National Motorcycle Dealers Association News
May 2014
// ‘We represent, you benefit’
Dear Colleague,
This month’s NMDA news contains all the latest motorcycle information, plus other issues facing the sector.
Motorcycle dealers believe there has been an overall improvement in the day to day relationship with their manufacturer. Signs of an improving economy has boosted consumer confidence and resulted in an increase in motorcycle sales, according to the National Motorcycle Dealers Association (NMDA) Dealer Attitude Survey Spring 2014 results.
It is also extremely positive to see that the motorcycle market was up by an impressive 16.1% in April.
If you have any queries or questions concerning any of the items raised in this month’s update, please do not hesitate to contact us here at the NMDA on the contact details provided below.
I hope you enjoy this latest update.
Steve Latham,
Head of NMDA
Email:
IN THIS ISSUE:
/ · THE DEALER/MANUFACTURER RELATIONSHIP IMPROVES – SAYS NMDA· MOTORCYCLE MARKET CONTINUES TO IMPRESS IN APRIL
· DRIVING AN UNTAXED MOTORCYCLE AFTER THE ABOLITION OF THE TAX DISC
· FCA UPDATE FOR MOTORCYCLE DEALERS
· PAYING TO HAVE THE RADIO ON - ‘PERFORMING RIGHTS’
· ‘RIDE TO WORK DAY’ - MONDAY 16 JUNE 2014
· VEHICLE SAFETY RECALLS: APRIL/MAY 2014
· NMDA MEMBERSHIP – YOUR ASSOCIATION BENEFITS
THE DEALER/MANUFACTURER RELATIONSHIP IMPROVES – SAYS NMDA
Motorcycle dealers believe there has been an overall improvement in the day to day relationship with their manufacturer. Signs of an improving economy has boosted consumer confidence and resulted in an increase in motorcycle sales, according to the National Motorcycle Dealers Association (NMDA) Dealer Attitude Survey Spring 2014 results.
The NMDA Spring 2014 Dealer Attitude Survey published this month show that there has been an increase in the overall value of the franchise.
· When asked about the overall value of the franchise, the all dealer average increased from 6.4 to 6.6.
· Triumph, Harley Davidson, Ducati and Kawasaki were recorded as the top 4 franchises.
· The least valued franchises by respondents are Suzuki, Honda and Piaggio Group.
The dealer/manufacturer relationship has generally improved since the last survey in Autumn 2013.
· The all dealer average when asked about their partnership with their manufacturer has increased from 3.5 to 3.6. 70% of networks improved their score and 80% returned a rating on or above the average mark.
· The Honda network of dealers is the only franchise to illustrate any significant decrease in satisfaction with a fall in rating of -0.4 and now drop to second from last place in the rankings.
· Harley Davidson move to first position the rankings table having returned a rise in score of +0.7. Ducati move significantly up the chart with an increase in rating of +0.8. Other networks to show improved confidence in the partnership they have with their manufacturer include Kawasaki +0.3 and Yamaha +0.5.
Profit and profitability ratings have improved slightly in this survey which falls in line with the recent upturn in the economy.
· When rating the profit return by representing their franchise, the dealer average improved from 2.9 to 3.1 70% of networks returned a score on or above this average mark. In addition, 50% of dealers responded with an improved score since the last survey.
· When asked about the future profitability of their business the all dealer average improved from 3.3 to 3.4.
Stephen Latham, Head of the NMDA commented:
“It is positive to see that manufacturer/dealer relationships have improved following our survey in Autumn 2013. Dealer profitability heavily impacts on overall dealer satisfaction. Therefore with the ‘shoots’ of an economic recovery returning to the marketplace it is likely that the increase in scores could be down to increase in sales.
“Over the last few months there has noticeable increase in the number of motorcycle enthusiasts entering motorcycle dealerships. There has also been a significant number of leisure bikers who enjoy motorcycling, suggesting a return in consumer confidence and financial security is having a positive impact on the sales of motorcycles in this sector.
“Harley Davidson, BMW and Triumph have experienced high levels sales volumes over recent months. In this survey some manufacturers have seen more activity than others, suggesting that certain manufacturers – namely Piaggio Group need to develop their relationships with dealer networks to avoid falling below average in certain areas of the survey”.
Please find a PDF of the NMDA Spring 2014 Dealer Attitude Survey Results attached to this month’s newsletter.
MOTORCYCLE MARKET CONTINUES TO IMPRESS IN APRIL
“It is extremely positive to see that the motorcycle market was up by an impressive 16.1% in April,” said the NMDA’s Stephen Latham.
There were 1367 more machines registered than April 2013 with sales reflecting new confidence in the market and economy.
The most significant improvement comes from the purchase of traditional motorcycles of larger engine capacity. Many dealers have suggested that the better weather has got dry-day bikers back on the road.
The sub 50cc moped market is still running behind last year at -1.3%, however April’s figure is better than the year to date decline of -4.8%.
Commuter motorcycles between 51-125cc saw improved sales with 535 more (18.9%) units registered in April. The large bike sectors 651-1000cc and machines above 1000cc showed growth of almost 25%, suggesting that the established bikers are returning to the market.
BMW topped the over 1000cc market with both its 1200 GS and RT leading. It was also pleasing to see Piaggio’s VESPA GTS 300 ranked as the best selling 126-650cc machine.
Latham continued, “The last few months have exceeded expectations for motorcycle dealers with a year to date growth of 13.7%. Around 3902 more bikes have been sold this year – totalling almost 1000 more machines on the road every month in 2014 so far.
“With the new confidence in the economy and improving employment figures, the NMDA are hopeful that the 2014 motorcycle market will continue its upward trend”.
