Vauxhall pledges cut in daily rental to boost residual values

13/02/2012 in News, Market Insight

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Vauxhall has pledged a cut in its short cycle business sales in order to improve residual values for customers.

Last year it reduced its annual sales to rental by 6,000 cars; this year it plans to cut another percentage point from its UK market share, a drop from 12% to 11%, by taking out a further 20,000 rental units.

"We have planned for this reduction in sales – that’s why we’ve got confidence in this strategy,” said Vauxhall fleet director James Taylor. "There will be no pressure to go back into it.”

“The object of the exercise is to make money. We have a different direction from the top of the organisation and it is on board with this strategy,” Taylor said.

He said residual values are likely to see a £400 uplift on average for seven to eight-month-old cars.

Some models will be in four-figures, such as the Insignia, where supply is being particularly constrained – volumes will fall by 60% to 70%.

“Those improvements will flow through to our three-year values,” said Taylor.

The strategy will also enable Vauxhall’s used car retail operation Network Q to buy back a greater proportion of rental cars. The target is 70%, which gives Vauxhall more control over how these cars return to market.

Click here for the full interview in Fleet News:

http://www.fleetnews.co.uk/news/2012/2/9/vauxhall-cuts-rental-in-new-rv-strategy/42480/

Author
Tim Rose

Vauxhall Motors

The launch of the Vauxhall Ampera will be a key moment in Vauxhall's history over the next 12 months, as it has the potential to carve out a new market, without any significant competitors on the horizon.

The Ampera is an electric vehicle with range extender technology which can achieve a potential 175mpg.

Vauxhall is also concentrating on its core business in the run-up to the launch, particularly in generating aftersales business.

Vauxhall MasterFit recently signed up its 100,000th member to its discount parts, MoT and labour aftersales initiative which is aimed at getting older cars into the dealer network for service work.

The Vauxhall MasterFit Service Club is free and is open to all Vauxhalls over two years of age, regardless of where they were bought from. Vehicles between two and three years old receive a 15% discount; those four to seven years old qualify for a 20% discount; additionally, those eight years and older can benefit from the maximum discount of 25%.

In 2012 Vauxhall said it planned to reduce car sales, losing it a percentage point of market share, in order to boost product appeal and brand strength. Non-profitable short cycle business is to be reduced, said MD Duncan Aldred.

Note: Manufacturers administer the franchised contracts for cars and LCVs in different ways. Broadly, for some the contract to sell cars and LCVs is managed through a separate dealer contract. For others one contract covers both vehicle types.

AMi seeks to acknowledge the difference and reflect it in the count of each dealer groups total franchised outlets (franchised businesses) and sites (locations).

Vauxhall treats car and LCV sales as coming under separate contracts –AMi counts each individually.