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Carmakers quit 'ivory towers' to improve used sales

Many manufacturers are coming down from their ivory towers and working in partnership with those in the used car market. They have realised that they need to do more to support the market and those selling used vehicles. There are so many ways in which this can be done and it is up to each carmaker to find the best way to address certain potential problems.

Not too long ago a new car was built and after that it was on its own in the big bad world, and whatever happened to its residuals was of little concern to the producers. It was left up to the leasing and rental and car salespeople to establish the best route to market. But how things have changed in the not too distant past, as manufacturers realised that strong residuals and careful management of used car stock actually helps in the sale of new cars. This is because the leasing industry and public alike get more confidence and feel more comfortable with certain products.

There have been two major players in the past few weeks that have tried different techniques to ensure better prices, and to gain a better understanding of the used car buyer.

Firstly Ford has held a series of used car training seminars, not only for Ford dealer salespeople, but also for disposers from the rental industry, leasing companies, auction houses and a small number of companies who dispose of their own vehicles. This is a first for a major manufacturer, not only in the UK, but also in the rest of Europe. In fact senior managers from Ford Europe attended the course and if it proves successful it could be rolled out to other countries. The aim of the day's training was to give delegates an understanding of the product and some of its features, in comparison to the competition.

In the past new car salespeople received plenty of training, but used car sales staff were left to their own devices and had to muddle through. It is refreshing to see a major player taking the used car market very seriously. They say knowledge is a wonderful thing, and as this course proved, they are right.

The second manufacturer taking action to increase awareness and help to maintain residuals is Volvo, with an initiative to offer metallic paint free of charge for a limited period. It is not the first time that this has been done by a car producer, but the interesting thing here is the reasoning behind it. Like everyone else in the industry, and even some police forces, Volvo realises the importance of colour. Volvo wants to see the best possible residual values being achieved for its cars, and of course a better colour reduces risk on disposal. Offering metallic paint free of charge is the most beneficial way to ensure that this happens. They are not distressing new prices, but the buyer makes a saving when the car is new and possibly gets better prices at the time of disposal. So the customer gets a double helping of kindness.

As the used car market gets tougher heading towards the back end of the year, it is reassuring to know that some manufacturers are being pro-active in giving help and co-operation to disposers, making for a great partnership. It may be difficult for manufacturers to quantify the results of taking steps like these, but whatever they do to help will be of benefit to disposers somewhere down the line.

MPVs
People carriers, or MPVs, have now been around for a number of years. The Renault Espace was the first vehicle to have any significance in this area of the market and it was some time before it had any real competition in the UK. Then the floodgates opened, with just about every manufacturer building a variation on the theme. But as all these MPVs start hitting the used car forecourts it is becoming obvious which are the favourites. The crucial thing is not the manufacturer; more the engine it has in it. Whatever the model, it has to be diesel. Petrol engined versions are becoming hard work and the gap between petrol and diesel values is growing. Used car buyers in this market know exactly what they want, and room and economy are generally at the top of the list. Many manufacturers are coming down from their ivory towers and working in partnership with those in the used car market. They have realised that they need to do more to support the market and those selling used vehicles. There are so many ways in which this can be done and it is up to each carmaker to find the best way to address certain potential problems. Not too long ago a new car was built and after that it was on its own in the big bad world, and whatever happened to its residuals was of little concern to the producers. It was left up to the leasing and rental and car salespeople to establish the best route to market. But how things have changed in the not too distant past, as manufacturers realised that strong residuals and careful management of used car stock actually helps in the sale of new cars. This is because the leasing industry and public alike get more confidence and feel more comfortable with certain products. There have been two major players in the past few weeks that have tried different techniques to ensure better prices, and to gain a better understanding of the used car buyer. Firstly Ford has held a series of used car training seminars, not only for Ford dealer salespeople, but also for disposers from the rental industry, leasing companies, auction houses and a small number of companies who dispose of their own vehicles. This is a first for a major manufacturer, not only in the UK, but also in the rest of Europe. In fact senior managers from Ford Europe attended the course and if it proves successful it could be rolled out to other countries. The aim of the day's training was to give delegates an understanding of the product and some of its features, in comparison to the competition. In the past new car salespeople received plenty of training, but used car sales staff were left to their own devices and had to muddle through. It is refreshing to see a major player taking the used car market very seriously. They say knowledge is a wonderful thing, and as this course proved, they are right. The second manufacturer taking action to increase awareness and help to maintain residuals is Volvo, with an initiative to offer metallic paint free of charge for a limited period. It is not the first time that this has been done by a car producer, but the interesting thing here is the reasoning behind it. Like everyone else in the industry, and even some police forces, Volvo realises the importance of colour. Volvo wants to see the best possible residual values being achieved for its cars, and of course a better colour reduces risk on disposal. Offering metallic paint free of charge is the most beneficial way to ensure that this happens. They are not distressing new prices, but the buyer makes a saving when the car is new and possibly gets better prices at the time of disposal. So the customer gets a double helping of kindness! As the used car market gets tougher heading towards the back end of the year, it is reassuring to know that some manufacturers are being pro-active in giving help and co-operation to disposers, making for a great partnership. It may be difficult for manufacturers to quantify the results of taking steps like these, but whatever they do to help will be of benefit to disposers somewhere down the line. People carriers, or MPVs, have now been around for a number of years. The Renault Espace was the first vehicle to have any significance in this area of the market and it was some time before it had any real competition in the UK. Then the floodgates opened, with just about every manufacturer building a variation on the theme. But as all these MPVs start hitting the used car forecourts it is becoming obvious which are the favourites. The crucial thing is not the manufacturer; more the engine it has in it. Whatever the model, it has to be diesel. Petrol engined versions are becoming hard work and the gap between petrol and diesel values is growing. Used car buyers in this market know exactly what they want, and room and economy are generally at the top of the list."

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