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Car Confidential: Sorting the men from the boys

It’s a tough time to be a boss in the motor retail industry. Sales are drying up and buyers are disappearing as fast as Labour supporters in Glasgow East.

At the time of writing, the UK’s new-car sales had dipped by 6% compared with last summer – and many in the industry are predicting even gloomier times ahead.

I recently sat next to Vauxhall chairman and MD Bill Parfitt at a dinner and conversation kept coming back to the turbulent market conditions.

Credit crunch, falling retail sales, collapsing second-hand values and widespread confusion over revised CO2 taxation are conspiring to make 2008 a tough year.

‘We’ll get through it, but we’re having to think smarter,’ he mused. ‘It’s all about turning the taps on and off, so our supply and demand are in sync.’

Sounds easy, but it isn’t. Not when volumes are forecast and budgeted years in advance.

Not when factories are built and staffed and churning out new motors like sausages on a production line.

The grim reality is that difficult economic times sort the men from the boys.

Everyone will feel the pinch (sales at uber-profitable Porsche are even down 26% so far this year), but the potent cocktail of market forces could be enough to put some of the world’s sicker carmakers out of business altogether.

I predict casualties within 18 months.

A small aside after my column a couple of weeks ago bemoaning the absence of some car brands at the recent British International Motor Show.

A little bird at BMW explained its rationale to me in no uncertain terms.

‘For the same cost of exhibiting at Excel for two weeks of the motor show we are instead sponsoring the O2 Arena for three years.

It gets our brand in front of more people.’

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