This week we have included a summary of our response to the FOS consultation on fees. We have strongly recommended that FOS should review how they levy fees and make the biggest users pay for it, as well as consider charging claims management companies for cases where they have no valid basis for a claim.
Also this week the NAMA Car Data Report has been released which shows that the average value of vehicles sold at auction decreased, which is generally due to the large number of older used cars going through auction.
BIS GUIDANCE – MEASURES TO SUPPORT SMALL & MEDIUM SIZED ENTERPRISE GROWTH
EUROPEAN PASSENGER CAR REGISTRATIONS
NFDA CONGRATULATES AM AWARD WINNERS
WHAT CAR? INTELLIGENCE REPORT
NEWS FROM OVERSEAS
NFDA RESPONDS TO FOS FEES CONSULTATION Plans and Budgets 2013-2014: Financial Ombudsman Service This week the NFDA has submitted a response to the Financial Ombudsman Service’s (FOS) annual plans and budgets consultation for 2013/2014. The paper sets out the ways in which the FOS will tackle:- demand for its service and how this will be paid for, future developments and its general budgetary considerations for the coming year. As the FOS is a demand led service all demand predictions will be based on the volume of cases received throughout 2012 and predictions for likely growth in demand for the service.
The consultation is looking at the plans and budgets for 2013/2014 and the NFDA feel this is an important paper to respond to due to a number of key reasons.
The NFDA has submitted a response that reflects the growing concerns of many of our members. The first of these concerns is surrounding the time it takes to process claims, particular PPI ones. Throughout our response, we have clearly stated that the process of handling complaints is unnecessary and detrimentally lengthy. A further concern around the complaints process is the supplementary case fee for PPI claims which is levied at the time of submitting a complaint to the FOS, rather than after the complaint has been settled as is the case with the standard fee. This is problematic when businesses can be waiting up to 12 months (or more) for cases to be settled; something we have expressly stated in our response. In addition to this we have also suggested to the FOS that the cost of claims where it is found that a claims management company has brought a case with no basis, should be levied on the CMC. This is something that the FOS is very against, however we do not think it is sustainable for businesses to continually pick up the cost of claims where there has been no fault by them.
The NFDA have also stated concerns with the FOS’s proposal to increase staff levels who will be assessing cases. Whilst we are encouraged that the FOS is attempting to reduce the delay in processing cases, we feel that an essential problem has been missed. We have stated that increasing staff levels will not alleviate the backlog of cases unless training of staff improves. Currently we receive a high number of concerns from members who find that their cases are handled by inexperienced staff. We have placed great emphasis on this point and expanded upon our concern that simply hiring more staff may only increase problems if training is not improved.
Finally the NFDA has vigorously raised concerns surrounding the disproportionate methods in which the charging structure for claims is levied upon businesses. It has been stated, that it is not proportionate for all users of the FOS to cover the costs of additional FOS resources because of claims created by a minority. The NFDA is very aware that the majority of successful claims brought to the FOS are committed by a minority of perpetrators, generally the large banks. Therefore, we have responded to the paper stating that this is a problem that urgently needs addressing.
For a full copy of our submission please use the link provided below, or for any questions or queries, contact Louise Wallis at email@example.com
OFT ANNOUNCEMENT – MERCEDES-BENZ AND DEALERS FINED The Office of Fair Trading (OFT) has imposed fines totalling £2.6 million on Mercedes-Benz and three of its commercial vehicle dealers.
The fines punish a series of competition law infringements concerning the distribution of Mercedes-Benz commercial vehicles between 2008 and 2010. The infringements include price fixing, market sharing and the exchange of competitively sensitive information.
According to the OFT, Mercedes-Benz was implicated on the basis that it helped to facilitate or consolidate the anti-competitive arrangements amongst the relevant dealers.
The fines include a 15 per cent reduction, which was agreed by the OFT in return for the companies' admissions and agreement to a streamlined administrative procedure, which allowed the case to be concluded more quickly and efficiently than would otherwise have been the case.
Another commercial vehicle dealer implicated in the investigation, also admitted various infringements; however, it should avoid a fine as a result of the OFT’s leniency policy. The leniency policy offers immunity to companies that are the first to blow the whistle in respect of their participation in a cartel (or, as in this case, to come forward and admit participation once an investigation has already started). Applicants are also required to provide valuable evidence to support the OFT’s case.
This commercial vehicle dealer will have to continue to cooperate with the OFT in respect of the investigation in order to preserve its immunity from fines, although it could still be exposed to private damages actions from those harmed by its anti-competitive conduct.
