I had a couple of texts and emails this morning from people who still are in touch from my previous life in vehicle sales. It seems that UK car sales are at an all time high and the UK registered more than 2.6 million cars last year.
There’s lots and lots of opinions and headlines out there, with some saying that the ‘good times’ are back after the panics of 2008 and the ‘Scrappage’ schemes, while others are saying that it’s a false figure due to self registration.
In the comments sections of these motoring websites of course, there are lots of naysayers, with doom n gloom being the preferred currency.
Comments such as “ a false market” fuelled by self registration and cheap PCP finance deals and that the market is doomed when all of these cars come back from the lease deals that they’re supplied on….. It’s just not fair they howl.
My view? I started selling cars in 1984 and the same system of self registration existed back then. Personal finance leasing deals were an invention of the late eighties and the same things were said at that point. Apparently, we were all going to die a fiery death when, just as today, self registration by manufacturers was paraded before the public as a con by the media.
Autocar’s contention that the drop in October registrations was due to dealers having to sell pre-registered cars from previous months is quite probably correct. So what? Been there, got the franchised T Shirt, I remember having to deal with it.
From a dealer’s viewpoint, self registration by car manufacturers can be either annoying or an opportunity. The clever guys get out the calculator, work out how much bonus can be made from the latest incentive, roll up their sleeves and get on the phone. When I was involved, often it wasn’t our money we were playing with anyway, it was a car manufacturer offering guaranteed buy backs and other, often negotiable, incentives both to buyers and dealers.
At one point, I was with a Jaguar dealership selling XJ40 runout models in 1993, the XJ6 3.2S, on a PCP deal. From memory, figures like a few thousand down on a £33,000 car, £290 per month, then an ‘optional’ final figure of £19,500. We couldn’t sell enough of them, as customers couldn’t believe that Jaguar would stand beside a final buy back figure so ludicrously high.
When the XJ40 turkeys came home to roost, Jaguar had already set aside the funds required to move them through the dealer network at a realistic figure. Nobody died, but I recall saying “Flamenco Red with Magnolia Hide” in my sleep.
I can also recall exactly the same issue in the late 1990’s with Lexus sales when Hertz bought a bundle of LS400’s that came back when six months old just as Lexus declared an all time high in UK Lexus registrations….. From a dealers viewpoint it was simple. We had them with us from Lexus on a sale or return basis, no obligation. The figures were too high, so we let them sit there a while and sold our brand new ones. Eventually, the fleet department became quietly negotiable and we sold them. I recall sitting on my hands in a closed doors dealer meeting as others were squealing at the injustice of dealing, sniff sniff, with a daily rental company and self registering cars. Oh the shame….
My point is, these tactics have been around as long as car dealers and manufacturers have. It’s all part of the dance. Those self registered cars will find homes. Will they be bought by people who might otherwise have bought new? Probably, but the fact that people are in the marketplace to deal at all signifies a buoyant market. If that pre-registered car hadn’t been there, they would have bought something, somewhere.
To me, the issue isn’t that of new car registrations vs new car sales. Those registered cars will be sold. Either the manufacturer or the dealer will put some financial incentive in place and someone will see a deal. Whether they have a car makers name as the first keeper or a final owner, in the big scheme of things it doesn’t really matter.
Are car manufacturers duping the public by making themselves appear more successful than they really are? Not really if you’ve half a brain. People can be pretty suggestible sometimes so there are plenty out there, keyboards at the ready with indignation in the Daily Mail comments section. The rest of us just get on with it.
As for Personal Leasing Plans ruining the marketplace, I just don’t get that one at all. After all, just how many people in the UK are mortgage free enough and have the cashflow to lay out between £400 and £600 per month on a depreciating asset?
One thing is for certain. Next time there’s a new registration record set, we will be having exactly the same conversation all over again, on whatever platform of communication we have to hand. In the 1980’s we didn’t have Tweets, never mind email. And the delivery mileage stock list came on a fax machine with that horrible faded thermal paper……