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The biggest auto scandal in history is not going away yet…

WEEK by week, day by day, the emissions saga rumbles on, with petrol engines now also implicated in attempts to cheat the regulators. Oliver Harry takes a look at what we know… so far. 

Q) So, one month has passed. Is the scandal still rumbling on?
A) You betcha, and it shows no signs of disappearing any time soon. There’s barely a day goes by without the German giant making headline news around the world.

Q) Was VW actually using the defeat devices in European emissions testing, then?
A) It was indeed. VW’s UK MD, Paul Willis, admitted as much to MPs during a select committee grilling on October 12. Willis handled the situation well, it must be said, and shed light on some pretty grey areas. He confirmed that 1.2 million cars had been affected on these shores, and he also acknowledged that VW had ‘mishandled’ the whole situation.

Q) 1.2 million? How on earth is VW going to fix them all?
A) Good question. Around 400,000 will need fuel injectors altering, as well as a software fix. The remaining number, made up of around 700,000 2.0-litre and 30,000 1.2-litre models, can be fixed with software alterations. It isn’t as drastic a change as feared, but the task ahead for VW UK is far from straightforward.

Q) It sounds promising, nonetheless. Surely a hardware change is needed, though?
A) Not according to Willis, who maintained that UK vehicles won’t need the hardware changes that will likely be applied to cars over in the US. Stateside vehicles will probably get a new urea tank, as part of an exhaust system overhaul. This is down to different regulations in the UK and US markets, apparently.

Q) Still, all these changes are bound to cost a bob or two…
A) You could say that. In fact, Volkswagen has admitted that it will cut spending by nearly £742 million to try to pay for it all. It sounds like a lot already but it’s bound to cost more. Much more. It’s going to have a big impact on future car development, that’s for sure.

Q) But the group must still have enough money in hand to cover the vast expenses?
A) Just about, we have been told, although the European Investment Bank, which has loaned Volkswagen some £3.4 billion since 1990, is threatening to withdraw its support. It has a point, perhaps, as the loaned money was (irony alert) intended for low-emission engine development, after all…

Q) So VW is beginning to react to the crisis constructively then?
A) Yes, although its slow reaction to the scandal didn’t go unnoticed by the parliamentary select committee. MPs questioned why it took so long for VW to take affected cars off sale, leaving customers to unknowingly buy them up.

Willis insisted it as logistically unavoidable. VW is a big machine with countless cogs, of course, and the long chain of command makes swift decisions difficult. But you can’t help but question why it hasn’t handled the situation as well as other giants have dealt with crises in the not-too-distant past. Toyota springs to mind…

Q) What will it do now, because surely no-one is going to buy a diesel VW any more?
A) Yes, it is pretty hard to see, isn’t it? VW much agree, because it has announced a cut back of diesels. It seems electricity is in and diesel is out at VW, with a huge refocusing towards EV powertrains.

We all thought the Phaeton would be the first to die in the name of a new era of frugality. Not a bit of it. In fact, it will be back as an electric, Tesla-rivalling flagship soon enough. VW is probably hoping it will distract people away from the here-and-now. That is, however, rather difficult to envisage.

Q) Interesting. So will VW begin repairing European cars from January onwards?
A) Er, not quite. Although VW has promised to begin fixing its cars from January, the German authorities rejected the plan. Instead, they issued a mandatory recall of 2.4 million cars.

It seems the German government is just as fed-up with VW’s slow response as the rest of us. Nevertheless, it’s pretty rare for it to be publicly snubbing VW, and demonstrates the government’s desire for some level of control over the deteriorating situation.

Q) Talking of governments, is this really the first that our government has heard of the emissions scandal?
A) This is where get even more interesting. It Appears that the government was warned about dodgy diesel emissions as far back as 2009 – at least according to an article in The Times.

Some clever bods from King’s College London and Leeds University found the NOx levels and particulate matter in London had risen by seven per cent in five years when they expected it to have fallen by 20 per cent. Something was clearly afoot.

