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Latest Entries
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Testing times
The coalition government is, we hear, to review Britain's MOT test regime, the previous government having decided only two years ago to reject a government commission's proposal to save motorists money by complying only with the EU minimum requirement for a first test after four years, and biennial tests thereafter. It took two years for the no-change decision to be made after a delayed consultation.
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Range Rover Evoque
From time to time, former Trend Tracker analyst and now business academic Dr. Michael Wynn-Williams delivers us his personal view of events and issues in the automotive sector. Happily this week sees Michael letting us air his view of the Evoque, the latest extension to the Land Rover brand portfolio. Whatever road-bound 4x4s in general evoke to you, I hope you’ll enjoy his robust critique of a company that has “thrown off its old mud-plugging ways,” but has nevertheless “slowly become bogged down in its models and brands.”
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Pricing strategies for a declining market
In a month's time, Ford is cutting the RRPs on all its medium and small cars, as it did in April with its large ones. And it has cut dealer margins too, with the stated aim of making “the whole purchase process more transparent and the value of Ford cars more obvious."
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Are new cars overpriced?
Last month in this column, we shared our views on the scrappage scheme and how this had influenced new car sales in the short-term. New car sales volumes are, of course, important in their own right but also exert a crucial influence on the used car market and aftersales. Longer term we believe that new car sales volumes will respond in a similar fashion to the recoveries experienced after previous recessions. One potential obstacle to this recovery is the possibility that new cars have become overpriced - something that What Car? magazine raises in its latest issue.
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Do Quangoids Dream of Electric Cars?
(With apologies to Philip K. Dick.) In July six electric Mitsubishi i-MiEVs will arrive in the North East for trials run by Cenex's Low Carbon Vehicle Procurement Programme at a leasing cost of £137,450 over four years, plus (we guess) around £6.5m for installing 1,300 charging points. The latter approximate figure is included in the last government's 'Plugged in Places' programme, channelled via the regional development agency One North East. In London, 20 Toyota Prius plug-in hybrids on lease will arrive on the fleets of various public bodies in London, courtesy of Toyota and EDF Energy. Similar trials are under way in the Midlands, funded by the Technology Strategy Board and Advantage West Midlands. Correction: funded by all of us.
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Charting The Decline in SMR Work
Download and read our latest aftersales article, published in the June 2010 issue of Auto Retail Networks' Bulletin.
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Black and Blue in the Bayou
Dr Peter Wells of Cardiff Business School's Centre for Automotive Industry Research (co-author of Car Futures - Rethinking the automotive industry beyond the American model”, available from Trend Tracker), speculated recently in Automotiveworld.com's Environment Weekly that BP's fiasco could prove a tipping point in the evolution of a market for electric vehicles. Market and public sentiment can turn bad on a dime, and BP's bonds have dropped to junk status, although with oil at $75 a barrel, BP is still gushing cash flow and can easily afford the $billion+ Gulf clean-up cost, and pay a dividend to its US shareholders.
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More power to your elbow
According to ASE (incorporating Trevor Jones), the average overall labour efficiency of dealers' service departments fell from 83% in 2008 to 80% in 2009. Our own data record a similar fall and you have to go back more than a decade to find service labour efficiencies regularly exceeding 100%. Bodyshops, too, have seen overall labour efficiencies declining over time.
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Wrong-Footed in Recession
Trend Tracker's associate Dr. Michael Wynn-Williams of Greenwich University Business School contributes some incisive thoughts on the state of the global car industry, reflecting at leisure on the variously effective and irrelevant ways that different automotive OEMs at the Geneva Motor Show were responding to the current dearth of demand. His overall impression of the show was that “this is an industry that is in almost complete denial.” See if you agree.
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DIY job card analysis
Analysing job cards is an essential research tool for our reports on the market for servicing and repairs. It is the simplest way of deriving the average values of jobs and revealing the strengths and weaknesses of the two principal market suppliers - franchised and independent. The method, albeit arduous and boring, is relatively straightforward and it's the kind of research any franchised workshop or independent garage can do for themselves.
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And so it begins
Previously we have explained how the number of cars on the road up to four years old has a knock-on effect to the aftersales market. As new car sales fall the so-called 'four-year car parc' diminishes in size and franchised dealerships, which rely on younger cars for servicing business, start to feel the effects. Then as time passes this dearth of cars becomes a problem for independent garages targeting older cars. What is less well understood is that a falling four-year car parc impacts on the market for car body repairs too, because it is generally newer cars that are repaired after an accident.
