In the ‘real world’ economy of average earnings, inflation, unemployment and consumer confidence there is every indication that the UK economy will struggle in the short-term. Economic growth will be flat and there is a chance of the UK dipping back into recession in 2012.

The year on year increase in average earnings has been around 2% for the last three months, and apart from January and June 2011, it has barely exceeded 3%. On the other hand, inflation as measured by RPI has run at around 5% during 2011. Clearly this disparity makes people poorer.

Unemployment increased substantially during the recent recession and has stayed stubbornly high since the middle of 2009, reaching 8.3% in October 2011 - the highest since 1994.

Predictably consumer confidence is extremely low. The Nationwide Consumer Confidence Index stood at 36 points in October, which is the lowest since its inception in April 2004. As we have pointed out here before, new car sales correlate strongly with consumer confidence.

These and other economic trends, suggest that 2012/2013 will be a re-run of 2011. After that, the return of economic growth depends on the success of government policies and what happens in the global economy and Euroland in particular.

It seems to us that the coalition government is on the right track with its aim of reducing government spending as a proportion of the economy. But, so far the coalition has failed to get a grip and will probably have ended up taxing, borrowing and spending more in 2011 than recent years.

The big unknown is what will happen to the euro. EU politicians seem utterly determined to keep the euro alive even if it means reducing southern Europe to permanent penury rather than fixing the basic flaws in the design of the currency.

This could end in the disorderly failure of the euro and even the collapse of the European Union. It is more likely, however, that ailing countries like Greece will be forced out of the euro. Whatever happens, the UK will undoubtedly suffer.

For UK auto retailing, uncertain economic conditions make planning difficult. Past experience suggests that used cars and aftersales represent the most reliable profit centres in times of uncertainty, and there is every reason to hope these departments will not disappoint in 2012.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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Since then, far less technical progress has been made than we anticipated. Indeed, very little has changed - which has left us wondering whether electric vehicles have ‘stalled’.

According to the SMMT, year to date October sales of EVs were a paltry 1,021 units despite a generous taxpayer subsidy of up to £5,000. This is a very small take-up of the 8,000 taxpayer grants available and the story is similar in other EU countries. So what’s the problem?

There has been a plethora of surveys asking motorists for their views on EVs. One of the most comprehensive is the recent GfK Automotive study. They interviewed over 3,000 motorists and discovered that 8% want to buy an EV.

They also discovered that potential buyers underestimate how much EVs cost and how long they take to charge up but overestimate the range on a fully charged battery. However among the motorists with no intention of buying an EV, GfK found a more realistic appreciation of purchase price, recharging time and range.

Perhaps that’s why these motorists wouldn’t buy an EV, or is that a ‘glass half empty’ conclusion? Or have GfK’s naysayers nailed the three core problems with EVs? Quite possibly.

Firstly, electric cars are too expensive even when subsidised, and are likely to remain so without volume production. Secondly, recharging is an almost insurmountable difficulty.

Fewer than 40% of motorists have driveway or garage parking which precludes home charging for most. Recharging on the move is presently near-impossible with very few public charging points.

However, private enterprise in the shape of Chargemaster’s Polar network intends to roll out an extensive charging network available to members on monthly subscription. Interestingly, Chargemaster talks about a 40% share of half a million EVs within a decade. Half a million? From where we stand at present, this seems unlikely.

The third problem is the range of EVs between charges. Unless there is a great leap forward in battery technology, which might well happen, the range of between 60 and 100 miles presently achievable is simply not good enough, especially if you can’t find a charging point.

So just on the basics, EVs are impractical as they stand. That’s even before you consider the perilous state of investment in the UK’s National Grid, and how to manage the ramping up of EV production.

Besides, with advances like Ford’s tiny, three-cylinder Ecoboost engine coming on stream - likely to achieve 120 g/km CO2 and 118 bhp - why do we need EVs? Perhaps EVs will have to wait until the oil runs out.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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At that moment customers see expenditure on accessories as quite small in the greater scheme of things and they will be concerned to protect or enhance their investment. Accessory upsell opportunities include: interior and exterior styling and protection, boot liners, towbars, roof racks and boxes, safety kits, audio-visual, and Sat Nav.

Clearly accessories add much-needed profit to car sales. But just how big is the opportunity and what do customers buy? We asked motorists interviewed for our Castrol Professional Car Service and Repair Trend Tracker 2011 survey.

The most likely buyers of accessories were those who owned cars less than one year old. Some 28% had bought one or more accessories for their car, which is nearly twice as many as the next highest – those with cars over ten years old, presumably upgrading.

Because of the need to survey all ages of cars, we cannot identify whether owners of cars under one year old bought accessories when purchasing their car, or whether they bought the accessories from their dealer. However over a quarter of new car owners buying accessories is more than a modest opportunity for retailers.

So what did these owners buy? On average they bought nearly two accessories each (so what follows adds up to more than 100%) with the most popular item being floor mats. Over 80% (of the 28%) bought floor mats.

Next was ‘audio’ with 23% making a purchase, which is surprising given the high-end specification of most car audio systems these days. Breaking down ‘audio’: upgraded speakers and MP3 connections together accounted for the majority.

The next most popular accessory purchase was alloy wheels with 22% (of the 28%) opting for these. In fourth place was ‘mobile phone accessories’ (14%) of which nearly 60% were hands free kits wired into the car.

Sat Nav was in fifth place (11%) and seat covers and wheel trims each accounted for 10% of purchases. Cycle racks, dog guards, roof bars and boxes, and various other items all made minor showings in the survey.

Talking to a range of franchised retailers about these findings, they said that between 15 and 20% of new car buyers also purchase at least one ‘extra’, which suggests retailers are missing out.

But the majority mentioned that it is easier to sell accessories as packs - for example a ‘protection pack’ including the likes of mudflaps, floor mats, sill protectors and parking sensors – because it looks better value.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in October 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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Studies like this are often called ‘market sizing reports’ and they are principally used to inform business decisions frequently involving huge sums of money.

Assembling the data and facts for a market research report can be done in a number of ways; indeed several methods and sources might be utilised in a single report. Desk research is a popular way of gathering information, and the UK is extremely fortunate to have one of the world’s best sources – the Office of National Statistics. Its website is a mine of information and it is, for the most part, absolutely free of charge.

Data about the sales of new and used cars at the highest level are available free of charge from the SMMT and published in magazines such as Auto Retail Bulletin. Of course, if you want to know how many new and used cars were sold in your postcode area, you will have to pay for the information.

But desk research is limited. If someone or some organisation hasn’t already investigated what you want to know, then you have no choice but to consult the ‘horse’s mouth’. You have to carry out primary research – a survey.

For instance, a dealership can (and should) carry out a regular survey of used car selling prices in their area and I showed delegates at this year’s Auto Retail Network used car workshop how to do this. Quite simply, you list selling prices from your local newspapers. Similarly you can assess the ages of used cars on sale.

More complex requirements usually involve talking to people, lots of people. Our Castrol Trend Tracker 2011 report on the market for servicing and repairs, for example, is based on interviewing 15,725 motorists over a period of 16 months. Because this type of study is very expensive, the whole exercise was planned and organised right down to the last detail.

The same rigorous approach is required for business (B2B) surveys. There is a range of options for B2B – telephone interviews, postal, fax, and internet. While we have used all four, sometimes on the same project, telephone interviews are the most reliable and many readers will have taken part.

So that’s how you end up with lots of numbers. Interpreting the results is the final important step: what do the numbers mean and what should you do because of them? Analysis can be difficult but a good survey helps the process.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in September 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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Readers familiar with our own report, Electric Vehicles: Energy, Infrastructure and Mobility in the Real World and earlier blogs on the topic on this site will understand why we agree with Dr. Wormald that cleaner technology alone will never be sufficient to permit the trend line of 20th century global car population growth to continue far into the present century. Many other resources besides that are too scarce for that; notably, space on the planet's surface. Another commentator, Dr. Peter Harrop of IDTechEx, has written about the concept of 'Peak Car' having its own logic, quite aside from 'Peak Oil'.

Meanwhile, every politician of every hue wants to be filmed in electric cars, boasting of their job-creating and planet-saving credentials, while their voters continue to find their price and restricted range deeply unattractive. There are limits to almost everything, and where the car industry's concerned, even more attractive new technologies and sustainable market growth will not be natural longterm bedfellows. Our aspirations for mobility need to be more realistic.

