Will Coronavirus hit used car prices?

[limpsfield]

Pommy said:

Throttlebody said:

Pommy said:

To add some balance thats not necessarily what CEO's do as ultimately they are rewarded on performance and maintenance of company value and share price. You don't see many CEO's espousing a bad run ahead because it instantly sends share prices down or inhibits share price growth. To do that and then beat expectations is a gamble so its much easier to be bullish and try to maintain share prices.

The market also will price the share so he can't say everything's rosy if its completely contrary to a standing economic position as it then makes him look incompetent or a liar.

Talking of company share prices, Lookers share trading has now been suspended by the FCA pending the £19 million accounting black hole outcome. A big player in big trouble.

Let me guess, they previously booked some form of expected revenue into current year reporting which now doesnt exist...

Lookers:

"On Monday, the company said it had identified a £19m hole in its accounts after a number of years of overstated profitability.....The accounting prove, which has been carried out by Grant Thornton, came about after Lookers identified “potentially fraudulent transactions” earlier this year.

According to an update this week, roughly half of the £19m in the necessary adjustments relates to last year’s results, with the remainder accumulated over a number of years."

https://www.cityam.com/lookers-shares-suspended-as...

[Pommy]

limpsfield said:

Pommy said:

Throttlebody said:

Pommy said:

To add some balance thats not necessarily what CEO's do as ultimately they are rewarded on performance and maintenance of company value and share price. You don't see many CEO's espousing a bad run ahead because it instantly sends share prices down or inhibits share price growth. To do that and then beat expectations is a gamble so its much easier to be bullish and try to maintain share prices.

The market also will price the share so he can't say everything's rosy if its completely contrary to a standing economic position as it then makes him look incompetent or a liar.

Talking of company share prices, Lookers share trading has now been suspended by the FCA pending the £19 million accounting black hole outcome. A big player in big trouble.

Let me guess, they previously booked some form of expected revenue into current year reporting which now doesnt exist...

Lookers:

"On Monday, the company said it had identified a £19m hole in its accounts after a number of years of overstated profitability.....The accounting prove, which has been carried out by Grant Thornton, came about after Lookers identified “potentially fraudulent transactions” earlier this year.

According to an update this week, roughly half of the £19m in the necessary adjustments relates to last year’s results, with the remainder accumulated over a number of years."

https://www.cityam.com/lookers-shares-suspended-as...

Boom, and there it is.

[anonymous-user]

Deep Thought said:

Show me where i said that.

Read your posts.

[Deep Thought]

jsf said:

Deep Thought said:

Show me where i said that.

Read your posts.

You made the statement. You back it up with evidence of where i said it.

[anonymous-user]

Deep Thought said:

If i were a CEO or CFO of a listed company, i'd want to get all the bad news out there right now when there is an expectation that things are bad so i could then over deliver on expectations.

= Lie about your calculated projections

Deep Thought said:

So if you were the CFO, would you want to spend the next 2 years NOT delivering to previously set expectations or would you reset those expectations so you could meet and / or exceed them?

= Lie about your calculated projections

Deep Thought said:

Better - i would have thought - to say "its going to be really st" and then over deliver than "lads we reckon its going to be ok" and under deliver.

= Lie about your calculated projections

Deep Thought said:

I think fundamentally theres an opportunity here to reset expectations to something a business can meet or exceed, based on prevailing market conditions.

= Lie about your calculated projections

CFO's have to meet the rules set out under the law, if they are putting out projections that do not match their calculations they can be prosecuted for share price manipulation. They have to be honest and be able to back up their projections with hard data and show the methodology of how they came to their conclusion. They don't have to be right, but they have to be able to back up their guidance to the shareholders. What you are suggesting they do is paint a picture that is worse than their calculation, so in future they can look like they did a better job. That is clear as day share price manipulation and will see you in jail.

[Deep Thought]

jsf said:

Deep Thought said:

If i were a CEO or CFO of a listed company, i'd want to get all the bad news out there right now when there is an expectation that things are bad so i could then over deliver on expectations.

= Lie about your calculated projections

Deep Thought said:

So if you were the CFO, would you want to spend the next 2 years NOT delivering to previously set expectations or would you reset those expectations so you could meet and / or exceed them?

= Lie about your calculated projections

Deep Thought said:

Better - i would have thought - to say "its going to be really st" and then over deliver than "lads we reckon its going to be ok" and under deliver.

= Lie about your calculated projections

Deep Thought said:

I think fundamentally theres an opportunity here to reset expectations to something a business can meet or exceed, based on prevailing market conditions.

= Lie about your calculated projections

CFO's have to meet the rules set out under the law, if they are putting out projections that do not match their calculations they can be prosecuted for share price manipulation. They have to be honest and be able to back up their projections with hard data and show the methodology of how they came to their conclusion. They don't have to be right, but they have to be able to back up their guidance to the shareholders. What you are suggesting they do is paint a picture that is worse than their calculation, so in future they can look like they did a better job. That is clear as day share price manipulation and will see you in jail.

You can run with a model based on and supported by a pessimistic market outlook.