Q) So the scientists tipped the government off?
A) That is what we are being led to believe. Their analysis was commissioned by the Department for the Environment, Food and Rural Affairs, after all. A similar warning was delivered in 2011, too. We don’t know precisely how much the government actually knew about the issue, but it must surely have had at least an inkling following the investigations.

Q) Well, at least we know exactly which cars have been affected now, right?
A) You’d think so, wouldn’t you? What with revelation after revelation erupting in the past few weeks, you might imagine that everything is now fully out in the open. It seems, though, that we were wrong. Instead of slowing down, it turns out that VW’s EA 189 engine might not be the only one tainted…

Q) But didn’t VW insist that EA 189 was the only engine with the defeat device?
A) It did indeed. But US regulators are now claiming that the group’s 3.0-litre diesel unit fitted between 2014 and 2016 has a defeat device. It potentially affects 10,000 VWs, Audis and Porsches. Yes, you read that right – Porsches.

The Stuttgart marque has been dragged right into the heart of the scandal. It also drops group chief executive Matthias Muller into fresh controversy – he was in charge of Porsche when the engines were fitted, after all. If anything is even remotely amiss, he will find himself right in the firing line.

Q) Is Porsche’s involvement for certain?
A) Not as of yet, with VW vehemently denying the accusation and Porsche claiming that it has been ‘surprised’ by the allegations. The investigation is ongoing, and as Car Dealer goes to press, we are not entirely certain what this will mean for the sports car firm.

What we do know is that as more and more cars are brought into the spotlight, VW’s reputation is sinking further and further. How can we trust a manufacturer that could still be lying to us after we believed it had revealed all? It really (and literally) can’t afford for any more vehicles to fall under further suspicion now.

Q) That’s shocking. Surely VW can’t be hiding anything else from us?
A) You’d have thought not, but it has been. Just when we thought that the Porsche implications were damning, it emerged that the scandal has spread – massively – and that now petrol engines are involved. VW admitted there were CO2 irregularities in its smaller- engined vehicles, with reports pointing towards the 1.4-litre four-cylinder petrol in particular.

The BlueMotion diesel is also implicated. This revelation is a game-changer, dragging millions of new car owners into the crisis and costing VW an estimated €2 billion (£1.4 million) on top of the €6.7 billion it has already set aside for scandal fire-fighting.

Q) CO2 irregularities? How does this affect VW vehicles?
A) VW released a statement admitting to finding irregular CO2 levels in 800,000 of its vehicles – and in conflict with the manufacturer’s certified figures. What is so bizarre is that the scandal has been based entirely around diesel NOx emissions so far. This massively widens the crisis, and affects cars from the VW, Audi, Skoda and Seat brands.

Specifically, this implicates small models, with hatchbacks such as the hugely popular VW Polo and Golf, Audi A1 and Skoda Fabia being likely suspects. As this issue concerns CO2 figures, which is linked to fuel consumption, the road tax on UK roads for affected vehicles will probably rise. This is where VW really has an issue. As of yet, affected motorists have not lost any money, but with potentially higher road tax, the likelihood is Volkswagen will have some seriously angry customers on its hands.

Q) So is VW still the only company caught cheating? Surely it can’t be alone…
A) The finger of suspicion has now been pointed at Vauxhall after a German environmental organisation claimed that the Zafira 1.6 CDTi emits 17 times the legal level of NOx under EU6 emission regulations. Vauxhall firmly denies the allegations though, and there has been no confirmation of any wrongdoing.

Q) Has VW’s reputation been heightened or worsened because of all this?
A) Without doubt, VW’s reputation has been indelibly tainted, not only by the cover-up but also by the way that it has handled the situation. Poorly, in a word. The company has been slow to react. By keeping company execs away from the limelight – apart from when they are forced to face the music (cue Paul Willis) – the firm has failed to convincingly reassure customers.

It’s a dangerous game to play, because with the world’s media focusing intensely on the crisis, rumours can quickly escalate. What’s more, with further vehicles now suspected of emissions cheating, and the CO2 revelation further damaging public goodwill towards the company, it raises the question – could Volkswagen be hiding anything else?


