistics chains and resources to deal with this global crisis,” he said.
In the social media post, he also said VW is acting to secure liquidity and ensure the ability to deliver, for spare parts or the continuation of critical vehicle projects, such as the ID.3 start-up and the supply of battery cells.
On a positive note, Diess also said that over 100,000 Volkswagen employees in China are starting up their business activities again. “The sanitary and organisational measures are being continued there with great discipline – exemplary in my view – in order to keep the spread of the virus under control even after acute containment,” he said.
Jaguar Land Rover confirms UK plant shutdowns
Tata-owned Jaguar Land Rover (JLR) has confirmed that it will temporarily suspend production at its UK manufacturing facilities. The company’s intention is to resume in the week of 20 April, subject to review.
Jaguar Land Rover said in a statement that it is operating in line with advice from the NHS and Public Health England to minimise the spread of the coronavirus, whilst implementing plans to safeguard its business continuity. The company will “work towards an orderly return to production once conditions permit” it said.
Currently, Jaguar Land Rover’s manufacturing plants in Brazil and India continue operating. The company’s joint venture plant in China reopened in the week of 24 February, as “life begins to get back to normal in the country”.
JLR said the company’s thoughts are with those directly affected by COVID-19 and with the healthcare professionals, whose role in combating this virus is appreciated by all.
Motorpoint launches free home delivery service
Independent car retailer Motorpoint has launched a free home delivery service for customers in light of the current coronavirus outbreak.
The service, which is now live, is available seven days a week and free to customers within a 100 mile radius of their nearest Motorpoint branch. Customers over 100 miles would incur a charge. Furthermore, staff delivering vehicles will observe recommended ‘social-distancing’ measures at all times during the handover of the vehicle.
Mark Carpenter, chief executive of Motorpoint, explained: “These are challenging times and to help minimise the disruption to our customers’ lives Motorpoint is rolling out a home delivery service with immediate effect to those people who aren’t in a position to physically collect their vehicle from our branch network.
“You can already search, find and reserve any one of our 6,000 plus cars from your home via our website. From today you also have the option for your car to be delivered to your door on a date and at a time that suits you courtesy of Motorpoint.”
BCA goes online only from Thursday 26 March
BCA will be moving all of its sales processes online from Thursday 26 March as the company prioritises the well-being of customers in relation to the ongoing COVID-19 situation.
All BCA sales will only be accessible through BCA Live Online and the BCA Buyer app, with no physical buyer attendance at sales anywhere in the BCA network. This is introduced as a temporary measure and will be reviewed regularly.
BCA will continue to run the full programme of sales nationwide, with all centres selling digitally. The full programme of online-only auction sales, Bid Now and Buy Now sales will continue as normal.
Stuart Pearson, chief operating officer of BCA UK Remarketing, said: “BCA has continued to operate normally for as long as possible to support our customers, but we have decided that from Thursday 26 March all BCA sales will only be accessible online.”
“We remain committed to providing customers with access to our market leading remarketing services, offering buyers the best choice of stock and sellers a range of remarketing platforms to meet their needs. In the current circumstances, we believe this will be best done digitally to prioritise the well-being of customers and our people alike.”
Customers can still pay for vehicles at their local BCA auction centre. Alternatively, BCA can email the invoice with payment instructions to pay online.
Buyers can continue to collect vehicles from their local auction centre, with BCA advising customers to contact the auction centre in advance to check the arrangements. BCA can also organise delivery for customers, with online booking available.
Tesla and Toyota top vehicle maker rankings after COVID-19 review
A ranking of top vehicle manufacturing companies worldwide compiled by data and analytics company GlobalData shows the impact of the COVID-19 coronavirus crisis will be strongly adverse across the industry this year, with all major companies impacted.
The GlobalData ranking – which takes into account factors impacting company performance such as positioning for disruptive megatrends, as well as the impact of the COVID-19 coronavirus crisis – shows Tesla and Toyota leading the 32-strong field of automotive companies.
The COVID-19 theme has been newly introduced to the GlobalData ‘thematic’ scorecards and it stands out as the number one short-term theme for the automotive sector. However, themes such as electric vehicles are just as important for medium- to long-term prospects – which partly drives Tesla’s position at the top of the pile.
Attention this year will be firmly focused on the impacts on the sector coming from the COVID-19 crisis that is forcing temporary manufacturing plant shutdowns of uncertain duration.
