AM Online

The Big Picture: Used Car Conference

As an indication of the importance of the used car market, the capacity audience of dealers and suppliers at AM’s Used Car Conference in Birmingham last week was one of the most significant.

At the beginning of the year, I was told that without a used car operation, the chances of survival for a dealer in the face of falling new vehicle sales and the worst recession for a generation, were significantly slimmer.

The subsequent rise in RVs throughout much of this year has provided a boom time for used car dealers: another commentator said recently that you weren’t worth your salt if you didn’t feel you’d “never had it so good”.

However, if there was one lesson to take away from our conference and research that is being revealed at this week’s AM dealer council chairman’s meeting, it is that the situation is going to get a lot tougher.

Set against rising unemployment, VAT increases, weakened sterling and the end of scrappage, buyer confidence will continue to be hit, leading to reduced new registrations and a lack of part-exchanges, exacerbated by increased fleet operating cycles cutting stocking opportunities further.

Consumers are also driving a hard bargain, with the cost more important than brand and the environment.

Used car transactions are also forecast to fall until at least 2013 from highs of 7.7 million in 2004 to 5.9 million.

It is going to be much harder to make a profit.

The critical decider is dealers’ ability to source the right stock for an increasingly spendthrift customer.  

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