TRA - Turners Automotive Group

[Waltzing]

have to have a big slows down surely to see 3.50..?

[Waltzing]

Back on track ,,, well lets hope so ..

[KW]

Turners have posted one record result after another over the last 4 years despite lock downs, Covid, the cost-of-living crisis, the steepest rate of interest rate increases in more than a decade and the N.Z. economy being in a recession for a protracted period of time.

You got it backwards.  They didnt post record results despite Covid, they posted record results because of Covid.  This is now unwinding, just like the post-Covid travel industry. 
https://www.nzherald.co.nz/rotorua-daily-post/news/millions-of-dollars-pumped-into-rotoruas-car-dealerships/WYG53AL46SFNJ672K73SIBRIXQ/

[Basil]

Basic transport is a necessity with our pathetic public transport system. Do you stop buying basic necessities in a recession?  No, I don't either.

[Waltzing]

actually US air travel just booked its most flights day ... and more flight capacity is needed apparently.. yes next 12 to 24 months will be slow for many retailers... mini GFC. recession like economy conditions.. but if they dont reduce QTR Div then 3.50 will take a while ..

it looks like TRA has already adjusted its product price points coming out of covid to a lower level.

EV product made in european has hit a price point problem and apparently customers are not happy with battery replacement.. current fleet of petrol looks like it has a few years yet to run.

[Waltzing]

The other point here is that what portion of inventory is sourced locally in NZD and what portion is hedged ..

[BlackPeter]

The other point here is that what portion of inventory is sourced locally in NZD and what portion is hedged ..

That's easy - TRA sources ALL their inventory from NZ. No need to hedge.

[Waltzing]

yes but there is a ref in the results about the cost of imported inventory in relation to clean car standards... in the "environment statement" just wondering why its there... page 6.

2cc have a hedging which means a portion of there inventory is not local... they look very different business models..

[BlackPeter]

yes but there is a ref in the results about the cost of imported inventory in relation to clean car standards... in the "environment statement" just wondering why its there... page 6.

2cc have a hedging which means a portion of there inventory is not local... they look very different business models..

You are referring to this bit?

"Government regulation (changes to Clean Car Discount and Clean Car Standard) increasing import cost of used vehicles"

As far as I can see are they just describing the operating conditions the market was in ... used vehicles got dearer, and this obviously impacted on them as well - even if the pre owners of their inventory have not been directly impacted by the increased import cost ... I am sure they (the previous owners) very much enjoyed the windfall for them when on selling their old lemon to TRA.

[Waltzing]

margin squeeze ?  that will impact all operators .. like the price of oil its impacted by all players responding to fill the gaps.. likely see the Sp fall back after each DIV to the 3.80's

[BlackPeter]

margin squeeze ?  that will impact all operators .. like the price of oil its impacted by all players responding to fill the gaps.. likely see the Sp fall back after each DIV to the 3.80's

Not clever enough to correctly predict future share prices, and I never met anybody else who is able to do that either ...

Clearly - the market currently not that flash as it used to be, and the current SP clearly reflects that.

Whether however the market is over- or underdoing it (lets face it, Mr Market hardly ever gets it right apart from the broken clock effect) is anybody's best speculation ...

[KW]

Basic transport is a necessity with our pathetic public transport system. Do you stop buying basic necessities in a recession?  No, I don't either.

A small number of car sales may be essential - eg. the person who buys a replacement car because their old one died or got written off.  But most of them are probably discretionary sales - people just want something new, or bigger, or flasher, or sportier, or whatever.  In a cost of living crisis that car upgrade gets put off and people just make do with what they currently have.

I'm still very happy with my 2013 Hyundai Veloster   

[Left Field]

....  In a cost of living crisis that car upgrade gets put off and people just make do with what they currently have.....

There are also a growing range of alternatives to cars (and public transport)...... in Nelson & Wellington it is quite common to see young families using ebikes/cargo bikes for shopping and the school drop offs. Young people are also using escooters for commuting. Hire scooters are also popular.


( Don't get me wrong..... I don't hold TRA, yet think they are well positioned to weather a storm...... it's just about recognising some headwinds ahead! )

[Waltzing]

average Car age in US is 14 years and probably growing...

business models count and its probably your small operators that will get hit first... by 2028 the NZ market could be in a much different place.

unless they cut the DIV which is not uncommon as yields turns the nzxn should keep the sp going.. but not certain..

[Basil]

A small number of car sales may be essential - eg. the person who buys a replacement car because their old one died or got written off.  But most of them are probably discretionary sales - people just want something new, or bigger, or flasher, or sportier, or whatever.  In a cost of living crisis that car upgrade gets put off and people just make do with what they currently have.

I'm still very happy with my 2013 Hyundai Veloster

Turners and 2 Cheap cars are providing very basic cars to people whose car has died or is nearly dead.
The average stock value at cost (circa $7K) tells you the which end of the market they're supplying.
Then there's their multi award winning Tina marketing which is simply brilliant.  Speaking of brilliant marketing and well-known advertising personalities, (Tammy), Rod Duke's Briscoes is also holding up extremely well.  https://www.nzherald.co.nz/business/weve-got-big-plans-rod-duke-on-why-briscoes-is-thriving-while-other-retailers-struggle-money-talks/LZ52SN5TA5EAJAJR76JVHIP2IY/