September could be bleak for new car sales

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New car sales numbers are down for July by some 13% and not likely to improve much for August. The real worry however is September. According to our sources forward orders for the new reg plate are a fraction of what would normally be expected.

However, for the consumer, this could be good news because there will be a reaction from both the manufacturers and the dealer network to try and stimulate activity and shift some units.

The obvious underlying causes are the economic downturn and the fact that scrappage is not around to massage the figures, but also many car makers, in the wake of the recession, decided to scale back production leaving dealers and customers with horrendous lead times.

Lead times for some models can often be as much as 6 months and as a result buyers are turned off by the long wait and dealers are reluctant to try and structure a deal when the customer trade-in has to be valued so far in advance as it could lead to the dealer getting it disastrously wrong and render the deal not worth doing anyway.

One thing history and experience has taught us however is there is no way the car trade will sit back and let it happen, everyone will sharpen their pencils and do everything within their power to entice buyers into their showrooms with all kinds of incentives.

By the end of August there will either be a price war breaking out or the factories will need to realise that in order to hit annual budgets they will need to build enough of the right cars to ensure they are in with a chance of reclaiming some of the lost ground.

Pre-reg anyone?