Your weekly guide to all that’s rotten in the auto industry, plus a few good bits
More anxieties, angst and woe – termed by Unionists of a lack of democratic rights as ‘grievances’ – over the disaster that is Brexit without a plan. Investors in the car industry, it’s life blood, are heading for the hills. An example of the rising panic is the value of Lookers’ Group car market halved since the vote. Hedge funds scent blood in the water and are avoiding investing tax evading cash in car dealers.
“All the Mercedes we sell come in from outside,” says Lookers CEO Andy Bruce, (meaning Europe) “as do the Volkswagens and Renaults. It would be a real problem if we had to go through an onerous import process. You can imagine what Dover and various ports in northern Europe would look like. We can’t prepare for that.”
The Brexit currency shock, which pushed up grocery prices also inflated car prices and a no-deal Brexit is likely to spell yet higher prices and delays for car dealers and their clients who typically wait 12 weeks for a new car. “You can imagine it would add a huge amount of complexity – and cost – to getting the cars to customers,” adds Bruce.
The worry for franchised car dealers is the vast costs they’ve incurred encouraged by their suppliers to build space age luxurious showrooms, comfy ‘brand experiences’ where you can get a hot breakfast at a bar served by a chatty female assistant in a suit and necktie designed by a male designer, best coffee or frothy cappuccinos, watch a wide screen television, read right-wing tabloid newspapers, a potted plant not often watered on your table, and use scrupulously clean toilets while you wait two hours to hear your car has failed its MOT because a tyre is worn. (As I did yesterday.) Those shrines to the automobile push up dealer’s liabilities and lower the discounts they can offer you. Now Brexit has thrown all their profit level certainties up in the air.
The one I attended yesterday, Mercedes, guardian of Smart cars, had me listen to an Aberdonian farmer point out which big flashy models in the showroom he owned, emphasising the Smart he was waiting for was actually for his wife to drive. There’s nothing more amusingly provincial than an Aberdonian farmer telling you all about his success in life. “It’s yon SUV ower there, ye ken, no the wee yin, the big yin wi’ a’ the trimmin’s. Great cor, naithin’ like the Smert”
Like other retailers, car dealers have adapted to the designer label existence and are paying the price. are having to adapt to an internet age. Accountant KPMG forecasts that up to “half the UK’s 4,200 dealerships could close by 2025”. Vauxhall, in the advert illustrated above, a large swathe of their UK showrooms.
“People used to drive round dealerships, do test drives and haggle over part-exchange, but all that happens online now,” says Bruce. “The average number of visits per sale is down from four or five to 1.5.” By next year, Bruce plans for shoppers to buy a car from Lookers’ website and have it dropped to their door without setting foot in a showroom.
Bruce’s final words sound prophetic: “Dealerships will never become extinct. You can’t buy a car from Amazon. If one of the car manufacturers did decide to go through Amazon, they would be taking a huge risk.”
Aye, well, I’m sure travel agents, record shops, insurance brokers and banks used to think exactly that. And where are they now?
GROUSEY’S FOOTWELL FINDS
I’m beginning to get irked by two annoying driver habits. The first is the sons of bitches who turn off a main road into the one your waiting in to exit, and cut the corner at speed in one move, scraping past millimetres from your car’s nose. They refuse to slow down, or expect anybody to be waiting at the double hatched line. The other is those who drive on their brakes. You’re waiting in line at traffic lights and they zoom up your rear hitting the brakes a yard behind your car. They’re the same who inch forward when you inch forward in your desperate attempt to keep a safe distance from the sods.
VW Camper van & Beetle
Volkswagen, permanently in the doldrums after the Dieselgate scandal, fined billions of dollars so far, and still shell-shocked after a top executive was charged, are doing their best to keep VW fans distracted. After shutting down production on the Beetle they’re considering a new version that’s electric. Where they will manage to store enough battery power to give it a decent mileage is another matter. VW also announced a new campervan so tall you can stand up in it. It will likely have a wet-room shower-bathroom, in addition to berths for two adults and two children. A small integrated kitchen incorporates a sink, gas hob and two fridges. A confession: when a poverty-stricken student looking for work in London I lived in one that sat at the back of a large public garage. Nobody knew I was there. I entered at midnight and left at 7am.
Range Rover goes electric
Engineers and designers of the high-end go anywhere in Chelsea Range Rover have a problem. The company has instructed them to create an all-electric version. David Bache’s simple, original 1970 two-door, hose down interior Range Rover is now one of the world’s most expensive SUVs. (Early ones can also fetch tens of thousands.) But how to keep its status, structural rigidity, noise dampening qualities, and speed, plus ground clearance, is a serious challenge to engineers. Will its dimensions be even longer than today’s silly excess, or shorter without a thumping great transmission tunnel down its centre? Do I care? Not really. The current model is a long way away from its practical and lightweight original. I’d buy a second-hand Skoda Yeti, a vehicle just as good without the costs or glares from pedestrians.