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Black Horse comment

The motor retail industry is predicting bumper new car sales in September. After initial fears that consumers would not understand there was a new number-plate format, the hype has started to build and order banks are looking good.

What a difference a year makes. Who could forget, 12 months ago the trade was in the depths of depression. Customers were staying away and manufacturers were finally starting to bow to pressure and cut list prices.

Now many dealers report waiting lists for the most popular models and a shortage of good retailable used car stock due to a lack of part exchanges.

Of course, for most of the industry, the concentrated effort in September will be on new car sales. With winter looming there is a worry the next two months will be the last chance to shift the metal and claim those all-important volume bonuses before customers take their spending money elsewhere.

Despite the worries about the state of the economy, there is a mini-consumer boom with retail sales across the high street up and personal borrowing also rising. Interest rates have been cut again - so the temptation is to buy now and not wait any longer.

In such a frenzied atmosphere it is easy to let some of the fundamentals of motor retailing slip. Yes, shifting the metal is key but making a sustainable profit is even more important - and while prices are low and margins tight, much of that profit is going to come from finance.

The past few weeks have seen the pricing debate reawakened in the press and customers are more aware than ever of their ability to haggle. High profile campaigns by internet-based retailers, working with low cost base and importing from continental Europe, have squeezed new car prices and margins to the bone.

At the same time direct lenders continue to take an increased share of business, particularly in the used car market - once again a traditional, steady profit source for dealers.

So, the focus over the next few (hopefully) hectic weeks must be to concentrate on selling cars and finance - at the point of sale.

The reality is: there are few true cash buyers. Most customers are borrowing money from somewhere or could benefit from releasing the capital they have tied up in a car. Only a motor dealer can offer virtually instant completion of the sale, plus added value products such as personal contract purchase schemes with guaranteed future residual values.

These benefits allow dealers to offer customers speed of service and personal attention while maintaining competitive rates.

Black Horse is here to help. We have dedicated ourselves to our dealer network and are committed to making point-of-sale finance easier to sell.

Through our showroom technology and business processing we can offer rapid decisions on proposals, a wide range of finance products and a highly experienced account management team to support dealers.

Above all, we understand the industry and we recognise how important these next few weeks will be for front line retailers. We will do everything possible to help make it a bumper September for the whole industry.

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