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ASA FINDS SERVICING STOP ADVERT ‘MISLEADING’

ASA FINDS SERVICING STOP ADVERT ‘MISLEADING’

Two complaints against aggregator

The ASA received two complaints over claims made on repair aggregator Servicing Stop’s website.

One complainant, who believed that Servicing Stop continuously charged the ‘sale’ price for their services and that the savings were therefore not genuine, challenged whether the savings claims quoted within the ads were misleading and could be substantiated, while the other complaint challenged if the prices were misleading because their vehicle required a specific oil with VM approval that incurred an extra charge.

On the first complaint, the ASA looked at a series of complex savings offered on the website that were promoted as being ‘up to 60 percent off’. In response, Servicing Stop stated that at certain points throughout the year, they ran sales during quiet periods. It provided the ASA with dated and undated invoices showing the price history of the Kia Sedona vehicle servicing. It said that the period of time for which the new lower discounted price was available was not longer than the period of time that the item was listed for at the previous higher price.

It provided a spreadsheet of the sale dates for the servicing of the Kia Sedona and Honda CRV vehicle models over a six-month period from April 2017 to October 2017. There were variations between the ‘previous’ prices stated over this period. Its data showed that the Honda CRV services were on sale for a total of 37 days over a six-month period and the Kia Sedona had a sale period of 41 days over the same six-month period. It explained that there were fluctuations between the previous prices due to the many variants in price between the number of makes multiplied by the number of postcodes.

The ASA disagreed, noting that the ‘previous’ price varied when the discounted price remained the same. It told Servicing Stop to ‘ensure savings claims are genuine’. However, on the price of VM specific oil, the ASA noted that the aggregator put a disclaimer in saying that the price of such oil can vary. As a result, it was not in breach on this complaint.

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RETAIL TRADE FACES ‘UNCERTAIN FUTURE’

RETAIL TRADE FACES ‘UNCERTAIN FUTURE’

New car registrations continue to fall

The UK’s motor retail and parts industries face an ‘uncertain future’ as the number of firms in ‘significant financial distress’ according to a new report.

The research, published by insolvency firm Begbies Traynor shows that both new and used car dealers are having a very hard time as new registrations continue to fall. Interestingly, the firm cites a glut of used cars on the market as one of the reasons for used car dealer’s distress, rather than the number of pre Euro-5 vehicles taken out of the market as a result of scrappage schemes offered by various VMs.

Over the past year, the level of ‘significant distress’ for used car dealers rose by a third to 1851 dealers, compared with the same period in the previous year.

Julie Palmer, partner at Begbies Traynor, said: “Consumers up and down the country are tightening their belts in the face of rising inflation, increased interest rates and real wage pressures, causing households to put the handbrake on spending on big ticket purchases, and encouraging many to hold on to their vehicles for longer”.

“Even those owners looking to upgrade their vehicles are struggling to do so, as a recent glut of second hand cars on the market continues to depress the value of second hand motors while making new vehicles and their hefty price tags even less appealing”.

New car dealerships fair little better, with consumer confusion regarding diesel legislation and a lack of electric infrastructure keeping would-be car buyers away. Worryingly, the findings chime with the results of a KPMG survey released at the same time that predicts over half of all dealerships in the UK could close within eight years, leading a number of dealer principals and other motor industry executive to state that the only way these businesses can survive is to convert to a used car dealer and/or repurpose to becoming an independent service garage (see page 5).

FINANCIAL HEALTH

The Begbies Traynor findings were published in the firm’s Red Flag alerts, which monitors the financial health of UK companies. It warns that a number of macro-economic pressures last year contributed to this considerable increase in distress, with the combination of rising inflation, stagnant real wage growth, a weak
pound, political uncertainty, November’s rise in interest rates, and the ever-tightening credit environment putting increasing financial stress on businesses across the country. As a result, 258,349 UK businesses ended the year in a position of negative net worth, while a further 154,251 demonstrated a ‘worrying increase’ in their working capital deficit.

Palmer added: “When the overall business environment is so challenging, unfortunately there can be few real winners, however certain sectors of the economy are certainly feeling the pinch more than others. In particular, the vast UK support services sector saw a spike in distress as their stretched customers reined back spending. The construction industry saw the lowest levels of optimism in five years while the real estate sector felt the full impact of the increasingly stagnant UK housing market”.

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HELLA ANNOUNCES NEW PLANT AND BUSINESS DEAL

HELLA ANNOUNCES NEW PLANT AND BUSINESS DEAL

Hella and BHAP tie the knot

AS PART OF growing demand for its vehicle lighting systems, Hella has opened a new production plant in Tianjin, China valued in low-to medium double-digit million euro.

The opening of the site follows a joint venture between Hella and Beijing Hainachuan Automotive Parts Co. Ltd. (BHAP) – a subsidiary of the BAIC Group, which will see both parties collaborate on LED headlamps, rear combination lamps, car body lighting and interior lighting under the newly formed entity, ‘Hella-BHAP’.

