These feats of modern technological design are nearly there. Charging times reducing ranges now up to 150 miles for a small number of fully electric vehicles. £5,000 support for anyone looking to make a green statement on the company car park or suburbian badge comparing site (Pardon the pun, household drive I meant!).

The challenge here is simple, there simply aren’t enough charging points, Purchase prices of these vehicles even allowing for the political enticement  (£5,000) are steep, plus a question, would you invest in any fully electric vehicles for your fleet in Twenty11?

I remember sitting down to watch my two favourite TV programs of the week, Tomorrows World followed by Top of the Pops. Tomorrows World fronted by Michael Burke for those of you that can only remember MTV as music TV, showcased the future of  late 20th and early 21st Century living and technological innovation.  In 1967 they previewed the first home computer terminal and in 1979 modern-day mobile phone. Both of these basics of day-to-day life we now take for granted.

It seems to me the £5,000 on offer is not going to cost the state very much over the next 2/3 years, however with all major vehicle manufacturers committed to offering fully electric vehicles and the huge rises in the cost of Petrol and Diesel. The latest increases (Duty and VAT January 2011)  taking both to record high’s with no sign of reduction in the cost of the product, and the huge % of tax in the overall cost there is at some point soon going to be a dilemma for the state.

How if we  move over to fully electric vehicles is the chancellor going to cover the lost tax revenue? I’m thinking about this and can’t see the answer, unless they, wait a minute collect the tax in some other way?

This piece is not about politics left or right, just a few thoughts on the inevitable transition from Fossil to Plug and drive. If you have any comments on this subject please do. In the meantime here are a few suggestions to do your bit for the green loby, save some money, pay less tax and take some positive steps towards a cleaner conscience.

Take a fresh look at modern clean diesel engines, some of these now offer the lowest CO2 emissions, fantastic fuel economy and have superb residual values. These cars don’t drive like the rickety noisy oil burners of the early Tomorrows world era. They are quiet, responsive, offer the same if not better performance than their petrol rivals. Thanks to all the above Residual based finance products such as Contract Hire and Personal Contract Purchase (PCP) are good value for money and monthly payments can be surprisingly low even for premium brands.

Electricity is on the horizon, for now though we recommend high performance diesel, watch this space for more on the plug-in revolution… 

So wheels are turning again around the world, it seems that the push, pull, push, push, push of the last 20 years of car production, Fear with a capital ‘F’ is driving or in reality stalling transactional activity.

Defining push,  in recent years Manufacturer production capacity and hunger for market share have driven dealer sales in the UK. The strongest of mid volume brands and quality niche producers the only profiteers in a “never mind the profitability see the sales figures environment”. An ever more frantic cycle of targets and full transporters arriving ending with air fields full of cars that no one would admit to. Driving along the M62 and up to Grimsby to look at a dog one weekend towards the end of 2008 confirmed the reality…

“Pull” on the other hand a delicate balance between desirability, acceptable volume and profit for the manufacturer. Or put another way their preferred position.

As the financial crisis developed it became clear the machines had to stop, stock on the runways must be cleared and you can hear the conversation between Manufacturers and bankers. “We won’t do that again”..(Fingers, toes etc crossed as they utered the words). The bank manager of the merged or skint bank saying we can’t fund your stock on the runway unless it has wings and carrys passengers.

So clear the decks they did, various bonuses, sales incentives and campaigns. The major funders and valuation agencies at the time panicking about future values of huge numbers of units returning to a bear market in 2/3 years. Several things happened firstly residual values were slashed. Glasses and CAP future values fell off a cliff. Business written in 2009 was lower in both volume and from the lowest residual base in more than 10 years. So as the manufacturers piled the money in behind the scenes and the dealers threw their margin in. The funders and Leasing companys’ pricing policies were being controlled by their risk managers. Incidentally funders and leasing companys’ in the main are owned by BANKS! Funny that, well if you are into the blackest of black comedy…

So given there was no money to even buy parts in some cases to build cars no one could in their instant panic afford to buy. The factories one by one shut down night shifts and in some cases closed completely. Slow signs of recovery long term reductions in interest rates re assuring the man in the street that still had a job and gently normality, stability and dare write the word confidence started to return.

