RE: Can Riley revive MG and TVR?
Discussion
puffpuff said:
Yes, that would be it, the Riley Brooklands.
Lovely Car, and I like the Imp/MPH has a very Zagato/Alfa like feel. Although they are too small!
No, no, no, unless any revival car can be raced at Brooklands (and yes I was at the VSCC driving tests in January) any revival car shouldn't start by using that name; Silverstone, Millbrook or even Bedford Autodrome would make more sense these days. (Yes there was a Healey Silvestone and Bedford Trucks). Even our A7 gets up the test hill. Trying to pinch the cache of what would be an unrelated car isn't really on. I can also see M-B giving trouble.
I'd have thought that Monaco or Biarritz would be better in that one could still try to beat the Blue Train (or TGV) to those places.
we make far too many models of course So there's a whole Zoo to choose from.
900T-R said:
I don't know where you have those figures from, but even BMWs margins on CARS are nowhere near that.
BMWs annual report, 2005. 900T-R said:
Apart from that, you're missing the point entirely. Even if you're making a handy profit, you're not in business not to maximise profits. And even if the manufacturer can get away with overproduction/not producing the right car at the right time for the right market, it's only because they have a stranglehold on their dealer franchises.
No, you are missing my point. BMW design car, work out their margins to meet their objectives, add £5k, set retail price. They then stock heavily and offer £5k discounts to make it appear to the customer that they are getting a fantastic discount because the "dealer has a car he needs to shift that noone wants". Sure the dealers may be the pawns in the game, but this game is played out millions of times per day across every known retail market.
900T-R said:
The scenario is the same everywhere: you're a dealer, having invested lots of money in 'dealer standards (glass building on A1 location near motorway, £30,000 for approved furniture, £40,000 for approved signposting, approved bog rolls that are three times as expensive as the ones you get from Tescos around the corner yadda yadda) to get/retain your franchise. One morning a trailer stops by and proceeds to offload ten new cars you haven't ordered. Oh, you've already paid for them too - they're debited from your dealer finance account the moment they got on the trailer. That's what's behind the advertisements in your local paper that start with "We've managed to secure ten XXXXs in the special limited XYZ edition especially for you." 
I take it you've owned dealerships, not just been employed by them then? How do you know that the dealership owner's aren't "in" on the game, but use stories like that to make their staff to sell harder....... Inchcape's P&L seems quite healthy at the moment with 5% nett profit margins and nearly 100% growth in the share price over the last 2 years.
J
joust said:
900T-R said:
I don't know where you have those figures from, but even BMWs margins on CARS are nowhere near that.
BMWs annual report, 2005. That's the profit on the BMW Groups complete portfolio of activities.
joust said:
No, you are missing my point. BMW design car, work out their margins to meet their objectives, add £5k, set retail price. They then stock heavily and offer £5k discounts to make it appear to the customer that they are getting a fantastic discount because the "dealer has a car he needs to shift that noone wants".
The automotive business is far too competitive for that. Price your product (list) £5K above what it realistically will fetch in the market, and you'll be losing every comparo in the car mags, see your image go down the drain, leading to having to resort to even bigger rebates. See the difference between list price and 'target price' (what they reckon you should be paying) in What Car magazine - if it's a current and well-regarded car you'll seldom see much more than a grand's difference between the two - significantly more indicates a 'sitting duck' in the market.
Trust me: no one in the business wants to sell pre-registered cars, rentals with buy-back declarations from the manufacturer, et cetera. They're last resorts to clear the lots, keep the factories humming along, make up the numbers by the end of the year so you look to be doing better than you are. The weaker the car manufacturer's market postion, the more pre-registrations, rental agreements, dealer demos. That's overproduction for you.
joust said:
Sure the dealers may be the pawns in the game, but this game is played out millions of times per day across every known retail market.
None of them peddling the second most expensive consumer good one is likely to purchase, none of them facing the same kind of development and tooling investments - a lot of them resulting from by government regulations - and ever shorter product cycles in which to claw back said investments.
joust said:
]I take it you've owned dealerships, not just been employed by them then?
