Vauxhall’s Luton van venture receives a financial boost

The future of van-making at Vauxhall’s Luton plant has received a timely endorsement after figures revealed profits for the venture trebled in 2008.

IBC Vehicles, the joint venture between GM-owned Vauxhall and Renault which manufacturers vans at Luton, made a £27.3 million pre-tax profit in 2008, up from £9.2m in 2007, according to accounts filed at Companies House.

This was due to a 3% increase in sales of vehicles made at the plant to £848m and a sharp improvement in margins.

The results are dramatically stronger than the £229.4m pre-tax loss reported by Vauxhall’s car arm in 2008, where manufacturing is based at Ellesmere Port, and is a welcome advertisement for the Luton venture, which produces vans branded as the Vauxhall Vivaro, Renault Trafic and, through the Renault-Nissan alliance, the Nissan Primastar.

The long-term future of the 1,500 staff at Luton is under threat because of doubts that Renault will extend the venture into 2013. However, Nick Reilly, the chief executive of Vauxhall’s parent company General Motors Europe, has said he wants a new contract to keep the plant alive. He is in talks with Renault about an extension and is prepared to look at alternatives if those negotiations fail. (Daily Telegraph: January 12).

GM looks to first profit in six years

General Motors, the embattled carmaker, is hoping to motor into the black for the first time in six years in 2010.

The company, which last made a full-year profit in 2004, is hoping to do so after last year’s restructuring which saw it enter Chapter 11 bankruptcy protection for six weeks to cut its debt pile.

Bob Lutz, GM vice-chairman, said a full-year profit would depend on the speed of the US economy’s recovery.

Speaking on the first day of the North American International Auto Show in Detroit, he said: “Depending on mix and depending on other expenses we would hope to make a profit on an operating basis. There may be some restructuring charges that could make the overall figure slightly negative. The truth is we don’t know.”

He added that for GM to be profitable, the US car market would need to see 11-12 million vehicles sold this year, against 10.4m sold in 2009. (Daily Telegraph: January 12).

CCTV cameras collecting £3m through ‘ghost’ parking tickets

Motorists across the country are being hit with ‘ghost’ parking tickets as an increasing number of councils are using CCTV to catch offenders.

The cameras are being used to take pictures of those infringing parking rules and generate an automatic fine which is sent through the post 14 days later.

Thirty four councils have taken advantage of the power to use CCTV and it is estimated they generate £3 million of revenue every year. More councils are expected to follow.

Motoring groups say the practice of ‘ghost’ ticketing is unfair as it makes it harder for motorists to collect evidence to mount a successful appeal.

It is also more prone to errors, they claim, because the camera system fails to account for those who stop only briefly to look at a map, or have blue disabled badges.

AA president Edmund King said: “We regard them as ‘ghost’ tickets because drivers are unaware of their alleged offence for some time afterwards.

“These tickets are very hard to challenge because drivers are in no position to check the roadside signs or whether the ticket was issued by mistake.”

Fines range from £120 in London to £70 elsewhere, with a 50% discount offered for offenders who pay their fine within 14 days.

Cameras help authorities issue tickets for parking over yellow or red lines, in bus zones, on zig zags or in a restricted bay. (Daily Telegraph/Daily Mail: January 12).

China overtakes America as world’s largest car market

China has ended America’s century-long dominance as the world’s largest car market after vehicle sales jumped a staggering 46% last year.

In 2009, vehicle sales in China soared to 13.6 million compared with the 10.4m sold in the United States. Only 33 years ago there was only one million privately owned cars in the whole of China.

The acceleration of car, van and truck sales in China to overtake those in the USA is being viewed as a hugely symbolic move and underlines the power shift in western car markets to Asia. (National newspapers: January 12).

Claims culture force rise in car insurance

Drivers face paying up to 20% more for their car insurance after higher bodily injury claims and cut-throat online competition conspired to make 2009 one of the industry’s least profitable years on record.

For every £1 the retail motor insurance industry received in premiums last year, it paid out £1.20 in costs and claims, according to estimates from EMB, the independent actuarial and consultancy. For commercial motor insurance, the pay-out was a slightly better £1.10.