This co incided with a black hole in the used car market. Less demonstrators, daily rental returns, short term lease vehicles. Plus the inevitable run on what was left of the bargains in pre registered stock. One thing did remain, the view that the car market is on its knees and there is a desperation to write business at any cost…

Suddenly almost overnight the tables turned from discounted runway blockers to, “Yes we can order those 4 BMW’s from the factory they will be around 16 weeks”, or that Golf GT Diesel ordered on the 8th August 2009 that was delivered on the 9th February 2010 (185 days to build a Golf – The peoples car!). This was by no means an unusual situation for the Wolfsberg giant, reaching a stage in the UK  in early 2010 where in desperation it offered disgruntled waiting customers a Peugeot courtesy car as it had loaned out all it’s available VW hire fleet. What if  some of these waiting customers driving a lesser brand courtesy car had defected…? Where in this unprecidented situation i wonder do ‘Brand Values’ sit. 

Assuming our highly valued business and private customers are coming to the market once every 2/3/4 years their view of supply is. “I’ll wait up to a few weeks before we need the replacement vehicle, go to the market get a great deal after all the market is on its…Not too fussed if we have to compromise on the odd extra, but sure we’ll get the cars and a cracking deal, desperate dealers, manufacturers etc…” 

Given that car manufacturers have for some 18 months now been building cars to sold orders, restricting the numbers of stock cars dealers are able to order, plus Bank, Manufacturers and dealer finances have dramatically reduced the capacity for holding stock below is a overview of some of the current supply issues in the new car market place in the UK.

Audi

Q7 Order book full for 2010 – estimated delivery Dec/Jan 2011, A3 Sportback September delivery, Q5 September/October delivery, A6 Avant Multitronic September delivery, A5 15/16 weeks.

BMW

New 320 efficientDYNAMICS 10/12 weeks, Refreshed 3 Series coupe June launch factory orders July, New 5 Series saloon 10/12 weeks, 5 Series touring launch September.

Mercedes

C Class major engine related problems (Injectors) closed production for a lengthy period of 2010 to date. All funding support removed from C200 cdi, C220 cdi and C250. Dealers complaining of heavily limited production of mainstream products. Predicted lead times into 3 months plus…

Volvo

Product restrictions on popular models including XC60 currently September delivery. Their factory closure for re tooling and believe it or not a full order book…

Nissan (UK Manufacturer)

Qashqai their value for money highly rated SUV earliest delivery quoted late August as of last week.

I could go on safe to say the above is not an exclusive list. What next?, well somehow that delicate balance between fields of metal and realistic lead times has got to return…The theory of economics Supply and…Afterall huge manufacturers with equally huge management structures will hopefully get it right!

In the meantime guys, we’ll be talking to you early enough in the lifecycle, to allow you to make the best decisions for your fleet and business vehicles. If you are new to us we’ll take time to discuss the most up to date position. In a nutshell if its desirable or you are willing to compromise or we are very lucky, it’s highly likely you’ll wait longer than you thought before you read this…

Added to the American problem plus their involvement with the Peugeot/Citroen plant in the Czech Republic they now may recall 3,500 Prius models in the UK for a potentially dangerous braking problem. It will be interesting to monitor how these 3 major dents to their brand values affect sales and consumer appetite. Probably more interesting to see how the No1 car manufacturer in the world reacts..Watch this space!

Improve Cash Flow

Businesses or companies where the owners/directors have their own vehicles can sell these vehicles in a sale and leaseback arrangement. This works best where the vehicles(Cars or Vans) are either owned outright or there is a significant amount of equity(ie the vehicles value is substantially greater than any outstanding finance amount).

