SMTA Monthly Bulletin March 2022

BULLETIN Your monthly news round-up of the Scottish Motor Industry

MARCH 2022

TIME IS RUNNING OUT! MOT TESTER TRAINING & ASSESSMENT

For those that have yet to complete their MOT Training and Assessment for 2021/22, you have a few days left to complete this. The cut off date is 31st March and the DVSA have advised there will be NO extensions to this date – you must complete this in order to keep your tester status.

Contact us on 0131 331 5510 to book your training and assessment.

MOT SEMINARS 2022

SMTA in conjunction with the DVSA will be holding six MOT seminars across Scotland. These seminars will bring you the latest MOT information from the DVSA.

NOT TO BE MISSED!

Glasgow 10th May

Good availability

Edinburgh 11 May

Good availability

St Boswells 12 May

Good availability

Perth 17 May

Over 50% sold

Aberdeen 18 May

Last few tickets left

Inverness 19th May

Over 50% sold

th

th

th

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Seminars kindly supported by

Places are limited, so click the link below to buy your tickets now!

CLICK HERE TO BUY TICKETS

The approved insurance broker to the Scottish Motor Trade Association

INTEREST RATE RISE ADDS TO PRESSURES CAR RETAIL OVERHEADS AND CONSUMER FINANCES The Bank of England’s decision to raise interest rates to 0.75% have been criticised for placing “more pressure on household finances” - and will impact the car retail sector too.

The Bank made its third rise in four months – from 0.5% to 0.75% – in a bid to calm the rising cost of living as soaring energy bills combined with rising food costs and concerns about the impact of the war in Ukraine.

Echoing last week’s warning from the Finance and Leasing Association (FLA), the Bank warned inflation may reach 8% or more in the coming months.

In the year to January prices have risen by 5.5% in the UK – the fastest rate for 30 years – with the Office for National Statistics (ONS) noting that energy and fuel prices had contributed to the rising cost of living.

Members of the Bank of England’s Monetary Policy Committee (MPC) voted eight-to-one in favour of an increase in interest rates this week, warning that inflation could hit double-digits later in the year if energy prices push up the energy price cap.

Reflecting on the impact of interest rate rises on car retail, Richard Bartlett-Rawlings,

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RSM partner and head of automotive manufacturing, told AM: "Vehicle prices have already been moving northwards to reflect both supply issues and increases in the raw material costs associated with the manufacture of vehicles.

on large purchases or committing to significant monthly expenditure. As such I foresee the used car market remaining strong, as people hold onto vehicles and new cars remain in short supply due to component issues.

Finance houses have also been increasing interest rates as well, with new deals attracting higher APR due to the expectations of the market moving forwards. Where new cars have been ordered but the finance not locked in, the buyer is potentially exposed to further increases in APR, which may be driven by the expectation of further intervention by the Bank of England to offset inflation."

Due to the shortages of new cars and the position of the used car market I don’t think new car sales will be significantly impacted, but they are already at historically low rates due to the widely publicised component issues around microchips. This will be further exacerbated by the conflict in Ukraine which is a key area of supply for vehicle components and may result in further reductions in production."

Bartlett-Rawlings added: "The key issue as always will be the fact that consumer spending will start to fall as people start to fear the effects of both tax increases and inflation which in real terms erodes their real wage levels. I think we will start to see people reducing their spending to save for a rainy day, rather than spending

Article courtesy of AM Online

ONLINE USED CAR FINANCE TO MORE THAN DOUBLE IN THREE YEARS Almost one-in-two motor finance applications made during 2022 will happen online, according to new figures compiled by iVendi.

The company says that across its vehicle retailer user base, it expects to see 45% of applications made by customers digitally and remotely, rather than in the showroom as part of a traditional sales process.