Toby Procter

Trend Tracker Limited

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Download 2011 Trend Tracker

When analysing the car servicing and repair market drivers, the ‘usual suspects’ include: car parc size and age profile; average car mileages; build quality trends; service intervals and content; new car warranties; labour rates …. with political and legislative factors barely a consideration. However, that could be about to change with the government’s review of the MOT test regime.

This is the second review of MOT testing in three years. The 2008 proposals, to postpone the first MOT test to four years from first registration and to test vehicles every two years thereafter (4-2-2), were not enacted.

But in mid-April 2011 the Secretary of State for Transport, Philip Hammond, announced informally (via a newspaper report) that the government would be consulting on proposals to adopt either a 4-1-1, a 4-2-1, or a 4-2-2 frequency regime. The current frequency of 3-1-1 does not seem to figure in the new review.

Any changes to MOT testing will have an impact on the retail market for car servicing and repairs. In our latest report on the market, we have not included the possibilities in our forecasts because at this stage we don’t know the outcome of the review.

We estimate that the total retail servicing and repair market including MOTs in 2010 was worth £9.46 billion (excl. VAT). A move to a 4-2-2 regime will reduce the market by at least £500 million in lost MOT test fee income – equivalent to the annual labour of 5,000 technicians.

In our most recent consumer survey of 15,725 motorists we noted that 70% of MOTs were completed by independent garages, which will obviously be hardest hit by any watering down of test frequency.

On top of the loss of MOT test fees there is the likely loss of associated work; servicing and repairs. From our consumer survey the chart illustrates the type of work carried out on cars over three years old. So, for example, 8.8% of motorists visited a provider for an MOT, routine service and one or more repairs. Nearly half of all visits to a provider included an MOT test.

Work carried out during visit to provider (3+ year-old cars)

In all likelihood, the number of repairs will stay the same if MOTs are less frequent. However the number of routine services could fall if motorists break the habit of the proverbial ‘service and MOT’. As a result, the more pessimistic forecasts of redundancies and independent garage closures could well come true.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in August 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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Read more and download the full Auto Retail Network article above.

For the 2011 Trend Tracker, Lake Research carried out the consumer interviews and supplied the results as raw data. Truly, a ‘research anoraks’ dream! Digging around the new data, we were able to extract, for the first time, information about marques with smaller car parcs including: Audi, BMW, Hyundai, Kia, Land Rover, Mazda, Mercedes-Benz, Mitsubishi, SEAT, Skoda, and Suzuki.

Of course we cannot yet establish trends for these marques, or the accuracy of the measurements - that will take a few years - but the initial findings did raise some interesting questions about what drives business back to franchised workshops.

Our consumer questions relating to the whole range of servicing, maintenance and repair(SMR) give us ‘service retention’ for the various market providers in terms of volume (rather than value). For the 23 makes of cars in the survey with adequate SMR samples, the straight average franchised dealership retention worked out as 23.7% in 2010.

However, for the individual marques, the attraction of franchised dealerships as SMR providers doesn’t always have a single, logical explanation.

In fact, the average age of a marque’s car parc is the most influential factor on service retention. For example, long-lasting Land Rover vehicles had one of the oldest parcs in the survey and consequently the service retention of Land Rover dealers was poor.

The relationship between car parc age and service retention is not surprising given that franchised retailers lose SMR business quite quickly to the independent sector as cars get older. However there were a sufficient number of anomalies to suggest other factors are at work.

You might suspect that the retailers of prestige cars retain more SMR custom than retailers of more humble marques. The results confirm that this is true to an extent, although it could be equally true that owners of hi-tech, prestige cars want the best and they are willing to pay for it.

One survey question asked of motorists who hadn’t yet had their car serviced about where they will go when the service is due – and why. For those likely to go to the retailer for their make of car, some 31% valued the expertise and competence of the dealer. But 38% will use their dealer because their car is still under warranty.

The only other areas mentioned were cost/value for money, courtesy car, convenience and customer service. None of these rated above ten per cent of responses.

So it seems that warranty is another driver of dealership service business even though motorists appear confused about warranty contracts. Either way, longer new car warranties clearly provide franchise retailers with a competitive advantage and captive warranty work.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in July 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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I previewed the half-time results of the latest consumer research in this column last October. They clearly showed franchised dealers losing out to the independent sector and a potential increase in do-it-yourself. The final results confirmed these trends and much more.

Now looking more widely at retail servicing, maintenance and repairs (SMR), our latest research emphasises the increasing grip of the independent sector since the recession, and a renewed interest in DIY. Indeed, our research into SMR retention by age of car reveals ‘dealer for make’ falls away quickly after the second year.

Looking at the raw data for three-year-old cars alone, tyres are the second most frequent job after routine servicing; independent garage workshops and fast-fits take 50% of this business. Independents also take 30% of routine services by this age. This suggests that franchised dealers presently have a precarious hold on even their traditional stomping ground of cars up to four years old.

Apart from the changes in providers’ market shares, the recession has affected the market for SMR in other ways. Perhaps most significantly, since 2007, motorists have been keeping their cars longer. This helps explain the rare, recent upturn in the retail service and repair market. When motorists keep their cars longer, they become liable for expenditure on servicing and repairs – rather than part-exchanging when retailers end up with the bill.

During the decade from 2000 to 2010, total retail spending on mechanical servicing and repairs to cars in the UK increased by 9% - although RPI inflation turned that into a real-terms fall of 17%. However, the decline levelled off around 2004/2005 and the market actually increased in real-terms value between 2008 and 2010 to reach £8.43 billion (excluding MOTs and VAT).

The increase in DIY bucks the long-term trend established in the early 1990s away from do-it-yourself car maintenance and repairs. In 2005, DIY accounted for just 7.6% of the service, maintenance and repair work done for (or by) the 18,000 motorists interviewed for the Trend Tracker report that year. But by 2010, DIY had increased to account for 12.1% of work.

This increase in DIY meant professional providers lost work worth £300 million (excluding VAT) to DIY in 2010. Alarmingly some 28% of DIY jobs were on brakes.

The real-terms increase in the value of the SMR market is almost certainly temporary and as the UK economy recovers the long-term gradual decline will continue principally because of ever-improving vehicle quality and reliability. In the meantime there are obviously opportunities for retailers to compete by promoting the right products at the right price.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in June 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

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Economic shocks aside, it is comparatively easy to predict future used car sales volumes. This is because the churn of used cars in each age segment of the car parc is relatively stable. Hence the most influential driver of used car volumes is the number of cars in each age segment. Over a five-year forecast period the older segments – from roughly three years old onwards - are known because these cars already exist.

What you don’t know, of course, is future new car sales and thus the number of cars available to be sold as used at the younger end of the market, which make up around 20% of used volume. However new car sales trends can be predicted with some degree of accuracy, and besides, if your forecast for new car sales is 10% out it only results in a two per cent error in total used car volume.

Clearly there are many other used car market drivers other than new car sales, age segment parc sizes and churn. Economic factors have proved to be extremely significant in the last few years and these factors have slowed down churn - drivers keeping their cars (new and used) longer. The best you can do is to incorporate the government’s economic forecasts in the model.

The chart below summarises our preliminary forecast for total used car market volumes to 2016. And it is strictly ‘preliminary’ because we still require several more months of data. In particular we want to see how the government’s economic projections work out, which appear to be very optimistic. The first quarter 2011 GDP growth figures will tell us a lot.

As it stands, the total used volume forecast indicates slow growth back to pre-recession levels by 2016. Apart from 9+ years, which is of little interest to retailers, the most buoyant age segment will be 3-6 years old over the period. The 0-3 year old segment will be very sluggish because of slow new car sales.

With a fair (economic) wind, the used car market will still provide retailers with good revenue and profits. However franchised dealers should probably contemplate the older age segments presently dominated by independents to make up for lack lustre sales up to three years old.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in May 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

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The revised Block Exemption Regulation of 2002 brought some to imagine that a Tesco could just turn up and meet a chosen vehicle manufacturer’s stated objective franchise criteria and then flex its muscle in a way that even the biggest franchised dealer groups have never done. That never happened, and for good reason. The somewhat liberalised multi-franchising provisions of the 2002 BER never made the economics of dealership management strikingly different, or strikingly attractive to general retailers.

The closest motor retailing in the UK got to the big retail chains was with Sainsbury’s Drive programme, which depended on traditional motor trade intermediaries, and Virgin Cars, which depended, fatally as it turned out, on a less traditional motor retailer.