The existing vehicles are sold to us at an agreed value. The resulting capital can then be injected into the business without a cap in hand visit to the bank, or complicated cash flow forecasts. Replacement vehicles can then be supplied by way of a tax efficient Lease or Contract Hire agreement.

Other significant cash flow benefits include minimised servicing and repair cost’s as the new vehicles come with 3 year 60,000, some 100,000 mile Warranty. Most come with at least 1 year roadside assistance, a good number of the better badged vehicles get 3 years breakdown cover. Not to mention no tyres, exhausts, brakes, MOT’s, cam belt changes at £500+ per time. For now we rest our case on cash flow.

Save Tax

Until 2009 vehicles owned by a company were subject to a 25% yearly write down allowance and leased vehicles over £12,000 subject to a sliding scale of taxable benefit. This year sees a significant shift in that the CO2 emissions of a car now not only set its road tax price, it’s benefit in kind taxation % but also the % of the lease rental offset against taxable profit. Example a car with less than 160g/km of CO2 100% of the monthly lease cost can be offset against tax!

So by replacing older vehicles with vehicles with lower CO2 emissions the company can SAVE TAX in more than one way. Most of the new generation models with lower CO2 are also much more frugal, 50+mpg is not unusual. So by replacing older less fuel-efficient vehicles not only can we reduce direct cost but also pay less VAT. Less fuel purchased = Less VAT paid. Seems simple however it’s a deeper consideration than can we afford new cars at this time.

Motivation…

It would be fair to say most companies this year will not be considering large pay increases and most have probably trimmed where possible. Company cars traditionally an emotive if not the biggest thing apart from the £’s earned are not top of the employees mind. In some cases they are happy to still have a job. Therefore the impact on a Sales director, Sales manager, Sales engineer, account manager etc of a shiny new motor on the drive at the end of the most difficult of years will not only finish their year on a high but rejuvenate them for the start of 2010. Coming back after the Christmas break in that new, fuel-efficient, low-cost, taxed with no costs for nearly a year vehicle. He/She will be lifted motivated and glad they stuck at it, more importantly glad to get at it…On the other hand…?

So Improve Cash Flow in the right circumstances yes, Save Tax, improve fuel economy, reduce maintenance cost’s and be ahead on the street with a re invigorated motivated team. Sounds like a plan to us!

For more on how we can make these words a reality call 0845 373 5368 and ask for Paul Parkinson, Managing Director Synergy Automotive or email paul@synergyautomotive.co.uk

Here perception of value is formed. We can start to say ”We understand our client’s must have’s, need to have and nice to have’s. We are nowhere near selling anything, yet we are so much nearer selling ourselves. Carefully building a clear picture forms the foundation of trust, key to any worthy relationship…

The business is written and we’ve added another customer to the Synergy bank (I like the word customer bank, like we are banking or saving for the future. Doing business with existing happy customers is a pleasure, on the good grief scale measures 9/10 rating on the good business source scale and a 1/10 on the grief scale. i.e reselling to existing happy customers is easier, more pleasurable and usually results in good business for Supplier and customer…

How do we ensure they experience what they expect and more. Meeting expectations in todays market is viewed as ok service. So how do we exceed their expectations. It’s really simple…

1. Communicate pro actively on time, example provide regular order updates. By updating our clients weekly on a Wednesday, they never need to chase us…A nice place to be in. Never an uncomfortable silence when a client asks where is my car i ordered 3 months ago…
2. If we say we’re doing it…Exactly what it says, never over promise. Work in a considered way tirelessley  fulfiilling our committments. Helping our business partners and customers to cement relationships.
3. If there’s a significant change in any manufacturer information – Pick up ther ph0ne and talk to someone…

Is customer service..?

Managing expectations

Listening, discussing,understanding and delivering the right products financed in the right way.

Pro actively comunicating, saving time and money.