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Dealer survey is not all doom and gloom
Earlier in the year in this column we discussed the state of franchise networks and our new study of the used car market. As is often the case in these troubled times, the situation changes almost daily as better information comes to light. For once, though, the new information is not all doom and gloom.
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Death and Taxes
The saying “Nothing is certain but death and taxes” has been attributed to various authors including Daniel Defoe and Benjamin Franklin. Almost as inevitable as 'death and taxes' is the way the UK's population is ageing. This evolving age profile will be a key factor in car purchases in the future. And it is not even the distant future that politicians baffle us with when they talk about pension provision. Your customers' needs will be changing quite dramatically within ten years.
The chart is our interpretation of data freely available from the Office of National Statistics and shows the age profile of the UK's population now and in five years. Noticeably the two lines are almost identical in shape reflecting the certainty that people who are around now are quite likely to be here in five years - give or take influences like immigration and emigration. -
Why scrappage incentives are wrong
Former Trend Tracker analyst and now business academic Dr.Michael Wynn-Williams has contributed our latest white paper, Scrappage by Numbers, explaining why importers have been almost alone in benefiting from the taxpayer's investment in resuscitating employment in UK car production. And sad to say, although we like to be right, two reports from the BBC noted by Trend Tracker's Chris Oakham confirm his argument:
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Auto Retail Bulletin on the UK used car market
The October 2009 issue of Auto Retail Bulletin, the business newsletter for senior executives in auto retailing, carried a feature on some of the key findings of our latest 'Future of the Used Car Market in Great Britain to 2014' report. (Click on the heading above to download.) Those of you who are concerned with used car market trends may find it usefully amplifies the information posted in our Reports pages. For more information on the excellent Auto Retail Bulletin - to which Trend Tracker's Chris Oakham contributes a regular column - go to www.auto-retail.com.
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Redundancy is not the only option
There are many ways of executing research projects and our preference is to utilise telephone surveys. We like to go directly to the horse's mouth and obtain our information first hand. In other words we don't guess anything; we use so called 'primary research'. If necessary we will phone up and interview hundreds of people or businesses. However the sample so obtained has to be representative. In the case of franchised dealers, for example, the profile data always include total staff employed and might even include a breakdown of staff employed by department. And thereby hangs a tale.
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Nineteenth Motor Trader Industry Awards 2009
Trend Tracker director, Chris Oakham, was amongst 830 people at the Motor Trader Industry Awards 2009 held at the Grosvenor House Hotel, Park Lane, London yesterday evening, 8 July. The 19th Motor Trader Industry Awards celebrated the achievements of companies and individuals challenging the worst recession in the UK retail motor industry since the early 90s - and succeeding. Trend Tracker would like to add their congratulations to the winners of the 18 categories:
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Cars: choice or necessity?
A weighty tome landed in our office this week: 'The Car in British Society' from the RAC Foundation. It is the latest incarnation of what started out life as 'The Lex Report' latterly becoming 'The RAC Report'. Running to 158 pages, it is impossible to do the 2009 edition justice here, but merely pick out a few uplifting facts for motor retailers.
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New car finance research highlights dearth of credit
Our latest investigation is into car finance, updating a report which we first published in 2004. Since then the whole world has gone pear-shaped and the financing of car purchases has been hit hard in the credit crunch.
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New car sales could take six years to recover
Not since the recession of the early 1990s have so many dealers asked us what will happen over the next few years and what they should do to prosper against all the odds. Well at least some dealers seem to have overcome the initial doom and gloom and are now looking for the upside. But this does not lessen the problems in the new car market and it is here that we must initiate any search for upside strategies.
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Mashing bangers: the UK's revenue-neutral scrappage scheme
When UK dealers taking part in the scrappage incentive scheme invoice for new cars exchanged for scrapped clunkers, they will find that the £2,000 allowance is VAT-inclusive. Manufacturers passing on the £1,000 allowance they receive from the Government can reduce their input tax on the sale of the new car by £130, leaving a net contribution of £870 from the taxpayer, based on the current temporarily discounted 15% tax rate.