IT’S estimated that 1.1 million cars in the UK are affected by the rogue software that led to the emissions scandal. So far, the spotlight has been on the VW brand itself and the impact on consumers. But how is the issue affecting dealers?

Alison Loveday, managing partner at independent law firm berg, said: ‘We have experienced first-hand what happens when businesses which rely on large institutions are let down by them. It can be terrifying to consider challenging them, as we saw with small businesses and the banks, as the various banking scandals started to emerge.

‘Yet for dealerships and fleet managers, the impact of the VW scandal could be huge. There
will be a need to consider the impact on sales as the extent of the damage caused to the VW brand in the eyes of its customer base and supply chain becomes apparent.’

Customers are cancelling orders and this will not only affect the financial performance of individual dealerships, but also the target and bonus arrangements of employees.

The financial and contractual arrangements in place may need to be renegotiated and bank covenants reviewed. The financial agreements entered into by consumers may be affected by, for example, a drop in residual values and the calculation of balloon payments, which, in turn, may impact the dealers. What of those business owners who are awaiting a deferred payment arising from the sale of a VW dealership? This payment may become unobtainable through no fault of the previous or current owner. More stories like this at – compare and save.

Loveday added: ‘We recognise the need dealers will have to engage with effective advisers, who can take these issues up on their behalf, and have those difficult conversations if necessary, but ultimately seek to negotiate a meaningful way forward. It is essential that dealers are invited to express their views and concerns, and to communicate any information they have which, with hindsight, now appears to be relevant, and which may assist VW in pulling together its strategy to rebuild trust in the motor industry.’

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VW emissions scandal worries automotive property investors

Oct 05, 15 VW emissions scandal worries automotive property investors

The Volkswagen scandal over diesel emissions tests has been well-documented over recent days, and the financial implications for the company look severe.

To date, VW has set aside $6.5bn, but there is speculation that it could cost up to $18bn to resolve the issue.

The scandal is a particular cause of unease for automotive property investors.

VW Group is by a long way the most traded and sought after manufacturer covenant, with a large number of institutional funds, property companies and private investors exposed to the world’s largest automotive manufacturing group.

The company entered into attractive institutionally-friendly leases which achieved the keenest yields in the market, by leveraging its significant covenant as a way to unlock high value sites, yet retain control by granting under-leases to dealer partners.

But a survey of 62 institutional investors, by the investment banking advisory firm Evercore, shows 66% would not invest in VW for six months, or until it clarified what costs, fines, and legal proceedings it faced.

We have witnessed similar early sentiment from UK property investors, but in reality such investors are unlikely to shy away for long. It is perhaps reasonable to assume that investors would not willingly look to dispose of VW-let investments at present, and therefore in our view the likelihood is that we will see a cooling off of activity, rather than values, as the investment market settles.

There is also the impact to consider on dealer covenants, especially those trading with VW group franchises. The manufacturer will certainly witness a fall in sales volume – in the short term at least – which will impact on profitability for dealer partners.  Whether this can be recovered through possible legal action, or by side agreement is yet to be seen, and how long it will last will be down to how quickly VW Group can regain customer trust.

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Adam Chapman heads up the Knight Frank Automotive team

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Auto Trader reveals top 10 fastest selling used cars in January 2016

AUTO TRADER, which operates the UK’s largest digital automotive marketplace, has announced the top 10 fastest selling used cars in January 2016, with Vauxhall, Toyota and Volkswagen topping the leader board. 

Vauxhall’s Astra Estate and Insignia hatchback variants took the first and second fastest selling used car titles for January 2016, selling in just 25 and 26 days respectively.

The Ford Fiesta, the fastest selling used car of 2015, dropped out of the national top ten this month, but featured in nearly every regional list, dominating the top ten in Northern Ireland with four different variants of the ever popular model.

Drivability and practicality were paramount concerns amongst buyers nationwide as nine out of the top ten vehicles were sold with manual transmissions, and six of the top ten were larger model variants –specifically estate, SUV and MPVs. The recent drop in diesel prices did not seem to be a factor, however, with an equal split between petrol and diesel vehicles.