For a chat and what’s new in the industry new, plus some gems to help reduce CO2…Just call or email paul@synergyautomotive.co.uk

I know i said there is so much going on in and around our business in last week’s e-newsletter…

Normally we’d keep some of the info here for next month, however there are some IMPORTANT Details enclosed….

VAT reverts to 17.5% from 1st January 2010 – See below how this affects you and your business..Beat the 2.5% VAT rise – Why not call us to see if we can help you save this VAT increase…

Audi Announce 1% Discount Margin reduction for all new cars invoiced and delivered from January 1st onwards. Beat the 1% Audi Discount margin reduction – We are where possible locating vehicles for 2009 delivery…Although cars are thin on the ground!

Glasses Guide (The trade bible) Editor confirmed used car values reach their corrected peak! Selling your part exchange this month will achieve best price before the winter negative adjustments start in November…

VW restructures fleet network and trading terms. Lead times difficult some models already 2010 delivery! Talk to us re any VW model and we’ll do our best to locate a deliverable car..:-)

New cars purchased using CASH will cost 2.5% more from 1st January 2010.

If your financial year end is 31st December Purchasing a new or VAT Qualifying used car before will not only be tax efficient but also cost 2.5% less by beating the VAT increase! Take a look at some, useful information below, you could save money…!

I am considering changing my car, cars and not sure how this change will impact on the timing of my decision?

I am considering opting out of my company car and looking at Personal Contract Hire (PCH) or Personal Contract Purchase (PCP). How will the reversion affect this and which finance option is best for me?

Personal Contract Hire – Regardless of the payment quotation given on these transactions, VAT is charged at the prevailing rate, payments made in 2009 will be charged at 15%, payments made from January 2010 at 17.5% rate advised until further notice from HMRC.

Personal Contract Purchase (PCP), Hire Purchase – Where a vehicle is invoiced and financed in 2009, repayments are calculated on a purchase price including 15% VAT. PCP transactions do not include any reclaimable VAT -

So if you are considering a PCP Deal and want to beat the increase we advise get your order in and subject to availability you could save 2.5% if the deal is completed in 2009.

Remember the tax point is the date of the invoice so any transaction invoiced from 1st January 2010 will be at the new VAT rate, Regardless of the date the car was ordered.

Cash Purchase – New and VAT Qualifying Used Cars ordered, invoiced and delivered in 2009 will include 15% VAT. Any applicable car invoiced in 2010 will be invoiced including 17.5% VAT – In over 95% of cases this 2.5% increase in VAT is not reclaimable…

Loads of detail in here we just thought with the changes in VAT, this communication is relevant and useful and could help save some money!

We are here to help, please do not hesitate to call, email or leave a comment in here and we’ll respond promptly to any questions…

Paul

Tel 0845 373 5368
Fax 01423 813511
Mob 07973 740857
www.synergyautomotive.co.uk

 The good news is steady and consistent improvement in business levels on all fronts and we hope our associates and friends are experiencing the same…

As the dust settles, an appropriate term for the aftermath of a collapse, we feel new confidence from customers and suppliers . This confidence is cautious and conservative, more like the mindset of our parents and grand parents. I considered entitling this piece ‘light at the end of the tunnel’. Somehow it just didn’t seem to convey where we’ve been and the devastation in the world of  business and finance.

 Good News Clients in the digital world, marketing and PR seem to have weathered the storm well, orders placed  for Audi Q7, VW Touareg, Audi A3 and VW Golf. Also helping these and others dispose of existing fleet vehicles. Our legal partners looking strong with orders in for Audi A3 Cabriolet, A6, Q5 and Nissan Qashqai. On the local authority front, Security vehicles for a University and a bespoke road sweeping machine (100k) ordered for a large client.

Probably we’re not so well known for Vans as Cars. This month 10 vans (8 new, 2 Used) to 4 different companies. 

In many cases assisting with a tax or cost efficient finance plan using our market knowledge and connections  supported by our can do service culture! 