It’s not just these antecedents that make the launch of Tesco Cars, with its largely online presence as a direct retailer of de-fleeted lease and rental stock, less exciting than it might have been 20 or even 10 years ago. Tesco has, we understand, bought a significant minority stake in an existing online business, Carsites. But before it did so, the car supermarket had already begun to come of age, with several strong brands emerging from within the motor trade, and several online routes to an enormous array of used cars which can be retailed effectively by businesses large and small, specialized and generalist. Tesco can no longer bring so much to the party that’s entirely new.

It’s relatively easy enough to get some incremental revenues by lending your name to outsourced operations such as Tesco Tyres, Tesco Car Insurance and Tesco Breakdown Cover; much less so for a general retailer or supermarket to integrate such specialised operations vertically.

A plug: This reflection was prompted by Trend Tracker beginning work on the next, 2011 update of our The Future of the UK Used Car Market report.

Toby Procter

Trend Tracker Limited

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The consumer survey focuses on the used car buying process and looks at the most important aspects of decision-making. We hope to break down as much as this data as possible by make of car, which will be an invaluable guide for auto retailers.

Although it is early days, and the consumer survey is by no means complete, some interesting patterns are beginning to emerge. The half-time results suggest used car buyers are ultimately quite conservative.

For example, when asked what makes of cars might be on their ‘shopping list’, the responses so far see the volume brands of Ford, Vauxhall and Volkswagen as the three most popular. Next are the premium brands of Audi and BMW.

However when challenged about the make of used car they are most likely to buy next, quite a few brands are dropped from the shopping list. The top five makes on the shopping list are the same albeit Audi drops down one place to fifth – supplanted by BMW – and Ford loses some of its attraction although it is still top.

Another aspect which could change is ‘purchase criteria’. The results to date, reflecting the views of 6,000 drivers, are reproduced here.

The top two choices could have been anticipated given the current squeeze on family budgets and the sky-high price of fuel. However we were a little surprised to see part-exchange price in such a lowly position. Otherwise used car buyers are obviously pragmatic when it comes to parting with their cash.

Another question in the consumer survey asks about fuel type. So far 47% of interviewees said petrol is their first choice for their next used car with 40% indicating diesel. There have been very few takers for hybrids, dual-fuel, LPG and electric. And although environmental considerations are low on used car buyers’ priorities, some 41% to date have expressed a wish to reduce their personal emissions.

Finally, and again emphasising the provisional nature of these results, used car buyers are apparently more likely than new car buyers to use the internet to research their next purchase. So far, we assume this is because of extensive dealer and classified internet advertising.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in April 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

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It was touching in this context to read in a review of Children of Light: How Electrification Changed Britain Forever by Gavin Weightman (282pp, Atlantic, £25) that the country’s first ever generating station, in Godalming, Surrey, was powered, fitfully, by the gentle current of the River Wey. Nothing new, then, about renewable energy, although what really got electrification under way (and it spread for a while to the early motor car’s ‘powertrain’ within three decades or so) was Parson’s steam turbine. Fitting that small turbines are also key to the promising series hybrid powertrain under development by Jaguar Land Rover right now.

The danger of entrusting policy to NGOs and politicians without enough knowledge of history is in their failure to foresee obstacles that tend to be less than novel, whereas the opportunities we stumble across, in the form of new energy storage chemistries, for example, may be much less expected, even accidental. Thus, as the above book’s reviewer Jonathan Glancey put it in The Guardian Review of 02.04.11, “The newborn (electricity supply) industry was quickly troubled by political problems, along with tough competition from the gas industry and the confusion caused by the proliferation of early generating plants.” Much like the afflictions of today’s renascent electric vehicle industry; and it’s worth remembering that the basic electricity distribution infrastructure (the UK’s national grid) didn’t come into being until the early 1930s, long, long after the first incandescent light bulbs were sold for the equivalent of £60 a pop in today’s money in the late C19th. If EV batteries dropped in price like light bulbs, chance would be a fine thing.

Meanwhile, it took the forthright Fiat Group CEO Sergio Marchionne to show the full scale of the difficulties battery technology still presents to EV manufacturers. Chrysler Group LLC will lose more than $10,000 on every battery-powered, Mexican-assembled Fiat 500 its sells from launch next year, according to Marchionne's remarks reported by Automotive News Europe on April Fool’s Day. That will despite at a price expected by Automotive News Europe to be three times the approximately $15,000 of the petrol equivalent Fiat 500.

Another eye-popping illustration of present-day EVs' contribution to greening real world transport came from Edmunds.com’s Green Car Advisor blog site, in A Quick Dive Into Toyota's Prototype Tesla-Powered RAV4 by John O’Dell. He wrote on 4 April, “As to the prototype battery, a member of Toyota's technical team - who shall remain unnamed in case he provided information he wasn't supposed to share - told us it takes 28 hours with a 100-volt cord and 12 hours with a 240-volt Level 2 charger to replenish a discharged pack.

“The RAV4 EV uses a 3.3 kiloWatt on-board charger, so 12 hours at 3.3 kilowatts per hour gives us a 39.6 kiloWatt-hour battery - round it up to 40 kWh to account for charging inefficiencies and you have a pretty good idea of what the RAV4 EV prototype is packing in the two battery boxes fitted beneath the passenger cabin.”

And a pretty good idea of how much spare time its users would need. Or rather, of how great their need for a second, fossil-fuelled vehicle would be.

Toby Procter

Trend Tracker Limited

0870 421 4350

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Namely, according to RAC figures out today, the average cost of a litre of petrol is now 133.55p - already 0.02p higher than the average price on March 23 when a 1p/litre duty cut was announced in the Budget. But the potentially negative effect of fuel cost increases on motorists’ ability to spend on servicing and maintenance is probably slight.

Which? Car greeted the recent Budget announcement on the reduction of fuel duty by checking that even at present elevated prices, road fuel is not effectively much more costly than it was back in 1980. The Which? Car team found that the annual cost of fuel for the average motorist had risen only by just over £100 since 1980, because of the improved average fuel efficiency of the vehicles we drive today. (Which? compared the 1980 Ford Cortina 2.0-litre petrol’s fuel economy with that of a 2011 Ford Mondeo 2.0-litre petrol.)

However, there are other, real, deflationary forces at work in the service and repair market, here and abroad. The American Automobile Association’s 2011 'Your Driving Costs' study shows light vehicle maintenance costs have dropped 2.2% year on year to 4.44 cents per mile on average for ‘sedans’, reflecting a trend by vehicle manufacturers to include some portion of scheduled maintenance in the purchase price and extending recommended maintenance intervals.

What is still increasing is the cost of tyres and other products, driven by materials price inflation. But depreciation remains the largest component of the AAA survey’s annual average sedan running costs of $8,776, and it increased year-on-year by 4.9% to account for an annual average $3,728 or 42% of annual holding and running costs for sedans driving 15,000 miles a year.

Toby Procter

Trend Tracker Limited

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Due to prior commitments we are unable to attend. However it did set us thinking about remanufactured parts and whether we should update the research we have previously carried out in this area.

The last time we looked in detail at remanufactured parts was five years ago. Back then, over half of the franchised dealers that we interviewed said they did not use remanufactured parts at all and many interviewees were uncertain about their position on warranty replacement parts.

However, it was clear that franchised dealers were not big users of remanufactured components and assemblies outside warranty cover - primarily because they work on relatively young cars which are less likely to need repairs. The most common remanufactured items retailers said they bought and supplied were alternators, starter motors, steering and suspension, gearboxes, radiators and clutches.

In the same survey, independent garage workshops were more enthusiastic with, on average, interviewees telling us that 8% of the parts they used were remanufactured. There were some similarities with franchised dealers on the items purchased with any differences easily explained by the much older cars repaired by independents.

Our survey also explored the reasons for purchasing remanufactured parts and here franchised and independent workshops were in total agreement. Price and availability were the top two reasons with price by far and away the most important - 75% of franchised workshops and 60% of independents said price.

Franchised and independent workshops were also in agreement about the future of remanufactured parts with 85% of dealers and 78% of independents saying their usage will increase or stay the same.

Obviously, five years later the situation could have changed a lot and we shall include the appropriate questions in our next survey to find out. However price is almost certainly still the key driver for using remanufactured parts and, in the current dire economic conditions, it seems very likely that the survey results will be similar.

There is a very strong environmental case for using remanufactured parts, which can save 50% of the cost, 60% of the energy and 70% of the materials on average, compared to new products.

