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EU CO2 emissions rules causing UK car supplies to falter, says Cambria

Mark Lavery, Cambria Automobiles chief executive

Cambria Automobiles has claimed that a shift towards luxury car retail enabled it to maintain profits as manufacturers adjusted vehicle supplies to mitigate the impact of new EU CO2 emissions regulations.

Delivering a trading update for the five-month period to January 31, the AM100 retail group, which has grown its representation with Aston Martin, Bentley, McLaren, Lamborghini and Rolls-Royce in recent years, said that new retail sales in the period were down 9.8% while total new vehicle unit sales, including fleet and commercial, were down 11%.

Its shift towards the sale of more expensive vehicles meant that the total profit from the new car department of the business remained in-line with the same period a year earlier, however, as used vehicle unit sales continued to perform well – rising 4.4% by volume.

In its trading update statement – issued via the London Stock Exchange today (March 4) – Cambria said: “During the trading period, the new car market has been significantly affected by a number of factors including the impact of recent changes to the emissions regulations. 

“The manufacturers are adjusting vehicle production and supply in order to meet the challenging emissions objectives and minimise the fines that will be levied upon them for exceeding those targets.”

The trend is something that OEMs will attempt to redress in 2020/21 as stringent new EU emissions regulations impose a €95 fine for each gram of CO2 over its 95g/km fleet average, per vehicle sold.

Cambria said that the outcome of Brexit could further impact vehicle supplies due to OEMs approach to the emissions regulation. It said: “If the emissions targets for each manufacturer are assessed solely on registrations in the UK post Brexit, rather than being averaged across Europe, then the challenge for the manufacturers to hit the targets in the UK only becomes even more difficult.”

In January Jato Dynamics reported how a manufacturer-led rush to clear their stocks of vehicles with high CO2 emissions levels contributed to a 21% increase in new car registrations across Europe in December last year.

Franchise development and 2020 outlook

In Cambria’s trading update, it summarised recent developments within its own business. 

In January, the group completed the acquisition of Aston Martin and Rolls-Royce dealerships in Edinburgh, which had previously been operated by Leven Car Company.

Last month it completed the refranchising of Volvo Preston into Alfa Romeo and Jeep to create FCA Brand centre in the Lancashire city, meanwhile.

In a summary of the sector, the group’s statement acknowledged that the trading environment remains “challenging”, with a number of disruptive factors impacting new car sales. 

It also stated that, whilst not a factor in the period, the spread of Coronavirus could have an impact on both new car supply and on new car manufacture in the UK where there is reliance on parts supply, particularly from China. 

Cambria chief executive, Mark Lavery, said: "The performance in the first five months of the financial year has been good despite the significant challenges that the UK consumer sector faces. 

“We have made further progress with our franchising strategy adding our fourth Aston Martin dealership and our first Rolls-Royce dealership, both in Edinburgh. 

“We are delighted to have been successful in acquiring these businesses and look forward to developing our presence in this important market.

"While the new car market remains difficult, our superior brand representation, excellent franchise portfolio and strong balance sheet means that the Group remains well positioned and able to take advantage of any opportunities that may arise."

Cambria will announce its interim financial results for the six months to February 29., 2020, on May 6.

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