AM Online

Chartered Trust comment

Franchised and independent dealers who survived through last year might well be hoping 2001 brings better fortune. By any standards it has been a difficult 12 months and those who have already suffered first snow, then floods, may already feel the new year has not started any better.

However, there is some brightness on the horizon and dealers with an eye on the future should be starting to look ahead and plan accordingly.

By common consent, there is plenty of pent-up demand in the market. Prices have fallen and potential buyers do now realise there are bargains to be had. There even seems to be a recognition that prices cannot drop further, despite the wild claims of some of the consumer lobbying organisations.

As the same time the euro is gaining value against the pound, reducing the advantage still held by parallel importers and some internet traders. Longer lead times for continental supplied cars means, by and large, a switched-on UK dealer ought to be able to make a suitably attractive offer to any customer thinking about taking this route.

In the used market there are signs prices are beginning to stabilise, at last. Although the winter months are not the best on which to base a case, the main trade guides believe we should see some return to normal epreciation levels on the first few months of the year.

And finally, despite the best efforts of government, there are still pre-registered cars in the market, which means opportunities for those bold enough to buy in bulk and trade quickly.

Underlying these general market trends are two important factors - one economic and one political.

In the economic world there is general agreement that interest rates will come down. The question is not if, but when. This can only be good news for motor retailing. Falling rates (or even rumours of falling rates) boost customer confidence and increase spending power. Not only is a customer able to afford more, they also feel better about taking out the finance to pay for it.

Of course, falling interest rates also present dealers with a challenge. Customers will expect to see the reduced rates on offer or are in danger of walking away to a direct lender. In these circumstances, it is important to maintain a good rate spread and not be sucked into a downward spiral of ever reducing returns.

Your Chartered Trust advisor has no inside knowledge about when rates will move. But we do have considerable experience in tailoring finance plans to suit individual dealer customer bases - and we can help with training staff to maintain rate spread in the face of tough, high street competition.

So talk to us now and start developing your finance and training strategy early.

Of course the political factor will be the general election, which most political commentators expect to be in early May, shortly after a late March budget. With timing like that it is fair to assume the government will not want to be too harsh with new taxation on the motorist or any other voting group.

So, let's take the optimistic view - falling interest rates, no new taxes, stable prices and a new plate change in March.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest

Login  /  Register


No comments have been made yet.