ICDP's blog

Writing this after a four day holiday weekend in the UK, when I had the chance to more or less put work to one side and do other things, it would be easy to start thinking about the options of everyday being a holiday and retiring or at least slowing down on the work front.

I have long been enthusiastic for an automotive business model based on usage rather than ownership, primarily coming from the viewpoint of the potential to maximise the profits derived from a car over its lifetime.

The news last week that an agreement had been reached between the European Commission, Germany and other interested parties who had raised last minute protests about the ICE ban from 2035, might be interpreted as a U-turn. 

As expected the deal was finalised last week for the acquisition of UK based dealer group Jardine Motors by Lithia of the US.  It is anticipated that the coming months will see more activity by Lithia as they seek to expand their UK footprint from the upper premium focus that Jardine currently has.

The last few days have been busy for ICDP as we prepare for our spring members meeting in Berlin this week.  At this point in the year we are wrapping up a number of research streams before launching out with the new programme activity starting in April.  The spring meeting is therefore a ‘best of the best’ recap and an opportunity to look back at what has emerged over the last 12 months, some of which we anticipated, some of which is new or at least of a different magnitude.

Before Christmas we saw headlines from around the world as Tesla cut prices dramatically in order to stimulate sales before the year end.  This achieved the desired result for Tesla of getting close to their previously declared shipment target for the quarter, but also attracted negative headlines from customers who had recently purchased at the original price and from those in the motor trade who had used Teslas in inventory which now had to be written down in value.

The title of my blog is not intended to suggest that there is anything about Chinese cars that you need to brace yourself for in terms of the driving or ownership experience.  On the contrary the quality and general competitiveness of cars coming from the major Chinese manufacturers now appear to be on a par with European volume brands.

I do try to keep the topics of my blogs varied, covering the whole spectrum of ICDP research and the various conversations that I have around not only sales but also aftersales and other related areas such as mobility.

Following on from the news a couple weeks ago that the second largest dealer group in the US, Lithia Motors, was in discussions to acquire the UK group Jardine Motors, statutory filings revealed that TDR Capital, directly and through subsidiaries, had acquired over 3% of #4 UK dealer group Vertu.

I had a sense of déjà vu reading an article in Autocar magazine last week by Hilton Holloway (unfortunately no online link available) describing a concept that would allow an ICE car to be repetitively leased and refurbished by the manufacturer with a planned life cycle of up to 25 years.

I struggled a little bit this week to pick the topic for the blog.  There are some obvious options around more restructuring at Cazoo and more delays to agency rollouts in Europe.  It's also interesting to see a change in the arrangements between Renault and Nissan as yet another illustration of how the globalisation of the last 30 years seems to be reversing.

As a child I went to Sunday School and recall to this day being told the cautionary tale from the Bible of the foolish man who built his house on the sand.  The other half of the tale said that the wise man would build his house on rock.

We all know that the Tesla roadster which Elon Musk fired into space in 2018 will at some point come back through the atmosphere and crash and burn.  However that is estimated to happen in millions of years whereas investors and the automotive industry at large are much more interested in what's going to happen to Tesla as a company over the next two or three years.

As a little bit of fun before the holiday break I asked readers of this blog to consider where they would invest their own money if you were fortunate enough to win the euro millions and had the odd €200 million sitting in the bank.

It’s been an interesting year – to put it mildly, and most of us will be looking forward to a few days away from business life.  Rather than worry too much about the real world, and all the challenges that brings, I invite you to indulge in some festive fantasy… 

A busy week in the run-up to the holiday period, so my blog is a little later than usual.  However, there was no shortage of topics that caught my attention over the last several days.  The one that stood out however was around new car pricing.

BMW announced last week that they intend to make their trend research available to all. Their focus mainly relates to new technologies that will ultimately find their way into products in some form, but includes areas like connectivity and sustainability that will certainly also have an influence on those of who are more focused on the distribution sector.

In the last few days we have heard of delays to a number of the planned implementations of agency agreements in Europe.

Last week, the UK Government announced that battery electric cars would be subject from 2025 to the annual road tax from which they were previously exempt. The amounts involved are not huge in the context of the purchase price or annual operating costs for a car - £165 for cars with a list price under £40,000 and £355 for more expensive cars.