Motor Industry News
The new registrations in March have seen dealers upping the pace throughout the last four weeks. The general feeling is that demand is up on 12 months ago. Some brands are still experiencing a seriously busy spell due to manufacturer offers such as the NO VAT offers from both Seat and Skoda which are still running until the end of March. The only issue is that supply is still slow when compared to the demand which may dilute new car deliveries over March and April, rather than the huge traditional influx on the first of the Month at new registration time.
This in turn will mean that there should be a more than ample supply of part exchange vehicles ready to hit the forecourts and auction halls throughout the next 2 months. The trade are more than aware of this and smaller dealers are preparing to buy the cars that will present a good profit opportunity. There has been a shift in how traders buy stock. The auction halls are still busy but smart buying is still the way forward. Dealer groups have really started looking at alternative means of disposal to both increase trade profit and avoid auction and transport costs. Currently there are two primary ways:
Firstly we can see that a lot of groups are either advertising their own private ‘trade’ auctions held either weekly or every couple of weeks. This attracts usually the same group of hungry bidders out to grab a bargain and still keeps Joe public away which prevents prices being hiked up.
The second, and perhaps more advanced way of trade vehicle disposal, is by means of online auction which the traders have to apply to join and be VAT registered. In terms of functionality it isn’t dissimilar to the well-known auction site ‘eBay’. The dealer group will list the car with photographs and an accurate description. All the usual service history, number of keepers, MOT length etc. are listed. The traders then bid without physically seeing the car. Once they have won the vehicle, it is to be collected within 7 days and paid for on collection. The reason that this format is proving ever popular is due to the fact that the car can be inspected and more importantly driven if necessary just prior to collection, so if it isn’t as described the buyer can cancel the purchase! So overall there is less risk than buying at a traditional auction.
Ex daily rental cars are worrying the used car market at the moment. The issue comes not only with the overall condition of the car but more importantly the service history….or lack of it! More and more manufacturers are offering longer warranty periods, but the service intervals MUST be adhered to within certain strict tolerances. The rental market appears to be overlooking this and we have seen evidence of either a complete lack of service history or late services. This may not sound too worrying but in some cases it completely invalidates the warranty which on a 12 or 18 month old car has a massive impact on both used value and saleability.
One manufacturer venturing into new territory is Land Rover. This month sees the 2wd Freelander hit the market. Perhaps the most important part for them is the sub 160g/km emissions which will see the Freelander hit company car lists. This creates a fresh alternative to the usual suspects on the lists and a lot of users will choose the Land Rover as it’s seen as an aspirational brand and something different parked on their driveway. The retail market may be slightly different, with a lot of retail customers linking the Land Rover name only with ‘4x4’.
At VIPDATA, we continue to actively carry out extensive market research to ensure accuracy. Over the coming months the continuing unrest affecting the oil producing countries are sure to have a catastrophic effect on many vehicle values. For March, values have stayed very strong for proper retailable stock and are still on the rise. This excludes anything that is in poor condition, lack of service history or undesirable models such as larger saloons, people carriers or 4x4s with petrol engines. Whilst spring is on the horizon, all of these will continue to be in the depths of winter in terms of low values.
There is a lot of stock on the market. Auctions are reporting a lot more demand this first quarter than the last quarter but the situation in the Middle East may slow the job down, and anything thirsty may suffer. But on a positive spin anything economical with a small engine will be in demand.
Any model that is ‘Ready to Retail’ (RTR) with low mileage, will make very strong money where as high mileage stock that requires preparation is not wanted unless it’s particularly cheap.
Vauxhall Combo Values are up slightly and the usual trends apply. Vans in the market are mainly white with a side door. Ford Connect values appear to have peaked and are now slowing, and the new shape Citroën Berlingo is doing very well in trade circles ……..if you can find one.
Ford Transit Values are all over the place depending on where you are, and Mercedes Sprinter will sell well with Long Wheelbase variants in short supply.