Automotive Messenger

Automotive Messenger
May 2014
Spring comes early – welcome to the latest issue
of Automotive Messenger
Passenger car registrations in the UK
exceeded all expectations in quarter one
of 2014, and the month of April sees no
let up. Used cars are also looking good,
and despite some issues around margin
retention, most franchise retailers seem
to be enjoying solid profitability.
In this issue, we broaden our
discussion to look into the impact
on the industry of the recent Budget
announcement and issues in Low
Carbon with an article contributed by
Productiv.
Our lead story focuses on the world
of Finance and the change in Regulator
from 1 April to the Financial Conduct
Authority, or FCA for short. A lot has
been written about the impact the FCA
Tarun Mistry
T +44 (0)20 7728 2404
M +44 (0)7966 432299
E tarun.mistry@uk.gt.com
will have on the motor retail industry
and, indeed, whether the sector is ready
for any challenge.
The Head of Grant Thornton’s
Leasing, Asset and Consumer Finance
team, Tarun Mistry, is well placed to
comment. Tarun has previously worked
in the industry for both Mercedes and
Peugeot Financial Services, and he and
his team’s experience in this space make
them highly qualified to comment on
Automotive Finance issues.
Tarun comments “The change to
the FCA creates a huge challenge
and new levels of compliance. There
is a real issue around the traditional
model of selling F&I products and we
are geared up to help ensure that all
Neil Barrell
T +44 (0)117 305 7616
M +44 (0)7976 550 312
E neil.barrell@uk.gt.com
Bill Parfitt CBE
T +44 (0)121 212 5221
M +44 (0)7528 870341
E bill.parfitt@uk.gt.com
parties to the transactions are able to
continue providing their excellent levels
of service”. Tarun will be joining our
editorial team and be a more visible part
of our Automotive offering with a focus
on the vitally important Finance market.
Contents
02 Registrations: the cup run-eth over!
04 The road to production readiness
05 PCP: F&I the time to get compliant
06 Some budget cheer!
07 News snippets from the
automotive industry
09 Registration data
Paul Burrows
T +44 (0)1908 359 554
M +44 (0)7850 538 309
E paul.v.burrows@uk.gt.com
Automotive Messenger
Registrations: the cup run-eth over!
March 2014 becomes the biggest registration
month for a decade
We are beginning to run out of
superlatives for the UK motor retail
industry. Registrations for the month of
March alone reached 464,824, the best
for a decade – only missing the record
since dual registration months came
into being (1999) in 2004 by a mere
2,130 registrations! Cumulative for the
first three months of 2014, registrations
are up by 13.7% over 2013, which we
all thought was a bumper period.
When will this remarkable run ever
tail off? The SMMT are suggesting
it will be this year, with demand
flattening rather than going into
decline. Looking at the Portbury dock
site from the M5 bridge recently, the
compounds were packed with vehicles
in April immediately after the March
sales spike. Either there is too much
product around, or aspirations remain
extremely strong. Indeed, in a separate
survey, we have identified business
confidence improving (see our latest
monitor http://www.icaew.com/en/
about-icaew/what-we-do/businessconfidence-monitor).
2
Since January 2014, private
registrations have exceeded 50% of
all registrations, and listening to a
few retailers, all the product is going
to customer homes rather than preregistration – another positive sign.
We know that demonstrator and
courtesy car changes have an impact,
and that there are variations between
brands, but the trend does seem to be
universally positive.
Europe registrations rise by 10%
Europe is also beginning to creep
back in terms of volume. The latest
provisional data suggests that
registrations in EU and EFTA markets
rose 8% for the first three months
of 2014 on the back of a 10% rise
in the month of March. This month
thus becomes the seventh consecutive
monthly gain and points to a
sustainable upward trend.
Various commentators have
offered their views on the reasons
for the rise, ranging from improving
corporate and consumer confidence,
and release of pent-up demand, to new
model launches. IHS Automotive, a
well-respected commentator on the
automotive sector, suggest “part of
the improvement is genuine…but
discounting is still at high levels”. They
go on to say “more new and attractive
(car) models are coming to keep luring
Europeans into renewing their fleet.”
As we have commented in previous
articles, there is only a finite amount
of product support available unless
volume growth creates additional
monies. Certainly some retailers are
trading margin for volume at the
present time, so reward structures need
to be watched closely for any signs that
may impact the bottom line. As ever,
the balance of profitability between
manufacturer, distributor and retailer
is crucial.
Automotive Messenger
The European market is very much a balancing game as
manufacturers seek to strengthen their global footprints
The European Commission is
forecasting the economy of countries
sharing the euro will grow 1.2% in 2014
following a recession that officially
ended early in 2013. VW Group
continue to benefit with their overall
European brand market share standing
at 25%. They saw 20% growth at Skoda
and 9% at Seat in March 2014. Both had
new models bolstering demand.
Beleaguered PSA Group enjoyed
double digit growth with strong
demand for the Peugeot 2008.
