HAA KOBE:

97 Glanza V white 150K Y94,000. : 04 Nissan Elgrand E51 Gold 48K Y820,000 : 1991 Figaro Grey 83K Y176,000, : 2008 GT-R Bronzed Graphite 14K Y3,935,000. : 95 GT-R R33 Vspec Purple 140K Y455,000

CAA NAGOYA:

97 Bomgo aft SGL5 Silver 107K Y139,000. : 02 Toyota Touring Hiace White 95K Y700,000. :99 Levin AE111 BZ-R White 87K Y196,000. :1991 Honda NSX White 109K Y1,993,000. : 1991 Figaro Grey 68K Y359,000

© 2011, MD. All rights reserved.

First off, a bit of background on what Tesco have actually bought.  Tesco have purchased a stake in Carsite with further options to increase the holding.  Carsite in turn were bought into last year by Sir Trevor Chinn former CEO of the Lex Leasing Group, and he is the man who has stitched together the two partners to form the new company.

Carsite have previously been lumped into the same box as Autoquake, as they were both internet retailers.  However the business models differed greatly.  Previously I would have backed the Carsite model over the Autoquake one.  Essentially Carsite was a site, that’s all; they carried no stock and operated out of an airfield in Bedfordshire which was conveniently shared with a couple of other companies, which included lease companies. Their overheads were site management, some sales/handover staff and a building with phone lines and consumables, and probably most importantly the advertising bill.  Essentially Carsite got first option to advertise cars coming back off lease, if they received a deposit on a car or substantial interest they would take the car from the leasing company and prepare it for the customer. If an advertised car received no deposit then it stayed with the lease company and probably went to auction. So what they did was gamble on advertising costs, that’s about it.

I have had some dealing with Carsite in the pre Sir Trevor Chinn days. I found them good to deal with, and set up a supply chain with them to one of my overseas buyers. The main problems I had with them were:  (A)  lack of cars: They never had access to the amount of cars they were advertising. (B)  Lack of variety in their stock.: This may have been more my problem than theirs but it is a fact that if you are living off ex-lease cars you will have a lot of duplicate vehicles in your stock book. (C) The product wasn’t great.  That’s not a criticism of Carsite. A lot of their cars came back from Motability and two other leasing companies, and in my opinion they needed to broaden their inbox to get a better standard of car.

So do I think Tesco will be successful?  You can stand in front of the tide all you want but the internet is upon us and will only grow in strength.  I can think of few things now I would hesitate to purchase on the Internet.  Internet car sales will continue to be a slow growing niche as it cannot, at the moment, satisfy the majority of buyers who want full dealership facilities.  However there is an increasing number of buyers looking to purchase in this way, Tesco have already set up partnerships with car servicing centres to take care of warranties , Surely in time Tesco cars will form an alliance with a car underwriting company or look to set up their own operation. Lets be honest take away the internet aspect and it’s not dissimilar to how many car supermarkets work now.

Tesco obviously have massively deep pockets and can absorb losses in a new market (witness what they are trying to do in the states with “fresh + easy”) even so I can’t see how deep their pockets need to be.  They have not committed to setting up garages around the country and employing hundreds of staff.  They have formed an alliance with an established company and will act as agent between sellers and buyers, it’s not the sort of operation that will burn cash, even if it does take a while for them to optimise the system. Too many internet based companies have put the emphasis on the technology, and a lot of companies have been formed by tech people on the basis that they know how to code a cool website and will learn the car industry as they go along.  As has been proven in the past the medium is not the message.  There are several carcasses of failed internet retailers on the side of the road. Some would point to them as evidence that its risky business, however there have been factors.