“The COVID-19 crisis is hitting automotive companies hard on both the supply- and demand-side this year,” says GlobalData analyst Calum MacRae. “Supply chains are being disrupted and market demand has suddenly plummeted across the major regions of the world during March. It looks like the market demand crisis and loss of volume for companies will extend into the second quarter before some stabilisation and recovery thereafter.”
However, MacRae also notes that the sector was under pressure before the coronavirus crisis hit. “This crisis is rather unhelpfully layered on top of already rapidly growing pressures on company bottom lines arising from the need for increased investment in costly advanced technologies such as electrification and automated drive systems. In Europe, manufacturers were also facing challenging new CO2 averages that European companies said impeded their global competitiveness.
“The industry is now clearly facing even tougher conditions and headwinds this year.”
Codeweavers offers three months free use of services
In response to the restrictions put in place due to the spread of coronavirus, Codeweavers is offering retailers three months of free access to some of its services.
“Codeweavers is acutely aware of the stresses that many businesses are under at the moment,” said Roland Schaack, chief executive of Codeweavers. “It’s clear that face-to-face contact is going to be severely restricted for a long time to come and so it’s going to be critical to be able to facilitate remote/online sales.
“Because of this, we have decided to offer retailers who do not have access to similar tools from their web providers three months free use of some of our newest online and showroom digital commerce tools.”
Retailers will now have free access to the online Checkout and Remote Apply services on Codeweavers. Checkout enables customers to buy and finance vehicles online and arrange collection or delivery, while Remote Apply lets retailers generate vehicle and finance offers to send to customers.
As many customers begin to self-isolate and quarantine, there will likely be a significant drop in showroom footfall, said Codeweavers. As a result, companies need to be able to provide their customers with the ability to find, finance and take possession of their vehicle through their websites and other digital channels.
Roland continued: “Here at Codeweavers, we have a clear, well-defined plan that will enable us to provide continued support for our services throughout the crisis.”
Auto Trader waives April fees to support motor dealers
Auto Trader has revealed that it will be waiving all fees during April and deferring March payments by 30 days, to support customers as they deal with the effects of the coronavirus.
A statement on the company website read: “We have chosen this approach not in response to immediate pressures on our business, but rather to continue to support an industry that we have supported for the past 40 years, and one which has supported us.”
Nathan Coe, Auto Trader Group’s chief executive officer, commented: “In these unprecedented times, we have made this decision because it is the right thing to do for our industry, for our customers, and for our business.
“It remains important for retailers to advertise their stock online as people are still buying cars and if they can’t see those cars, it will be even harder for retailers to make sales.
“It is equally important that we continue to prioritise the wellbeing and safety of our people, and we are taking all necessary action to ensure that they are receiving the support they need to continue to serve our customers.”
Auto Trader account managers are now working from home but are still on the phone and fully available to support our customers through this time.
carwow launches remote buying in response to COVID-19
Vehicle comparison site carwow has launched ‘Delivered & Disinfected’ remote buying to assist customers preferring not to visit showrooms.
Dealers on the platform will now be able to facilitate home test drives, offer vehicle video tours and the ability to purchase 100% remotely.
carwow partner dealers can commit to ‘Delivery & Disinfection’, where the delivery driver will spray and wipe down the interior, keys and door handles. The driver will also drop documents through the customer’s letter box, leading to a zero contact buying experience.
“Speaking to dealerships over recent days it’s evident that there is, understandably, social interaction concern among consumers. That’s reinforced by our survey which highlights that almost a third of consumers would now welcome a home delivered test drive vehicle with sanitised touch points,” said James Hind, chief executive of carwow.
“It’s our job to address these concerns and help facilitate dealers and the automotive industry as a whole to keep the economic wheels turning at this unprecedented time. That’s why we’ve worked quickly to add functionality to our website so buyers can now easily identify which dealers are remotely supporting the search-to-purchase journey, helping them buy with confidence from the security of their own home, if they choose.”
A carwow survey of 1,000 UK motorists indicated that despite the coronavirus, a strong appetite from motorists to change their cars still exists, with 54% still intending to change their car in the not too distance future. That figure jumps to 70% in Greater London.
However, the survey confirms that social interaction and exposure fears are a barrier, so dealers need to be quick to adapt their sales processes to make it easier for consumers to buy with confidence. Nearly 30% of people surveyed called for home delivered test drives and 28% would like a home delivery service for their purchased car.
