Fleet News

Vardy warns car makers in plea for pricing calm

A GROWING row between manufacturers and dealers over access to fleet discounts could lead to renewed Government interference in the car market that would push fleet residual values to new record lows. Peter Vardy, chairman of dealership group Reg Vardy, made the warning as part of a plea for market calm to allow recovery from 18 months of pricing uncertainty in a bid to rebuild confidence among buyers.

The Government's Supply of New Cars Order 2000 was intended to draw a line under the car pricing row, with reductions averaging more than £1,000 on most cars and dealerships offering equivalent discount terms to fleets. Officials warned that a failure to react to the order could lead to further legislation forcing manufacturers to comply.

But many car dealers who expected to see the price of vehicles available to them fall are complaining the reality has 'fallen short' of what they expected. Fleet NewsNet understands several manufacturers have not met a December 1 deadline to produce fleet equivalent terms for dealerships and that at least one has seen all dealers retain their current purchasing arrangements and have not switched to buying on fleet terms. The Office of Fair Trading and the Department of Trade and Industry are already collecting information on the effect of the order to ensure that manufacturers are treating both sides of the industry equally.

Vardy said: 'The unprecedented fall in vehicle values made 2000 one of the most difficult for the motor industry. A number of manufacturers have published fleet purchasing terms for retailers. These terms have, to date, fallen short of what the industry expected following the DTI order. A period of settling down needs to happen. The OFT will be very active in this area and I am sure it is checking current discount levels manufacturers are giving to fleets. Any further Government action over new car prices would mean used car values would be worth nothing.'

However, Ken Trinder, managing director of Pendragon Automotive Services, said the industry was in fighting mood, particularly with the European Commission review of Block Exemption looming. Pendragon intends to use its buying power to obtain the largest discounts available from manufacturers. He said: 'Manufacturers are trying to wriggle out of their obligations under the Order, but the Government will be very intolerant of that kind of behaviour. We will go to the OFT if we have to.'

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