I've never been employed by a dealership, thankfully. I'm an editor for an automotive industry magazine, and contributor to a global automotive remanufacturing mag within the same publishing house (and that's just my day job!).
joust said:
How do you know that the dealership owner's aren't "in" on the game, but use stories like that to make their staff to sell harder.......
Newsflash: about one in three dealerships in Western Europe is in the red, the financial position of one in five is 'acute', average return on investment is well under 1%. And that's including their other (more profitable) activities.
joust said:
Inchcape's P&L seems quite healthy at the moment with 5% nett profit margins and nearly 100% growth in the share price over the last 2 years.
That's probably because their portfolio extends beyond new car sales. The most profitable part of a dealership, by far, is the workshop. If dealers would rely on their showrooms for earning their keep, there would hardly be any franchised dealerships any more. Then there's leasing, finance, fleet services...
Edited by 900T-R on Thursday 15th March 14:35
Edited by 900T-R on Thursday 15th March 14:46
900T-R said:
joust said:
900T-R said:
I don't know where you have those figures from, but even BMWs margins on CARS are nowhere near that.
BMWs annual report, 2005. That's the profit on the BMW Groups complete portfolio of activities.
www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/investor_relations/finanzberichte/geschaeftsberichte/2006/popup/_downloads/gb2006_gesamt.pdf
pp44. ROC is highest for automobiles across the group at 21.7%. Bikes are 17.7% and financial services is a pathetic 1.4%. The group as a whole is 6.3%. Cars is by far the most profitable part of the group.
pp47. Revenues and PBIT broken down.
Automobiles: Revenue = 47.7, PBIT 3.0, R2E = 6.3%
Financial Services: Revenue = 11.0, PBIT .6, R2E = 5.4%
If you bothered to read the rest of their balance sheet you'd appreciate how silly your comments have been over the past few posts.
900T-R said:
Trust me: no one in the business wants to sell pre-registered cars, rentals with buy-back declarations from the manufacturer, et cetera. They're last resorts to clear the lots, keep the factories humming along, make up the numbers by the end of the year so you look to be doing better than you are. The weaker the car manufacturer's market postion, the more pre-registrations, rental agreements, dealer demos. That's overproduction for you.
Err - hang on. On one hand you say BMW are stupid for giving me the deal, and on the other their financial performance is stellar by any metric. 900T-R said:
I've never been employed by a dealership, thankfully. I'm an editor for an automotive industry magazine, and contributor to a global automotive remanufacturing mag within the same publishing house (and that's just my day job!).
Not a financial background then. It shows. 900T-R said:
Newsflash: about one in three dealerships in Western Europe is in the red, the financial position of one in five is 'acute', average return on investment is well under 1%. And that's including their other (more profitable) activities.
Oh please. Newsflash. One in three high street fashion retailers are in the Red.
Newsflash. One in nine telecoms providers are in the red.
Newsflash. The whole world is in the red.
That's called a capatalist market. There are good and bad companies. Doesn't mean the market is shagged.
900T-R said:
joust said:
Inchcape's P&L seems quite healthy at the moment with 5% nett profit margins and nearly 100% growth in the share price over the last 2 years.
That's probably because their portfolio extends beyond new car sales. The most profitable part of a dealership, by far, is the workshop. If dealers would rely on their showrooms for earning their keep, there would hardly be any franchised dealerships any more. Then there's leasing, finance, fleet services...
I'm bored with this. You seem to not even grasp the simple financial metrics that are publically available, and hence your arguments don't stack up with the facts. Don't try and contradict published accounts.
J
joust said:
900T-R said:
joust said:
900T-R said:
I don't know where you have those figures from, but even BMWs margins on CARS are nowhere near that.
BMWs annual report, 2005. That's the profit on the BMW Groups complete portfolio of activities.
pp47. Revenues and PBIT broken down.