Meanwhile, Nissan models continued to be popular amongst UK car buyers, appearing in nearly every regional top ten. The hugely successful Qashqai featured three times in the top ten for London and topped lists in South West and Wales. Other models, namely the Note, Juke, Micra and X-Trail, appeared multiple times in many of the regional top ten lists, especially in the North East, home to the Nissan factory in Sunderland.

The Fiat 500 also appeared in nearly every regional top ten list, topping lists in Scotland and the South, while customers in the South East were eagerly preparing for some winter weather as they snapped up Land Rovers – four models appeared in the regional top ten, with the Discovery featuring twice.

With competitive finance deals available, the online trend is moving towards more aspirational vehicles when searching for a car. However, the fastest selling used sales results still favour practicality.


Average Days to Sell Average Price Position Average Retail Price
1 2015 Vauxhall Astra Estate Petrol Manual 25 98.56% £9,909
2 2012 Vauxhall Insignia Hatchback Petrol Manual 26 98.36% £7,342
3 2013 Toyota GT86 Coupe Petrol Manual 29 98.07% £16,832
4 2013 Volkswagen Passat Estate Diesel Manual 29 99.83% £12,370
5 2013 Volkswagen Polo Hatchback Petrol Automatic 30 99.30% £10,003
6 2015 Hyundai ix35 Estate Petrol Manual 30 98.58% £13,158
7 2015 Skoda Yeti Outdoor SUV Diesel Manual 31 96.16% £17,088
8 2015 Citroen Grand C4 Picasso MPV Diesel Manual 31 96.74% £17,392
9 2013 Toyota RAV4 SUV Diesel Manual 31 99.76% £16,185
10 2013 MINI Hatch One Hatchback Petrol Manual 31 99.75% £9,290

Auto Trader estimates that more than 52 per cent of all cars on the classified website are not well matched to local demand. The company’s forecourt management tool, i-Control, gives dealers a better than 50 per cent increase on stock turn, with those using the tool turning stock within 36 days on average in January, compared to a whole market average of 73 days.

Forecourt management tools such as i-Control can track live market movements, recommend stock to buy, where to find it, how much to pay and how much to sell it for, taking into account regional differences in supply and demand.

Karolina Edwards-Smajda, Auto Trader retailer and consumer products director, said: ‘The start of a new year is always a busy time for Auto Trader, and thanks to our latest TV advert, traffic to the site has increased, and as a result, adviews have been considerably higher than this time last year.

‘It is also very positive to see that i-Control is continuing to halve the time dealer stock is sitting on forecourts for. By providing insight into live market pricing trends and regionally desirably, retailers are able to source stock knowing there are buyers ready to buy in their local area.’

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Kia receives 1,500 orders of its new Sportage in just three days

KIA’S ALL-NEW SPORTAGE went on sale just a few days ago and has already amassed over 1,500 sold-orders from dealers across the UK.

The stylish and technologically advanced car made its UK showroom debut on Friday 5 February and in the following days dealers from across the country were reporting heavy showroom traffic as the brand’s fans wanted to get a look at the new compact crossover.

With the previous generation Sportage seeing its best ever year in 2015, Paul Philpott, president and chief executive of Kia Motors UK, is confident that the new model will exceed its predecessor in sales.

‘The new Sportage is a significant step forward for Kia, both in terms of interior quality and dynamic refinement and sophistication – and clearly both existing and new customers recognise that fact.

‘Our dealers currently have only one worry: “can we satisfy the demand?” Well, both Kia in the UK and our factory in Slovakia are working flat-out to ensure we can.’

Nas Khan, managing director at multi-award winning Jennings Motor Group, added: ‘We are delighted to report that the launch of the all-new Kia Sportage model has been a phenomenal success at both of the group’s dealerships in Stockton, Teesside and Washington, Tyne & Wear.

‘The new compact SUV model, which features an attractive new interior and exterior design, a host of advanced new technology features and greater quality, has generated a combined total of 20 orders across both branches since its official launch on Friday.’