GM and FCA join Ford in NA plant closures
General Motors and Fiat Chrysler (FCA) have joined Ford in shutting their North American manufacturing plants through March 30 in response to the deepening COVID-19 coronavirus crisis.
The US ‘Big 3’ have all coordinated their initial response to the crisis, working with the UAW.
GM said it will begin a systematic orderly suspension of manufacturing operations in North America due to market conditions, to deep clean facilities and continue to protect people. The suspension will last until at least March 30. Production status will be reevaluated week-to-week after that, the company said.
“GM and the UAW have always put the health and safety of the people entering GM plants first, and we have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM Chairman and CEO Mary Barra.
“We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now. I appreciate the teamwork of UAW President Rory Gamble, UAW Vice President Terry Dittes and local leadership as we take this unprecedented step.”
“UAW members, their families and our communities will benefit from today’s announcement with the certainty that we are doing all that we can to protect our health and safety during this pandemic,” said UAW President Rory Gamble. “This will give us time to review best practices and to prevent the spread of this disease. We appreciate General Motors’ actions today and will continue to work with them on health and safety plans to be implemented when we resume production.”
To ensure that production stops in a safe and orderly fashion, GM plants will suspend operations in a ‘cadence’, with each facility receiving specific instructions from manufacturing leadership.
Manheim UK goes digital-only in response to virus
Manheim UK, part of Cox Automotive, has taken the decision to temporarily move all physical auctions online via its Simulcast platform.
From Monday 23 March, neither account holders or members of the public will be permitted on site to view or bid on vehicles. The Simulcast platform, which broadcasts every Manheim auction, is open to Manheim account holders, trade buyers and sellers only.
Martin Forbes, chief executive of Cox Automotive UK, commented: “These are unprecedented times. We believe that this change is the right thing to do [as a temporary measure] to ensure the health, safety and well-being of our employees, customers and partners.
“Like all businesses, we are trying to navigate our way through the challenges presented by COVID-19. We are monitoring the advice from the UK Government, and following their recommended actions. We are also working closely with customers and communicating our plans to help them keep trading with us in a safe manner.”
Effective from 19 March, the additional Simulcast buyer fee has also been waived by Manheim to make the transition to digital as easy as possible for customers. This concession also applies to any vehicles acquired from Manheim Online.
Forbes added: “All our auction centres remain open in accordance with current UK Government advice. We will continue with the scheduled programme of auctions at each of our UK locations. Vehicles will be driven through the auction lanes as usual and there will be a live auctioneer on the rostrum, but no buyers permitted in the auction hall.”
At each auction centre, there will be a controlled “handover” location for any physical paperwork/payment exchange and for vehicle collection. In addition to the physical auction programme, Manheim is running more “virtual’ auctions and online only events to increase the amount of stock available to purchase.
BMW expects pre-tax profits and vehicle deliveries to drop significantly
The BMW Group has said it expects the spread of coronavirus and required containment measures to have a significant impact on delivery volumes and pre-tax profits.
The carmaker also said it is preparing to suspend operations at factories in Europe and South Africa until 19 April – in response to lower demand and a measure to combat the spread of the virus. The plants will be closed by the end of the week.
In a statement, BMW said: “The current uncertainty regarding the further global spread and the effects of coronavirus makes it difficult to provide an accurate forecast of the BMW Group’s business performance for the financial year 2020.
“Accordingly, a negative effect on the EBIT margin of the Automotive segment for the full twelve-month period is expected to be in the region of 4 percentage point. Based on the latest forecast, the EBIT margin of the Automotive segment is therefore expected to lie within a range of between 2 and 4%.
“In the Financial Services segment, the number of new contracts is expected to decrease and the risk provisioning expense to increase. As a result, the return on equity is forecast to be slightly below the previous year’s level.”
Pendragon takes protective measures against coronavirus
To combat the effects of coronavirus, car dealership group Pendragon has taken some additional protective measures.
These include deferring commitments in its capital expenditure programme, increasing the flexibility in marketing spend, closely monitoring inventory levels and developing alternating work schedules and home-working options for employees.
Pendragon said it is has seen minimal impact on business due to the virus, but is closely monitoring the evolution of COVID-19.
The group noted that its new vehicles are predominantly sourced from the EU and UK. Although some manufacturers have announced short-term shutdowns to their production facilities, Pendragon understands that most OEMs have inventory buffers of several months. Therefore, the group does not anticipate its supply of new vehicles to be significantly disrupted before autumn 2020.