That doesnt mean you are lying.

I'm drawing a line now. You've clearly taken an interpretation from what i said and are unlikely to be convinced otherwise.

Edited by Deep Thought on Thursday 2nd July 16:51

[Venisonpie]

ettore said:

Quite - and the plants aren’t all open, nor at full capacity. Same is true of dealers. So the quarter of full lockdown bleeds inexorably into the next quarter.

Supply chain is still buggered but he’ll have a reasonable view of the volume for the full year and y/e results will be comparatively ste. Doesn’t mean prices won’t be ok though!

This is the interesting thing, I was convinced we'd see prices drop for used cars. I've changed my position having sold three recently and been staggered at what they achieved. That said how long they remain like this who knows, I'm still pessimistic for the longer term once supply starts to come back. Having said that the three month break has given manufacturers a window to plan with govts picking up the interim labour costs. They can control outputs to match predicted reduced demand - they won't have huge production runs backing up that need to be discounted so margin can be maintained.

I've been consistently wrong so far and probably am still!

[anonymous-user]

Deep Thought said:

I'm drawing a line now.

Thank goodness for that.

[leonardfell]

I'm drawing a line now.

Edited by Deep Thought on Thursday 2nd July 16:51

[/quote]

Probably a good idea before you dig a deeper hole

[maz8062]

Deep Thought said:

jsf said:

Deep Thought said:

If i were a CEO or CFO of a listed company, i'd want to get all the bad news out there right now when there is an expectation that things are bad so i could then over deliver on expectations.

= Lie about your calculated projections

Deep Thought said:

So if you were the CFO, would you want to spend the next 2 years NOT delivering to previously set expectations or would you reset those expectations so you could meet and / or exceed them?

= Lie about your calculated projections

Deep Thought said:

Better - i would have thought - to say "its going to be really st" and then over deliver than "lads we reckon its going to be ok" and under deliver.

= Lie about your calculated projections

Deep Thought said:

I think fundamentally theres an opportunity here to reset expectations to something a business can meet or exceed, based on prevailing market conditions.

= Lie about your calculated projections

CFO's have to meet the rules set out under the law, if they are putting out projections that do not match their calculations they can be prosecuted for share price manipulation. They have to be honest and be able to back up their projections with hard data and show the methodology of how they came to their conclusion. They don't have to be right, but they have to be able to back up their guidance to the shareholders. What you are suggesting they do is paint a picture that is worse than their calculation, so in future they can look like they did a better job. That is clear as day share price manipulation and will see you in jail.

You can run with a model based on and supported by a pessimistic market outlook.

That doesnt mean you are lying.

I'm drawing a line now. You've clearly taken an interpretation from what i said and are unlikely to be convinced otherwise.

Edited by Deep Thought on Thursday 2nd July 16:51

You're out of your depth there, DT. Best to stick to car price projections (based on the trade auctions that you frequent) or your demographic profiling with fake for sale ads

I'm drawing a line now

[Scootersp]

To be fair, asking 4 people to make a projection you'll get 4 different answers, as (huge?) part of the projection will be about employment numbers and the post furlough (or whatever other countries are using) support era and the therefore wide range for future demand. It wasn't long ago that people were talking about 30's style depression and now on here we have claims the car market very bouyant and no signs of that changing....

.....it's got to be fingers in the air stuff as, anyone doing rpi, unemployment projections etc that Audi might use as factors in their calculations, are doing the same to a huge degree, must be the hardest time to project bloody anything and I really can't see someone having jail pinned on them for a pessimistic forecast in these unprecedented circumstances. I mean what does an airline CEO report, when their business is looking at the whims of governments worldwide and the chance or a second wave or no second wave?

[Touring442]

Venisonpie said:

I'm still pessimistic for the longer term once supply starts to come back.

If it comes back. Belts tightened, hanging onto cars another year or two. Hopefully some stonking new car deals on the way. It's just guesswork from here.

[cheeky_chops]

Had a letter through today - West Way Nissan South Birmingham will not be reopening with immediate effect.

The writing was on the wall when i went in Jan - Sales desks delaminating and held together with sticky tape, dirty cracked faux cream leather chairs looked 20 years old. The missus sat back in her car as she didnt want to go for a test drive and certainly wasnt going to wait at his desk! No one called me back and the salesman was v simialr to the furniture.....

[Powershift]

'Britain's Financial Conduct Authority (FCA) on Friday proposed extending pandemic relief measures for consumers with car financing contracts or high-cost credit until the end of October.

The watchdog set out options for supporting consumers with motor finance, buy-now pay-later, rent-to-own and pawnbroking contracts who are coming to the end of a three-month payment freeze introduced after Britain went into lockdown in March.

The options include a further payment deferral or reducing payments to an amount the customer can afford for a further three months.

"For those who ...can afford to start making payments, even partially, it is in their best interest to do so, but for those that need help it will be there," FCA interim chief executive Christopher Woolard said.

The ban on repossessions should continue until Oct 31, the FCA said'.

https://www.businesstimes.com.sg/government-econom...

