Car Fleet Market Trends Of 2016
01/08/2016 20:11
As the festive celebrations fade rapidly into the distance, the trade will begin to pick up quickly and launch itself into the often frantic and surprisingly unrewarding first couple of weeks of the New Year. It is highly likely that franchised and non-franchised dealers will by now already be selling new and used cars at a frenetic pace, in many cases facilitated by traditional New Year sales programs that have become synonymous with the beginning of a fresh selling season for “big-ticket” items in almost every consumer market in the UK and Europe.
The whole sale sector has jumped into action
This heralds an expeditious spell in which the wholesale sector springs back into action and turns the supply of used car stock back on by taking delivery of the new 65-plated cars held over from December, and restarting defleet programs. The supply of stock will start to feed the often desperate auctions with fresh stock for the avaricious trade buyers. Often during this time, dealers can be at their most stretched from a margin perspective, with strong retail demand and low trade supply resulting in the need to spend perhaps a greater level of money on sometimes poor quality and un-exciting stock left over from December sales to fill the empty spaces on the used car pitches. It is a wonder why the trade puts itself through such a frustrating window and 2016 will be no different.
The question is: What will 2016 bring to the trade overall and what are the key factors that will influence trading in both the retail and wholesale sector? Looking at the high-level factors first, it is clear that the economy in the UK is expected to continue to perform well and this will result in a general improvement in both wholesale and consumer activity. Confident businesses will be compelled to buy new cars, as will a financially comfortable consumer.
Till the fourth quarter, interest rates will increase
Glass’s economic partner, Oxford Economics, forecast that interest rates are unlikely to increase until the fourth quarter of the year and employment levels will continue to increase through 2016 and into future years. Personal disposable income is also set to increase and the House Price Index is gently increasing too. Combined with a steady currency rate against the Euro and the Dollar for the next 12 months and understanding that the European economies of UK neighbors are still in a fragile state of flux, means the UK is a good place to be.
From a new car perspective, it does mean that there will be further pressure on new car sales and the practice of pre-registration will not be disappearing any time soon, unless more draconian legislation is passed to restrict the practice. A number of the key manufacturers claim to want an end to this new market distortion and working with the SMMT may see some changes during the course of the year that might help, although Glass’s suspect that the need to enhance “sales” will be a necessity for most companies during 2016. To know more on the latest updates on finance and world market, follow us at https://www.facebook.com/pages/Trends-in-Trade/872091739518711