SMTA Monthly Bulletin July 2022

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

JULY 2022

Headline Sponsor

FEMALES IN FOCUS EVENT Tori-Leigh Adams

GRAND CENTRAL HOTEL, GLASGOW FRIDAY 19TH AUGUST 2022

GUEST PANELLIST ANNOUNCEMENT! Tori-Leigh Adams is a 19 Year old female striving to make a difference In the Automotive Industry. Tori-Leigh has now gained her Level 3 in Vehicle Maintenance and Repair and is passionate about raising awareness for females in the motor trade.

Tori-Leigh wasn’t 100 percent sure which career path she wanted to take before applying to West Lothian College. She tapped into her love of stock car racing and decided to try and turn an interest into a career by applying for the Light Vehicle Maintenance course.

Heather Dewar

Louise Aitken-Walker

Cat Treanor

This years ‘Females in Focus’ event will be hosted by Heather Dewar, a BBC sports journalist, podcast host, television and radio presenter. With more than 14 years of experience working in television and radio, she will be facilitating discussions with our panel of guest speakers which includes World Rally Champion; Louise Aitken-Walker and UK Business Development Manager; Cat Treanor.

Table of 8 - £400 plus VAT (individual tickets £50 plus VAT)

TO BOOK PLEASE EMAIL:

karen.thompson@smta.co.uk The approved insurance broker to the Scottish Motor Trade Association

USED CAR PRICES FALL AS DEMAND COOLS IN JUNE Used car retail prices continued to fall in June, according to Indicata. Its Market Watch insights report shows prices dipped by 2.6% last month, the sixth consecutive monthly fall in 2022.

Used car sales fell by 13.3% in June, according

between January and June as the market

with a stock turn of 11, compared with 8.7 for

to Inidcata, as the used market continues

continues to correct itself from the historic

hybrids, the second fastest-selling powertrain.

to cool down due to reduced economic

32.2% rise in prices between January 2021 and

confidence. Stock levels also fell by 4.4% from

December 2021.

June into July.

Wholesale used car values bucked the trend

volume of used EVs remains low but the high

“The market continues to correct itself in

in June, with a rise of 8.8% month-on-month

demand shows the increased acceptance of

2022, but with stocks low and demand still

at BCA auctions.

zero emission used cars by retail drivers.

consistent we do not predict a market crash.

Evidence that demand continues to outpace

The UK’s fastest-selling used cars in June were

With new car supply challenges likely to

supply – despite the UK’s cost of living crisis –

the Kia Niro, Toyota CH-R, and the Hyundai

continue now until 2024 we believe prices will

was highlighted by an average £745 uptick in

IONIQ, while the top-selling models were the

settle down over the summer and may rise

values as the average used car sold for £9,196

Ford Fiesta, VW Golf and Nissan Qashqai.

again in the autumn when used car demand

last month.

looks set to improve,” explained Jon Mitchell (pictured), Indicata UK’s group sales director.

UK used prices have fallen by a total of 7.2%

EV sales in June were 23% higher than in May, which was already a record month, while the

The main bright spark for the market was the continued rise in popularity of used EVs as

Read the full article at AM Online

they became June’s fastest-selling powertrain

ANNUAL DINNER & AWARDS 2022 Headline Sponsor

HILTON HOTEL GLASGOW THURSDAY 27TH OCTOBER 2022 BOOKING TICKETS

Our guest speaker is none other than the incredible Ann Daniels.

A record-breaking polar explorer and a renowned international speaker, Ann Daniels is the first woman in history, along with expedition teammate Caroline Hamilton, to reach the North and South Poles as part of all women teams.

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Table of 8 – £999 plus VAT Individual Tickets – £130 plus VAT For further details and to book please contact Karen Thompson on:

07922 079889 karen.thompson@smta.co.uk

COX AUTOMOTIVE DOWNGRADES FORECASTS AFTER RECOGNISING ‘REALITY’ OF CAR MARKET Cox Automotive predicts that the UK’s new car market will end 2022 on 1.62 million registrations after downgrading its forecasts to acknowledge the “reality” of the sector’s global supply crisis. The automotive services provider now expects a 1.4% decrease yearon-year, which would leave registrations 29.7% down compared to the 2000 to 2019 average and 29.7% down on pre-COVID 2019 after downgrading its previous forecast by 11.3%.

A worst-case scenario for the year would see by 1.43m registrations, it said, representing a 12.9% decrease year-on-year to leave the sector 37.9% down on the 2000 to 2019 average and 37.9% down compared to 2019.