James Tew, iVendi's chief executive, said this represents a rise from 35% in 2021, 30% in 2020 and 22% in 2019, which is “indicative" of the trend. He said: “The pandemic has made a relatively large section of the car buying public more comfortable about online processes. While the overwhelming majority will combine elements of a showroom and digital journey, there has probably been a permanent shift towards the latter.

Secondly, dealers have moved to meet that need. Many have upgraded their online presence substantially over the last two years and the motor finance journey they are offering digitally is simply better and easier to use, hence more consumers are opting to adopt it.

Lastly, the technology on offer has continued to improve at a rate that is

much better than incremental. The online journeys now offered by companies such as iVendi are more effective, and easier to adopt for dealers and to use for car buyers, plus are better integrated into the whole purchasing process.”

The Finance and Leasing Association (FLA) has warned that inflation could peak at 8% in the first half of 2022 after the global economic outlook weakened following Russia’s invasion of Ukraine.

In 2021 the consumer car finance market grew 2% by volume and 13% by value in December to completed a “rebound” despite the headwinds of COVID-19 and vehicle supply shortages.

Tew said that many online motor finance journeys now offer a degree of flexibility that meant customers could “play” with the main variables behind each deal - handing them control. He said: “In many ways, online motor finance is more customer friendly, allowing the customer to run different variations of the numbers in a way that is difficult when sitting in front of a

salesperson in a showroom. Systems have done this for many years but the latest iterations, such as Digital Deals, are more efficient than ever.

Once they have made a choice, the potential buyer can even check the likelihood of approval online without leaving a footprint on their credit file that is visible to lenders, before they make an application, which is a major plus point for many. For all these reasons, we expect the swing towards online applications to continue not just this year but to continue to rise substantially for the foreseeable future. While there will always be a place for showroom-based applications, we believe, increasing numbers of car buyers will choose the digital option.”

Article courtesy of AM Online

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MORE BAD NEWS FOR NEW CAR MARKET AS EXPERTS PREDICT WAR IN UKRAINE IS SET TO SLASH PRODUCTION EVEN FURTHER Experts have warned that new car production is set to be slashed even further this year thanks to the war in Ukraine and an existing shortage of semiconductors.

S&P Global Mobility, which specialises in automotive data, has cut its forecasts for the next two years as a result of the current global issues.

It now predicts that 170.1m cars will be built worldwide across 2022 and 2023 – a drop of more than five million compared to previous forecasts.

That breaks down as 81.6m cars in 2022 and 88.5m cars in 2023 – both 2.5m fewer than previously thought.

The firm’s worst case scenario predicts that as many as four million cars per year could be wiped off production lines.

A report from S&P Global Mobility said: "With conflict in Ukraine comes more reminders of the fragility of the world’s automotive supply chains.

The downgrade decomposition will broadly comprise just under one million units from lost demand in Russia and Ukraine; and the remainder split between

the worsening semiconductor supply issues, and the loss of Ukraine-sourced wiring harnesses and other components respectively."

Article courtesy of CarDealer Magazine

IMI REPORT HIGHLIGHTS LACK OF DIVERSITY IN MOTOR SECTOR Lack of diversity is a real problem in the motor sector and the higher up the food chain you go the worse it gets.

That’s a key finding of the Institute of the Motor Industry’s final report from its Diversity Task Force.

The report was led by IMI President, Professor Jim Saker and IMI Chief Operating Officer, Lesley Woolley and sponsored by Steve Nash, CEO of the IMI. The IMI found that automotive vacancies are at their highest level for 20 years at more than 23,000, accounting for approximately 4% of the workforce. It said a more diverse workforce was critical to turn the tide and the lack of role models is a “fundamental barrier” to achieving that goal.

Analysis of ONS data for the sector has found that the proportion of non-whiteBritish in senior roles in automotive retail (5%) is significantly less than non-whiteBritish individuals in senior roles not in automotive (13%).

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The proportion of women in senior roles in automotive is also less than outside of the sector. There are 19% of women in senior roles in automotive compared to 39% in the non-automotive workforce.