Production of this model is to be
stepped up, which is almost counterintuitive for a brand trying to take
cost out of its system. Volume metrics
are vital. Renault also had a great first
quarter for its primary brand and also
Dacia, which saw registrations rise by
over 40%.
Europe, including the UK, will
nonetheless, continue to see pricing
pressures manifesting themselves in
customer offers and volume related
incentives for the retailer networks. As
noted above, there comes a point where
the two sides of the equation move
apart and retailers start to rely heavily
on volume to offset margin pressures.
We suspect the UK is ahead of the curve
in this respect over the rest of Europe,
but PCP business keeps the wheels
better oiled.
One quite stark statistic we saw
relates to the German market, the
largest in Europe. It has been claimed
that 30% of all registrations were
demonstration vehicles registered to
retailers who then sold them as nearly
new – sound familiar? Europe is
moving forward but it needs to reflect
real consumer demand. Price reductions
can only last so long.
But we prefer to focus on the
positives and the UK is firmly up there
with good news. Quarter two will give
an interesting view of the real market
out there as it contains no peak month
registrations as seen in March and
September. More of that in our
next edition!
Automotive Messenger May 2014 3
Automotive Messenger
The road to production readiness
Automotive Messenger seeks to broaden the sector agenda, and in this issue
we hear from Productiv, who discuss the importance to the industry of
nurturing new, and green technologies, to achieve their potential. Without
these initiatives, the industry will not rise to the technological and low
carbon challenges of the future, factors which will inevitably determine the
direction and viability of the whole industry.
The ‘valley of death’ is an expression in the
automotive industry which refers to the difficulty of
getting new technologies from prototype to mass
production. The Proving Factory® was set up in
January 2013, a £20 million project with £12 million
Government investment, with the goal of addressing
the need to industrialise and manufacture low
volumes of innovative low-carbon technologies –
de-risking the process for both technology
developers and manufacturers – to prove their
viability in automotive applications.
The Proving Factory lead partner, Productiv’s Chief
Executive, Richard Bruges, said: “Inventing a new product
is a massive emotional investment, but there are huge
financial implications too. The value of a product grows
exponentially as it progresses through development.
At the prototype phase, the technology is worth only
as much as the idea is – the worth of the IP. Once the
technology has been optimised in terms of efficiency and
manufacturability it is typically worth around £2 million.
This is the point where most technologies founder without
support. At proving-volume levels, the technology could
be worth around £20 million, a figure that will increase
ten-fold if it is then taken up and used in high volumes by a
manufacturer.”
“The major challenge for many technology developers
is making their designs suitable and cost-effective enough
for mass production. The cost of a one-off prototype could
easily be in the region of £200,000, and might be very
complex to create. We need to turn this into 100,000
units of the same product, each costing less than £2,000,
before scaling it up to 100,000+ at £500 each.”
The Proving Factory supports its technology developers
in this feasibility improvement through the Design Review
process. Design Reviews start with the technology
developers providing all the necessary information on
their products, including the industry breakthrough it
achieves, and the technical details of the design. At the
4
Design Review Day 1 event, the technology developers
present their innovation to a group of up to 30 engineers,
including materials, component-manufacturing and
assembly experts, many of whom have decades of
supply chain and materials processing experience, to
establish a baseline understanding of the design. From
the presentation, discussion, and group working on the
day, the assembled experts capture as many improvement
ideas as possible. Typically 150 suggestions come out of
this first day. At the Day 2 event a couple of weeks later,
each idea is peer-reviewed and rated for manufacturing
and assembly feasibility, impact on performance and
cost, and implementation readiness. The best ideas then
progress to a costing exercise, and are finally presented to
the technology developers for inclusion.
The Proving Factory’s head of engineering, Neal Coope
said: “The Design Reviews offer technology developers
vast levels of expertise to support them in improving
the feasibility of their innovations, but the process is
mutually beneficial. The Design Reviews in return allow us
to improve the ultimate efficiency of The Proving Factory
facilities, by creating consistency in the manufacturing and
assembly processes across all of the technologies.”
All of the technology developers have now completed
the Design Review process, and The Proving Factory is
well on track to begin creating pre-production prototypes
and initial production samples. For more information visit:
www.theprovingfactory.com.
Time will tell whether innovation nutured this way leads
to mass production for low carbon technologies. Neil
Barrell, Grant Thornton Director, is a fan, “I have been
there, this is a great concept to meet our green needs”.
Automotive Messenger
F&I – the time to get compliant
With the exception of the financial crisis, there have been
few events with greater consequences for the consumer and
automotive retail finance markets than the change of Regulator
to the Financial Conduct Authority (FCA) on 1 April.
Across the consumer finance sector from motor retailers to secured lenders
to credit card providers to retail credit
companies to large debt purchasers and
payday lenders – we are seeing a vastly
different degree of readiness for the
FCA. Equally the Regulator has much
to focus on, which may work in favour
of the motor retail industry.
How ready are retailers and their
captive finance companies?