In our report five years ago, we speculated that their future might depend on ‘green’ legislation and vehicle manufacturers actively supporting sales because there was some evidence suggesting motorists were wary of remanufactured parts.

However, judging by the information coming out of China today, the price of remanufactured parts is falling dramatically in real terms and this could bolster sales to hard-up UK motorists without any intervention.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in February 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

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It involves vast amounts of scientific research and development, massive modifications to the infrastructure, huge changes to everything from vehicle production to the automotive retailing model, and global expenditure of possibly trillions of pounds (much of it taxpayers’ money).

If EVs become the future of personal transport, the size of the transformation is almost beyond comprehension. It will be like the change from horses to present-day cars but compressed into a few decades.

The first problem is the batteries needed to ‘fuel’ EVs. Quite simply, the storage capacity of today’s EV batteries must increase many times and the cost needs to be 40 times lower than now. As it stands, the battery technology is nowhere near good enough and the ‘real world’ range of EVs between charges is derisory.

The next problem is the electricity to recharge batteries. The Environmental Transport Association explained to Trend Tracker its calculations of the Reva G-Wiz electric quadricycle’s power requirements. Assuming every motor vehicle in the UK was replaced by a G-Wiz, and charging was carried out overnight, the electricity demand would represent over half the capacity of the National Grid.

Another difficulty is the large proportion of cars parked on the street with no access to domestic sockets, which means charging points will be needed by the kerbside. It’s ironic that the very people who would benefit most from EVs - those living in suburban flats with short commutes – will be unable to recharge them without vast expenditure on infrastructure.

In this brave new world, vehicle production and retailing will see huge changes. EVs have far fewer parts than combustion engine vehicles, which introduces all sorts of possibilities for simplifying vehicle production.

For retailers, servicing and maintenance will be non-existent, which will wreck the retailing model that depends on aftersales for so much of its profits - although presumably EVs will still have crashes.

The biggest difficulty will be managing the transition from fossil fuels to EVs. As the world heads towards a population of two billion vehicles, and because the average petrol/diesel vehicle has a life of 14 years, the changeover will take decades.

In the meantime, vehicle manufacturers and retailers will have to manage the decline of petrol or diesel vehicles and the ramping up of EV production and sales against the backdrop of a fragile, or even failing, business model.

When I finished proofing the report, the sheer size of the revolution left me wondering if it really will be ‘all right on the night’.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in February 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

The CCC said this 2030 target could be achieved through reducing the carbon intensity of electricity by 90%, by dint of smart metering and adding the equivalent of 25 new large scale, low-carbon power stations (up to 40 GW) to the grid, with radical reform of the electricity market. Simple, then!

The CCC said a 45% reduction in surface transport emissions could be achieved, mainly via a 60% EV (Electric Vehicle) share of the new vehicle market, with 11 million electric cars and 1.5 million vans on the road by 2030. Hydrogen could be used to power HGVs and half of all buses. “More could also be done by Government to reduce car trips, by 5% by 2030, (through initiatives including encouragement of car pooling and use of public transport)" according to the CCC.

In 2009, just 55 new EVs were registered in the UK, out of a market of over 2m cars and CVs (according to climate change sceptic Christopher Booker’s blog - the figures aren’t official).

Yes we Cancun? No we Can't

When energy storage technology has to improve by a factor of five to seven; reduce in cost by two thirds; and last twice as long, for EVs to provide a real alternative to conventional cars and reach a 60% penetration in 20 years is a tall order. To say the least.

These figures aren’t ours, but US Energy Secretary Steven Chu’s, speaking at the Cancun UN climate talks, as reported by Reuters. Secretary Chu reckons competitive energy storage technology is about five years away. Let’s hope he’s right. Starting from scratch in, say, 2020, when the first new cars with truly competitive metal-air 'batteries' may be ready for volume production, a trajectory like that achieved by hybrid powertrains would achieve a market share by 2030 not of 60%, but less than 1%. With the limitations of li-ion batteries, it seems implausible that EVs will break out of a small early-adopter niche before 2020 to pump-prime the market. And when vehicles with second-generation, post-li-ion batteries do hit the market, the first-generation EVs, having cost twice as much as their closest equivalents when new, will be pretty much worthless, regardless of age or mileage.

0.8-60 how quick?

In 2009, a decade after the launch of the first-generation Prius, UK new registrations of ‘alternative fuelled’ cars, mostly hybrids, totalled 14,963 units, or 0.8% of the 1,994,999-unit new car market. Remember, unlike EVs, hybrids require no dedicated refuelling infrastructure, nor do they impose any range restrictions. No democratic government on earth has enough sticks or carrots to inflate natural demand from 15,000 units to 1.2 million.

We should respond to this cavernous gap between wishful thinking and evidence with more than mere irritation at the apparent inability of intelligent public servants to inspect real-world data. We should demand that they invest more intensively, not in funding EV production lines and incentives, but, like Mr Chu, in funding more powertrain technology research. The US Department of Energy’s Advanced Research Projects Agency put US$400m into battery chemistries and other technologies considered too risky for the private sector. That’s not a lot compared to what was spent on bailing out Detroit, or the US$557 billion in subsidies that a report in The Guardian earlier in 2010 claimed the fossil fuel industry received in 2009.

At the same time, we need urgently to pull all available strings to de-carbonise electricity production. For now, we are still slaves to fossil fuels, while at this embryonic stage of 'EVolution', our politicians are over-investing in producing and subsidizing vehicles without seemingly understanding their infrastructure demands, market appeal or environmental credentials.

To quote Fuel Cell Today's newsletter from departing analyst Dr Kerry-Ann Adamson, “We need to work towards technology being politically neutral with government supporting the development of technologies that could play a role in meeting societal aims, not picking winners.”

We hope EVs will be winners for society at large rather than the few – tomorrow’s EVs, if not today’s – but there’s much more work to be done before we know how. Our forthcoming report on the subject explains why.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research

Trend Tracker'sEVs: Energy, Infrastructure and Mobility in the Real World is available to download and includes chapters on:

• EV technology
• Battery chemistries
• Profiles of X EV manufacturers and Y traction battery manufacturers
• EVs and power generation
• Recharging infrastructure development
• Oil and other critical resource constraints
• Market penetration forecasts
• Fiscal policies
• Business models

This report is based on strategic research and three years of tracking developments in the EV and automotive sectors. No mere technology update, it offers uncomfortable advice based on a mass of technology, energy and resources data. It’s designed to help investors, politicians, environmentalists and senior executives in the automotive and power utility sectors get to grips with the dynamics and problems of what could be the most difficult transition since globalisation –from oil to electricity.

The second project involved researching bodyshops by phone. By phone? How could snow prevent making phone calls from a nice warm office? Well, the snow didn’t prevent making the calls; we made lots of call, but bodyshops were too busy to take part in the survey. For example, one bodyshop manager we contacted said they usually complete thirty jobs per month. The day prior to our call they had towed or estimated 29 damaged cars. In the end we made 460 calls to obtain 100 interviews, which is twice as many as usual and put the project two weeks behind.

Bodyshops have not represented the best of investments in recent years. So will 2010 prove to be better than average thanks to the appalling weather at the start and end of the year? It will be mid-2011 before we have a definitive answer to this question, and it also depends on what you mean by ‘better than average’.

Adjusted for inflation, the value of car body repair market has fallen by more than 15% in the last ten years. This is due to a real-terms fall in average repair cost and a fall in the number of repairs – both driven by a complex mix of market forces. On top of this, the recession hit bodyshops as businesses with closures and bankruptcies reach epidemic proportions in 2008/2009. This increase in closures was in addition to steadily declining numbers over the last decade.

The upside of large numbers of bodyshops going to the wall, even against the background of a dwindling market, is more business for the remainder. Indeed our projections suggest that the average turnover per bodyshop should increase by around 15% in real terms between the pre-recession year of 2007 and 2010.

But this will be thanks to the demise of competitors rather than any improvement in market conditions, prices for work or even the welcome boost of inclement weather. And whether this results in improved profits and return on investment, the real measure of 'better than average', remains to be seen.

Our survey interviewees were clearly pleased with the level of work coming through their doors, but worried in equal measure at the cost of the overtime required to meet insurance company delivery targets, which bodes ill for profitability.