However, there are proportionally more disabled individuals in senior roles in automotive retail (15%) compared to those in senior roles outside of automotive (12%), albeit the difference is quite marginal.

Article courtesy of Motortrader

NEW CAR PRICES RISE BY 25% IN THREE YEARS New car prices have risen by more than a quarter, in some cases, in the last three years.

A study by consumer motoring website Honest John found widespread price hikes for some of Britain’s best-selling models.

The new Vauxhall Astra (pictured), for example, is now 26% more expensive than it was three years ago, with an OTR price of £23,805. A comparative Nissan Qashqai is now 25% more expensive, costing buyers £24,555 today.

The research highlights the rising cost of living in the UK with motorists already reeling from record-high fuel prices that are forcing drivers to pay more than £1.50 for a litre of fuel.

Honest John says these higher list prices are likely to come as a shock to buyers who may not have changed their car in several years.

And with a global computer chip shortage causing short supply and long waiting lists, buyers will find it fiendishly difficult to negotiate much of a discount.

pay for new models that feature pricey tech they have neither asked for or need.”

“This research will come as a shock for many car buyers,” said HonestJohn.co.uk’s senior editor Dan Powell.

“Consumers are accustomed to seeing prices creep up as manufacturers launch new models or update a vehicle’s specification, but some of these price jumps are eye-watering and some drivers will question why they are being asked to

The three-door Ford Fiesta 1.0 EcoBoost in the popular ST Line trim and the Fiat 500 are both now 19% more expensive than they were three years ago, while the VW Golf is 10% dearer.

Article courtesy of AM Online

TRADE SNIPPETS Fuel price crisis re-ignites EV demand

MOT tester shortage could lead to test delays, warns IMI

Article courtesy of AM Online

Article courtesy of AM Online

Automotive 30% Club founder Julia Muir honoured by IMI for work on closing industry gender gap

BMW Group acquires Alpina brand in deal that will start from 2025

Article courtesy of CarDealer Magazine

Article courtesy of CarDealer Magazine

SMMT and BVRLA welcome electric van grant extension Article courtesy of Motortrader

Ford announces seven new EV cars and vans to hit roads by 2024 Article courtesy of Motortrader

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EDINBURGH GARAGES TARGETED

BY THIEVES Police Scotland have advised that there has been an increase in garages around Edinburgh being targeted for the car keys that are deposited through letterboxes.

The criminals are using a number of methods in order to bypass the security of the building to obtain the keys from within.

Attached is their most current briefing document which covers a number of methods to improve security measures within garages.

Read the full Police Scotland briefing document here

APRIL MOT VOLUMES FORECAST POST TOWN

SUM OF FORECAST TO EXPIRE

SUM OF EXPIRED TYPICAL

SUM OF CHANGE FROM TYPICAL

CHANGE FROM TYPICAL [%]