Markus Banner, Member of the Hella Management Board, said: “The new plant will strengthen our market position on one of the world’s major automotive markets. When extending our structures locally here on site, we are also very consciously counting on collaboration with successful Chinese partners such as BHAP. And that is because such cooperation means that we will be able to meet the needs of local customers even better than ever before.”

“Tianjin, where the new factory is located, is of strategic importance to the Chinese automotive industry as many of our key customers are located nearby”, said BHAP General Manager Chen Bao, “Hella is a perfect partner for BHAP, and we join hands to develop the automotive lighting business in this region and provide our clients with the best services and support,” adding that its cooperation will gradually expand into  electronics and aftermarket.

The new location employs100 staff with plans to extend this number to 250, along with its current site and 12,000 sq m production facility in due course.

 

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VOLVO INVESTS IN £6MILLION TRAINING FACILITY

VOLVO INVESTS IN £6MILLION TRAINING FACILITY

Volvo’s Daventry premises

A new Training and Development Centre has been opened by Volvo Car UK, following a recruitment drive to employ 300 new technicians into its dealer network by 2020.

The Daventry-based premises comes as a £6m investment that will offer year round training for Volvo staff and its retail network. To support this, the site contains a 16-vehicle bay workshop, accompanied with a spacious auditorium and classrooms featuring remote video and web-based technologies for supporting off-site and online training. In addition, the centre is equipped to assist technicians with servicing electric and autonomous vehicles.

The launch will help streamline the firm’s operations including its new Volvo Retail Experience (VRE) and Volvo Personal Service (VPS) retail initiatives as Jon Wakefield, Managing Director of Volvo Car UK, highlights: “I’m very proud of our new training facility, which represents a significant commitment to both our operations in Daventry and our retailer network throughout the country.

“The site is a fitting accompaniment to Volvo’s transformation into a true premium car brand that is a technological leader, as well as the big improvements we are
introducing to the customer experience.” The dealership is already hosting training programmes for its new XC40 premium compact SUV that will appear in UK retailers early this year. The full list of courses can be accessed via Volvo’s website (volvocars.com).

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ASA FINDS BMW AD ‘MISLEADING’

ASA FINDS BMW AD ‘MISLEADING’

BMW i3 model

The Advertising Standards Authority (ASA) has upheld a complaint against BMW regarding a paid-for Facebook post, which featured a video claiming its i3 model contained ‘zero emissions’ in the voice-over and subtitles on screen.

The complainant challenged whether the claim: “With zero emissions, the i3 is a clean car and helps to give back to the environment” could be ‘substantiated’.

BMW (UK) responded saying that its i3 vehicle came in one model with the addition of a ‘range extender’ as an option. The firm said this comprised of a small petrol engine that didn’t drive the car unlike hybrid versions and instead, maintained the state of the charge of the battery, allowing the car to run purely on electric. In addition, BMW told the advertising watchdog that the reference to ‘clean car’ ‘should have been interpreted in the same manner as when consumers compare an electric car to their previous petrol ones as electric versions are considered better for the environment.

Despite the VM’s evidence, the ASA found this ad breached the rules, because it does still have a petrol engine, albeit one that isn’t connected to the drivetrain.

“We noted that BMW considered the statement was meant as a comparison between buying an electric car and buying a petrol car rather than not buying a car at all. However, we did not consider that this was sufficiently clear in the ad and concluded that the claim was misleading,” the ASA said in a statement.

The ad cannot appear again in its current form and has told BMW to ensure its environmental claims in relation to all-electric vehicles are clear in the future.

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AAG ACQUIRE FAST PARTS WALES AND MORE

AAG ACQUIRE FAST PARTS WALES AND MORE

Newport-based factor chain Fast Parts Wales and Peterborough-based Hereward Car and Truck Components are among a list of businesses acquired by Alliance Automotive Group in the last quarter.

Fast Parts Wales is a three branch light vehicle factor business based in South Wales with depots in Abercarn, Cwmbran & Tredegar.  The business was started around 25 years ago by the Travis family and the deal also includes the FastRads cooling system business based in Abercarn. The annual sales are around £9m and prior to the acquisition the business was a member of AAG’s GROUPAUTO buying group.

Hereward Car and Truck Components is another family run business, started in 1983 by the Saddington family. The two-branch factor was a member of the IFA buying group prior to the acquisition by AAG. Annual sales have been around £2.8m.

Single branch factors Macclesfield Motor Factors, DMFX (Darlington) and GD Components (Anglesey) have also been acquired by AAG.

There’s more info in the January issue of CAT Magazine.

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SUPPLIER UPDATE: WINTER DEALS

SUPPLIER UPDATE: WINTER DEALS

New supply deal for Pro-Align

A couple of important supply deals have been signed this month. First, around-the- wheel kit dealer, Pro-Align, has arranged with diagnostic tool maker Texa to supply the latter’s new aftermarket ADAS system. As the wheel alignment company has a contacts book full of past and existing customers in the crash repair and tyre fitting markets, it seems like an obvious add-on.