On a positive note, bodyshops told us that a higher than normal proportion of cars had minor damage, below excess thresholds, and will therefore be lucrative retail work rather than insurance.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in January 2011.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

The study, which sampled over 1,000 UK car buyers, revealed that despite 69% of drivers claiming to do their best for the environment, only 5% of motorists buying a new car would be influenced by a car’s ‘green’ credentials.

When asked to rank what was the main influence behind their purchase decision, 63% of motorists surveyed said that price was the most important factor, closely followed by vehicle size (at 56%). Design, style, brand and safety all rated ahead of a car’s environmental considerations.

So it seems that pure plug-in electric vehicles (EVs), and their hybrid cousins, haven’t yet inspired UK motorists. Indeed for EVs, even early adopters are noticeable by their absence with only 55 cars sold in the UK in 2009. Hybrids have seen much stronger sales with 14,645 registrations in 2009, although this is still the proverbial ‘drop in the ocean’.

The recession might be partly to blame for the lack of interest in lower carbon and zero emission cars. The high price of EVs and hybrids is obviously an important factor given the results of the Bosch survey. And the EVs available to date have also been very poor in almost every way.

But with the anointing of the Nissan Leaf as 2011 European Car of the Year, and the coming availability of similar plug-in EVs from other vehicle manufacturers, EVs appear to be coming of age. Except for the price. Plug-in EVs are very expensive even after the £5,000 taxpayer-subsidy payable from January 2011.

When it comes to doing their best for the environment – as 69% of Bosch interviewees intimated - you don’t need us to tell you that there are three dozen diesel cars and a dozen petrol cars with CO2 emissions of less than 99 g/km currently available at often reasonable prices. Many are as good if not better than much more expensive hybrids and achieve similar low emissions. Clearly EVs are zero emission, but you have to wonder if these will ever take off without continuing subsidies, or if the serious range and durability issues will ever be overcome.

According to National Grid plc CEO, Steve Holliday, EVs will account for twenty per cent of UK new car sales by 2016 and there will be one million EVs on the road by 2020. This is one of many forecasts. Only in the first half of 2011, after the £5,000 taxpayer-subsidy has been available for a while, will it become clear whose forecast is correct.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

We believe the standard dealership business model is ill-adapted to profit from electric powertrain technology - but that the risk of EVs eroding aftersales absorption is still too distant to displace other concerns. Such as the evidence that manufacturers are already having to extend warranties to recapture lost aftersales business for their networks.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research

Trend Tracker's EVs: Energy, Infrastructure and Mobility in the Real World will be published in January 2011, with chapters on:

• EV technology
• Battery chemistries
• Profiles of X EV manufacturers and Y traction battery manufacturers
• EVs and power generation
• Recharging infrastructure development
• Oil and other critical resource constraints
• Market penetration forecasts
• Fiscal policies
• Business models

This report is based on strategic research and three years of tracking developments in the EV and automotive sectors. No mere technology update, it offers uncomfortable advice based on a mass of technology, energy and resources data. It’s designed to help investors, politicians, environmentalists and senior executives in the automotive and power utility sectors get to grips with the dynamics

Bloomberg made him sound as if he’d been living under a stone for the past several years. There’s barely any country in the world that doesn’t already offer what Dr Z was asking for. But he had a point. He and his competitors are investing in EVs and FCVs to meet mandatory emissions targets, but, as he said, “Even in the best case, the cost of electric autos might run several thousand euros more than conventional vehicles for the foreseeable future … we won't earn high returns from electric vehicles for years to come.”

EVolutionary fiscal policy needed

Any returns at all would be useful, but they might not be deserved from today’s drastically limited EV performance and astronomic price. Dr. Zetsche suggested that government incentives for EVs should be linked to technological advances such as battery performance, making an admirably direct reference to the absence of a conventional business case for building EVs with present technology until the oil wells have finally run dry.

Replacing oil for light vehicles is going to take all the time we have before the oil does run out, according to a new report from the UK-based automotive research company Trend Tracker, EVs: Energy, Infrastructure and Mobility in the Real World. But between now and the next $200/bbl oil crisis, only the subsidies that Zetsche and other OEMs are banking on can have any chance of making EVs seem attractive purchases. And until their range trebles, most EVs will be second cars for short-range commuting, sold in small numbers to affluent early adopters who will be the least deserving of taxpayers’ involuntary support. Alternatively, most may be bought by taxpayers for city councils' car clubs, like Paris’s Auto Lib project.

Would you Adam and EV it?

The same fairness problem applies to over-generous feed-in tariff subsidies for home electricity generation, as pioneered in Daimler’s home market. UK homes with solar PV panels on the roof can sell power for 10 times what a large wind farm gets. They can buy it from the grid at around 12p per kWh, and sell it back at 44p per kWh. And their output is going to be based on estimates only. “Come on in, you crims, the door is wide open,” as green campaigner George Monbiot put it. None of this will do much if anything to decarbonise the UK’s power mix. But greening the mix to produce genuine ‘well to wheel’ emissions reduction for EVs is one of the many conditions, besides vastly better batteries and a quite different tax system, that will be necessary for their successful evolution.

EVs: Energy, Infrastructure and Mobility in the Real World will be published in January 2011, with chapters on:

• EV technology
• Battery chemistries
• Profiles of X EV manufacturers and Y traction battery manufacturers
• EVs and power generation
• Recharging infrastructure development
• Oil and other critical resource constraints
• Market penetration forecasts
• Fiscal policies
• Business models

This report from Trend Tracker Ltd., one of the UK’s foremost automotive research companies, is based on strategic research and three years of tracking developments in the EV and automotive sectors. No mere technology update, it offers uncomfortable advice based on a mass of technology, energy and resources data. It’s designed to help investors, politicians, environmentalists and senior executives in the automotive and power utility sectors get to grips with the dynamics and problems of what could be the most seismic transition since globalisation –from oil to electricity.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research

The crisis actually began in the summer of 2007 with the bursting of the sub-prime mortgage bubble in the US housing market. These sub-prime mortgages had been packaged up into bonds or mortgage-backed securities, and sold to banks around the world. The value of these packages collapsed and banks had to write them off. Banks became hoarders of cash to shore up their balance sheets and this caused the liquidity crisis in the wholesale money markets – the ‘credit crunch’.

The problem spilled over into the UK economy and gross domestic product (GDP) fell in the second quarter of 2008 and went on to shrink for a total of six consecutive quarters before increasing by 0.4 per cent in the fourth quarter of 2009. For the year 2009 as a whole, GDP contracted by 4.9 per cent, compared with growth of 0.5 per cent in the previous year. While that is a huge contraction, GDP had grown by over 50% between 1999 and 2009, and thus the fall was at least from a high base.

The new government hardly got off to a flying start with much horse-trading before the formation of a coalition. The emergency budget turned out to be less than billed. Meant to address our wildly out of control public expenditure, budget deficit and the UK’s huge ‘overdraft’, it seems to us that the cuts are likely to be nowhere near as large as the headlines suggest. The Chancellor’s sums rely more on GDP growth and higher taxes than cutting expenditure.

Continuing price inflation is also a problem. Fuel, for instance, is up 25% in the last twelve months driven by high oil prices and a weak £sterling. No surprise, then, that 86% of motorists are more concerned with fuel prices today than a year ago according to recent research by Halfords-owned Nationwide Autocentres.

With all this uncertainty - and a backdrop of unemployment and as yet unsolved economic troubles worldwide – consumer confidence is well down on, say, five years ago. For example, The Nationwide Consumer Confidence Index stood at 65 in May 2010 compared to its highest point of 110 in February 2005 and lowest point of 40 in January 2009. You probably wouldn’t be shocked to learn that there is a strong correlation between consumer confidence and new car registrations, and even used cars sales and aftersales.

So for at least the next few years, the outlook for the UK is at best flat. For the retail motor industry, so reliant on consumer confidence, it will continue to be very, very tough. That’s what the ‘New Normal’ looks like.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in July 2010. (See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

Analysing correlation is important if you want to explore cause and effect. Sometimes, though, you don’t need to be a statistician to see how one thing correlates with another. As the graph illustrates, there is evidently a connection between consumer confidence and new car sales. Although the graph uses a six-month moving average to smooth out the background noise of the month-on-month swings in new car sales, the relationship between the two is still clear even if it hadn’t been cleaned up.

Such an obvious link between consumer confidence and new car sales suggests cause and effect. The relationship is intuitive anyway. If customers don’t feel secure they are less likely to buy a new car. Indeed, they are less likely to buy any big ticket items, including houses and holidays. And even if they have the money they would rather save it for the proverbial rainy day.

