By Peter Cakebread, managing director, Marshall Leasing
Last year the issue of vehicle pre-registration caused quite a stir in the industry. It’s fair to say that a lack of transparency fuelled the situation – it’s been very hard to ascertain the true extent of the practice and this led to considerable speculation.
But while some commentators were convinced that pre-registration was prevalent enough to spell trouble, I believed it was not a cause for alarm.
That proved to be the case last year. This year, however, could be a different story.
The situation in southern Europe is one factor to watch. Across Spain, Italy, Portugal and Greece, demand for new vehicles has dropped dramatically and manufacturers may look to the UK as an alternative sales avenue.
Logically, this could lead to a situation where pre-registration is on the rise. However, another factor has come into play that offers an interesting twist.
That factor is the weakening of the pound. Suddenly, the UK becomes a less attractive prospect for manufacturers on the Continent and this, in turn, may cause a reduction in the amount of stock sent our way.
In that sense, one could say that the weakened pound offers a useful counterbalance. However, the extent of its impact still remains to be seen and we certainly wouldn’t want to be reliant on it.
Fortunately, as of yet there isn’t evidence of a large increase in pre-registrations this year – although it is by no means off the cards.
What happens if there is a significant increase? It is often the used car market that feels the impact, and in particular the market for late-plate, low-mileage vehicles, where volumes of pre-registrations can damage values rapidly and significantly.
As I’ve said before, more transparency is needed.
Unfortunately, there is no evidence so far that we will get any.
Instead, we must rely partly on hearsay, which is inherently flawed.
It does appear that the practice of pre-registration is more widely spread among manufacturers than in the past.
Whether this results in a major increase in the aggregate volumes concerned is, of course, the more important question.