Pro-Align will also carry Texa’s range of diagnostic equipment.“Texa is pleased to welcome Pro-Align to its’ distribution network, where they are ideally placed to offer a complete service to OE and professional workshops facing the challenges of repairing newer vehicles fitted with Advanced Driver Assistance Systems,” commented Dave Gordon, Texa’s OE and National Accounts Sales Manager.

Meanwhile, Poland-based supplier of new and remanufactured rotating electrics, AS-PL Limited has struck a deal with the Nexus trading group. The brand’s products will be available through factors that buy with the group, initially through Nexus Automotive’s Central Europe representative. Tomasz Kaszubowski VP of AS-PL said: “When joining the Nexus Automotive Central Europe group, we gain not only the ability to share knowledge and mutual experience. At the same time, we can carry out actions that will improve our competitiveness and contribute to satisfying our customers’ needs.”

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MARATHON ACQUIRES NEW WAREHOUSES

MARATHON ACQUIRES NEW WAREHOUSES

Independent wholesaler Marathon Distribution has acquired two warehouses bringing its’ branch network to 14 sites. The move comes as part of a business strategy to improve its’ Northern logistic operations.

The Warrington distribution centre has recently opened its’ doors to trade customers.

Meanwhile, construction work on the new Gateshead site is still underway and should be functional by February next year.

The opening of these centres has also sparked a recruitment drive, creating a number of job opportunities and an internal shake-up, as Adrian McComas, Sales and Marketing Manager at Marathon Distribution, elaborates: “Several colleagues from our Castleford and Redditch depots will be transferring over to the new Warrington site.” He continued, “Regional Director Lee Pearsall has been appointed to manage operations for this part of the country.”

More branches are in the pipeline. McComas concluded: “We will also be looking to expand into Scotland in 2018 to enable us to service our Scottish customers more efficiently. We’ve already got substantial business in the North East and West of England, so it will make it easier to service those areas and gives us an opportunity to develop the business more, with more frequent opportunities for our stockists.” We look forward to reporting on these new sites when they go live next year.

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200K INVESTMENT AT REVCOAT

200K INVESTMENT AT REVCOAT

Calcination Oven

Catalytic converter brand Revcoat Technologies has made a major investment in new processes and machinery. New equipment includes a calcination oven, automatic case seam welder and several types of automatic coating machines.

The firm produces various types of diesel particulate filters in addition to the converters for petrol engines and has spent over £200k on the new equipment.

James Slade, Director at the firm said: “Over the past 12 months we have researched and developed catalyst wash-coats using high oxygen storage chemicals and Nano-technology precious metal solutions to meet the requirements of today’s emission standards.”

“Combined with our specifically designed coating and canning technology we can produce emission catalysts tailored to any requirement. Our catalytic solutions and our proprietary catalyst coating technology are individually tailored to take advantage of the latest technology in raw materials.”

“Our investment in this technology for the development of automotive emission catalysts gives us the ability to offer solutions for present and future requirements of environmental legislation.” Revcoat Technologies is owned by by European Exhaust & Catalyst Ltd.

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ASA RESPONSE COULD IMPACT USED CAR DEALERS

ASA RESPONSE COULD IMPACT USED CAR DEALERS

Glyn Hopkin dealership

In a move that could have far-reaching consequences on the used car industry, the Advertising Standards Authority has upheld a complaint against two lineage ads for car dealer Glyn Hopkin. The adverts related to two three-year old Alfa Romeo vehicles, and the complaint was that the vehicles were not advertised as being ‘ex-fleet’.

The vehicles in question had been registered directly to Fiat- Chrysler Automobiles (FCA). In response, the dealer said that the vehicles were not for sale directly from the website and that would-be purchasers would be able to see all the documents related to any particular car.

Glyn Hopkin stated that they bought the advertised vehicles directly from FCA and that an ex-fleet did not suggest that it had multiple drivers. Furthermore, the actual previous usage, irrespective of the registered keeper, could not be categorically defined on a used car and they stated that such information had not been given to them by FCA.

SMMT was asked for its input. It said that it believed that the Office of Fair Trading’s (OFT) ‘Guidance for second hand car dealers’ only applied to ex-fleet vehicles that might have had multiple users, and that by describing a vehicle as ex-fleet did not necessarily mean that it had been used by more than one driver.

SMMT also pointed out that the new car market had changed radically in the UK, through the growth in popularity of PCP and lease schemes, where most of the vehicles were owned by fleet management/vehicle leasing companies.

The ASA accepted these points, but still ruled that the advert broke guidelines and that it, and all others like it, must state that if a vehicle had been part of a fleet if had been used for business purposes, even if they had been in the hands of a single user from new, as had been the case with both of the cars in question.

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