The larger players in most of those
sectors have spent enormous sums –
internally and externally – creating
new processes, building compliant
infrastructures, rewriting procedures
and, in many cases, having those tested
or reviewed by firms such as ours.
There are other companies whose
businesses have previously ‘enjoyed’ the
attention of the FSA and so you might
argue that they are well rehearsed in
the scrutiny, challenge and exhausting
process of providing evidence! But then
there are the rest, and it is very much a
mixed bag.
Perhaps not surprisingly, my
regulatory colleagues have been in
great demand in the past 12 months as
companies have asked to have those
procedures tested or for a gap analysis
of their sales process to be carried out.
Some of these have been far too recent
for comfort!
No-one is really sure what will
happen now – all the rules are based on
‘principles-based regulation’ and the
word that usually follows ‘principles’
is ‘interpretation’. Ideas of a robust
compliant process will vary. One idea
of a good customer outcome might be
different to another.
F&I issues in their broadest sense are
so vital that we at Grant Thornton will
shortly be engaging with the leaders
of the lenders in the sector to debate
possible long term solutions to F&I,
not just at a high level, but with specific
insight as to how the sales process can
remain both robust and create the right
reward for all involved.
It is vital that the industry is leading
and shaping that change because
the consequences of the Regulator
instructing change through ‘happening
upon’ these areas are potentially going to
be intolerable and damaging. Do not lose
sight of the current impact of the growth
in PCP business on profitability!
Peter Landers
Head of Consumer Finance,
Grant Thornton Automotive
T +44 (0)20 7865 2792
M +44 (0)7766 474681
E peter.landers@uk.gt.com
Automotive Messenger May 2014 5
Automotive Messenger
Some budget cheer!
There have been a number of recent tax changes which are relevant to the sector,
mainly positive, and highly relevant in the first instance to Corporate ID investments.
Hazel Platt, Automotive Tax Partner, explains:
Capital allowances
In his Budget speech, George Osborne
announced an increase and extension to
the annual investment allowance (AIA).
The AIA works to allow businesses
to take a full deduction in the year of
expenditure for qualifying capital spend
when calculating their corporation tax
liability. The increase is from £250,000
per annum to £500,000 with effect from
1 April 2014, and the extension is from
31 December 2014 to 31 December
2105. After this, the AIA will revert
to its previous level of just £25,000 per
annum. This is a very useful relief and
means that it is sensible to consider
the timing of capital expenditure
programmes and where commercially
viable, accelerate expenditure such that
is incurred whilst the greater allowance
is available. We know a number of
brands are undergoing major CI
programmes, and where this involves
Corporates incurring expenditure, there
could be good tax news!
Other news in the field of capital
allowances is the recent court case of
Rogate Services Limited. Here the
taxpayer claimed capital allowances on
the construction of a building used as
a ‘car valeting bay’, where it applied
glasscoat finishes and wax to new cars.
The first tier tribunal ruled that the
‘workshop [was] designed to allow
glasscoat to be applied advantageously’,
and was ‘a place of work which does
not amount to plant’. If you have
made such claims previously, we
recommend you discuss them with
your Tax Advisers.
Compound interest
Hazel also identifies recent news
from the courts regarding the latest
decision in the long running question
of whether the payment of interest on
VAT overpaid in error by a taxpayer
should be calculated on a ‘simple’ or
‘compound’ basis.
Hazel notes “the High Court have
recently issued their judgement in
the Littlewoods Retail case being that
Littlewoods’ claims for compound
interest should succeed in full. On the
face of it, this judgement is good news
for taxpayers but the judgement is very
complex and so our message is one of
cautious optimism tinged with a degree
of realism that the matter is far from
decided on a definitive basis. As they
say, give in one hand and take away
in another”.
LLPs
Many groups in the sector have
included an LLP in their structure but
with effect from 1 April 2014 the LLP
rules have been tightened up to deal
with perceived exploitation. As a result
any LLPs with a corporate member or
LLPs where members receive a fixed
salary need to be reconsidered to ensure
that they are still effective.
In summary, Hazel notes “there
are many changes and developments
both positive and also those where
existing planning may be affected or
may need to be revisited. What is clear
is that HMRC are keen to clamp down
on anything they perceive to be tax
avoidance, something we are seeing
more and more.”
Hazel Platt
Corporation Tax Specialist
T +44 (0)1908 359 519
M +44 (0)7827 876 468
E hazel.a.platt@uk.gt.com
If you are uncertain about anything to do
with corporation tax, Hazel can be reached
at hazel.a.platt@uk.gt.com or on
07827 876468.
6
Automotive Messenger
News snippets from the
automotive industry
Beware the curse of the recall
More Toyota in the US
Multiplying Mini
Recalls of motor vehicles are nothing
new – but they took on the tag of
‘infamous’ when Toyota had issues in
the US which became very public and
political. This time there are similar
problems for General Motors (GM)
over ignition switches.