The graph also shows that the scrappage scheme boosted new car sales despite customer confidence declining over the period of its operation. However, the scrappage scheme is no longer with us and there is VAT increase in January 2011. As for customer confidence, it appears to be on the wane again and this is backed up by another measure from the same monthly Nationwide Building Society survey – the Expectations Index.

The Expectations Index reports the views of people about the economic situation going forward six months, which on a personal level means jobs and household incomes. We don’t have the space to include a graph of the Expectations Index, but this too has the same obvious correlation with new car sales. The latest survey indicates a great deal of pessimism about the next six months.

In comparison, the UK’s franchised dealer groups are verging on optimistic. Most groups have now lodged their 2009 accounts with Companies House and the PLCs have been reporting interim results. In general, groups worked hard in 2008 and 2009 to pare down their operations. Unprofitable outlets and franchises were sold or closed, expenses and overheads were reduced, and staff numbers cut – substantially in some cases. As a result, the vast majority of groups made a profit in 2009 and many increased turnover too.

Some dealer groups also included a commentary on the future outlook in their 2009 accounts. These are generally positive and often explain how they will set about further improvements. Used car sales and aftersales feature prominently but there is hardly a mention of new car sales. Given that 2009 was an awful year economically, and most dealer groups still managed to turn a profit, perhaps their optimism for 2010 and 2011 is justified.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in November 2010.(See auto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

Trend Tracker Twitter - Follow Us

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing.

]]> http://www.trendtracker.co.uk/blog/2010/09/pessimism-and-optimism#comments http://www.trendtracker.co.uk/blog/2010/09/pessimism-and-optimism http://www.trendtracker.co.uk/blog/2010/09/the-remarkable-resilience-of-retailers Sat, 25 Sep 2010 17:48:15 +0000 office@trendtracker.co.uk (Trend Tracker) At least some of Trend Tracker’s analysts, myself included, have shown a glass-half-empty attitude towards the standard-model new car franchise system, as some of our past white papers have attested. But we have to admit that earlier reports of its impending demise were more than a little premature. The system isn’t bust yet, indeed it survived the 2008 recession rather better than many might have expected.

True, the Motor Trader Top 200 UK franchised dealer groups shed some 7,000 jobs, or six per cent of their workforce last year, and complacency would be indecent. But if things weren’t worse, that was partly because the high gross margins achieved in dealer workshops (to the continued dismay of consumer lobbies) continued to underpin the expensive business of maintaining showrooms for new cars that fewer and fewer customers could consider buying.

One of Trend Tracker’s regular client engagements is the aforementioned Motor Trader Top 200 survey, whose latest, 2010 iteration, sponsored by Mobil 1, can be accessed at http://www.motortrader.com. The report shows that dealer profits in 2009 proved to be less sensitive to fluctuations in new car sales than to losses sustained from declining used car values: “We’ve always made so little profit on new cars that when sales dropped it hardly made any difference,” said the managing director of one Top 200 group responding to the Motor Trader survey.

Aftersales demand, which contributes around half of most dealers’ gross profits, declined slower than the new car market, so did not significantly impact on overall turnover, though many dealers saw overhead absorption weaken during the period.

We have in the past referred to “the falling props” (service/repair, parts and vehicle finance) which would ultimately, some of us felt, let the roof fall in on the franchised dealership business model. There has been decay in these props – but the edifice is still standing. Some networks have decided to become more competitive with their labour rates, and some tied finance houses have begun to fight back against direct lenders. Life for the average franchise will be tough at best in 2011, with a VAT hike and the downward curve in new car sales post-scrappage that will go on shrinking the dealer service parc. But considering the imminent demise of block exemption following hard on the heels of a major recession, the dealer body is still showing remarkably little appetite for change, and few volunteers for consolidators to buy out.

Toby Procter

Trend Tracker Limited

0870 421 4350

Twitter.com/TrendTrackerUK

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research.

]]> http://www.trendtracker.co.uk/blog/2010/09/the-remarkable-resilience-of-retailers#comments http://www.trendtracker.co.uk/blog/2010/09/the-remarkable-resilience-of-retailers http://www.trendtracker.co.uk/blog/2010/09/rare-earth-metals-to-get-rarer-faster Fri, 24 Sep 2010 16:34:44 +0000 office@trendtracker.co.uk (Trend Tracker) The New York Times reported on Thursday (22.09.10) that the Chinese government had officially denied halting exports of rare earth metals to Japan, in retaliation for the detention of a Chinese trawler skipper in a long-standing territorial dispute. China had already cut export quotas for the cerium, lanthanum, neodymium etc. etc. on which Toyota et al depend for their NiMH batteries, permanent magnet electric motors and much else besides, and has over 90% of the world’s known rare earth metals deposits.

Terrifying news for all who are betting on hybrids & EVs weaning us off oil. First they flood us with cheap exports of almost everything, then turn off the tap just when we get addicted. See the issue assessed in Trend Tracker’s forthcoming report on the future of EVs, of which more news soon. One point is clear: technology which depends on costly metals which may be depleted sooner than oil is something to be cautious about. But don't imagine we can relax with our nice, familiar petrol and diesel cars. They need platinum for catalysts, and cerium, Europium, Yttrium for glass manufacture, and goodness knows what else, too. What isn't getting scarce, apart from scare stories?

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report, bodyshop market, car finance, electric vehicles, car servicing, automotive research

]]> http://www.trendtracker.co.uk/blog/2010/09/rare-earth-metals-to-get-rarer-faster#comments http://www.trendtracker.co.uk/blog/2010/09/rare-earth-metals-to-get-rarer-faster http://www.trendtracker.co.uk/blog/2010/09/forecasting-the-future-2009-2015 Tue, 21 Sep 2010 10:49:41 +0000 office@trendtracker.co.uk (Trend Tracker) Essentially the Car Service and Repair Trend Tracker Update 2010 combines three longstanding research reports into one. First, and perhaps best known, is the Service Trend Tracker. Published since 1995, this report is based on extensive consumer surveys. Every month, 1,000 motorists are asked about where they last had their car serviced. The result is ‘servicing retention’ by make of car and provider of servicing – dealers, independents and DIY – a measure we have always found to mirror, very closely, the industry standard ‘service retention’ that includes all types of mechanical work including routine servicing.

The second report is the Repair Trend Tracker, run since 2005, and based on consumer surveys too. The third report is the UK Car Service and Repair Market report, published every two years since 1994, looking at market size and trends and the garage supply structure in the UK.

The USP of this body of work is the trend data reaching as far back as 1987, crucially before the recession in the early 1990s, which enables us to produce the forecasts going forward five years to 2015 contained in the new report. We shall not bore you with the details of the econometric model utilised, but suffice to say it has produced surprisingly accurate results in the past.

Of the various inputs to the forecast model, the effects of each vary and can be interdependent. This time, as in the recession of the early 1990s, the dominant variable was the fall in new car sales leading to changes in the age profile of the UK car parc. Of course new car sales have been falling since the peak in 2003 and thus the number of cars up to four years old, so essential to dealers’ service departments, had been falling for a while to stand 15% below its peak at the beginning of the recession. By the end of next year the four-year car parc will be 25% lower.

The recession of the early 1990s resulted in similar falls in the four-year car parc, and the effects on the servicing and repair market this time will be the same, although ameliorated by longer new car warranties. Quite simply, the ups and downs of each car parc age segment affect, in turn, the market providers. Thus franchised dealers draw most of their work from the four-year car parc, as the new report illustrates, and therefore a 25% fall in this segment obviously reduces the potential customer base for dealers’ workshops. In other words, the changing car parc age profile, and the number of cars in each age segment, effectively transfer work between provider sectors. So with such concrete historic trends available to us, the forecast was relatively easy, and we trust accurate.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in June 2010. (See //auto-retail.co.uk
for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/09/forecasting-the-future-2009-2015#comments http://www.trendtracker.co.uk/blog/2010/09/forecasting-the-future-2009-2015 http://www.trendtracker.co.uk/blog/2010/09/grossing-up-gross-margins Mon, 13 Sep 2010 13:33:08 +0000 office@trendtracker.co.uk (Trend Tracker) At this time of year, dealer group PLC’s publish their half-year results – informative barometers of the past six months. Also at this time of year private limited companies with financial years ending last December must post their accounts to Companies House.

