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Market Analysis: Retail reveals the truth

Ford leads the way in cutting back on discounted fleet sales in favour of retail business

Listening to some car company bosses you would think daily rental companies have to beg for permission to buy new cars. 

“We are pulling out of short-cycle low margin business” is the mantra, with almost every volume player promising to concentrate on genuine retail sales and reduce loss-making fleet deals. 

However, like St Augustine, their real message seems to be: “Make me good, but not yet”.

Often car companies want just one more big deal before they kick the habit.

Certainly looking at retail sales performance this year suggests that some are, shall we say, over-claiming (see table on next page).

At the top is the one company which really has cut back on fleet sales.

Ford has publicly said it has reduced fleet sales by more than 10,000 per year for each of the past couple of years and it has increased the number of its retail dealers.

The results speak for themselves: however you cut the numbers, Ford is becoming a more retail-oriented company. 

However, the claims of some others look harder to sustain. 

Renault has said its fall in overall share is mostly due to a reduction of fleet discounts – so why has its retail share also fallen sharply?

Renault could point to a decline while the new Megane was being introduced but, unfortunately, the Megane was the only model to increase its share so far this year.

Almost all the existing models, from the Twingo to the Laguna, lost share.

The other company to have fared particularly badly is Vauxhall.

Its retail sales were less than half those of Ford in the first four months of this year. 

You would have to go back to the days of the Vauxhall Victor for the last time that happened. 

Looking at the overall development of retail sales, the other company that really stands out is Hyundai – the only major brand to have actually increased retail sales in the teeth of a recession.

Its blizzard of new small models has been perfectly timed. 

Credit should also go to Audi, which has kept its retail sales virtually constant – in contrast to arch-rivals BMW and Mercedes-Benz.

It is the compact A3, with its recently improved engines, which is keeping Audi sales strong. 

At the wrong end of the table, there must be quite a few dealers looking for a new franchise. 

With some supposedly mainstream brands selling just one or two retail cars per outlet per month, dealers are looking for new partners.

Suddenly the Hyundai franchise development team has more new best friends than it knows what to do with. 

Click here for May new car registrations.

Retail Registrations May 2009

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