Fleet News

Exchange rate adds to importers' challenges

'I RECENTLY commented on the impact of the Euro exchange rate on car importers. When it stood at 1.5 Euros to the Pound a 15,000 euro car equated to £10,000 but when we could only buy 1.4 Euros with a Pound that cost went up to £10,700. With a recent exchange rate of 1.34 Euro to the Pound that 15,000 Euro car rose for a UK importer by a whopping £1,200.

Consider the fact that this relates to a relatively inexpensive vehicle – and the short space of time involved – and you get some idea of the challenges faced by importers thanks to currency volatility.

There is increasing talk around the industry, although I cannot confirm the veracity of the rumours, that many dealers across Europe now have hundreds of new right-hand drive cars and vans sitting in their compounds while UK buyers sit on their hands, reluctant to take vehicles that would stand them wrong on the forecourt.

In the current UK climate of give-away new car deals these vehicles would be all but unsaleable. This is seriously bad news for many European dealers with, for example, those in Germany reporting sales down 16% in April and a 5% decline year-to-date. Some dealers have been highly dependant on the export market – mainly to the UK – to prop up their sales volumes and meet targets.

The high value of the Euro, coupled with low domestic demand, has hit them with a real double whammy. Happily, this isn't our problem and my view is that any reduction in imports should help to keep new and used prices in the UK stable – especially in the vulnerable late-plate sector.

Soft tops – year round appeal

Received wisdom in the trade always has it that when the sun comes out, the sports car market takes off – especially for soft-tops. Although you might think this makes common sense the facts don't square with the assumption.

In truth, strong activity in the new and used sectors of this market is a year-round event. The UK is now one of the biggest markets in Europe for soft tops, well out-stripping Mediterranean countries – despite the few opportunities here to enjoy them at their best.

This sector goes from strength to strength, growing on an almost monthly basis and the choice of new models keeps increasing. Among today's favourites on the used market are the inevitable Mazda MX5 and now the MGTF, which is a much improved car and is now regarded as a highly desirable and good value used buy.

Early BMW Z3s are now very affordable and, in the right colour, enjoy superb image for relatively little money. The four-seater cabriolet market also features plenty of choice, but is still dominated by the BMW 3-series in terms of quality and range.

The Volkswagen Golf also maintains a strong position but let's not forget that staple of the affordable rag-top sector, the Ford Escort. Despite being out of production for five years there are still plenty on the roads and the market for this kind of car is always healthy. Renault's Megane has also earned a well-deserved place here, along with Peugeot 306, thanks to strong looks and value for money.

For those with cabriolets or convertibles on the fleet the message is, don't despair over the unpredictable weather. Whatever the trade says, there are always customers for open tops, come rain or shine.'

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