Hard on the heels of the US road
safety Regulator issuing a maximum
fine for the failure of GM to provide it
with answers to the speed at which it
handled its ignition switch problems,
GM have decided it has to replace a
second part relating to the ignition
system. Whilst not terminal for GM,
the share price showed signs of stress
around the announcements and you can
assume US customers have taken a dim
view of the whole issue.
The message is clear – full, frank and
prompt recall action is the only answer.
Otherwise the curse of the recall will
lay heavy for years to follow. Indeed
Toyota now seem to be heading very
much in that direction after recently
announcing five recalls involving
27 models and a total of 6.4 million
vehicles! They are clearly trying to head
off big problems caused by bad press
(eg attributable accidents), especially
from the USA.
Clearly influenced by events of the past,
Toyota chose to launch their re-styled
Camry at the 2014 New York auto
show. The new model carries more
‘emotion’ to take a much used phrase,
and commentators note that Toyota and
indeed other brands are styling-up their
bread-and-butter midsize vehicles –
traditionally a key segment for volume.
Mini is planning to bring new models
to the market over the next few years.
Every brand needs to keep up its
momentum, as registration data cruelly
exposes. BMW is investing £750 million
in Mini facilities – the Oxford plant
runs at full capacity supplying 110
countries.
AA and RAC
GMAC is re-invented
General Motors Acceptance
Corporation (GMAC) was renamed
Ally Financial a while back, and
recently completed its IPO raising
$2.4 billion, enabling the US
government to recoup the amount it
spent on rescuing the motor lender
during the financial crisis. This has been
achieved via two private placements
ahead of this IPO, and the government
retaining a stake of around 17%. We
understand that the IPO prospectus
warned that its exclusive rights to
provide financing to dealers and
consumers of General Motors expired
in 2013 and that the same arrangement
for Chrysler was lost to Santander.
Nonetheless, we understand that
Vauxhall and Ally are in harmony in the
UK and there is no doubt that such a
relationship between manufacturer and
captive finance company is vital for the
achievement of volume aspirations. See
our comments around the importance
of PCPs.
Both still very active in the sector, the
AA recently encouraged consumers
into new cars and the RAC announced
the promotion of black boxes to its
members – data capture which could
revolutionise the insurance market –
proof that ‘big data’ is the future?
The French ‘slash and burn’
Despite their volume increase in
the first quarter of 2014, Peugeot
have announced radical plans which
frankly come as no surprise. They
intend to halve the number of models
and develop the DS brand in to a
standalone unit. This is something we
predicted over six months ago and
have been discussing with retailers. The
change could be fundamental and see
significant rationalisation in the UK
networks of both Peugeot and Citroen.
Automotive Messenger May 2014 7
Automotive Messenger
News snippets continued...
A global explosion of car sales!
‘Steel’ yourself
US bias
Market research company Nielsen
have suggested that from their new
global study roughly two-thirds of
consumers plan to buy a new or used
car in the next two years. Evidently
Latin America, and countries in Africa
and the Middle East had the highest
projections, markets identified as ones
where ‘social status conferred by a
vehicle is highest globally’.
Meanwhile Frost and Sullivan
consultants predict from research that
global online car sales are expected to
increase eightfold between 2011 and
2025. That, believe it or not, represents
one in every five new car purchases.
India, Brazil and China are predicted to
lead the way.
On reflection, one in five looks a bit
on the light side but then again ten years
is a long time! It begs the question, how
do automotive manufacturers predict
the longer term, future trends with any
degree of certainty? These could be
massive calls.
A play on words, but the latest news
from the steel industry, major suppliers
to the global automotive industry, is that
global demand will be slower in 2014 than
2013 due to a cooling of demand from
China. You know we are very mindful of
the situation in China and with general
imports and exports both contracting
there in March, commentators have
been asking questions. The response has
been “we should not over-estimate the
problems” regarding international trade.
Time will tell.
Some of the snippets have come from
‘over the pond’ in this edition, where
there is a generally an improving state
in the US economy. A very positive
event occurred there in March by
video conference – the Federal Reserve
debated removing their unemployment
rate threshold for raising interest
rates for the very same reasons as the
UK – unemployment was rapidly
approaching the breach point and
no-one wants to send a message that
interest rates will rise. There seems to
a be a real commitment in the US, UK
and Europe to hold back interest rate
rises until the last possible moment as
the economic recovery is still fragile.
Good for them and good for the
Automotive industry we say!
Bend it like Beckham!
Mr B has recently been announced as
an Ambassador for Jaguar in China. To
quote “He is a truly modern, British
individual with a genuine passion for
design, innovation, performance and
driving”. In retort, Beckham said “it’s
an honour to support a brand with such
an amazing heritage”. Spot on!
8
A work of art
Evidently the city of Detroit is not
just about automotive manufacturers
– its Institute of Arts holds original
paintings by the likes of Pablo Picasso,
Vincent Van Gogh and Henri Matisse to
name but a few. These are now subject
to a battle royale with the City’s biggest
Bond Insurer who stands to lose heavily
in the Chapter 11 process currently
in place for the city. You can’t argue
that London in Administration would
be fascinating but equally completely
unthinkable!