[growlerowl]

Scootersp said:

To be fair, asking 4 people to make a projection you'll get 4 different answers, as (huge?) part of the projection will be about employment numbers and the post furlough (or whatever other countries are using) support era and the therefore wide range for future demand. It wasn't long ago that people were talking about 30's style depression and now on here we have claims the car market very bouyant and no signs of that changing....

.....it's got to be fingers in the air stuff as, anyone doing rpi, unemployment projections etc that Audi might use as factors in their calculations, are doing the same to a huge degree, must be the hardest time to project bloody anything and I really can't see someone having jail pinned on them for a pessimistic forecast in these unprecedented circumstances. I mean what does an airline CEO report, when their business is looking at the whims of governments worldwide and the chance or a second wave or no second wave?

There's a big difference between giving the most accurate forecast you think is possible with a list of caveats versus intentionally playing some kind of ridiculous underpromise/overdeliver game as the CFO of an automotive giant worth billions (which is what DT was suggesting, in keeping with his MO of dismiss all negative news/talk up all positive news) . Getting your forecasts wrong as the CFO on regular occasions just demonstrates incompetence or worse and will get him fired.

[Camelot1971]

growlerowl said:

There's a big difference between giving the most accurate forecast you think is possible with a list of caveats versus intentionally playing some kind of ridiculous underpromise/overdeliver game as the CFO of an automotive giant worth billions (which is what DT was suggesting, in keeping with his MO of dismiss all negative news/talk up all positive news) . Getting your forecasts wrong as the CFO on regular occasions just demonstrates incompetence or worse and will get him fired.

Compared to your MO of dismissing all positive news/talk down all positive news?

[Scootersp]

Touring442 said:

Venisonpie said:

I'm still pessimistic for the longer term once supply starts to come back.

If it comes back. Belts tightened, hanging onto cars another year or two. Hopefully some stonking new car deals on the way. It's just guesswork from here.

So the used supply has to be stifled by the (relative) lack of new car sales?

So if the belts are tightened and people stick then the manufacturers may be forced to reduce new and then finally there may be pressure on the used market..........'if' new deals get pushed down toward 1-3 year values of the same car out there now then sales may ebb back towards new and the used then take a hit.

I'm just trying to rationalise the supply hit that's being reported/real. Since the pandemic very few cars have been scrapped (due to MOT extension and lack of use in general) sales were impossible, so the supply hit has to come from the pend up demand being more towards used buys not new? even then most will be accompanied by a P/X, so is the supply squeeze mainly on the 1-3 year old stuff, ie people are buying them and older but not so much p/x them via new purchases (I appreciate it's layers and layers of different scenarios all overlapping).

Is it perhaps the pent up demand and then the lag to turn around all those P/x's to the right dealers as I know not all dealers will sell the p/x's they received they'll generally be selling newer and off load px's to other dealers.

Or is it huge company fleets just sitting on them and not returning/releasing to market?

[J4CKO]

Joey Deacon said:

Deep Thought said:

Because it comes back to what i said very early on in this thread - people tend not to give a monkeys about the fact that other people (particularly in different industries) may be getting made redundant.

Fundamentally many people have at least as much money in their pocket, if not more, than pre-lockdown. They dont give a monkeys if, for example airline staff are being laid off.

Maybe they should (because it could be indicative of whats to come) - but typically they dont.

It never ceases to amaze me that so many people seem to have so much money. I don't know how they do it, but a lot of people have a lifestyle that exceeds what is possible on their salary and it can't always be a case of being financed up to their eyeballs.

The only rational explanation is that a lot of people have been given money by their parents or they simply inherited money. I suppose with house prices the way they are, it only takes one dead grandma to leave you more money than you could potentially save in a lifetime.

I think we see different people doing stuff and mung it all together and its easy to think everyone is having new cars, holidays and buying stuff all the time. We spent 12 grand taking the kids to the states in 2012 and someone said "Dont know how you afford that", well it was a lot of saving, some profit on shares and not having many holidays for a while.

Then some manage to avoid paying much/any tax, that gives more spending power, as does criminal activity if you are seeing supercars in sketchy areas then its probably not someone on PAYE who is careful and has saved up.

Inheritance is a big thing, if you have a half decent income and not laden with debt, a big windfall can go a long way.

Then there are people with two big incomes and not huge outgoings.

And everything inbetween.

[Throttlebody]

Camelot1971 said:

growlerowl said:

There's a big difference between giving the most accurate forecast you think is possible with a list of caveats versus intentionally playing some kind of ridiculous underpromise/overdeliver game as the CFO of an automotive giant worth billions (which is what DT was suggesting, in keeping with his MO of dismiss all negative news/talk up all positive news) . Getting your forecasts wrong as the CFO on regular occasions just demonstrates incompetence or worse and will get him fired.

Compared to your MO of dismissing all positive news/talk down all positive news?

Another forum psychiatrist.

[Scootersp]

Inheritances usual come later in life now, when most are settled into a certain lifestyle and generally ok financially so I suspect a few holidays or cars tends to be high up there on it's usage?