In some ways private limited company accounts are a better indicator of the state of the retail motor industry. Small companies are more sensitive and vulnerable to market conditions, and hence they often react more quickly than PLC’s because they have to. As many private limited companies have still not posted their accounts, it is early days yet, but we have noticed already that the companies bucking the recession have clearly worked hard to improve their gross profit margins.

You will have undoubtedly come across the basic financial model so beloved of consultants everywhere. It goes like this. Imagine a dealership with a turnover of £100 that generates a gross profit of £15. The cost of sales (mainly purchases of new and used cars) is therefore £85. Expenses and overheads come to £12 and thus the net profit is £3, or three per cent of turnover. The consultant then says what if turnover is increased by £1. And what if expenses are reduced by £1 and overheads are reduced by £1. The answer is that net profit as a percentage of turnover increases to five per cent. Magic!

But what some consultants tend to ignore is the gross profit margin. Their model often leaves the gross profit margin – in this example 15% - the same. And therein lies a problem that we have noted across many sets of 2009 accounts: static or even falling gross profit margins. Indeed some dealers express pride in maintaining their gross profit margin at 2008 levels.

In a recession rather than turnover increasing, it is more likely to fall. If you then aim for the same gross profit margin, gross profit as money falls and you have to over-compensate by larger cuts in expenses and overheads. Obviously in a recession you have to act fast and cutting expenses and overheads – principally headcount – must be a priority. But savage cuts, especially to staffing levels, can exacerbate the downward pressure on turnover caused by the recession.

The alternative is to improve the gross profit margin and we have discovered many instances where it has been a clear strategy. For example in the accounts for one dealership, the directors describe 2009 as “a very successful year” despite the fact that new and used car sales fell by six per cent as did turnover. However, the business managed to increase its gross profit margin by two percentage points – “by implementing a strict used car purchasing policy” – and maintained expenses and overheads at 2008 levels by cutting headcount by 10% “without any detrimental effect on the business”. The net result was that pre-tax profit actually increased by one-third in monetary terms compared to 2008. The improvement in gross profit margin was a major contributory factor.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in September 2010. (Seeauto-retail.co.uk for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/09/grossing-up-gross-margins#comments http://www.trendtracker.co.uk/blog/2010/09/grossing-up-gross-margins http://www.trendtracker.co.uk/blog/2010/09/small-percentages-add-up-to-bigger-percentages Fri, 10 Sep 2010 12:00:00 +0000 office@trendtracker.co.uk (Trend Tracker) We make no apologies for returning to the subject of parts wholesaling again because it appears, judging by our workload, that this sector is seeing a real renaissance in the franchised sector. However our work with several vehicle manufacturers, looking at network performance on their behalf, has highlighted one interesting problem – staff lacking basic knowledge.

To be more specific, staff, and this sometimes includes parts managers, are less than adequately equipped to extract maximum performance from their business. It is not, as you might think, a deficiency of technical skills or product knowledge, but a lack of commercial acumen. Perhaps this was inevitable given the sophistication of stock control computers, which mean many staff members can get by with a minimal understanding of how the parts department’s financial model works – until the day dawns when thing go wrong, of course. In this respect it seems that available training quite often misses the mark.

By way of example, we came across a franchised parts wholesaling operation turning over £3 million including retail, workshop, bodyshop and trade; the latter accounting for 70% of turnover. The overall gross profit margin on these sales was just over 20% (after stock adjustments) and the operating or direct profit margin a fraction under 10%. With a contribution of almost £300K to the dealership you might be happy with this result and, admittedly, it is by no means the worst we have come across. What made us unhappy was it could have been so much better – at least £30K better.

The problem was a simple one: small percentages building up to bigger percentages. Buying margins were off the average of similar franchised operations as were sales discounts. All of this added up to an overall gross margin that was at least one percentage point – equivalent to a shortfall of £30K in profits - down on the average and some way off the best performers.

Ignoring stock adjustments, the dealer’s parts department results could be described as follows. For parts worth £100 at retail, they paid £54.40. When they sold the parts the average discount given was 31.9% off retail resulting in a sale price of £68.10. Hence the overall gross margin was £13.70 divided by £68.10, or 20.1%. The average overall gross margin for almost identical businesses of the same franchise, with a similar buying and selling mix, was 21.2% because they bought at £54.00 and sold at £68.50.

The lower than average buying discount was caused by bad deals on non-OE parts and equally poor deals on OE parts bought from other dealers. The selling margins suffered because discounts given on captive accident repair parts were too generous.

The parts manager in this case could extract the relevant data from the computer, but he was unable to analyse the results and isolate the fall-down areas. With appropriate training and a better grasp of key yardsticks, he has now added £45K to his department’s contribution.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in December 2007. (See //auto-retail.co.uk
for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/09/small-percentages-add-up-to-bigger-percentages#comments http://www.trendtracker.co.uk/blog/2010/09/small-percentages-add-up-to-bigger-percentages http://www.trendtracker.co.uk/blog/2010/09/automotive--mark-ups--margins Fri, 10 Sep 2010 09:59:51 +0000 office@trendtracker.co.uk (Trend Tracker) If you buy something for £100, what do you have to sell it for to make a gross profit margin of 33%? The answer is, of course, £150. Certainly every reader of Auto Retail Network’s Bulletin where this article was first published, would have got this simple example of ‘mark-ups and margins’ correct. However, our experience running training courses for sales executives and aftersales personnel is that the mathematical skills of dealer staff are often sadly lacking, and many would come up with £133 as the answer – how would yours fare? Furthermore, our research on gross margins strongly suggests that this lack of knowledge has an impact on profits.

For example, a few years ago we carried out a series of site visits for a dealer group client looking specifically at gross margins in their service departments, and with their permission, we can share one of the findings. The group’s minimum margin for sublet and sundry sales was fifteen per cent. But the actual average across all the sites we visited was just over fourteen per cent. On closer inspection, we found the majority of sites just added 15% to the cost price of sublet and sundry sales, which is a margin of 13%. To achieve a minimum 15% margin they should have added 17.6% to the cost price.

In this case, the difference in gross profit between a 13% and 15% margin is around £2,000 per annum for the average service department, because sublet and sundry sales only make up eight per cent of sales. However this group’s minimum margin on sublet and sundry was too low anyway – between 17.5% and 21.5% is average. At this higher level, more than £3,000 potential profit is lost because of the wrong mark-up.

We have seen similar instances of incorrect mark-ups that cause far larger losses in potential profit in sales, service, bodyshop, and parts. We have also seen evidence that ignorance of this relatively simple maths can affect the ability to negotiate good deals with suppliers and customers.

In the body repair market,for instance, bodyshops invariably have an inflated idea of their margins on refinish paint. When you research the specific question of paint margins, the results usually range from thirty-five to forty-five per cent. Yet the average gross profit margin achieved on paint is a fraction over 30%. In fact body repairers are probably quoting the discount they get from their suppliers – their so called ‘buying discount’. They are not taking into account discounts they give to work providers and customers, the vagaries of computer estimating systems, or any wastage (which can be huge for the more careless).

Going back to the dealer group case study, the upshot of the gross margins audit was a five-hour training course on mark-ups and margins. This extended to all departments across the group, and individual courses included a mixture of departmental delegates. A further audit after twelve months revealed a big improvement, with some of the best results coming from accessory sales through the showroom. Getting the basics right can make all the difference.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in June 2006. (See auto-retail.co.uk
for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/09/automotive--mark-ups--margins#comments http://www.trendtracker.co.uk/blog/2010/09/automotive--mark-ups--margins http://www.trendtracker.co.uk/blog/2010/07/range-rover-evoque Wed, 07 Jul 2010 13:57:03 +0000 office@trendtracker.co.uk (Trend Tracker) 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.”

Will the new Range Rover help Jaguar gain traction? Download this latest Whitepaper

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/07/range-rover-evoque#comments http://www.trendtracker.co.uk/blog/2010/07/range-rover-evoque http://www.trendtracker.co.uk/blog/2010/07/pricing-strategies-for-a-declining-market Fri, 02 Jul 2010 10:09:51 +0000 office@trendtracker.co.uk (Trend Tracker) 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."

This represents a bit of an about-turn for Ford. It has not been alone in raising prices in the last year or so. My Trend Tracker colleague Chris Oakham's noted in his column in Automotive Retail Bulletin recently that the Ford Fiesta 1.25's list price had risen 32.6% in twelve months, while other Ford prices had risen 19% (Mondeo1.6) and 17.6% (Focus 1.6). Reporting these price rises, What Car? also noted that dealer discounts had been falling. (See Chris' column in his 1 July blog on this site, Are new cars overpriced?

