Fleet News

Self-registration problem a fact of life, says expert

NEW vehicle self-registrations with the potential to cause a residual value catastrophe are 'a fact of life' unless individually manufacturers choose to take action, according to the UK's leading motor industry guru. Professor Garel Rhys, director of the Centre for Automotive Industry Research, Cardiff University Business School, said calls for the Society of Motor Manufacturers and Traders to act multilaterally by calling a summit meeting of all manufacturers - large and small - to solve the massive over-supply problem could fall foul of the monopoly authorities.

'Trade associations must be very careful that they don't go too far in encouraging collusion between manufacturers because that could be seen as 'fixing'. Free markets are fine, but they can be painful and they are at the moment,' said Rhys. 'There are too many cars and too few customers. The alternative to that scenario is for manufacturers to close plants and reduce production levels voluntarily.'

Meanwhile, new analysis of the 505,312 August market by Glass's Information Services reveals that in comparison with last year's August market (525,539) the 'industry wide' self-registration position shows new car registrations in the last 10 days of the month were 2% above August 1997. Ford, Renault, Rover and Fiat all registered more cars in the last 10 days of the month than the market average - although all denied they were self-registrations - and, of the major players, Glass's said neither Vauxhall nor Peugeot 'seem to have been drawn into the self-registration wars' this year.

'There is no solution,' said Rhys. 'But the present situation cannot go on for ever, although it is a fact of life. Ultimately manufacturers will run out of money, but they can go on for a long time in the current fashion and that is to the benefit of the consumer. But in the fleet arena vehicles are on the balance sheet and price reductions harm the balance sheet. Fleets obtain European-style pricing through discounts, but want retail prices when it comes to residual values.'

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