One for the FDs
We like to finish on a financial note.
Those FDs with goodwill on their
balance sheets should be aware that
under the new FRS102, in play
for periods beginning on or after
1 January 2015, goodwill write off
will be limited to a maximum of
five years where no reliable estimate
can be made of its finite life. We
are aware that a number a retailers
write off over 20 years, so this may
quadruple the annual profit and loss
charge. There may be tax benefits
but we recommend that all covenant
calculations be checked to ensure
this change will not create a breach.
Automotive Messenger
Registration data
UK new car registrations
YTD2014
Brand
YTD2013
2014/2013
FY2013
FY2012
FY2011
FY2010
Units
Share (%)
Units
Share (%)
% Change
Units
Share (%)
Units
Share (%)
Units
Share (%)
Units
Share (%)
Ford
94,876
13.8%
84,347
13.9%
12.5%
310,865
13.7%
281,917
13.8%
265,894
13.7%
280,364
13.8%
Vauxhall
74,292
10.8%
69,227
11.4%
7.3%
259,444
11.5%
232,255
11.4%
234,710
12.1%
247,265
12.2%
Volkswagen
56,271
8.2%
49,260
8.1%
14.2%
194,085
8.6%
183,098
9.0%
179,290
9.2%
174,655
8.6%
Audi
43,766
6.4%
38,262
6.3%
14.4%
142,040
6.3%
123,622
6.0%
113,797
5.9%
99,828
4.9%
BMW
37,937
5.5%
31,322
5.2%
21.1%
135,583
6.0%
127,530
6.2%
116,642
6.0%
109,418
5.4%
Nissan
37,808
5.5%
33,931
5.6%
11.4%
117,967
5.2%
105,835
5.2%
96,269
5.0%
89,681
4.4%
Mercedes-Benz
33,799
4.9%
29,002
4.8%
16.5%
109,456
4.8%
91,855
4.5%
81,873
4.2%
74,977
3.7%
Peugeot
32,433
4.7%
31,260
5.2%
3.8%
105,435
4.7%
99,486
4.9%
94,989
4.9%
109,324
5.4%
Toyota
27,732
4.0%
26,065
4.3%
6.4%
88,648
3.9%
84,563
4.1%
73,589
3.8%
87,396
4.3%
Citroen
24,178
3.5%
22,187
3.7%
9.0%
78,358
3.5%
73,656
3.6%
68,464
3.5%
73,317
3.6%
Hyundai
23,103
3.4%
19,986
3.3%
15.6%
76,918
3.4%
74,285
3.6%
62,900
3.2%
61,752
3.0%
Kia
21,608
3.1%
19,204
3.2%
12.5%
72,090
3.2%
66,629
3.3%
53,615
2.8%
56,114
2.8%
Skoda
20,307
3.0%
15,504
2.6%
31.0%
66,081
2.9%
53,602
2.6%
45,061
2.3%
41,240
2.0%
Fiat
18,782
2.7%
14,877
2.5%
26.2%
60,198
2.7%
49,907
2.4%
41,612
2.1%
53,092
2.6%
Honda
18,265
2.7%
18,144
3.0%
0.7%
55,660
2.5%
54,208
2.7%
50,577
2.6%
63,652
3.1%
Renault
17,656
2.6%
9,806
1.6%
80.1%
46,173
2.0%
40,760
2.0%
68,449
3.5%
95,608
4.7%
Land Rover
17,098
2.5%
18,765
3.1%
(8.9)%
54,699
2.4%
48,626
2.4%
37,637
1.9%
37,272
1.8%
SEAT
14,023
2.0%
10,457
1.7%
34.1%
45,312
2.0%
38,798
1.9%
36,089
1.9%
32,935
1.6%
Mazda
12,487
1.8%
9,075
1.5%
37.6%
31,228
1.4%
26,183
1.3%
31,219
1.6%
45,449
2.2%
Suzuki
11,520
1.7%
9,956
1.6%
15.7%
33,088
1.5%
24,893
1.2%
20,295
1.0%
21,484
1.1%
Volvo
9,909
1.4%
8,926
1.5%
11.0%
32,666
1.4%
31,790
1.6%
32,657
1.7%
37,435
1.8%
MINI
9,767
1.4%
11,934
2.0%
(18.2)%
51,933
2.3%
51,324
2.5%
50,138
2.6%
43,894
2.2%
Dacia
6,821
1.0%
1,978
0.3%
244.8%
17,146
0.8%
-
-
-
-
-
-
Jaguar
5,474
0.8%
4,978
0.8%
10.0%
16,210
0.7%
14,109
0.7%
13,787
0.7%
16,417
0.8%
Other
18,210
2.6%
16,745
2.8%
8.7%
63,454
2.8%
65,678
3.2%
71,700
3.7%
78,277
3.9%
Total
688,122
13.7%
2,264,737
605,198
2,044,609
1,941,253
2,030,846
Source: SMMT
• 2014 year to date registrations of new passenger cars have
increased 13.7% over 2013, a phenomenal achievement
considering the 10.8% growth for the whole of 2013.
