Frightening News About Car Market
Tuesday, 29. June 2010
I attended the Buckingham Automotive Forum on Thursday at the University of Buckingham, the quarterly meeting at which the good and the great of the industry give us an indication as to what is likely to happen in the future and if the future is looking good or bad for the industry. In fact I was a guest speaker at the event, speaking alongside Professor Peter Cooke, Professor at the University and government advisor (he also writes a regular column, as I do, in Motor Finance Journal, Professor Colin Tourick, Marcus Puddy, Head of Consultancy at Lex Vehicle Leasing and Christopher Macgowan OBE, Past Chief Executive of the Society of Motor Manufacturers and Traders. We had the biggest turnout ever (obviously because I was speaking) with the audience full of industry experts from virtually every arm of the industry. Many leasing companies were there along with specialist lawyers, car manufacturers, Kwik Fit, EurotaxGLASS, Manheim auction house, dealer groups and many consultants. Whilst I was full of enthusiasm the day turned out to be one of doom and gloom. Predictions were that we are on the long road to recovery but things will get worse before they start to improve. The first bit of bad news was that there is still very little money about to lend, so whilst there has been a surge in enquiries the acceptance level is dropping making it more important that applicants prepare for finance very carefully before making an application. I also raised the question of special deals and delivery lead times. It was pointed out that the special deals tended to come about as a result of over production of cars and the need to move them quickly, especially if a new model was about to be launched, but as there is no over production it is unlikely that we will see a return to this situation for some considerable time. The glimmer of light was the improved Euro exchange rate which means that European cars will be cheaper for us and some of the attendees believed that there would be a degree of ‘dumping’ by European manufacturers into the UK which may help lease rates. As for lead times these will continue to move out. BMW X5’s made in the US and Mercedes made in India and Brazil make deliveries a nightmare. Transport companies have gone bust and there are now many transport ships moored of the south west coast of England not being used as there isn’t enough freight to make them economically viable to use. This makes it more difficult to supply new cars and is now putting pressure on demand for used cars. An unhappy balance but it makes it important to plan to change you car earlier, especially if you have an existing car that needs to be returned to the leasing company. You need to start looking as early as 6 months before you need delivery. Any views? Please drop me a line? By Graham Hill
