The start of a new year sees everybody looking forward to the next one as well as looking back at the 12 months which have just passed. Many will consider 2014 to have been an interesting year, with a Scottish referendum landing right in the middle of a crucial month for some, as well as the debate around how many ‘tactical registrations’ were supporting the yearly increase in new cars…
This year looks to be no less interesting, as we are already thinking about what the headline figure for new cars will be as manufacturer incentives and their focus on PCP show no signs of easing.
Other areas of topical conversation, and in many ways concerns, are the reports of continual pressures on dealer margins and what impact the price of oil is having on the industry – not forgetting the forthcoming General Election.
In the first half of 2014, many industry figures were ‘betting’ that we would achieve 2.5 million registrations for the year. Then, as September’s figures appeared and October didn’t seem to be continuing in the same vein, that outcome looked to be a dream. However, who would have guessed we only just fell short? This does raise that question yet again: what are real registrations and what are sales?
What is certain is that the manufacturers are continuing to drive retail registrations through subsidised dealer contributions. Most are increasing their support and focus on the funding scheme of choice for today’s consumers: PCP, which makes up more than 70% of retail finance agreements.
Do January sales still have merit in today’s market? Selected dealer groups are questioning whether it is sensible to invest their limited marketing spends on January sales, reducing retail prices and, therefore, potential margins. Does it actually sell more cars or does it only squeeze much-needed margins?
The findings of a ‘By Dealers, For Dealers’ survey did help support those retailers who decided not to have a January sale. Comparing January 2015 to December 2014, just over 50% of dealers reported that their margins had been squeezed compared to the previous month, and another 25% showed no sign of change. The remainder had seen some improvement.