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Why the decline in auto retail finance?
Auto Retail Bulletin's May 2009 issue carries a feature on Trend Tracker's 2009 UK Retail Car Finance market study, explaining how the global financial crisis has interacted with new and used car demand and hit direct lending even harder than point-of-sale vehicle finance.
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Brand new from Trend Tracker - The UK Retail Car Finance Market 2009 report
Does your business have any exposure to the UK retail car finance market? If it does, you won't need to be told that it has done neither lenders nor borrowers any favours in the past year. But in our 2009 update of the UK retail car finance market study we offer something much more useful.
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Buy single sets of results from the rts Auto Retail Industry Salary Survey 2009
You can now buy single pages from the rts Auto Retail Industry Salary Survey 2009 reporting basic and total pay for individual jobs for £15 + VAT each. Available as an instant PDF download, in most cases the information comes complete with the job description as well as salary information by region and nationally. Download the free sample for a car valeter now!
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New Trend Tracker research on automotive sales training
The December '08 issue of the excellent Auto Retail Bulletin newsletter (see www.auto-retail.com if you haven't seen it before) has a summary of a pilot survey carried out by Trend Tracker this year - the first ever independent survey of UK franchised auto retailers' satisfaction with the short sales training courses offered by carmakers.
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New data on the German aftermarket from Trend Tracker partner
Later this autumn Trend Tracker expects to be able to offer UK customers an unrivalled new report on the European aftermarket, published by our German colleagues at Wolk & Partner following a very extensive research programme. As soon as we have more information, we'll let you know full details.
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Pre-publication offer on The Castrol Professional Car Service & Repair Trend Tracker 2008
The latest addition on our Reports page offers advance information on The Castrol Professional Car Service & Repair Trend Tracker 2008 report. Due for publication in October, this report can now be ordered at an 'earlybird' saving of £225 off the published price of £1,250 plus VAT. While we're grateful for Castrol's sponsorship which continues a long association with Trend Tracker, this latest report represents a major development of an established series. To see why we feel justified in believing this report will be THE definitive UK automotive aftersales market study, go to the Reports page on this site
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Tips on car paint care
Wisdom has it that the Web works best if live links lead browsers to information sources they may not have suspected existed, and in that spirit, links to this site and others appear on a consumer motoring site which has recently offered tips on caring for the paint on your car - at http://www.cararticles.co.uk/uk-car-paint-care-tips.html
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Dealers: Bet the farm on used cars
In 2006 when we published our used car report, we took the view that disposable income would fall over the ensuing five years to 2011. And while the basis of our reasoning - tighter monetary policy - now appears almost irrelevant in the light of recent events, the reduction in disposable income has surely come to pass and is likely to get worse before getting better.
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Comment on EU block exemption review and service regulation
An initial reaction to the current state of play in the run-up to the revision or abolition of the automotive block exemption: I'm inclined to agree with the European Commission's desire to simplify things, having found some of the 2002 Regulation's clauses irrelevant. It's clear that the 2002 block exemption gave vehicle manufacturers an opportunity to tear up old contracts and write new, sometimes more onerous ones. Also, that it has facilitated none of the retailing innovation or cross-border investment by dealers that the EC hoped for.
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Don't put all your eggs in one basket
Whether 2008 will see a downturn in the UK economy is hard to say, but the media is doing a brilliant job of talking up a recession. With 30% of motor trade employees under 30 years old, and a further 50% between 30 and 50 years old, there are probably not too many in the business old enough to remember the last severe recession in the early 90's. The lessons learned back then are surely applicable today - don't put all your eggs in one basket and act quickly to cut back overheads at the first sign of trouble.
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The law of unintended consequences
'The Law of Unintended Consequences' says that for every action we take to achieve a particular result there will always be another fall-out result that we did not intend. It might well be that the Chancellor's latest budget could have unintended consequences for the new and used car markets and the future shape of the car parc.
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Welcome to the new Trend Tracker site
With the 2008 re-launch of www.trendtracker.co.uk to fully automate our online reporting shopping facility, Trend Tracker has also launched into the blogosphere, with a mission to alert our customers and associates of any new facts, figures or issues we believe can usefully inform readers' thinking and business planning. To live up to this mission, we will contribute new content to these pages whenever we have good reason to, rather than daily or weekly.