Monitoring sources of business it is re-assuring to note 88% of new enquiries this year coming from referrals. Focussing on delivering more than just the cars and the money, our clients tell us they like to recommend us knowing we’ll do our best to not only offer the right package but make them look good too…

The dust is settling, we are working to make sure we do our part to accelerate the process. Supporting our business partners with the very best we can do. As anything short of this is simply not good enough anymore…

 As with all actions there is the inevitable opposite reaction and as an industry we now find ourselves heading into the important September plate change market (59 Reg) with far few cars available for registration than the market requires.

 The manufacturers all close their factories in the summer holidays. The most inconvenient time for Great Britain but perfect for continental Europe. Why you might ask when we in Britain are such an important market. Its simple take a company like VW, making nearly 5M cars worldwide, believe it or not 4.7M are left hand drive. Only 150,000 at best arrive on these shores!

Why has the market changed? and how does this affect the UK market?

Firstly manufacturers will not  increase production to anything like previous volumes whilst working capital is so difficult to raise on the money markets and any signs of recovery are fragile and vunerable. Secondly the basic law of supply and demand will be seen for once to work in their favour. Or put another way a seller can sell his product for a better price if it is perceived to be scarce. By default no production, scarcity of stock and a more bullish view is taken by the seller…

This is a position the manufacturers will try to protect using all their considerable might. So how does it affect the Fleet Buyer/SME/Man in the street? Firstly the large Fleet buyer will face a number of challenges, Reduction or removal of incentives/discounts, some manufacturers will turn their back on the business, Banks are strategically walking away from none core activities as i have previously mentioned.

For the SME a similar picture on a smaller scale with the added complication that smaller businesses have been harder hit in the credit crunch so a good number will struggle to raise any sort of finance, a story mentioned frequently on the news.  

Individuals, Directors and employees opting out of company cars, same as all of the above. A small stimulus in the government Scappage Scheme. For a reality check on this program there have been a little over 157,000 units sold under the scheme this year leaving the potential for another 143,000. If we consider the new car market for this year will be 1.8,1.9M estimated it means that around 17% of all cars registered during the scheme will be to people who until recently were driving a 10 year old car they had owned in their name for a year..Question how many of your friends and colleagues fall into this category? I would venture not many maybe 1 or 2 in your whole network.

So what can you do to make the best of this situation?

A few simple hints and tips. News in today from Fleet News states if your business owns cars upto nearly 1 year old and decided to sell them for cash at Auction those cars would make £2,200 more this August compared to last year! Businesses owning cars in this category could theoretically sell and lease a replacement with two instant benefits. firstly the lease arrangement could have significant tax benefits, secondly the company selling its fleet of say 20 vehicles could raise a significant amount of required working capital. Avoiding the difficult conversation with bankers or expensive property re mortgages if the buildings still have any equity…

We are keen to talk to businesses with fleets of 10 or more vehicles to discuss some great ideas for saving money like the above, reducing tax, increasing fuel efficency and reducing CO2… For an informal chat and more information our FREE Fleet Audit talk to Paul on 0845 373 5368.

The market is radically different year on year and Synergy is looking to offer its clients the support and specialised knowledge to help them acquire, manage and fund company vehicles. We see ourselves as a facilitator working on behalf of our customers helping, advising and structuring the complete package. A key service gaining popularity with our clients is our ‘Fleet Audit’. Here we will look at the current fleet program and advise on savings. These could be in TAX, CO2 emissions, Fleet Finance, Fuel efficiencies, Service and Repair costs. We are happy to offer this service on a FREE basis and charge based only on a small percentage of savings made.

Our fresh pair of eyes looking at your vehicles and finance could help transfer some of those costs into Net profit. For an informal chat feel free to call me 0845 3735368 or email paul@synergyautomotive.co.uk. It cost nothing to talk… The worst that can happen is we can tell you you have a great deal and all costs are under control…