According to competition law specialist, Miles Trower of national firm TLT LLP, the case underlines the need for all businesses in the sector – large and small - and their directors to have working understanding of competition law and a top-down commitment to compliance:
“Rooting out and punishing cartels is top of the OFT’s agenda. Any sector which has undergone an investigation is also likely to stay under the microscope for some time. It is therefore vital that other businesses remain vigilant and assess whether their own processes protect them adequately. It’s not just about being competition law compliant, it’s about being able to show that you are. We offer a range of straightforward training options and guidelines in this regard, but the key element in any successful compliance policy is getting proper buy-in from management.” More generally, aside from prospect of prison for individuals implicated in the most serious cartels, the OFT has also recently increased the potential level of fines on companies. While still subject to an overall cap of 10% of worldwide group turnover, the OFT has increased the starting point for fines (which can be adjusted upwards or downwards depending on aggravating or mitigating factors) to 30% of the business’ turnover in the market in which the infringement took place (in the year before the infringement ended).
If this were not enough, directors of companies found guilty of serious competition law infringements can be disqualified for up 15 years where it is found that they failed to take adequate precautions to guard against such offences (even if they themselves are not implicated directly). The OFT has previously affirmed its intent to make full use of the director disqualification option in future.
For more information, please contact Miles Trower on 0117 917 7652 or miles.trower@TLTsolicitors.com.
A link to a previous TLT bulletin on the investigation is attached below: http://www.tltsolicitors.com/about_tlt/latest_views1/oft_pursues_mercedes_benz_commercial_vehicle_investigation
NAMA CAR DATA REPORT
The National Association of Motor Auctions (NAMA) published its monthly market report today for January.
The report shows that during January the average values of used cars sold at auction across the board decreased from £5,402 to £4,856, equivalent to a 10.7% reduction between December and January. This can largely be attributed to the high volume of older cars sold at auction during January having a negative impact on the average price.
In fact sales activity increased substantially in January, particularly in the dealer part exchange sector. Although this is in line with normal seasonal changes the increase was much larger than in previous years.
However the average price of vehicles sold was down across all three sectors, although a low supply of 2.5 – 4.5 year old vehicles helped to stabilise the fleet sector which saw a price decline of only 0.6%.
Price changes January compared to December, by customer type
Prices in the manufacturer/rental and dealer part exchange sectors fell whilst the shortage of good ex-fleet stock kept prices stable in that sector. The larger decline experienced in the dealer part exchange sector is less surprising and in line with seasonal changes. The 4% growth achieved in December in the dealer part exchange sector, which resulted in it unusually outpacing the fleet sector, can therefore be concluded as a ‘one-off’.
However when comparing the price movement versus January 2012, the fleet sector showed an increase of 12% – and that the average price in vehicles in the dealer sector also showed double-digit growth.
Tony Gannon, NAMA Executive Committee Member said "NAMA believe that the current pricing levels are likely to be maintained, although they will be subject to some short-term volatility.
“There continues to be strong competition amongst buyers for the most desirable vehicles and this shows no sign of waning. The low supply of three year old vehicles as a consequence of poor new car sales in 2009/2010 will continue during 2013. This is likely to result in the continued buoyancy of prices in the fleet sector due to the limited amount of quality vehicles it has to offer.”
USED CAR PRICES FELL BY 2.4% IN 2012, SAYS AUTO TRADER
Average used car prices fell by 2.4% in 2012 down £217 to £8,806, according to the latest Auto Trader Retail Price Index.
This follows a fall in used car prices in 2011 of 1.5% (£136). In Q4 2012, the average price of £8,912 was up 1.7% (£148) on Q4 2011 and at the highest level since Q2 2011
The biggest falls in average asking prices in 2012, when compared with 2011, occurred in the South East, down 4.7% (to £9,153); the West Midlands, down 4.6% (to £8,242) and London down 4.1% (to £9,124).
The highest average asking prices, at £9,666 and £9,646, were to be found in Scotland and Northern Ireland respectively.
Examples of falls in average prices in vehicle segments in 2012, when compared with 2011, include compact MPVs, down 3.0% (to £6,383); premium lower medium, down 4.9% (to £10,658); premium superminis, down 5.6% (to £8,250) and convertibles, down 9.8% (to £6,375).
Prices of small cars and superminis experienced very slight increases and the only significant increase was for coupes, up 7.2% (to £8,464).
Meanwhile petrol engined cars fell 5.2% (to £6,889) with diesels performing slightly better, down 4.5% (to £11,386).
BIS GUIDANCE - SME ACCESS TO FINANCE SCHEMES: MEASURES TO SUPPORT SMALL AND MEDIUM-SIZED ENTERPRISE GROWTH
Guide to the main forms of public support and advice available to businesses.
Guide for people who work in or with government who have frequent contact with small and medium-sized enterprises (SMEs). It:
summarises the main forms of public support and advice available to businesses
explains who can access which schemes
sets out where further information can be found
It covers schemes and programmes for small firms relating to loans, investment, contracts, business advice, and other financial support.
EUROPEAN PASSENGER CARREGISTRATIONS
In January, demand for new cars declined by 8.7% in the EU. New registrations amounted to 885,159 units, reaching a historic low recorded for a month of January, since the start of the series in 1990.