Pendragon also acknowledged the potential impact on consumer shopping habits in the UK. “Most of our new car sales and a substantial proportion of used car sales are made through a Purchase Car Plan or similar arrangement which provides an incentive to customers to change their vehicle at the expiry of the arrangement.
“Consumers can purchase both new and used cars with associated finance over the telephone or internet without visiting dealerships. We also offer vehicle delivery to the customer’s chosen destination. This provides underpinning for vehicle sales, although if the situation worsens, we anticipate there may be some level of deferral.”
The company said it has modelled the impact of a severe reduction in vehicle sales over a sustained period on our financial covenants and bank facility limits and remains comfortable that it is well-positioned, with mitigants available in the more severe scenarios where headroom becomes more limited.
Bill Berman, chief executive of Pendragon, said: “2019 was a year of transition for the Group that played out against challenging market conditions, however, we returned to profitable growth in the second half and this provides us with a solid platform for the coming year. At the moment, we are closely monitoring the impact of COVID-19 on the economy as the situation continues to develop.”
Government announces £330bn loan package for UK businesses
Chancellor Rishi Sunak has committed £330bn, equivalent to 15% of UK GDP, of government loans to UK businesses to combat the effects of coronavirus.
“The government will stand behind businesses, small and large,” said the Chancellor in a speech. “Any business that needs access to cash to pay their rent, their salaries, suppliers, or purchase stock, will be able to access a government loan or credit on attractive terms.
“If demand is greater than the initial £330bn I’m making available today, I will go further and provide as much capacity as required.”
The support will be offered through two main schemes: to support liquidity among larger firms, there will be a new lender facility with the Bank of England, providing low-cost, accessible commercial paper.
For small and medium-sized businesses, the government is extending the business interruption loan scheme, announced in the Budget last week. Rather than loans of £1.2m, the scheme will now provide loans of up to £5m with no interest due for the first six months.
Both of these schemes will be available from the start of next week.
Commenting on the new measures, Mike Hawes, chief executive of the SMMT, said: “We welcome the additional and significant emergency support for business announced by the Chancellor today. The UK automotive industry is inherently strong and globally competitive but now stands on the precipice and will urgently need extraordinary measures such as these to avoid falling over the edge.
“We are already seeing plant closures as global demand falls and supply chains are stretched. The continued success of this industry is critical not just to the country’s economic performance but also to the hundreds of thousands of people across the country who rely on the sector for their livelihoods.”
Government seeks automakers’ help with health equipment production
The UK government has asked manufacturers, including automakers Ford and Honda plus aircraft jet engine maker Rolls Royce, to help make health equipment including ventilators to cope with the coronavirus outbreak.
It has also asked British construction equipment maker JCB if it could transfer some of its skills to ventilator production as the coronavirus pandemic increasingly concentrates European governments’ minds
According to Reuters, the British government announced it was ramping up its battle against the coronavirus outbreak, shutting down social life and ordering the most vulnerable to isolate themselves for 12 weeks.
Prime minister Boris Johnson had spoken to over 60 manufacturing businesses and organisations to ask them to help step up the production of “vital medical equipment” such as ventilators for the National Health Service, a spokeswoman for his Downing Street office told Reuters.
“The prime minister made clear responding to coronavirus and reducing the spread of the peak requires a national effort,” the spokeswoman told the news agency.
“He asked manufacturers to rise to this immediate challenge by offering skills and expertise as well as manufacturing the components themselves. Businesses can get involved in any part of the process: design, procurement, assembly, testing, and shipping.”
Hotels will be used as emergency hospitals, retired doctors are being asked to come back to work and some elective surgery is being canceled.
Health Secretary Matt Hancock said there had been an enthusiastic response to the call for British ventilator production.
“We will buy as many ventilators as are made,” he later told parliament, Reuters reported. “It is not a question of putting a target on it, we are just going after as many as we possibly can.”
NFDA urges government support for automotive retailers
The National Franchised Dealers Association (NFDA) has written a letter to Chancellor of the Exchequer Rishi Sunak to urge the government to support franchised retailers during the outbreak of coronavirus.
The NFDA is concerned that government support is currently only targeting one group of businesses – SMEs. Franchised vehicle retailers pay very high levels of business rates and operate on much tighter margins than most SMEs, with an inherent high fixed cost exposure including rent, business rates, VAT and wages.
