The year ahead – buying cars to order

MTI recently caught up with Jeremy Sargeant of WR Autos to ask his opinion on how he sees’s 2009 going from a car sourcing business perspective. Obviously a lot of the problems facing franchised dealerships and independents with regards to aging stock are not an issue for a business that buys its cars to order but the one key element of “finding customers” is, of course universal.
“2009 will be a very interesting year for my business. I start the New Year with a strong prospect list and if I didn’t watch the news or talk to anyone in the pub I would be blissfully unaware that I should be very concerned about the coming year. However, I do watch the news (and spend my fair share of time in the pub), so I know that times are changing. As a business that buys its cars to order for clients, I have the luxury of not having to watch the value of my stock being written down month after month. Nor do I have to worry about stocking finance.”

“However, although my business has different pressures to some motor trade businesses, there is one key factor that unites us all. Quite simply, we all need clients and it is impossible to judge how many there will be in 2009.”

“All I can do is reflect on the last quarter of 2008 to look for trends for the future. In so doing, I can see that there is definitely a change in attitude from buyers. The last 3 months saw a few cancelled orders for me. Mainly, it was uncertainty about the future – client’s stocks and shares and equity in property being written down in value added to uncertainty over job security. These factors will continue to take buyers out of the market in 2009, but I am seeing other worrying trends too. For example, there is an increasing perception that to be seen to be doing well in this climate is not healthy. A good client with a senior position and a secure job in the financial markets recently said he is going to keep his two prestige cars for a further 12 months as his company tightens its reigns financially and his financier friends are losing their jobs. I have had wealthy business owners making the same decision – it is not appropriate to be buying expensive vehicles (or expensive anything) in this climate.”

“So, despite my strong prospect list, it would be naïve to be bullish about the coming 12 months.”

In Jeremy’s opinion the key factors taking clients out of his market next year are as follows:

• Job loss and diminished job security.
• A change in attitude to capital purchases.
• Difficulty securing finance for vehicles.
• Values of part exchanges written down to a level which stops people changing.
• Increased competition from a market that needs to discount heavily to shift stock.

Despite this Jeremy still remains optimistic about the first part of 2009;

“I am still having lots of conversations with people who are changing their cars and if interest levels continue for the next few months, my business, with its low overhead and consultancy approach to clients, will be OK. For the next 12 months, though, I am not expecting growth. Instead, I expect to maintain a steady level of business.”

We’ll be checking in with Jeremy again soon to gauge how things are going.