Fleet News

Used car values to weaken in 2013

CAP predicts new incentives to tempt retail customers into showrooms but admits the results will be a fall in used car values.

Pressure on franchise dealers to register more cars this year stems from the collapse in registrations across much of Europe, prompting manufacturer plans to drive sales harder in the UK.

Car sales in the EU last year fell to a 22 year low, while the UK winessed a rise in registrations last year by 5.3%. This prompted accusations that manufacturers were reporting ‘false' sales in the UK as dealers registered cars to themselves to qualify for volume bonus payments.

But at the same time, consumers were benefitting from discounts as dealers were forced to move pre-registered stock on as quickly as possible. In combination with low interest rates and competitive motor finance deals, retail customers found attractive deals.

CAP's retail and consumer specialist Philip Nothard  said: "If more people are tempted into the market to replace their car, independents will welcome the increased availability of part-exchange type stock in the marketplace. The probable weakening of trade prices due to higher supply will also give them more room for manoeuvre on the deals they offer to consumers.

"This is going to be a tough year for manufacturers and their dealer networks but their pain looks set to be the motorist's gain."

Research by CAP reveals fears among many franchise dealers that they will be forced to use increasingly large discounts to keep new car stock moving. In January, those who still had new car stock registered at the end of 2012 were privately concerned that they could lose money on those cars when they put 2013 stock into the showroom.

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