Read what Jack Evans had to say about the new Sportage, in issue 96 of Car Dealer Magazine.

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Final stands at CDX16 are being snapped up

CAR DEALER Magazine’s team hosted a number of exhibitors at Silverstone’s Wing conference centre yesterday as the last remaining stands for CDX16 began to get snapped up.

The open day was designed to show off the three huge halls at Silverstone which will be filled with exhibitors and dealers on May 24 for the motor trade’s largest FREE to attend dealer expo. Keynote speakers for the event are already confirmed as Twitter, Facebook, Google and Haymarket Automotive.

Just a handful of stands remain to be filled and these are expected to be snapped up in the next few days. ‘It was brilliant to show motor trade suppliers around the huge halls at Silverstone and explain to them how it would look on May 24,’ said Car Dealer MD James Baggott.

‘Going back to the halls reminded me of the buzz last year when 1,500 dealers flooded through the doors – and I for one can’t wait for that to happen all over again.’

At CDX16 there will be 12 workshops for dealers to attend with hints and tips on how to improve business in a number of areas, keynote speeches and panel discussions with some of the biggest names in the motor trade on the Car Dealer Live stage.

Car Dealer Magazine will also be announcing the winners of its acclaimed Twitter 140 Awards – with the gongs handed out by Twitter themselves – while the much enjoyed Women In The Motor Industry (WITMI) session is back with a star line up of panellists.

Tickets to the event are FREE of charge and can be booked by clicking here.

If you would like more information about exhibiting get in touch with the team on 023 9252 2434 to find out what’s left.

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Hyundai’s 2016MY i20 available to buy from March 3

HYUNDAI has announced full pricing and specifications of the refreshed MY16 i20 range, which now includes the i20 Active compact crossover and efficient new 1.0-litre T-GDi engines.

The T-GDi engine is a 1.0-litre three-cylinder, producing 98bhp and replaces the 1.4-litre, 98hp engine for i20s equipped with a manual gearbox. It offers improved performance and lower running costs than the previous engine, with CO2 emissions as low as 99g/km and a combined fuel economy of 65.7mpg. Prices for the SE model start at £14,025 OTR.

Hyundai has also introduced a new 1.0 T-GDi 118bhp model – the most powerful engine in an i20 to date. This is available in the Premium 5-door and Sport versions of the i20 Coupe and above. Prices start from £15,525 OTR in either body style.

Also new for 2016 is the compact crossover model, the i20 Active. This is available only with the new T-GDi in 98hp form, and will return a combined fuel economy of up to 58.9mpg and CO2 emissions of 110g/km.

The i20 Active costs £15,225 OTR, and comes with 17-inch alloy wheels, LED daytime running lights, DAB radio and rear parking sensors as standard. With unique bumpers, roof rails, a rear spoiler and a 20mm-higher ride, it’s described as ‘a purposeful and rugged addition to the i20 range’.

More standard equipment has been added across the i20 range. The i20 SE, for example, now adds DAB radio and a fresh 15-inch alloy wheel design to its line-up of rear parking sensors, cruise control, air conditioning and Bluetooth with voice recognition.

Premium Nav, Premium SE Nav and Coupe Sport Nav models now come with TomTom Live traffic services as standard.

Tony Whitehorn, President and CEO of Hyundai Motor UK, said: ‘We’ve seen an incredible response from customers to the new i20, and for the MY16 range we’ve made things better still. With the addition of the i20 Active, our customers can now also have a stylish, well-equipped and rugged i20 at a very affordable price.’

The 2016 Hyundai i20 will be available in showrooms from March 3.

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RMI appoints executive director to lead bodyshop associations

Feb 10, 16 RMI appoints executive director to lead bodyshop associations

The Retail Motor Industry Federation (RMI) has appointed Jason Moseley as executive director with responsibility for the National Association of Bodyshops (NAB) and the Vehicle Builders Repairers Association (VBRA).

Moseley will provide strategic direction and input to NAB and VBRA to grow membership and work with stakeholders.