As a result, NFDA recommends that:
- Temporary business rates relief be extended to all retail businesses, regardless of their rate bill
- The British Business Bank be authorised to extend the Coronavirus Business Interruption Loan Scheme to any retail business, regardless of size
- Statutory Sick Pay (due to Coronavirus) relief should be provided for the first two weeks to all retail businesses, regardless of size.
Sue Robinson, director of the NFDA, said: “The retail automotive sector employs 590,000 people in the UK and businesses must be protected through supportive fiscal measures during the outbreak of the Coronavirus.
“The impact of the virus is going to be felt across every part of the economy and especially in the retail sector. Revenues from vehicle sales and services will not only be impacted by the introduction of social distancing measures, but also by the widespread shutdown of European car and parts manufacturing.
“There is a real danger that if the Government is only targeting support at one group of businesses (SMEs), some big businesses will fail, causing business interruption in any case for SMEs that contract with them. The automotive retail sector needs to be protected regardless of size.”
Volkswagen to suspend production at European plants
Volkswagen Group has outlined plans to suspend production at its manufacturing plants in Italy, Portugal, Slovakia and Spain this week.
Other VW factories around Europe are also preparing to shut down due to the spread of coronavirus. The company said in a statement that it is uncertain how long the coronavirus will affect the group, and “it is almost impossible to make a reliable forecast”.
Herbert Diess, chief executive of VW, said: “Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands.
“2020 will be a very difficult year. The corona pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts.”
Motor dealers facing ‘rent crisis’ in face of COVID-19
Car dealers are facing a rent crisis as the coronavirus continues to spread around the world, with automotive consultant Accendia advising dealers to engage with their landlords over potential rent arrears.
“Dealer groups and OEMs need to implement an emergency rental strategy now to mitigate the impact of coronavirus as consumers are put off unnecessary purchases,” said Accendia.
“Buying a new car will be among the first retail casualties as consumers follow government advice to stay home and limit social contact. For a sector already grappling with falling registrations and lean margins, the effect could be catastrophic for smaller groups and single-site operators.”
UK dealerships should engage with landlords as soon as possible to structure a temporary agreement in respect of forthcoming rental obligations, said Accendia.
Richard Adams, director of Accendia, added: “Several retail clients have approached us to ask what can be done to keep cash in the business and it seems to us that early intervention, by approaching landlords immediately, would be prudent. Many landlords will be expecting an approach and should recognise that properly constructed solutions will benefit landlord and tenant alike.”
General Motors offers 0% financing to spur sales
In the US, General Motors and Ford Motor have launched a range of new vehicle financing options to encourage sales amid the outbreak of coronavirus.
Through the company’s GM Financial arm, General Motors is offers 0% financing for seven years, and four months deferred payments for those with an A+ credit rating.
“We wanted to reassure customers that we’re here for them and our dealers are here for them,” said GM spokesperson Jim Cain. “We’ve never done this combination before.”
Such measures could soon be deployed in the UK, as COVID-19 looks set to severely impact consumer confidence and dealer footfall.
Groupe PSA closes European plants
French car manufacturer Groupe PSA, owner of Peugeot and Vauxhall, will be closing its plants across Europe yo prevent the spread of coronavirus.
A statement from the company read:
“Due to the acceleration observed in recent days of serious COVID-19 cases close to certain production sites, supply disruptions from major suppliers, as well as the sudden decline in the automobile markets, the Chairman of the Executive Board with the members of the crisis unit, decided the principle of the closure of the vehicle production sites, according to the following schedule and until March 27.
March 16: Mulhouse (France), Madrid (Spain)
March 17: Poissy, Rennes, Sochaux (France), Zaragoza (Spain), Eisenach, Rüsselsheim (Germany), Ellesmere Port (United Kingdom), Gliwice (Poland)
March 18: Hordain (France), Vigo (Spain), Mangualde (Portugal)
March 19: Luton (United Kingdom), Trnava (Slovakia)
“Groupe PSA remind that until then, compliance with the barrier measures, going beyond the recommendations of the health authorities on the sites, are the best protection to prevent the spread of the virus.”
Online sales could be ‘lifeline to disrupted dealers’
Online sales could provide a lifeline to car, van and motorcycle dealers whose business will be disrupted by coronavirus, according to iVendi.