The big question has to be – can this be maintained?
• The month of March 2014 saw 464,824 registrations, a
rise of 17.7% over 2013 which even the SMMT quoted as
being “a surprisingly strong level of growth”. The increase
was attributed to a combination of “intensifying consumer
confidence” and “the availability of great new products”.
50.6% of the registrations were attributed to private
buyers and those retailers we have spoken to say that
demand was strong.
• Renault had a huge positive bounce back (from a low base)
and also saw Dacia break the 1% market share barrier
which we predicted in our last publication. The big three
volume premium brands (Audi, BMW, Mercedes) all saw
strong, double-digit growth, with PCP playing its full part
once again. Skoda and Fiat continued their recent trends
of substantial growth, and the two Korean brands Kia and
Hyundai also grew strongly.
• The bestselling models come as absolutely no surprise –
Fiesta followed by Focus, then Corsa. The Fiat 500 also
did well, and is the real talisman now for the brand with
varians emerging in all shapes and sizes.
• Sadly the two UK produced ‘iconic’ brands of Mini and
Land Rover both saw falls over the three month period.
They both illustrate the impact (or not) of new models/
variants and the tail off when any new product has run its
initial sales fever.
Automotive Messenger May 2014 9
Automotive Messenger
New car registrations (rolling-year annual total)
March
Total
Diesel
Petrol
AFV
Private
Fleet
Business
2014
464,824
222,409
233,702
8,713
246,660
194,955
23,209
2013
394,806
187,239
202,249
5,318
204,271
171,726
18,809
17.7%
18.8%
15.6%
63.8%
20.8%
13.5%
23.4%
Market share 2014
-
47.8%
50.3%
1.9%
53.1%
41.9%
5.0%
Market share 2013
-
47.4%
51.2%
1.3%
51.7%
43.5%
4.8%
2014
688,122
334,962
340,376
12,784
347,958
307,193
32,971
2013
605,198
292,405
304,354
8,439
294,609
282,702
27,887
13.7%
14.6%
11.8%
51.5%
18.1%
8.7%
18.2%
Market share 2014
-
48.7%
49.5%
1.9%
50.6%
44.6%
4.8%
Market share 2013
-
48.3%
50.3%
1.4%
48.7%
46.7%
4.6%
% change
Year-to-date
% change
EU and EFTA passenger car registrations March 2014
YTD2014
YTD2013
2014/2013
FY2013
FY2012
FY2011
Country
Units
Units
% Change
Units
Units
Units
Units
Germany
711,753
673,957
5.6%
2,952,431
3,082,504
3,173,634
2,916,259
United Kingdom
688,122
605,198
13.7%
2,264,737
2,044,609
1,941,253
2,030,846
France
446,609
433,882
2.9%
1,790,456
1,898,760
2,204,229
2,251,669
Italy
376,519
355,818
5.8%
1,303,534
1,403,010
1,749,074
1,961,579
Spain
202,128
180,725
11.8%
722,703
699,589
808,051
982,015
Belgium
148,532
149,160
-0.4%
486,065
486,737
572,211
547,340
Netherlands
107,723
115,421
-6.7%
417,036
502,479
555,798
482,545
Others
565,333
480,255
17.7%
1,913,943
1,936,369
2,142,520
2,200,644
3,246,719
2,994,416
8.4%
11,850,905
12,054,057
13,146,770
13,372,897
106,461
106,780
-0.3%
457,310
474,036
460,229
423,313
3,353,180
3,101,196
8.1%
12,308,215
12,528,093
13,606,999
13,796,210
Total EU
EFTA
Total EU28+EFTA
FY2010
Source: ACEA
• The first quarter of 2014 has shown an increase in new
car registrations of 8.4% for the EU, reduced slightly
to 8.1% when including the EFTA countries. This is an
encouraging trend for Europe, with only the Netherlands
of the major markets showing a decline
• In the EU market, VW Group retained its dominance but
Renault/Dacia, Toyota/Lexus, Ford and Volvo all posted
three month, cumulative double digit growth.
*EU27, data for Malta unavailable
10
• In the month of March, there was an 10.6% growth in
Europe with all major markets benefiting, Germany grew
5.4%, France grew 8.5% and there was also growth of 5%
in Italy and 10% in Spain.
• Europe is clearly basking in cautious optimism, but
no-one doubts the slow pace of growth likely to be
experienced, which would be further hindered if the UK’s
tremendous run starts to tail off.