Moseley’s most recent job was business development director and chief of staff Data Group for Solera, the parent group for Audatex, HPI and CAP.

For eight years he was chief operating officer of Motor Insurance Research Centre Thatcham. In 2006 he spearheaded the introduction of the bodyshop Kitemark standard.

Peter Johnson, RMI chairman said: “We are delighted to have someone with Jason Moseley’s industry standing and background joining the RMI to represent vehicle bodyshops and bodybuilders at this time.

“The sector’s two leading associations, NAB and VBRA, have recently joined forces to provide a unified voice for its members.  With Jason’s leadership qualities and communications skills, these associations will now be able to accelerate their representation and market influence.”

Jason Moseley adds, “The UK vehicle body repair and bodybuilding industries are at the dawn of an exciting new era, and I look forward to driving increased value for our members, whilst working closely with the RMI Board, the two associations’ advisory committees and management teams to achieve our ambitious growth plans.”

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Well done, Steve! Director is recognised as Vertu’s ‘Company Person of the Year’

THE Nissan and Renault divisional director for one of the UK’s largest motor retailers has been recognised for his outstanding performance.

Steve Gould, the Nissan and Renault divisional director for Vertu Motors plc, was named ‘Company Person of the Year’ at the group’s annual management awards at the Eslington Villa hotel in Gateshead.

Vertu Motors plc, the UK’s fifth largest motor retailer, owns Bristol Street Motors, Macklin Motors, Farnell Land Rover, Vertu Volkswagen and Vertu Honda. The company honours talented managers from across the group at its annual CEO Awards dinner, hosted by CEO Robert Forrester.

Steve has been recognised as leading a year-on-year improvement in the Bristol Street Motors’ Nissan and Renault division since joining in 2012. He now leads a division that boasts the best used car performance of any manufacturer across the group.

Under Steve’s leadership, there has been a dramatic increase in customer satisfaction across both the sales and service departments. This has coincided with a marked improvement in colleague satisfaction scores, particularly in aftersales.

Robert Forrester said: ‘Steve leads by example and the outstanding results he has overseen are in no small part due to his massive level of personal commitment. His delivery of outstanding customer experience in his division is exemplary.’

Collecting his award, Steve, on the left in our picture, said: ‘I’m ecstatic to be named Company Person of the Year, especially as we have so many amazing and hardworking colleagues across the group.’

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H R Owen buys Berkshire-based accident repair firm Bodytechnics

H R Owen has bought leading accident repair company Bodytechnics.

The acquisition brings another element to the end-to-end concierge-style approach to client care offered by the luxury car dealer group.

Bodytechnics is renowned as the UK’s leading bodyshop for prestige and luxury cars, fitting in perfectly with the H R Owen ethos of offering the very levels of service and care to their clients.

Bodytechnics, based in Slough, was established more than 20 years ago and enjoys long-standing relationships with many major luxury car manufacturers, including the likes of Bentley, Ferrari and Maserati, meaning it is able to carry out work that is officially approved by brands offered across the H R Owen group.

Bodytechnics sets itself apart from other accident repairers thanks to its expertise with the sort of rare and prestigious materials found on the most exclusive supercars and hypercars. The team is the best in the prestige accident repair business and is renowned for its ability to work with carbon fibre bodywork, and for its composite repairs.

As well as this new service, H R Owen is also able to offer insurance, prestige car hire and, for those special occasions, a chauffeur service that goes into London and beyond.

H R Owen Ferrari has been named the best Ferrari dealership in the world, while Jack Barclay in Berkeley Square will be the only place in the UK where customers will be able to buy the new Chiron when it goes on sale later this year.

David Fellowes, group aftersales director for H R Owen, said: ‘H R Owen customers have been able to enjoy an unparalleled level of service when it comes to buying their car and when things are going well, but now we are able to help them out when the worst happens.

‘Accidents happen, but they need not be a cause for concern for our customers, as we are now able to take care of everything, getting their car repaired and back on the road as good as new thanks to the expert team at Bodytechnics.’

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