Despite the contracting market outlook Philip Nothard, Cox Automotive’s insight and strategy director, suggested that the company’s revised forecasts reflected “a resilient market”. We’ve been consistently commenting on the sector's headwinds for some time, and retailers and manufacturers respond resiliently,” he said. “However, we must be realistic about the reality of the situation; new car production issues continue to affect most manufacturers, and there is a considerable shortfall in vehicles entering

the market.” Nothard added: “Although we believe output will increase as time goes on, this will certainly not make up for lost vehicles. Therefore, it remains unclear whether we will ever reach the circa 90m vehicles produced yearly again.”

Earlier this month AM reported how Kia, MG, Hyundai and Dacia were among the car brands defying the automotive sector’s supply issues to swell sales in H1 2022.

Supplies remain a key factor, though, with MG among the carmakers suspending the sale of certain models as it struggles to meet demand.

Read the full article at AM Online

THE MAJORITY OF CAR OWNERS STILL BUY THEIR CAR FROM A SHOWROOM The majority of car owners (55%) still buy their car from a car showroom, increasing to 64% of over 55s, compared to just 38% of under 34s.

The survey of 2,000 UK drivers, commissioned by InsuretheGap.com, found that over a third (36%) buy from showrooms (men 38% and women 34%) so they can part-exchange their vehicle, get a warranty (33%) and because they feel they have better consumer rights (27%).

However, one in five (21%) find negotiating in a car showroom stressful (men 18% and women 22%), and one in ten (10%) prefer to

buy cars online or privately (18% of under 34s) with 14% saying they can get a better deal not buying from a car showroom (18% of under 34s).

The remaining buyers purchase cars from the website of a car manufacturer or car dealership (18%), a private seller (11%), car supermarkets in person (6%), online retailers e.g., Cazoo, Cinch (3%), online marketplace e.g., ebay, gumtree (3%) and ‘other’ including

gifts from family members (4%).

One in twenty drivers (7%) are happy to buy a car online without seeing it, rising to 10% of under 55s, but only 5% of over 55s; and one in ten (11%) would also buy a car without a test drive (men 13% and women 10%).ks.

Read the full article at Motortrader

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LEGAL UPDATES

PURCHASE BY INSPECTION The lack of air conditioning did not inhibit the performance of the vehicle.

Lawgistics had a recent case go to a court hearing and was successful in defending it on behalf of one of their members.

The customer bought a VW Transporter from our member for £20,000. The advert was created by inputting the registration number into a website and all of the information about the vehicle was pulled through from a database into the advert that appeared.

Their member did not notice the advert stated the vehicle had air conditioning, when in fact, it did not. It did not even have an air conditioning system button.

The customer viewed the vehicle on three occasions, including a lengthy test drive when temperatures were in the 20 degrees range, and at no point noticed there was no air conditioning. The customer collected the vehicle at a time when temperatures were averaging 27 degrees, and yet it was two weeks before he notified our member that there was no air conditioning system.

Their member immediately offered an apology for not noticing the missing air conditioning, and to refund the cost of the vehicle in full, but the customer decided that he wanted a retrofit air conditioning system

at a cost of £2,200. Their member was sensitive to the customer’s issues but was not willing to fund the retrofitting of an air condition system as it was disproportionate to do so plus the dangers of inherent future issues that might arise if the system was not working correctly. A full refund was offered on numerous occasions, but the customer was fixated on the air conditioning being installed and issued proceedings for the cost of the retrofitting.

At trial, their member’s barrister, fully briefed

by Lawgistics, systematically stripped away the customer’s arguments until the judge could only find that the customer had fully inspected the vehicle, on more than one occasion, and had never asked about air conditioning, so therefore in accordance with section 9(4)(b) of the Consumer Rights Act: (4) The term mentioned in subsection (1) does not cover anything which makes the quality of the goods unsatisfactory— (b) where the consumer examines the goods before the contract is made, which that examination ought to reveal, or The inspection by the customer should have

identified the lack of air conditioning, as this was deemed by the court to be a purchase by inspection. The lack of air conditioning did not inhibit the performance of the vehicle, and as the Claimant did not ask about air conditioning, or notice for two weeks that there wasn’t an air conditioning facility, this shows that it was not an important factor in the purchase.

The judge agreed with us that a retrofit of an air conditioning system was disproportionate given that it would make very little difference to the value of the vehicle and would have cost more than 10% of the sale price.

The judge gave the Claimant the option of returning the vehicle to our member for a refund, less a deduction of usage of 35p per mile for the 4,500 miles travelled, or he could keep the vehicle. He chose to keep the vehicle and no costs or legal fees were awarded.

The customer went from the offer of a full refund so he could purchase a different van with air conditioning, to keeping the van which would be worth less as a part exchange or as a sale than he originally paid for it.

WHAT’S YOUR REPRESENTATIVE APR? If your motor finance provider suggests using 9.9% APR as a representative APR, you need to ensure that 51% of your finance deals are at 9.9% Lawgistics wrote a legal update back in October 2021 – Communication is key – especially when dealing with the regulator!