Automobiles: Revenue = 47.7, PBIT 3.0, R2E = 6.3%
Financial Services: Revenue = 11.0, PBIT .6, R2E = 5.4%
How does that translate to, or support your assumption of 40% net margin on your chosen steed?
joust said:
Err - hang on. On one hand you say BMW are stupid for giving me the deal, and on the other their financial performance is stellar by any metric.
Simple logic. BMW and Porsche make money on cars. They are also among the makes registering the least number of cars to themselves. Look at who the 'kings' of pre-registrations are in a certain market at a certain time, and you'll be shown the marques that don't make any money. Look at who offer the biggest structural rebates on sticker prices: that'll be GM, Ford (USA) and Chrysler, then. Aw, not good.
joust said:
Oh please.
Newsflash. One in three high street fashion retailers are in the Red.
joust said:
Newsflash. The whole world is in the red.
Don't think so, somehow.
[quote=joust]
That's called a capatalist market. There are good and bad companies. Doesn't mean the market is shagged.
If franchised dealerships as a whole show an average ROI of just about 0.5%, I'd say this particular retail sector is pretty moribund economically. If I were an investor, I'd sooner choose a savings account...
[
Edited by 900T-R on Thursday 15th March 15:23
joust said:
900T-R said:
That's probably because their portfolio extends beyond new car sales. The most profitable part of a dealership, by far, is the workshop. If dealers would rely on their showrooms for earning their keep, there would hardly be any franchised dealerships any more. Then there's leasing, finance, fleet services...
My basic understanding of this market, from a couple of clients who own franchises, is that the new sales aspect is pretty much a lost leader, but that it is the workshop which produces the break-even revenue and the then the leasing contracts that generate really nice profits.
Certainly, one of my clients has been hugely succesful in selling leasing deals over the last couple of years and I've watched his funds go through the roof on the back of it.
Not at all a technical answer but just a first hand, if limited, understanding.
Hi 900T-R.
If, as looks increasingly likely, I will be very shortly be invalided out of the motor trade, would you be interested in having a look at/ possibly publishing a much longer and more detailed version of the concise report I put together the other day?
I know you must get this all time but I would like to think I know what I'm talking about and would like to get this out to a wider audience.
Let me know.
If, as looks increasingly likely, I will be very shortly be invalided out of the motor trade, would you be interested in having a look at/ possibly publishing a much longer and more detailed version of the concise report I put together the other day?
I know you must get this all time but I would like to think I know what I'm talking about and would like to get this out to a wider audience.
Let me know.
Just to give JonRB some more amusement 
You said "If they sold all cars at a similar discount because no one asked fot that exact car the moment it was built, they'd be bust before you could say 'Oktoberfest'." Now you say that BMW won't go bust and try to move the conversation onto Ford and GM. Could you be a bit consistent please.
If franchised dealerships as a whole show an average ROI of just about 0.5%, I'd say this particular retail sector is pretty moribund economically. If I were an investor, I'd sooner choose a savings account...
Telecoms makes -20% as a whole. My telecoms company was recently sold for a 70% premimum. Seems investors are a bit more canny than you believe in that they will invest in the companies that do well in a sector, and withdraw investment from companies that don't.
I really can't believe you keep on trying to assert your arguments
J
900T-R said:
How does that translate to, or support your assumption of 40% net margin on your chosen steed?
Read the annual report and you will find out. It is there in black and white (hint, it's sometime after page 50....) 900T-R said:
Look at who offer the biggest structural rebates on sticker prices: that'll be GM, Ford (USA) and Chrysler, then. Aw, not good.
So? Some companies are good at making cars and selling them, some aren't. Doesn't mean the market is shagged, just means normal capatalist principles apply. You said "If they sold all cars at a similar discount because no one asked fot that exact car the moment it was built, they'd be bust before you could say 'Oktoberfest'." Now you say that BMW won't go bust and try to move the conversation onto Ford and GM. Could you be a bit consistent please.