DRIVING AN UNTAXED MOTORCYCLE AFTER THE ABOLITION OF THE TAX DISC
With the abolition of the paper tax disc from 1 October 2014 motorcycles will no longer be required to display a paper tax disc. Motorcycle dealers will be at significant risk during road tests or whilst vehicles are collected or delivered, as driving an untaxed vehicle will be a criminal offence and will leave employees and businesses at risk of prosecution.
Section 29 of the Vehicle Excise and Registration Act 1994 (VERA) makes it an offence ‘If a person uses, or keeps, on a public road a vehicle (not being an exempt vehicle) which is unlicensed’.
The courts have long established that by driving a vehicle the driver has use of a vehicle. Furthermore, interpretation of the term 'to use' does not require that there is any knowledge or intention to commit the offence; if the vehicle is unlicensed the driver commits the offence. As the driver does not have to know that the vehicle is unlicensed or even intend to use an unlicensed vehicle to be guilty of the offence, where the use in question is by an employee during the course of their employment, then the employer is also guilty of the offence.
In practice, all motorcycle dealers will need either to check the license status for any vehicle they are test-driving, collecting or delivering, or carry out such activities under a valid trade license. As this check can only be carried out online, dealerswill need to have sufficient access to the internet and know where to look.
The Government is currently testing the online checking service, and the current address is https://www.vehicleenquiry.service.gov.uk/ it remains to be seen how this will hold up to full scale use and whether any changes will be made before October.
Motorcycle dealers have to be aware that the site contains a clear warning that there is a delay in the current status becoming available. As such any recent licence or SORN applications would not appear. It is therefore not possible to be certain that a vehicle is taxed at any one time. However, if there is a significant period to run on the currently recorded tax disc then the risk to the dealer is minimal.
The only way to be certain that you will not be found guilty of such an offence is to ensure that all test/service rides, or bike deliveries are conducted under a valid motor trade license. We would strongly advise all car, van and truck dealers to consider their current procedures and how they will be affected.
FCA UPDATE FOR MOTORCYCLE DEALERS
On 1 April 2014 the Financial Conduct Authority (FCA) took over the supervision of consumer credit from the Office of Fair Trading (OFT). Dealers, ahead of the change, should have applied for interim permission to continue to be able to provide credit to their customers.
What next?
For the moment, dealers who are compliant with the existing OFT regime that is based on the Consumer Credit Act, Consumer Credit Directive and OFT guidance, should not have any major issues. There is a six month transitional period before dealers need to adopt the new FCA Consumer Credit Rules (CONC). Also, requirements such as reporting will not be required during this period.
From October 2014 dealers will need to be compliant with the FCA rulebook. However, most rules have been a straight lift from existing legislation and guidance and will not require any major changes to business operations to remain compliant. However, the following should be noted:
· Reporting to the FCA will start from 1 October 2014 and dealers will need to comply with this.
· Dealers will need to ensure documentation is compliant with the new rules and this will require some changes, particularly around status disclosure of your business, i.e. whether you are fully authorised or hold limited permission and details about your business. For those businesses already authorised for insurance a combined document will be acceptable.
Authorisation
Dealers generally will not need to apply to the FCA for authorisation until December 2015. This is very late in the process but can be seen as an indication of the low risk level that the FCA see the industry. The biggest issue for the FCA with dealers is the sheer quantity of licences that need to be converted. All businesses will be individually informed of when they need to apply to convert their interim permission to authorisation. An initial letter should be received by firms in the next couple of months. Once you are called forward for authorisation you must apply within a three month window. At the end of the three months your interim permission will die and if you have not applied for authorisation you will not be able to continue to provide credit to consumers.
Dealers will need to consider their position for authorisation. For businesses who are already authorised by the FCA to provide insurance, the option will be to apply for full consumer credit authorisation. If you are not currently authorised you will be able to apply for ‘limited permission’ which is a slightly lower cost and slim-lined version of the regime. If you are able to apply for this you can continue to provide insurance as an appointed representative of a third party, such as an insurance network or company, e.g. ITC, Warranty Direct etc.
We do not believe that either forms of authorisation will be problematic for the industry. There will be a slight cost difference with the two and this will need to be a commercial decision. Some dealers who are currently fully authorised for insurance may wish to become an appointed representative to allow them to become limited permission for credit.
If members have any concerns or queries please contact 01788 538303.
PAYING TO HAVE THE RADIO ON ‘PERFORMING RIGHTS’
Over the last few years we have seen a rise in enquiries and demands for payment from performing rights societies such as PRS and PPL. Are these demands for payment legitimate, and if so why are we liable to pay them?
When a song or piece of music is written, the person who writes it owns it. This is called copyright. The Copyright, Designs and Patents Act 1988 states that if you use copyright music in public, you must first obtain the permission of every writer or composer of the music you intend to play.
Most performers allow CD and broadcast through the radio or television for private use only. If the music is to be performed in public, permission is needed from the rights holders before each song is performed which, in turn, requires contacting a significant number of people in advance of such a performance. So what constitutes a ‘public’ performance?
Music is performed ‘in public’ when it is performed outside what could be regarded as the domestic circle or home life. This has been the cause of a number of cases both before and after the current legislation and can be complicated. In its most basic form the question is whether the performance was in a public place and/or whether more than 1 person can hear the performance. In Performing Right Society Ltd v Camelo [1936], a performance in a private room, clearly audible to persons dining in a restaurant, was held to be in public. Also in Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943], a performance at a factory to workers while working was held to be in public.
Given the case above, it is likely that playing music in either a reception area or in a truck workshop where more than one person can hear it will be a public performance.