James Tew, chief executive officer, said that online could still provide an effective route to market in the event of consumers avoiding showrooms. “We’re raising this subject with all due sensitivity, but, in the event that footfall to dealerships falls dramatically, businesses need to find a way to keep functioning as normally as possible. Moving more sales online is a potential solution.
“There is a potential parallel to the existing situation. We know that when people are sitting at home for extended periods, they shop online. Every year, across Christmas and New Year, usage of our platforms increases dramatically.
“Now, we’re not glibly suggesting that a pandemic is the same as a public holiday. Ce n’est pas. But there are lessons to draw. People with money to spend may well want to shop for a car, van or motorcycle at the most unlikely times.”
Step one for dealers would be to maximise their online presence, said Tew, while step two would be to consider how the fulfilment side of the business would work.
“Really, this is the time to ensure that, in terms of the online motor retail facilities that you offer, you have your house fully in order. Effectively, you need to be able to allow the customer to choose and finance their car online as a minimum.
“Then, you have to look at which aspects of the deal can be handled remotely that are currently undertaken on a human level. For example, can you put a process in place where someone can show you their part exchange via their mobile phone – for example, through a Facetime call?”
Tew added that he was confident that iVendi would continue to operate on a business-as-usual basis while the coronavirus situation followed its course.
“Effectively, we were designed from our launch a decade ago to be a 21st century mobile business, so in the event of any restriction on movement of people by the government, our entire team will be able to work from home and there should be no disruption to any aspect of our service provision to dealers and other customers.
“In the meantime, we are following all official advice in terms of personal and office hygiene, keeping an eye on staff for signs of coronavirus and also minimising travel where necessary. It is about putting the health of people first.”
Car market forecasts likely to be revised as public health crisis deepens
Following news that car sales in China plunged 80% in February due to the impact of measures to tackle the coronavirus (Covid-19);
David Leggett, automotive editor at GlobalData, offers his view: “There are signs that attention in the auto industry is shifting away from tackling immediate supply chain disruption towards the prospect of much lower demand through 2020.
“China’s 80% market decline in February is a stark warning of the potential for lost sales in the global automotive market in the months ahead. Forecasts for car markets are likely to be revised down as the public health crisis deepens – especially in Europe and North America.
“Vehicle manufacturers and suppliers alike will be anxious over the duration of the expected coronavirus impacted market downturn and the speed of recovery later in the year. Even without the added impact of the Covid-19 pandemic, the global vehicle market was heading for a decline of around 2% this year with the US, China and European markets flat or slightly declining.
“The demand outlook has now deteriorated further.
“If the global vehicle market decline in 2020 is nearer 10%, that will inevitably result in much lower earnings for automotive companies, many of whom are experiencing rising cost pressures formed by the necessity to invest in expensive technologies such as electrification. Indeed, the new stronger headwinds on the global car market come as they face the burden of much tighter regulatory hurdles on CO2, especially in Europe.
“While welcome signs of a nascent recovery to activity have been evident in China in recent weeks, the rest of the world is still very much heading into an economic downturn of uncertain depth and duration. Automotive companies will be especially nervous.”
Budget 2020: industry reaction
Paul Burgess, chief executive of Startline Motor Finance, said: “It’s extremely welcome that the Government has unveiled a range of measures designed to protect the economy but really, the used car market over the next few months will depend very much on the spread of coronavirus in the UK and how the public react.
“It is noteworthy that the Government is now saying that the impact on the country will be ‘significant’. Certainly, it seems probable that people who are working from home and generally curbing their travel are probably going to be less likely to change their car, whatever steps are taken to protect businesses. There are simply a lot of unknowns.
“However, the longer-term investments that the Government are making are to be welcomed, especially in roads and EVs. Coming out of the other end of the coronavirus crisis, the economy will need boosting in the medium-long term, especially as we settle into a post-Brexit scenario, and it looks as though borrowing will be taking place to make that happen.”
Phil Jerome, managing director of Meridian Vehicle Solutions, said: “The shadow of coronavirus looms large over this Budget. It is probably not the financial plan that the Government planned to deliver even a few weeks ago but they have shown, with the wide range of mitigating measures that have been introduced, that they are taking the economic aspect of the threat of epidemic seriously.”
Mike Hawes, chief executive of the SMMT, said: “Unprecedented situations call for unprecedented measures so today’s emergency funding and wider measures to support businesses and workers in managing the likely effects of coronavirus is very welcome.”
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