The Europe wide figures for new car sales across europe fell by nearly 2 percent in the first quarter of the year. Whilst some countries experienced an increase a number of factors, including economic troubles in Portugal and Greece contributed to the overall reduction. Within the top five markets: Spain, Italy and Great Britain all experienced negative retail figures for new car sales.
Whilst this is gloomy news for much of the Motor Trade (particularly within the UK), there have been some brands that have bucked the trend. Alfa Romeo sales have increased 60 percent within the year to date, much of this change has been attributed to new models such as the Mito and Giulietta - which have provided unprecedented recent success for the brand.
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Over half of the visits to Car Dealer websites occur outside of the traditional 9-5 office hours. Online enquiries tend to peak, between 7-10pm - but a response is usually not processed until the following day. The automotive director of Google UK stated that the average time for a UK dealer to respond to an online enquiry is 72 hours (compared to just 4 hours in the US).
Motor Traders can use a variety of services to deal with enquiries out of hours, including call centres or 'live chat' applications to respond to site visitors. In the current trading climate, effectively processing these out-of-hours enquiries can make the difference between profit and loss. For car dealers who are currently processing their out-of-hours enquiries in under 15 minutes, they report a higher conversion rate and quality of enquiry outside of the standard working day.
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Last week saw the launch of another electric city car, the Citreon C-Zero which are starting to prove popular with buyers in urban areas. The take-up of these new cars is expected to increase, with the current record highs in fuel prices. The trend towards Hybrid and all Electric vehicles provides challenges across the Motor Trade for Car Servicing, Repair and MOT stations.
Business that are slower to adopt with equipment and servicing plans for these greener vehicles will lose business to other better equipped centres. Whilst the numbers of these cars are still relatively small, the hybrid and all electric sectors of the market are growing rapidly.
Whilst in tough economic times it is difficult to invest in new equipment and training for staff to ensure they are fully equipped for electric vehicles, the question for Motor Traders will become - can I afford not to?
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The Windscreen repair brand, Auto Windscreens was placed in administration last month (February), when additional capitalisation for the business could not be found. A buyer has emerged for some of the companies assets and use of the brand name. Markerstudy Group a major player in the Motor Trade insurance market, has acquired the business assets from the previous owners a private equity firm.
In a press release from Auto Windscreens, the company strikes a positive note for a 'bright future' with the creation of 250 new jobs in the business. The intention is to compete as a major player within the UK windscreen market place. The Markerstudy Group currently employs 500 staff in the UK with head offices located in Kent.
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The new coalition Government is keen to see an increased uptake in apprenticeships for young people within the Motor Trade. Vince Cable spoke on the issue recently and the government are targeting an additional 100,000 apprentices in UK businesses by 2014.
Industry figures for the Motor Trade, recorded in excess of 11,000 apprenticeships during the past year. The trend towards apprenticeships and the government incentives offered are good news, for employers and potential employees at a time when youth unemployment is exceptionally high.
Training and career opportunities are available for many Motor Trader occupations. Many companies are taking on young people in this sector, with Jaguar / Land Rover being one of the largest, the company are creating 1,200 new apprentice places.
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Figures for January 2011, indicate a tough trading climate for the Motor Trade during the coming year. The SMMT statistics recorded a fall of 11.5% in new car sales. Increasing unemployment, lack of available finance and increases in VAT and fuel prices are all effecting consumer confidence and personal budgets.
Motor Traders and manufacturers are providing incentives to buyers to help revive flagging sales. However most consumers are taking a cautious approach with job security proving a factor with large numbers of public and private sector workers.
Many Car Dealers are focusing their stock on smaller more efficient cars, to help with rising fuel costs, with prices currently at a record high. The early indicators for this year are that their is a marked downsizing in cars and engine size. Electric cars are also becoming more attractive to buyers as the costs of petrol and diesel continue to increase. However the range of the current crop of electric cars and the number of public charging points needs to increase before this becomes a viable alternative for most road users.
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Car Dealers are currently trying to satisfy demand within the used car sector for 4x4's. This is largely due to the poor weather conditions and potential for further extreme weather. The increase in demand and prices for SUV's continues unabated despite the increase in fuel prices to record levels.
At the beginning of 2011, 4x4 prices were increasingly faster than other sector of the used vehicle market. The fuel prices are having a limited impact in this area, because Diesel vehicles are outperforming their Petrol counterparts with the highest prices.
Should there be a further spell of bad weather the demand is expected to peak even further than current levels. Therefore dealers are finding it increasingly hard to satisfy customer demand for 4x4's despite increased fuel costs.
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Freely available pricing information available to consumers online for car prices and servicing costs is driving down Motor Trade profits. To maintain profitable businesses many dealers are investing in improving relationships with their customers.
Typically the increasing reliability reduced frequency of servicing on newer cars, effects the number of opportunities Motor Traders have to interact with their customers and the income streams for Motor Trade businesses.
To keep regular customer contact, many car dealers are increasing spend on IT systems, marketing and staff training. The increased spend is focussed on keeping a business relationship with the customer after the initial vehicle purchase.
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To help encourage demand within the Motor Trade during the traditionally quiet first quarter, some manufacturers and car dealers are offering to absorb the VAT rise. When dealers opened for business they and their customers faced an increase in VAT to 20%, the highest rate since the introduction of VAT within the UK.
Already in 2011 Seat and Subaru have announced deals to absorb the cost of the VAT rise, when purchasing new vehicles. Many car dealers will be watching to see if this provides a significant boost to sales and may well follow suit.
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