Car manufacturers and the iPhone generation

628 More

Earning the right to be successful

610 More

Knowledge is power

714 More

Selling cars – it’s all about timing

1,006 More

Truemag

  • Home
  • About
  • Advertise
  • Archives
  • Contact
  • Subscribe

Lead times lead to confusion

The fact that many car makers are struggling to supply new cars within an acceptable time frame is causing real concern for many dealers and they are losing customers to rival brands as a result.

Even the ultra efficient Germans BMW, Audi and VW are being affected along with many others and sales personnel now have the unenviable task of trying to explain to potential buyers that they may not see their new car for half a year!

A problem facing sales managers and causing confusion for customers is the valuing of one or two year old trade-ins or a premium brand where the depreciation is much more difficult to predict but where a car is likely to lose larger chunks of money.

It is hard enough to value a car like this if its 2 or 3 months down the line but having to try and predict what a car might be worth in 6 months time and do it in a way which still enables the buyer to have confidence in the deal is almost impossible.

In this type of time frame and in an uncertain market, much like the one we have experienced over the last 2 years, certain cars could depreciate by as much as 15-20% and if the sales manager gets it wrong it could mean selling a new car for zero profit which of course is not very good for business.

On the other hand by being too cautious and trying to protect his margin he could scare the customer off and lose the sale. Many dealers when faced with an extended lead time will inform the customer that he will depreciate their current car by whatever the guide says over the period of time. This will generally be around 2% per month subject to certain parameters and if a customer has ordered a bespoke model he will often be happy to do that at least being fully aware of what the financial commitment will be.

But the current lead times are presenting significant issues, which could lead to buyers facing the threat of not being able to afford to proceed with a purchase they agreed 6 months prior due to the shortfall in the changeover figure on their new car.

Hopefully dealers and buyers can communicate effectively so as not to case any bad feeling and continue to do business, but unless the situation improves suddenly then it’s going to be a rocky few months.

With VAT set to increase next year there looks certain to be some delicate negations going on in the world of car retailing!

Sep 9, 2010In51der
  • New car lead times mean a lack of credibility for dealers and manufacturers
  • Long lead times still causing big problems for car dealers
  • New car supply issues may lead to innovation
  • Long lead times playing havoc with part-exchange valuations
  • Long lead times a turn off for the now generation
  • Will the green buzz lead to common sense?
  • Draft dodgersHPI reveals the Midlands as stolen vehicle hotspot
    In51der

    Motor Trade Insider - Bridging the gap between the customer and the Motor Trade

    12 years ago Blog, Consumer, Manufacturerscar lead times 2010, car makers, car manufacturers, car sales, Featured, long lead time premium cars, new car buying, new car lead times, part exchange valuation, part-exchange, profit, trade-in, used car prices137
    Most viewed
    Top 100 UK Dealer Groups
    39,745 views
    The car sales process and the “9 point plan”
    11,807 views
    webuyanycar review – They will buy any car but beware of the asterisk
    6,189 views
    Most commented
    Car sales and the power of silence…
    25 Comments
    Car dealers still not prepared to play the “we buy any car” game
    23 Comments
    A Traders Tale – Part Four
    22 Comments
    Win a pre-loaded Ipod Shuffle!
    19 Comments
    Bargain of the Week – StreetKa 1.6i Luxury
    14 Comments

    Auto Transport

    About MTI

    Motor Trade Insider
    is written by people working actively in the motor trade for people on the inside and people on the outside.

    Our aims
    Build a bridge between consumers and the trade, create Interesting and informative content, break down barriers and create better understanding, expose bad practices and rip-offs and promote outstanding products and service.
    Have something to say?
    We are always looking for experienced writers who can write good original quality posts on motor-trade-insider.com. Please contact us if you would like us to consider you. Make sure you give us details of your own blog or a link to some articles you have written.
    2017 © Motor Trade Insider
    Truemag theme by StrictThemes