900T-R said:
If franchised dealerships as a whole show an average ROI of just about 0.5%, I'd say this particular retail sector is pretty moribund economically. If I were an investor, I'd sooner choose a savings account...
I really can't believe you keep on trying to assert your arguments
J
joust said:
Just to give JonRB some more amusement
900T-R said:
How does that translate to, or support your assumption of 40% net margin on your chosen steed?
Read the annual report and you will find out. It is there in black and white (hint, it's sometime after page 50....) 900T-R said:
Look at who offer the biggest structural rebates on sticker prices: that'll be GM, Ford (USA) and Chrysler, then. Aw, not good.
So? Some companies are good at making cars and selling them, some aren't. Doesn't mean the market is shagged, just means normal capatalist principles apply. And how do you see some companies are not so good at building cars and selling them? Because they have to offer huge rebates on sticker prices across the board, while others don't. One can't argue though with the fact that overproduction is the bane of the automotive industry as a whole, and has squeezed margins out until they're practically non-existent. That Porsche, BMW, Honda and Toyota are bucking the trend to varying degrees is only of peripheral interest.
joust said:
You said "If they sold all cars at a similar discount because no one asked fot that exact car the moment it was built, they'd be bust before you could say 'Oktoberfest'." Now you say that BMW won't go bust and try to move the conversation onto Ford and GM. Could you be a bit consistent please.
I still stand by that statement.
It's simple.
Your argument:
I got £5,000 off a pre-registered Beemer. BMW is doing well. So selling pre-registered cars at a discount is good business practice.
My counter-argument:
If BMW sold all of their cars at the same conditions, in all probablitythey would be in as bad a shape as the manufacturers that have to resort to similar tactics across the board.
From a profitability perspective, what could possible be good about registering a car to oneself before it's sold off to a punter, effectively rendering it second hand? You are right that, given BMWs current profitability, the transaction result of your particular car probably won't cause them sleepless nights. That is not to say the result is the most desirbable: there can be no doubt that there is a loss in value compared to a built-to-order car. Let's face it: apart from the car being a few weeks/months older on paper (which is a value adjusting factor in itself), even if the car you bought was exactly as you'd have specced it, would you let that on to the car salesman and lose valuable bargaining tool?
A car is pre-registered for one reason: to make up the numbers for a specific period. The numbers game is incredibly important in the automtive business, and I don't mean profit.
As for dealers' margins: on average, dealers are allowed 10-12% gross margin on new cars (i.e. the manufacturer/importer invoice to the dealer is 10-12 percent lower than net consumer list price). Most brands have a graded system refelcting the extent to which the outlet conforms to dealer standards (location, building, showroom, standards to which the employees are trained, courtesy cars, special equipment, etc) - normally ranging between 9-13%. On top of this there's a end-of-the-year bonus structure (in the lower single digit percentage range, but still significant enough to make or break a year from a dealer's perspective) for meeting or exceeding sales targets in new car sales, approved used car sales and parts sales.
Note, too, that dealer standards (and the cost involved) have gone up, up and away during the past five years - since the new European block exemption rules fro the automotive trade (EC 1400/2002, better known as 'Monti' after the EC commissioner who was responsible for the review of the block exemption regulation) maintaining 'quality' standards is the only way for car makers to control who is part of their dealer network.
Given all this, it's rather easy to see that no dealership can possibly make 5% net profit on new car sales alone if they'd allow £5K discounts on £45K cars as a matter of course.
You can bet that if a dealer offers you something like 8% on a new car, he's accepting a negative transaction result to make the numbers for reaching their bonus, they expect earn more on you in finance/after sales or the (separate) transdaction result of your trade-in. Or the amufacturer/importer is massively discounting unwanted, over-stock cars to the dealer which can not mean anything but the OEM accepting a lower transaction result on these cars. Period.