Automotive Messenger
Registrations of new commercial vehicles in the United Kingdom
Commercial vehicles < 3.5t
YTD March14
Brand
YTD March13
2014/2013
FY2013
FY2012
FY2011
FY2010
Units
Share %
Units
Share %
% Change
Units
Share %
Units
Share %
Units
Share %
Units
Share %
Ford
18,530
23.2%
17,639
25.6%
5.1%
68,054
25.1%
62,372
26.0%
70,226
27.0%
59,488
26.7%
Volkswagen
10,669
13.4%
8,940
13.0%
19.3%
36,925
13.6%
30,956
12.9%
31,716
12.2%
25,710
11.5%
Peugeot
8,396
10.5%
5,514
8.0%
52.3%
21,230
7.8%
21,272
8.9%
19,328
7.4%
16,384
7.3%
Vauxhall
8,379
10.5%
8,075
11.7%
3.8%
29,736
11.0%
26,524
11.1%
33,514
12.9%
27,417
12.3%
Citroen
7,665
9.6%
6,280
9.1%
22.1%
22,989
8.5%
18,379
7.7%
17,275
6.6%
18,074
8.1%
Mercedes
5,571
7.0%
4,710
6.8%
18.3%
25,667
9.5%
21,055
8.8%
19,495
7.5%
20,173
9.0%
Renault
3,985
5.0%
2,348
3.4%
69.7%
12,978
4.8%
14,710
6.1%
19,382
7.5%
17,248
7.7%
Fiat
3,733
4.7%
2,758
4.0%
35.4%
12,019
4.4%
7,060
2.9%
8,130
3.1%
6,977
3.1%
Nissan
3,616
4.5%
4,057
5.9%
-10.9%
10,619
3.9%
10,136
4.2%
10,854
4.2%
6,223
2.8%
Toyota
2,509
3.1%
2,207
3.2%
13.7%
8,063
3.0%
7,747
3.2%
8,391
3.2%
6,617
3.0%
Land Rover
2,313
2.9%
1,954
2.8%
18.4%
6,644
2.5%
5,917
2.5%
6,209
2.4%
4,874
2.2%
Mitsubishi
1,835
2.3%
1,674
2.4%
9.6%
5,927
2.2%
4,853
2.0%
7,341
2.8%
6,821
3.1%
Isuzu
1,322
1.7%
1,174
1.7%
12.6%
4,112
1.5%
2,762
1.2%
2,431
0.9%
2,190
1.0%
Iveco
632
0.8%
913
1.3%
-30.8%
3,275
1.2%
3,593
1.5%
3,628
1.4%
2,616
1.2%
762
1.0%
639
0.9%
19.2%
2,835
1.0%
2,305
1.0%
2,233
0.9%
2,103
0.9%
16.0%
271,073
Other
Total light CV
79,917
68,882
239,641
260,153
222,915
Commercial vehicles > 3.5t and < 6.0t
YTD March14
Brand
YTD March13
2014/2013
FY2013
FY2012
FY2011
FY2010
Units
Share %
Units
Share %
% Change
Units
Share %
Units
Share %
Units
Share %
Units
Share %
Ford
720
38.1%
700
41.2%
2.9%
2,767
40.8%
2,879
40.4%
1,381
25.0%
2,820
41.0%
Mercedes
434
22.9%
391
23.0%
11.0%
1,485
21.9%
1,367
19.2%
1,458
26.3%
1,632
23.8%
Fiat
259
13.7%
282
16.6%
-8.2%
1,231
18.1%
1,416
19.9%
1,171
21.2%
1,180
17.2%
Iveco
121
6.4%
85
5.0%
42.4%
420
6.2%
444
6.2%
567
10.2%
526
7.7%
97
5.1%
45
2.6%
115.6%
200
2.9%
359
5.0%
354
6.4%
209
3.0%
Peugeot
Volkswagen
88
4.7%
101
5.9%
-12.9%
342
5.0%
251
3.5%
221
4.0%
204
3.0%
Renault
21
1.1%
39
2.3%
-46.2%
117
1.7%
215
3.0%
113
2.0%
41
0.6%
152
8.0%
56
3.3%
171.4%
226
3.3%
195
2.7%
269
4.9%
258
3.8%
11.4%
6,788
Other
Total heavy CV
1,892
1,699
7,126
5,534
6,870
Commercial vehicles > = 6.0t
YTD March14
Brand
YTD March13
2014/2013
FY2013
FY2012
FY2011
FY2010
Units
Share %
Units
Share %
% Change
Units
Share %
Units
Share %
Units
Share %
Units
Share %
1,091
19.2%
2,277
27.2%
-52.1%
14,046
28.4%
11,153
28.9%
9,863
26.4%
6,553
23.8%
Mercedes
929
16.3%
1,186
14.2%
-21.7%
8,793
17.8%
6,422
16.6%
6,326
16.9%
4,988
18.1%
Scania
736
13.0%
1,215
14.5%
-39.4%
6,846
13.8%
4,652
12.1%
4,071
10.9%
3,576
13.0%
Iveco
734
12.9%
849
10.2%
-13.5%
3,773
7.6%
2,908
7.5%
2,834
7.6%
2,523
9.1%
Volvo Trucks
686
12.1%
857
10.2%
-20.0%
5,524
11.2%
3,976
10.3%
4,624
12.4%
3,163
11.5%
Renault Trucks
668
11.8%
408
4.9%
63.7%
2,534
5.1%
2,555
6.6%
2,763
7.4%
1,934
7.0%
Man
410
7.2%
906
10.8%
-54.7%
4,934
10.0%
4,324
11.2%
4,772
12.8%
2,753
10.0%
428
7.5%
663
7.9%
-35.4%
2,980
6.0%
2,586
6.7%
2,157
5.8%
2,098
7.6%
(32.0)%
49,430
Daf Trucks
Other
Total heavy CV
5,682
8,361
38,576
37,410
27,588
Sources : SMMT
• Registrations of Commercial vehicles up to 3.5 tonnes
grew in the first Quarter of 2014 by 16% which suggests
further evidence of the recovering UK economy with the
so-called ‘white van man’ feeling more confident to
change vehicle.