Their client responded to the FCA’s request for copies of their loan agreements for the last six months and the response that came back from the regulator should be a word of warning to all our clients. And once again, it is clear that you cannot rely on your motor finance provider to help you out!

there was anything untoward with the finance examples on their website. Our client had been using 9.9% APR as their representative example for their finance quotes, however after review by the FCA, it was clear that 9.9% APR was not their representative example.

The FCA had concerns with the representative APR that was being advertised on our client’s website and the possible noncompliance with the FCA’s Financial Promotions rules relating to Representative APRs.

The FCA stated: “Our financial promotions rules apply to both lenders and brokers therefore your firm is responsible for its own financial promotions and how it calculates the Representative APR. We expect firms to use data from their own customers and identify the APR received. Following this, the data can then be used to establish what the Representative APR should be before advertising to the public on a website.”

Their client thought that their motor finance provider would give them the “heads up” if

As expected, the FCA did not inform their client how this could be done, they just sent a

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link to the FCA handbook relating to the rules and guidance on representative APR, which for your information are CONC 3.5.5R and CONC 3.5.6G. So, even if your motor finance provider suggests using 9.9% APR as a representative APR, you need to ensure that 51% of your finance deals are at 9.9%. If not, you will need to amend your website to the appropriate representative APR. This could be particularly pertinent leading into the New Year with the Bank of England’s announcement on 17 December that they are raising the interest rate to 0.25%, the first rise in three years. This will possibly force the finance providers to increase their rates which will then have a knock-on effect to the representative APR that are being advertised on your websites.

SEPTEMBER MOT FIGURES POST TOWN

SUM OF FORECAST TO EXPIRE

SUM OF EXPIRED TYPICAL

SUM OF CHANGE FROM TYPICAL

CHANGE FROM TYPICAL [%]

ABERDEEN

26866

25172

1694

6.73%

DUMFRIES

8256

7500

756

10.08%

DUNDEE

14348

12642

1706

13.49%

EDINBURGH

42623

39303

3320

8.45%

FALKIRK

15313

13970

1343

9.61%

GLASGOW

53076

50072

3004

6.00%

HEBRIDES

1452

1294

158

12.21%

INVERNESS

14888

13364

1524

11.40%

KILMARNOCK

18712

16781

1931

11.51%

KIRKCALDY

19094

17595

1499

8.52%

KIRKWALL

2829

2556

273

10.68%

LERWICK

1226

1194

32

2.68%

MOTHERWELL

17174

15750

1424

9.04%

PAISLEY

15996

14797

1199

8.10%

PERTH

10233

9001

1232

13.69%

TWEEDDALE

6433

5948

485

8.15%

TOTAL

268519

246939

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

TRADE SNIPPETS EV battery health ‘must’ join mileage and age as key used car valuation metric Article courtesy of AM Online

Banks under fire for not treating small businesses fairly on loans Article courtesy of Motortrader

Jobs axe hovers over 8,000 Ford workers as Blue Oval looks to cut costs and focus on EVs Article courtesy of CarDealer Magazine

Used-car dealer Cazoo to slash jobs and cut costs in huge money-saving initiative Article courtesy of CarDealer Magazine

Used diesel volumes reach record low as EV prices soar Article courtesy of AM Online

Fleets unhappy with rising car prices and discount cuts Article courtesy of Motortrader

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LATEST CAR FIGURES

FUEL TYPE

REGISTRATIONS BY REGION

JUNE 2022

YEAR TO DATE Petrol

46,887

Diesel

8,007

Total Scotland

12,523 564

10,213

Petrol/Electric

Grampian

6,404

Electric

1,105 Central

119

Diesel/Electric

=

Summary

1,481

71,831

124

802,079 4,00

7,981 5,664

Ford

5,261

Volkswagen

4,839

6.74%

Kia

4,707

6.55%

BMW

3,996

5.56%

Toyota

3,989

5.55%

Mercedes Hyundai

3,334 3,224 2,834

11.11%

7.89%

7.32%

Audi

Peugeot

255

8,000

Vauxhall

4.64% 4.49%

3.95%

TOP SELLING

MARQUES YTD 2022 6

820

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

0

Fife

Lothian Borders

Dumfries & Galloway

2,250

4,500

4,150

Vauxhall Corsa

2,005

Ford Puma Mini mini

1,686

Vauxhall Mokka

1,685

Volkswagen Golf

Tayside

6.491

Strathclyde

TOTAL UK CAR MARKET:

0

1023

660

201

Petrol/LPG

Highlands

1,306

Peugeot 208

1,197

Nissan Qashqai

1,174

Kia Sportage

1,165

Vxhll Crossland

1,136

Dacia Sandero

1,130

YEAR TO DATE

TOP 10 CARS

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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

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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.