“The big issue for the industry is the change in the claiming culture,” said Naeem Ali, consultant at EMB. “The logical conclusion from these figures is that motor premiums need to increase by circa 20%.”

The industry has faced strong growth in the cost of bodily injury claims as both the cost of individual claims and the number of claims has risen, encouraged by claims management companies and no-win, no-fee solicitors. (Financial Times: January 12).

Confident Lookers bids for growth

Lookers, one of the UK’s leading motor retailers, is looking to expand in 2010 after overcoming ‘challenging’ market conditions with a record trading performance.

The company says that it traded ahead of budget in the final quarter last year and, as a consequence, expects to report annual results for the 12 months to December 31, 2009 ahead of consensus market expectations.

In an interim management statement chief executive Peter Jones said: “Despite the difficult market conditions we expect to deliver a record trading performance for the company in 2009. We believe that market conditions will remain challenging in 2010. Nevertheless, the strong performance from both the parts and motor divisions, supported by our strengthened balance sheet and reduced cost base, gives us confidence that we will continue to trade successfully through the period, and be in a position to pursue strategic growth opportunities as they arise.”

Lookers said that its independent parts division continued to deliver further improvements in profitability and would achieve a record result for the year.

The company gained new car market share with like for like sales for the year closing 13% ahead of 2008 levels in a new car market that closed the year 6% down on 2008. Used car sales also remained strong with full year volumes up 6% on 2008 levels on a like for like basis.

The statement concluded: “We are confident that the company will emerge from the current downturn a stronger and more efficient business which is well placed to deliver future growth.” (Lookers: January 12).

Pothole worries as ‘big freeze’ thaws

Local authorities and motorists are counting the cost of Britain’s ‘big freeze’ in the form of repairs to potholes.

The cycle of freezing and thawing water will widen cracks in road surfaces, creating potholes, warns the Institution of Civil Engineers. Northamptonshire County Council is reported to want £5 million to fix weather-damaged roads.

Throughout the cold snap, much of the public’s attention has been focused on a shortage of salt for gritting treacherous roads.

But Institution of Civil Engineers vice-president Geoff French said the thaw could bring little respite, with drivers having to cope with increasing numbers of potholes.

The continuous cycle of freezing and thawing – particularly on roads where long-term maintenance had been neglected – could break up road surfaces, he said.

“Water gets into cracks in the road surface, it then freezes and expands the crack. Then more water gets in, it freezes because of the weather cycle we’re in and it steadily gets worse,” he said.

Buckinghamshire council is deploying six extra road repair teams a day – on top of its usual nine – at a cost of £18,000 per week for at least three weeks.

In April, the Asphalt Industry Alliance said in a report there was a pothole for every 120 yards of road in England and Wales and that it would take 13 years to clear the backlog of repairs.

The Local Government Association, which represents councils in England and Wales, calculates its members spent more than £60m filling in around 970,000 potholes last year.

Its transport board chairman David Sparks said: “The latest cold weather means they are working flat out to fill in the ones created during the last month of freezing weather.”

After last February’s two-week cold snap, there was a 40% increase in road damage, according to the AA. It pushed the number of potholes up to 1.5m – and the number of insurance claims it received almost trebled from 700 the February before to 2,000 as a result, it said.

AA head of roads policy Paul Watters said this year it would be ‘much worse’ because of cold weather which had been more widespread this winter.

He said councils were too focused on ‘patching up’ road surfaces, rather than rebuilding highways to correct structural faults. (BBC.co.uk: January 12).

Vauxhall/Opel set for management shake-up

General Motors is poised to unveil a management shake-up at Vauxhall/Opel that will make its European executives more accountable for their operations’ performance, according to the Financial Times.

The change is aimed at making the carmaker’s managers in the US and around the world more accountable and hold them to more exacting performance targets.

Opel’s supervisory board is due to meet on Friday (January 15) to approve a new line-up at Opel.

Nick Reilly, GM’s head of European operations, said a new management team would be announced on Friday or Monday (January 18) that would see previously separate GM Europe and Opel management structures merged into a single team. (Financial Times: January 12).