Some dealers are registering over 30% of their new cars on the last day of the month, according to research by ASE, the dealer profitability specialist.
Speaking at this month’s ASE/Motor Trader Financial Conference, ASE chairman Mike Jones said the company had tracked 19 key sales days for each month between December 2015 and April 2016 and found that most registrations took place on the first and last days of the month.
“There’s typically 18-19 key sales days in any given month. You expect the first day to be popular but all hell breaks loose on the last day,” he said.
While confirming that pre-registration activity is a long standing part of the UK car retailing market, with sterling relatively strong and other European markets still struggling, Jones expressed concern that dealers face the prospect of accruing high volumes of cars to retail in the following months.
ASE’s research showed in April around 9% of new cars were registered on the first day of the month rising to around 18% on the eighteenth day. Average registrations for the days in-between were 5.6%.
“The whole of April was behind until the end of the month,” he said.
ASE’s research showed that between December 2015 and April 2016 over 30% of Dacia’s monthly volumes took place on the last day of the month. During the March plate-change Renault and Citroen also saw 30% of their volumes registered on the last day. Six other brands also registered over 25% of their volumes on the final day.
Other brands mentioned included Fiat which registered 49% of its monthly volumes on the last two days of December 2015, while Nissan got off to a flying start in 2016 with 31% of its January volumes registered on the first day of the month.
“We are operating in a bonkers environment but we still need to do business in it. The number will go up in June so from an operating view we need to set out our stall at the beginning of the month to make sure we manage the volumes. The problem will not go away in the short term.”
Jones said UK dealers could be moving towards the long established US model where large volumes of new cars are always in stock.
“The trade has done a good job making sure that pre-registered cars do not end up in car parks or fields but on customers’ drive ways. We’re actually moving towards the US model where dealers always have a large stock of new vehicles which customers can drive away when they purchase.”
