There appear to be different schools of thought at present regarding the overall health of the motor trade. Like most retail businesses the last 6 months has been somewhat challenging (to say the least) and where there are pockets of good news there are equal amounts of the bad version.
Margins are under real pressure and showroom footfall is down but despite this the business is showing resilience that other businesses could only hope to replicate.
Ironically if you speak to those with the actual responsibility of buying cars for stocking dealer forecourts it still seems that there are desirable cars making top money which of course means that there is also a lot of stock which can only sell if it’s extremely cheap.
With the offers currently available on new cars having a direct effect on late plate stock this is bound to have the knock on of a cooling down of prices in this sector. Of course the small economic low tax/insurance examples continue to make great money and buyers are prepared to pay a premium knowing the savings they are likely to make over the lifetime of these kind of models.
Some dealers in their desperation to sell cars are gambling on the value of trade-ins to such an extent that as drivers carry out only really essential maintenance on their existing cars – for economic reasons – there are far too many cars going through the system that need big money thrown at them to make them retailable. This again has an effect on dealer margins and with volumes down and competition for the right to maintain cars as high as it’s ever been, there is likely to be no chink of light in the recovery anytime soon.
As one Sales Manager told us recently; it’s a case of head down, work hard, give your customers the very best service and continue doing so until there are more buyers prepared to spend money on a new car.
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