ABERDEEN

11,095

21,952

-10,857

-49.46%

DUMFRIES

2,883

6,598

-3,715

-56.30%

DUNDEE

5,566

11,248

-5,682

-50.52%

EDINBURGH

15,746

34,370

-18,624

-54.19%

FALKIRK

5,658

11,844

-6,186

-52.23%

GLASGOW

19,304

42,392

-23,088

-54.46%

HEBRIDES

530

1,257

-727

-57.84%

INVERNESS

5,332

11,979

-6,647

-55.49%

KILMARNOCK

6,979

14,720

-7,741

-52.59%

KIRKCALDY

7,193

16,050

-8,857

-55.18%

KIRKWALL

1,109

2,558

-1,449

-56.65%

LERWICK

550

1,146

-596

-52.01%

MOTHERWELL

6,411

13,569

-7,158

-52.75%

PAISLEY

5,562

12,566

-7,004

-55.74%

PERTH

3,761

7,920

-4,159

-52.51%

TWEEDDALE

2,359

5,418

-3,059

-56.46%

April 2022 figures courtesy of DVSA (Driver and Vehicle Standards Agency) 6

LATEST CAR FIGURES

FUEL TYPE

REGISTRATIONS BY REGION

FEBRUARY 2022

YEAR TO DATE Petrol

10,632

Diesel

1,617

Total Scotland

5,393 274

2,440

Petrol/Electric

Grampian

1,247

Electric Diesel/Electric

40

Petrol/LPG

34

=

Summary

516

312 803

16,010

1,250

69

2,052

Vauxhall

1,281 1,178

Volkswagen

1,122

Ford

1,098

Audi

1,064

Toyota BMW Peugeot Hyundai Mercedes

858 765 641 600

86

2,500 12.82%

8.00%

7.36% 7.01%

6.86% 6.65%

5.36% 4.78%

4.00% 3.75%

TOP SELLING

MARQUES YTD 2022 Figures courtesy of the SMMT (Scottish Motor Manufacturers and Traders)

500

Lothian Borders

1,000

881

Vauxhall Corsa

573

Vauxhall Mokka

496

Kia Sportage

473

Vauxhall Crossland

423

Mini Mini

334

Ford Focus

312

Ford Puma

296

Volkswagen T-Roc

Volkswagen Golf

Fife

Dumfries & Galloway

0

Peugeot 2008

Tayside

2,519

Strathclyde

174,081 Kia

343

471

Central

TOTAL UK CAR MARKET:

0

Highlands

275 255

YEAR TO DATE

TOP 10 CARS 7

ISSUE

OUT NOW! SMTA AUTO INSIGHT ISSUE 8

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SMTA CONTACTS

MEMBERSHIP ENQUIRIES/ TRADING PARTNERS: Norman Stirling – 07917 095014 Membership Development Manager Marcus Lawrence – 07375 057561 Territory Account Manager, Western Region Stuart Kennedy – 07375 057560 Territory Account Manager, Northern Region

MOT QMS ENQUIRIES

WOULD YOU LIKE YOUR GARAGE TO FEATURE IN SMTA’S MAGAZINE? SMTA produces a quarterly magazine to all our members, if you haven’t got one yet our Territory Account Managers will be visiting your garage soon with a copy for you.

If you’d like your garage to feature please contact: karen.thompson@smta.co.uk

DVSA MOT ANNUAL TRAINING & ASSESSMENT 2022/2023 Book your Training & Assessment today - call us 0131 331 5510 or email pauline.galloway@smta.co.uk We’re pleased to advise there’s no price increase for 2021/22 SMTA member price

- £52.00 (plus vat)

David Innes – 07789 264228 Operations Manager, Support Services Colin Meldrum – 07917 042576 Support Services Consultant Gordon Laing – 07799 732124 Support Services Consultant

APPRENTICE TRAINING ENQUIRIES Fraser Miller – 07789 264229 Apprentice Training Manager Kevin Millar – 07593 800386 Kickstart Gateway Project Manager

EMPLOYMENT LAW ENQUIRIES Moira Gaynor – 0141 331 5150 Company Secretary/Finance Manager

SCOTSURE WARRANTY: Lynn Greig – 07597 581335 Scotsure Account Manager, Scotland Claims and Enquiries – 0131 331 5512

EVENTS & MEDIA ENQUIRIES: Karen Thompson – 07922 079889 Events & Media Manager

ADVERTISING/SPONSORSHIP ENQUIRIES: Wendy Hennessy – 07974 380140

Non-member price

- £60.00 (plus vat)

This bulletin is kindly supported by

Scottish Motor Trade Association Ltd., Palmerston House, 10 The Loan, South Queensferry EH30 9NS SMTA Ltd Tel: 0131 331 5510

www.smta.co.uk

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Disclaimer: Whilst we endeavour to ensure the information in this bulletin is up to date and correct, we make no representations of any kind, express or implied, about the completeness, accuracy, reliability and suitability. Any reliance you place on such information is therefore strictly at your own risk.