Question: What other industry has such a vast discount structure when the UK grinds to a halt during a credit crunch? My local Subaru dealer, for September registrations only, are wiping a colossal £12,000 off the recommended retail price on the Tribeca SUV – no, that’s not a typo. Neither does the Tribeca come poorly equipped, far from it in fact. Go for the SE5 or SE7 model, and apart from the spec that equals the BMW X5, you can pick one up for £19,000 and £21K respectively. Considering an SE7 normally retails at £33,000, why does the motor trade always get such a pasting from its critics? Who would bet that the airline industry would sell a first class seat for the return price to Ibiza, even if it means an empty space during a transatlantic long haul?
The new car registration figures have just been announced, and for all of us in the trade these are as eagerly anticipated as the national GCSE results. The Society of Motor Manufacturers and Traders said there were just 63,225 car registrations in August. The average for the month of August over the past eight years has been around 75,000. “The August market was the lowest since 1966 and accounted for a quarter of the fall in volumes over the year to date,” the SMMT said. “The last three months account for 89 percent of the drop.” But remember that August is traditionally a quiet month as consumers wait for a change in registration number plates in September before buying new cars. It normally accounts for around 3 percent of annual volumes.
Nevertheless, the fall is seen as some indication of the strains being put on British consumer finances as the housing market bubble bursts, whilst America starts to recover from the liquidation of the largest US investment bank, Lehman Brothers, announced recently, which is going to have an affect on all of us over here one way or another.
A breakdown shows new private registrations fell 23.6 percent to 23,718. Business registrations fell 36.7 percent to 2,315 and fleet registrations fell 13.4 percent to 37,192. On a slightly brighter note the battle for the number one spot in new car sales was given to Vauxhall as its Corsa was the bestselling car in August whilst Ford came in at second place with the strong selling Focus. This goes to show just how much the supermini sector has grown. So it’s not all doom and gloom, then? Consumers are still managing to spend with the supermini’s share of the market rising to 33.8 percent from 29.1 percent a year ago. Diesels also raised market share with VW’s Golf as the best selling diesel model both in August and in the year to date.
So how does the trade keep helping the consumer? Knock thousands off the recommended retail price? It seems like a very bitter pill to swallow, nevertheless, with a further 10 per cent fall in new car registrations due until the end of the year, it’s likely we’ll see more stupendously good discounts to come. This has to be one of the most lucrative times to buy a new car and goes to show that we shouldn’t knock our local new car dealer. Better still, it seems the motor trade is the only industry fighting back during these dark times. The housing market has plummeted so much but you don’t see many house builders dipping their toes into the discounting waters. Maybe everyone needs to take a leaf out of our book?