In timescale the internet has in a short period become a constant in most of our lives. The technology has caught up to support the ideas. Companies like Jam Jar operated (only a couple of years ago) at a time where the internet was something I dialled up on my PC when I came home from work in the evening.  Now I read the newspaper front pages on my Smartphone in bed, before I get up to start the day.  People sit on the train browsing on their laptops, pads and phones routinely. Everybody has the time to browse for consumables, or cars on the web. Previous Internet based companies where generally marketed well or had good finance behind them etc but where still viewed as “Internet start ups”.  Subsequently no matter how well they were presented they were distrusted. This time it is Tesco. People trust Tesco we are talking about a company with 6000 stores worldwide that controls 30% of the UKs retail sales. It’s fair to say they are pretty big and well trusted; it’s fair to say that £99 refundable deposit on a car will be taken as read by everyone bar extreme cynics.

So far they have ticked a lot of boxes but what else do they have .Lets have a quick look at the man who is heading up the business Sir Trevor Chinn. That would be the same man who steered the ship at lex leasing from the 60s through the 90s when they became the largest car lease/finance company in the country, eventually taking over the RAC.  It would be fair say the contacts are there to solve any supply problems and the car trade business experience is proven.  Whether it is today or next  year , internet based selling will be a fixture of the market in the future.  It will be a slow evolution rather than the revolution I would have foreseen years ago. There will always be room in the market for local used car garages although personally I believe it a braver man than me who would set up a traditional car lot today. Any dealer will attest that the internet has at least proved that if you advertise a car online cheaply, somebody will travel three hundred miles to buy it from you. The old reliables that car dealers would pay a premium for, like a pitch  in a good area to capture passing trade, are less and less important as people are prepared to go further afield for bargains.

Tesco have already come out and stated they have no intention of starting a price war. This for me is the bottom line in the car trade. The sort of margins on cars sold now are increasingly smaller, and more and more profits are being subsidised by the cut from finance and warranty sales. Ultimately there is only so low a car can be priced. And in many instances the big supermarkets and retailers are already working off slim margins. Tesco will not be in a position to dictate the price because lease companies will only sell to them if they are taking a premium over auctions or current remarketers, and auction prices are holding steady because the lease companies are run on such lean figures that they really only want to lease stock that will have attractive residuals. We have all seen the problems that niche leasing companies have run into in recent years.

So that’s my summation. Tesco are not here to eat up the market, they are certainly not here to knock 30% of the price of used cars because that is an impossibility, but they are on the right lines for taking a piece of the action, and I will be watching their growth with interest.

© 2011, MD. All rights reserved.

A busy day in Kobe with 8600 cars on sale , Hard to quantify exactly how many were selling with the auction still in progress, but here are some early results back for cars that people are asking us about.

1986 Levin Gt-Apex  Red 148K   Y310,000

1986 Levin GT-Apex White 216K  Y356,000

1991 Figaro Grey 61K     Y420,000

1991 Figaro Green 73K   Y325,000

08 Nissan GT-R Silver 21K  Y4,250,000

1992 Nissan R32 GT-R Gunmetal 174K   Y210,000

2002 Mitsubishi Evo VII GT-A(semi-auto) Black 118K Y404,000

2000 Bongo SGL3(2wd)  white/silver  180K    Y255,000

Some nice looking European Exotica passing through later this evening If I think theres anything of interest, Ill send it over.

© 2011, MD. All rights reserved.

Auctions in Japan are slowly getting back up to speed after Golden Week. Entry numbers are still down but a large entry is expected for Haa on saturday.  Heres a few Ive selected from Nagoyas Caa auction this week

2005 Nissan Elgrand E51 Light blue metallic/Cream leather 110km Y955,000

2002 Nissan Elgrand E51 Gold, Entry spec level 73K  Y496,000

2008: Nissan GTR R35 Black 11K  Y4,650,000

2004: Honda Integra  Type R DC5  White 122K Y800,000

1998:  Honda Integra Type R  DC2  White 65K Y272,000

1998: Mitsubishi Evo V gsr Silver 90K  Y294,000

1999: Mazda Bongo Aft 2.5V6 Petrol  silver 135K  Y231,000

2000:Subaru wrx STi V6 RA Coupe terzo blue 97K  Y417,000

1999: Subaru wrx STi V5 4dr White 114K  Y214,000

2002: Mitsuoka Viewt K11 Burgundy 95K  Y150,000

We will look through Haa on sunday and post some example prices.  As always if there are any cars you want us to highlight please let us know.

