Pendragon looks to a bright future

Pendragon, the UK’s largest dealer group, is back from the brink and looking to a bright future characterised by ‘less arrogance and more humility’ as it celebrated its 20th anniversary in business.

The company marked its birthday with 350 high-powered motor industry and financier guests at a special dinner at London’s Landmark Hotel.

Chairman Nigel Rudd admitted that the fallout from the economic downturn had been the worst he’s experienced. He said: “I’ve never seen a business implode so quickly.”

Pendragon has already closed or sold 53 dealerships as well as removed more than 3,000 jobs in a £60 million cost reduction programme. (Daily Mail: November 13).

Porsche in slow lane with €4bn loss

Porsche has reported pre-tax losses of €4.4 billion for its 2008/9 financial year to July. The huge loss was caused by the company’s failure to take over Volkswagen, Europe’s biggest carmaker, last year.

In the previous year, its cash-settled Volkswagen stock options gave Porsche windfall gains of €8.6bn.

However, Porsche was marred by writedowns on options as Volkswagen shares rose as high as €1,000 in October 2008.

Porsche amassed more than €10bn in net debt just as credit markets froze. It was forced to turn to Volkswagen for a loan, opening the door for a reverse takeover which has taken place. (The Times: November 13).

Northgate shares in the fast lane

Shares in Northgate, Britain’s largest vehicle rental company, have jumped 24 per cent this week on the strength of a rebound in residual values.

Around 90 per cent of Northgate’s 63,000-vehicle fleet are light commercial vehicles and the shares rose as UK auction data showed van prices rebounding for a third consecutive month.

This week shares have risen almost 50p to 249.5p to the close of trading yesterday (Thursday, November 12). The company’s interim results for 2009/10 are due out next month. (Financial Times/Daily Mail: November 13).

PSA moves into car rental to gain market share

PSA Peugeot Citroen is to offer prepaid cars by the day to young city dwellers as part of the French motor company’s drive to regain market share and enhance the appeal of its brands with consumers and investors.

The new business, branded Mu, is to be launched in Paris, Berlin and Amsterdam this winter and will reach Britain before the summer.

Within less than a year, Londoners will be offered ‘pre-paid mobility on demand’ from Peugeot dealerships through a payment card that offers consumers the choice of a car, a small van or a scooter for a day or a weekend.

The Mu concept is targeted at young people in cities and is aimed at generating income from the stock of vehicles sitting at dealerships, a huge drag on dealer profitability.

Mu customers will be able to load mobility points on to a card which entitles the user to a vehicle.

The pilot schemes in France, offer a Peugeot 207 for 280 points per day, a cost of €56. For about the same cost consumers can rent a Peugeot scooter for three days, and for 25 units, or €5, a bicycle for a day. (The Times: November 13).

Daimler discounts Smart in USA

Daimler has begun offering discounts for the first time to American buyers of its Smart car in the hope of reversing a steep slide in sales.

Smart sold only 661 of its Fortwo model in the US last month, more than two-thirds below October 2008 and the lowest for any month since the car made its debut in the States early last year.

It is said that while the drop in fuel prices over the past year has not revived Americans’ appetite for the biggest gas-guzzling SUVs, it has damped enthusiasm for very small cars such as the Smart. (Financial Times: November 13).