Car dealers taking their medicine

The resilience of the motor trade never ceases to amaze me. When medicine needs to be taken we glug it down like a drunk at a free bar.

At present it is fairly brutal out there and although many cars are still sought after and fetching a premium price others are either not selling at all or going for beans.

Car buyers are being choosy, and rightly so, and dealers are often in a race to the bottom when it comes to price wars.

Naturally all of this is having a dramatic effect on profitability.

Despite this most dealers are doing the right thing by disposing of ageing, expensive stock and endeavouring to replace it with cars at today’s prices and although this can be a painful exercise it is certainly a necessary one if dealers are to return to profit any time soon.

The picture at auctions is slightly different however; we have had people out at both BCA and Manheim auctions, north and south and they have mainly been well attended and, according to the vendors, many are selling at 80 to 90% with an overall break even figure with some sales even turning a small profit.

This could be down to dealer’s stocking up now in anticipation of the usual price hikes when stock is scarce in early January.

If that is the case let’s hope that January has its usual effect on dealer confidence or, as one sales manager told us, we might as well close the doors and go home because carmageddon will be upon us once more.

Subscribe to Motor Trade Insider by Email