Where’s the used stock coming from?
31 January 2011
No doubt about what the hot topic in the industry is going to be for the next few months – used cars. Or rather, the lack of good quality, retailable used cars available for stock.
The auction houses are talking about a ‘bidding frenzy’ and one leading online wholesaler told me he had 30% more people looking for stock last week than before Christmas. BCA say the second week of January was one of the best on record for the group, with nearly 14,000 vehicles sold.
One bright thought is that all this could be good for new car sales. With so little late-plate stock around, customers are more likely to be attracted to a new car, especially if it’s being backed by a substantial manufacturer incentive. That’s the theory and you can already see it working: customers can bag a brand-new Renault Clio i-Music for £8,995, which is about the kind of money they used to pay for a nearly-new.
We’ll know next at the end of next week what that kind of offer has done for Renault sales but it’s worth noting they were up by 15% in December, against a market that was down 18%. Yes, there’s a lot of fleet activity in there, but it’s still an impressive result and the price positioning has got at least one other carmaker seriously worried.
With all these random thoughts buzzing around, it was useful to get a snapshot view at this week’s Vehicle Remarketing Association conference. It’s a new talking shop for auction houses, leasing companies and carmaker finance departments; together they sell about 1.8 millions used cars a year.
The missing link, of course, is that they don’t yet attract much interest from their customers; that’s you. In fact, the only retailers I saw at the conference were Cliff Deller from Inchcape and Jonathan Allbones from Car People.
The majority opinion, according to one of those push-button polls we all have to do at conferences these days, is that remarketing vendors are not particularly interested in the needs of buyers when they spec or source their cars. And retailers will always adapt to what’s in the market at the time.
I certainly agree with the latter – that’s what makes good dealers – but a bit more joined up thinking in the middle but might help. We’re never going to eliminate stock shortages entirely but less knee-jerk reaction and more long term planning would certainly make all our lives that much easier.
Have a good week, both in and out of the showroom. If you have a story for us, or want to get something off your chest, email email@example.com