© 2011, MD. All rights reserved.

Not a huge amount selling by all accounts sports and performance stuff a bit thin on the ground which is strange to see at Haa. Apparently some good value starting to appear in older European prestige and sports models we will keep an eye on this trend over the coming period anyway here is a snapshot of sold cars

HAA Kobe Saturday 7^th May

1998 :Toyota Granvia 3.0D  2wd White/silver twin roof, 124K   Y190,000

2000:Toyota Regius windtourer Black      37K   Y449,000

2004: Nissan Elgrand E51Pearl white 73K   Y805,000

2000:Nissan Elgrand ATE50 3.0D Silver   95K  Y365,000

1997:Nissan Elgrand AVWE50 3.0D  Black  112K  Y108,000

2008: Nissan GT-R Premium Edition in Slate grey 48K    Y3.950,000

1996: Skyline GT-R V-spec White with nice nismo bits showing 56K but not warranted Y540,000

Bongos as usual are not making it as far as auction the only 2 free tops here were

1995 Sgl5 Green Grade 4 99K   Y210,000

1995 Sgl5 Silver Grade 3.5 161K Y99,000

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© 2011, MD. All rights reserved.

Well it doesnt take a genius to realise that the strength of sterling against the Yen has put a kibosh on the majority of Imports, But there have been other factors too, We will be going into this at length in our imports section but we will also be keeping an eye on prices in Japan to let you know what cars are on the cusp of being importable again. we will also have a look at current shipping options and how to save money on your testing costs. Your Input is appreciated as I will only look at cars that people are asking me about although s usual,within reasons I will attemp to answer all questions

© 2011, MD. All rights reserved.

Using our car pricing knowledge and with the help of a network of buyers we hope to let you know in advance of whats hot and whats not. Updated weekly with real world auction Results collated  from our fearless team of Buyers and Bacon bap addicts

© 2011, MD. All rights reserved.

Tuesday 10th May

Nottingham , Good sale lots selling a few bargains

08(57)Audi A4 1.9tdi se Black 62K £7050

09(09)VW Tiguan 2.0Tdi 140 Sportmotion Silver-black leather 32K £16450

09(09)Seat Ibiza 1.4Se 5dr Blue 15K £6100

08(08)VW Polo 1.2Match(70) 3dr Black 33K £4800

07(57)Audi A6 2.0Tdi SLine grey-black leather 125K £8100

06(56)Audi A4 1.9Tdi 115Se Black 116K £5100

08(58)VW Touran 2.0Tdi 140SE Silver 30K £11,100

09(59)Audi A6 2.0Tdi 140SE Blue-grey leather 25K £15,100

08(08)Audi A3 1.4T Fsi SE Black 5dr sportback 51K £7700

Much slower day in London with a lot of provisionals in Paddock Wood some sellers were

10(10)Mondeo 2.2Tdci 175 Titanium X Black 17K £15,100

05(05)BMW 116SE Silver 38K £6150

06(56)Toyota Prius T-Spirit Black 46K £7600

08(08)Nissan Quashqai 2.0Tekna Auto Black 41K £10,600

And thats about all for tuesday .

Monday 9th may:

Found myself in Birmingham and as has been the norm recently prices where high and generally over book. Surprised to find a lot of cars not selling and only going to provisional

Some examples :

58 plate VW Jetta 1.9tdi pds blue met 41K £7650

07 corsa 1.0 life 5dr in gold done 38K £3650

2010(10)Audi a3 Sportback 2.0Tdi 140sport done only 6K made £15,000

08(57) Seat Ibiza 1.9tdi sport 5dr silver 38K  £4600

07(07) Bmw 318Dse silver with leather 80K leggy but nice £7600

08(08 A4 tdi se 143se in black with 1/2leather nice car good history 91K stll decent value at £10000

Fancied a go at a 2008 X5 3.0Dse in Silver done 78K but only went provisional at £20,000

Few other cars on my list but all provisional so not worth mentioning slow start to the week.

© 2011, MD. All rights reserved.