• Unfortunately heavy truck registrations fell by 32% but
a major factor in that has been the new Euro 6 legislation
delaying registrations.
• In the smaller van market, Ford retains its number one
slot but PSA brands came back strongly, with Peugeot
itself registering growth of 52% in the three months.
Interestingly Renault Trucks posted the only gain in the
heavy sector.
Automotive Messenger May 2014 11
Contact us
Automotive contacts
Regional contacts
David Dunckley
Partner
T +44 (0)20 7728 2408
M +44 (0)7977 586 324
E david.dunckley@uk.gt.com
Raj Mittal
Birmingham
T +44 (0)121 232 5177
M +44 (0)7974 026 177
E raj.k.mittal@uk.gt.com
Andrew Shackleton
Milton Keynes
T +44 (0)1908 359 576
M +44 (0)7973 712 040
E andrew.d.shackleton@uk.gt.com
Tarun Mistry
Partner
T +44 (0)20 7728 2404
M +44 (0)7966 432 299
E tarun.mistry@uk.gt.com
Nigel Morrison
Bristol
T +44 (0)117 305 7811
M +44 (0)7976 854 440
E nigel.morrison@uk.gt.com
Joe McLean
Leeds/Newcastle
T +44 (0)113 200 1506
M +44 (0)7970 471 894
E joe.mclean@uk.gt.com
Paul Burrows
Director
T +44 (0)1908 359 554
M +44 (0)7850 538 309
E paul.v.burrows@uk.gt.com
Ian Carr
Cambridge
T +44 (0)1223 225 625
M +44 (0)7970 096 195
E ian.carr@uk.gt.com
Richard Lewis
Reading
T +44 (0)118 983 9651
M +44 (0)7538 551 468
E richard.lewis@uk.gt.com
Neil Barrell
Director
T +44 (0)117 305 7616
M +44 (0)7976 550 312
E neil.barrell@uk.gt.com
Alistair Wardell
Cardiff
T +44 (0)29 2034 7520
M +44 (0)7815 062 698
E alistair.g.wardell@uk.gt.com
Rob Caven
Scotland
T +44 (0)141 223 0629
M +44 (0)7774 191 272
E rob.caven@uk.gt.com
Bill Parfitt CBE
T +44 (0)121 212 5221
M +44 (0)7528 870341
E bill.parfitt@uk.gt.com
Hazel Platt
Corporation Tax Specialist
T +44 (0)1908 359 519
M +44 (0)7827 876 468
E hazel.a.platt@uk.gt.com
James Stares
Southampton
T +44 (0)2380 381 193
M +44 (0)7791 618 106
E james.w.stares@uk.gt.com
Napier Munro-Faure
Associate Director
T +44 (0)118 983 9615
M +44 (0)7900 654 628
E napier.munro-faure@uk.gt.com
Naomi Horsfall
Executive
T +44 (0)121 232 5347
E naomi.horsfall@uk.gt.com
David Riley
Manchester
T +44 (0)161 953 6923
M +44 (0)7775 826 394
E david.riley@uk.gt.com
Leasing, Asset and Motor Consumer Finance contacts
Christian Roelofs
Director
T +44 (0)20 7865 2193
M +44 (0)7890 743 786
E christian.d.roelofs@uk.gt.com
Peter Landers
Associate Director
T +44 (0)20 7865 2792
M +44 (0)7766 474 681
E peter.landers@uk.gt.com
Phil Gerrard
Associate Director
T +44 (0)20 7184 4301
M +44 (0)7880 871 134
E phil.gerrard@uk.gt.com
© 2014 Grant Thornton UK LLP. All rights reserved. ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership.
Grant Thornton is a member firm of Grant Thornton International Ltd (Grant Thornton International). References to ‘Grant Thornton’ are to the brand under which the Grant Thornton member firms operate and
refer to one or more member firms, as the context requires. Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by member firms, which
are not responsible for the services or activities of one another. Grant Thornton International does not provide services to clients. This publication has been prepared only as a guide. No responsibility can be
accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication.
grant-thornton.co.uk
V24065