Looking at the major markets, only the UK posted growth (+11.5%), while downturn prevailed in Germany (-8.6%), Spain (-9.6%), France (-15.1%) and Italy (-17.6%). In absolute figures, Germany remained the largest market with 192,090 new registrations, followed by the UK (143,643 units), France (124,798) and Italy (113,525). Spain registered 49,671 new cars, which was slightly less than Belgium (50,684 units).
CONGRATULATIONS TO NFDA MEMBERS ON THEIR AM AWARDS The NFDA team would like to congratulate the following NFDA members who received an award at this week’s AM Awards Dinner:
Hall of Fame: Ken Savage, Perrys
Retailer of the Year: Arnold Clark Automobiles
Tyre Retailer of the Year: Arnold Clark Automobiles
Best Used Car Performance: Milcars Mazda
Excellence in Aftersales: Milcars Mazda
Excellence in Business: Cotswold BMW, Cheltenham
Dealer Principal/General Manager of the Year: Chris Eccles, Bowker BMW
Best Retail Group (more than 10 sites): Swansway Garages
WHAT CAR? INTELLIGENCE REPORT This month the What Car? Intelligence newsletter includes:
New car sales – a fast start to 2013
Model-segment analysis – family cars and MPVs
Research – views on self-driving cars
True MPG – new data reveals the most searched-for cars from our True MPG analysis
For a full copy of the report please email your request to firstname.lastname@example.org
NEWS DIGEST PPI-claims firm ‘rang emergency lift number’ – The Boss of one of Britain’s leading challenger banks has warned of the increasingly ridiculous steps that claims management companies are taking to find customers allegedly mis-sold financial products. Paul Lynam, chief executive of Secure Trust Bank, said one firm has even contacted the emergency telephone number in the lift in his business’s office, saying it was eligible for compensation. He said that, despite paying out less than £10,000 in compensation to customers, the cost of processing claims had cost the lender “well over £1m”.
Source: FT Ducati goes back to the drawing board with an app that lets you build your own superbike – The modern Ducati superbike is a triumph of technology. The 1199 Panigale contains five computers running software that revolutionises safety for speedsters by setting the traction control, adjusting the suspension and supporting the braking system. The bike even has a USB slot so a rider can download their speed around a circuit.
Source: The Times 4x4’s are a fast sell - Glass’s has published a league table of the fastest selling used cars, and 4x4s were by far and away the most popular cars on Britain’s forecourts in January. This news comes as no surprise when you consider the recent cold spell that has been sweeping the country. The league provides insight gleaned from GlassNet Radar, the company’s spot pricing system that provides up-to-the-minute pricing around the country. It is based around 300 vehicle models, and looks at average selling times for used cars, or to be more specific, the number of days cars tend to stay on the forecourt.
Source: bodyshopmag.com Ferrari drives to its best-ever year – Luxury carmaker Ferrari 2012 was the best year in its 66-year history. On virtually every measure, the iconic car marquee, which is owned by Fiat, beat its previous best year of 2008 despite the fact that economic conditions in most parts of the world were vastly worse last year.
Source: Independent Ford launches new LCV aftersales agreement - Ford has launched a new commercial vehicle service level agreement which will aim to give customers a 24 hour turnaround on aftersales work.
Source: AM-online Government cash to boost installation of electric charging points -
The Government has announced it will fund 75% of the cost of installing an electric vehicle charging point at any home address.
Source: AM On-line Electric car use wins cash boost - Electric car users installing a charging point at their homes will have 75 per cent of the cost paid by the government under plans to boost low-carbon motoring. The offer, which means each householder could contrubute as £250 to the costm is part of a new £37m government investment in electric vehicle-charging infrastructure, announced by Patrick McLoughlin, the transport secretary, during a visit to Sunderland yesterday.
Source: Financial Times Retailers set to call for freeze on business rates - Retailers are calling for the government to freeze business rates in April, citing a £20bn rise in their costs over the past seven years. The British Retail Consortium, the trade bosy for store groups, will say today the industry’s costs of doing business have risen by £20bn – 21 per cent – since 2006 to £116bn, with centrally driven expenses, such as business rates, rising the most rapidly.
Source: Financial Times
NEWS FROM OVERSEAS A Look at the Dealership of 2025
What will the ideal new-car dealership of 2025 look like and how will it operate? Much different from the dealership of today, according to the National Automobile Dealers Association's phase two facility study. The report says the ideal store of the future will sell more vehicles from the same-sized showroom -- a generic box that can be adapted at minimal expense to changing manufacturer standards, maintain a satellite service centre and downtown demonstrator outlet to give customers more choice in how to shop for and repair their vehicles, move support functions off-site to lower-cost property. Study author Glenn Mercer and NADA leaders say the change is necessary. Dealerships built today cost more than they're worth and can't be easily modified when automakers dictate new designs. Dealers and manufacturers must be more creative and flexible with their approach to facility projects, particularly as the cost of acquiring land and construction soars.
Source: Automotive News
DIARY DATES TUESDAY 5 MARCH – NFDA SOUTHERN DEALER FORUM – HILTON, COBHAM