New car price increases in 2009 (and Ford's weren't the only examples) were justified by the weakness of sterling and the inflationary impact of $75/barrel crude.

The affordability of base model Fiestas (defined as list price divided by months of national average gross pay) has veered between six months when the first Fiesta was launched 34 years ago, just over four months back in 2006, and recently, back up to over five.

Ford's move in the UK won't, it seems, make Fords more affordable. Right now, a Ford dealer is offering 24% off the list price of a 3-dr Fiesta Studio. Ford's new RRP for this model will be 17% lower than the present one. The lowest dealer price will probably rise a bit as margins shrink.

As we wait to find out whether the recession will be a double-dip model, all acknowledge that it's going to be increasingly hard to sell almost any new car. Dealers should prize any wriggle-room to cut a deal. It's at the dealership that transparency is valued, rather than on the manufacturer's website, and there are enough price comparison sites around now to reduce the significance of manufacturers' RRPs - except to dealers.

Successful pricing strategies always involve effective balancing of demand and supply. Few volume car brands can strangle supply in line with demand falling at the rate we can now expect.

Given the weakening post-scrappage market, this week may not have been the ideal time for Peugeot to launch its Just Add Fuel, “completely transparent peace of mind motoring package”, wherein monthly payments include finance, insurance, servicing, road fund, warranty and roadside assistance.

“Completely transparent” is a questionable claim, inasmuch as bundling items makes price comparisons tricky, and new-car warranty cover was in any case never a chargeable item. “Peace of mind” in Peugeot's concept refers to fixed prices eliminating inflation, which is not the greatest of our concerns at present. And finance, insurance and servicing can be acquired easily, and possibly more cheaply, from third-party suppliers.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/07/pricing-strategies-for-a-declining-market#comments http://www.trendtracker.co.uk/blog/2010/07/pricing-strategies-for-a-declining-market http://www.trendtracker.co.uk/blog/2010/07/are-new-cars-overpriced Thu, 01 Jul 2010 19:29:05 +0000 office@trendtracker.co.uk (Trend Tracker) 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.

What Car? notes some significant price increases in the last twelve months: Ford Fiesta 1.25/60 up 32.6%; Ford Mondeo 1.6/110 up 19%; Fiat 500/1.3 up 17.6%; Ford Focus 1.6 up 17.6%; and Vauxhall Insignia/2.0 up 17.2%. In addition, What Car? reports that dealer discounts have been falling.

These are clearly substantial price increases and What Car? mentions the weakness of the pound generally and against the euro in particular. Since the introduction of the euro, one pound has bought 1.5 euros, but today it only buys 1.1 euros. This means that a new car coming off the line in Europe valued at 10,000 euros used to cost us £6,700 but now it's £9,100, which is an increase of 36%. So it's surprising that new car prices haven't increased even more and perhaps they will. Obviously we manufacturer a large number of cars here in the UK, but this doesn't help because most are exported.

There are also many other factors pushing up the prices of new cars both here and in Europe. The oil price is probably one of the biggest because it affects manufacturing and transportation costs. Before 9/11 the oil price had been fairly stable at less than US$30 per barrel since the mid 80s. After 9/11 oil prices increased considerably with, in the last twelve months, Brent Crude up from $45 to $75.

For new car buyers 'affordability' is the key and one way of assessing this is how long it takes 'the man on the Clapham omnibus' to buy a new car. In 1976 when the Ford Fiesta first went on sale the entry level model cost £1,860 and national average gross pay was £3,750 - so it took six months of gross pay to buy a Fiesta. Right now the entry level model Fiesta is £11,500 and the latest average gross pay (April 2009) is £26,470 and thus it takes 5.2 months. However only a few years ago (2006), the entry level Fiesta cost £8,300. So with national average gross pay of £24,134 in that year, it took 4.1 months to buy.

From this perspective, 'affordability' of new cars could have been adversely affected in a very short time and even more so when you consider the lack of cheap credit. If the pound doesn't grow stronger, the recovery of new car sales could falter unless private and company buyers are willing to downgrade.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in March 2010. (See www.auto-retail.com for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/07/are-new-cars-overpriced#comments http://www.trendtracker.co.uk/blog/2010/07/are-new-cars-overpriced http://www.trendtracker.co.uk/blog/2010/06/do-quangoids-dream-of-electric-cars Mon, 21 Jun 2010 16:22:12 +0000 office@trendtracker.co.uk (Trend Tracker) (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.

By comparison with the <£5,000 subsidy the last government proposed paying to EV buyers, let alone the size of the national debt, the cost of these EV trials may seem trivial. But what are they trialling? Users driving within the restricted range of these i-MiEVs from one conveniently placed socket to another will undoubtedly say how great they are. But then, they won't be paying. Who'd want to pay £30,000 for essentially untried technology for a second car? (No current-generation automotive lithium-ion batteries have yet undergone their expected lifecycles. Without a battery, an EV is worthless, as CAP has reasonably determined.) EV buyers will typically need access to two cars, because their EV may barely take them 40 miles and back.

A recent forecast from J.D. Power Automotive Forecasting suggests that the global market for pure electric cars will amount to no more than 500,000 units in five years' time. As 40m+ annual car sales drive us towards a global car population of two billion, that's so far away from reducing oil dependency, it's hard to imagine that EVs will be any real help by the time the stuff actually runs out.

Yet the whole point of electric cars is help us survive the eventual end of the 'Oil Age'; With our present energy mix, they won't cut global warming emissions. We need to invest in better energy, smart grids, and much better energy storage, before pump-priming a fantasy market with trials of vehicles that aren't market-ready. Unless we soon discover the battery technology needed to expand EV demand beyond a niche market of do-gooders subsidised by taxpayers at large, governments' EV support will have proved an expensive diversion from other, more urgent tasks. Those include investing in more energy production, and reducing car dependency - not expanding the second-car population with ruinously expensive EVs, used by the few, paid for by the many.

Toby is the lead author of a forthcoming Trend Tracker report which will survey the activities of the auto industry, governments and utilities relating to the electrification of personal transport, and assess the likely outcomes of efforts to replace oil as its fuel by the middle of the century. Details of this report will be posted on this site nearer publication in Q3 2010.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/06/do-quangoids-dream-of-electric-cars#comments http://www.trendtracker.co.uk/blog/2010/06/do-quangoids-dream-of-electric-cars http://www.trendtracker.co.uk/blog/2010/06/charting-the-decline-in-smr-work Fri, 11 Jun 2010 16:38:02 +0000 office@trendtracker.co.uk (Trend Tracker) Download and read our latest aftersales article, published in the June 2010 issue of Auto Retail Networks' Bulletin.

Auto Retail Network is the leading networking and best practice organisation for senior executives in the auto retail industry. Get free trial membership by registering at The Bulletin.

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/06/charting-the-decline-in-smr-work#comments http://www.trendtracker.co.uk/blog/2010/06/charting-the-decline-in-smr-work http://www.trendtracker.co.uk/blog/2010/06/black-and-blue-in-the-bayou Thu, 10 Jun 2010 15:28:48 +0000 office@trendtracker.co.uk (Trend Tracker) 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.

Moving from the horrific to the trivial, my own diesel car sprang a fuel leak last night, and the sulphurous, stinking mess it left on the street was a reminder that there's nothing nice about oil, except what it permits us to do. But breaking oil dependency is going to be hard, BP or no BP. Working on a report the future of the electric car for Trend Tracker, I pay a lot of attention to the renewable energy sectors without which EVs can't do what oil-haters and greens hope for them. EVs are being hyped no end, but there's scant evidence of industry, money markets and governments joining forces to accelerate the switch from hydrocarbons with the urgency required.

Talking of urgency, the German government's refusal yesterday to lend to Opel is only the fifth story on the BBC website's business page as I write. And GM's site has yet to respond at all. The Obama administration has been lauded for allowing US automotive capacity to shrink to a probably sustainable level, and the Europeans condemned for funking the necessary restructuring. The freshly sanitized, right-sized GM can hardly complain if the Germans, now saddled with bankrolling the whole Eurozone, apply some of the same medicine that helped save what's left of Detroit.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electric vehicles car servicing

]]> http://www.trendtracker.co.uk/blog/2010/06/black-and-blue-in-the-bayou#comments http://www.trendtracker.co.uk/blog/2010/06/black-and-blue-in-the-bayou