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Traditional 'summer slump' can be avoided, says GRS

The traditional nearly new 'summer slump' has been caused by the machinations of manufacturers rather than factors normally blamed for the phenomenon, such as the weather, holidays, plate changes coupled with a downturn in demand.

Vehicle remarketer GRS says this year these often cited causes are balanced by a corresponding drop in supply helping to even out the trend.

The slump is, in fact, this year caused by another factor.

"The amount of nearly new stock coming off rental has reduced this summer because manufacturers have driven less volume into rental companies, said GRS sales and marketing director Mike Pilknington.

"These reduced volumes of nearly new returns have allowed manufacturers to keep a larger proportion within their own used car schemes. The amount of nearly new stock coming on to the market is therefore less than usual, helping to fuel demand and protect residuals."

GRS, however, still believes the market is being talked down.

"Instinctively everyone expects the nearly new market to slump because it usually does at this time of year. But the reality is the lack of supply has counteracted the traditional seasonal factors and we are not seeing the summer slump evidenced in previous years."

Next year, GRS predicts prices of nearly new cars can be stabilised if manufacturers explore alternative sales routes that protect RVs andn brand values.

"Those with well thought out remarketing strategies will look for new, carefully targeted, discrete routes to market. In a fragile market especially traditional sales routes such as auctions increase price sensitivity because there is nowhere to hide the volumes manufacturers need to sell. This applies to both open and closed sales," said Mr Pilkington.

He said that by specifically channelling vehicles towards different sectors of the market problems of oversupply with the resulting dip in prices are minimised.

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