November’s registration figures show car sales for the month down 36 percent year on year. Bad as it is, things could be worse, (take a look at the housing market), and the reduction will include shrinking levels of self-registrations. Selling 64 percent of the cars you did last November against the current economic backdrop is quite a feat, and the past seven days have brought a number of new factors into play, which should also help our industry in 2009.
Contrary to most predictions, the VAT rate cut has boosted consumer spending in some quarters. The department store John Lewis was first to report “much stronger trading compared to the previous three weeks” after a busy weekend in their stores, and “a clear increase in big-ticket purchases” following early implementation of the reduced rate of VAT. Though the retailer says that overall sales are down on last year, this recent good fortune is welcome news, which we hope will get some front-page coverage.
Interest rates are now at their lowest point since 1951, and set to fall even further in the months ahead. For those with some cash in reserve, saving is increasingly pointless, thus offering car dealers a little extra leverage to prise potential buyers out of their bunkers. Recent new car buyers (yes, they still exist) report good deals on both car and dealership finance, with some bargain hunters enjoying rates as low as 3 percent – substantially lower than the lowest personal loan rates. Cracking dealer finance, combined with a decent discount on the metal and the VAT drop on top, all adds up to exceptional value for money for customers, and a great profit opportunity for sellers.
As Drayton Bird, the World’s leading direct marketing expert, said at the recent EurotaxGlass dealer conference: “what matters most to people is their personal economy: everything inside their front door.” Consumers are beginning to experience the benefits of cheaper finance and mortgages, cheaper fuel and cheaper food, all of which could lead to a marked improvement in many peoples’ confidence as we enter 2009, and begin to push against the economic slowdown. Let’s concentrate on these positive aspects, and work hard to win the business that will still be out there next year. All is not lost!