Oh, forgot - the 'recommended' discounts for fleet sales range from 2-8% depending on car model, typically around 6% (of course, the dealer doesn't have to conform but as fleetowners exactly know what the recommended discount for a certain model is - I mean we know them so it's hardly a trade secret - that would mean no fleet sales at all) - deducting this from the 9-13% gross dealer margin there can be little doubtthat for these sales (50% of new car sales in The Netherlands, probably the same in the UK), the entire potential for profit comes from aftersales (company cars typically travel high annual mileages and are serviced 'by the book').
puffpuff said:
BossCerbera said:
puffpuff said:
Think of a circuit in Surrey that celebrates its centenary this year.
....the one with its name on the new Bentley coupé you mean? That used to be on the entry-level Bentley of the 90s?
That was first used by Riley in 1929? Yes, that would be it, the Riley Brooklands.
The lightweight, open, two-seater sports car that triumphed at Le Mans, in TT races and at Brooklands itself of course. Rather like this one, a modern version of which could fill some gaps in the market:
Stunning car, people forget what wonderful cars Rileys were.
I really wish you would read what I post, rather than getting in such a lather.
The car was NOT pre-registered, and I still got £5000 off it. I purchased the car in Febuary, waited a week, and got an 07 registration put on it as it was sitting in the dealer unregistered. I am the only person on the V5.
So, now, how does your argument now stack up
Justin
The car was NOT pre-registered, and I still got £5000 off it. I purchased the car in Febuary, waited a week, and got an 07 registration put on it as it was sitting in the dealer unregistered. I am the only person on the V5.
So, now, how does your argument now stack up
Justin
Well this all went a few miles off thread didn't it? Take a moment to recap on the original story....
After a lot of to-ing and fro-ing, NAC ends up owning the MG name. After much further work and investment, NAC gets the MG TF back into production and is just about to re-launch the car in the UK when.....
Some bloke in deepest Worcestershire we've never heard of suddenly acquires a remnant of the MG Rover empire that MAY POSSIBLY give him room to argue that he COULD be able to use the MG name on one or more products. Said bloke then issues a 'blue sky' press release claiming he's about to close numerous deals all leading to production of a car with some sort of MG badge on it. All a thorn in the side for NAC isn't it?
Of course, if NAC were to buy up the company with the plans to build this spurious car, that would get rid of the problem, wouldn't it? Everyone would be happy. NAC's problem would go away and our friend from Worcestershire would have trousered a nice profit for simply spotting the opportunity and putting out an 'inspired' press release.
As everyone here seems to agree, it beats selling cars for a living.
Perhaps Mr Riley has actually spotted the ONLY way to make a profit from the Automotive industry in the UK?
After a lot of to-ing and fro-ing, NAC ends up owning the MG name. After much further work and investment, NAC gets the MG TF back into production and is just about to re-launch the car in the UK when.....
Some bloke in deepest Worcestershire we've never heard of suddenly acquires a remnant of the MG Rover empire that MAY POSSIBLY give him room to argue that he COULD be able to use the MG name on one or more products. Said bloke then issues a 'blue sky' press release claiming he's about to close numerous deals all leading to production of a car with some sort of MG badge on it. All a thorn in the side for NAC isn't it?
Of course, if NAC were to buy up the company with the plans to build this spurious car, that would get rid of the problem, wouldn't it? Everyone would be happy. NAC's problem would go away and our friend from Worcestershire would have trousered a nice profit for simply spotting the opportunity and putting out an 'inspired' press release.
As everyone here seems to agree, it beats selling cars for a living.
Perhaps Mr Riley has actually spotted the ONLY way to make a profit from the Automotive industry in the UK?
Hand-built at £60K? Forget it. There is no market here, certainly not 1800 units worth. At this price they will be too close to Porsche and too unreliable. Even Aston-Martin are struggling despite the investment to build reliably (I know, I've just chopped in my DB9 for a 911). In the end there is a niche in the market, but no market in the niche. And as for a Veyron clone from "the Russian" - he's a dreamer.
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