Motability sales could provide dealers with a means to a “soft landing” in new car sales when funding for the scrappage scheme ends next month, says motor industry consultancy Network Automotive.
The company, which provides advice to several manufacturers and their dealer networks about Motability, said that it offered a potentially recession-resistant route to sales but was underexploited by some dealers.
Managing director Colin Bruder said: “It is probably inevitable that there will be a sudden drop in new car sales when the scrappage scheme ends but Motability could be one way for some dealers to create a soft landing for themselves.
“While Motability car sales are down during the recession, they have not fallen to the same extent as the overall market and it is proving to be one of the few sectors of new car sales that are recession resistant, if not recession proof.
“While some dealers already maximise the opportunities for Motability, others do not, and there is certainly potential for them to generate more business.”
Bruder said that some manufacturers and dealers had pulled back from the Motability sector because pricing is very competitive at the entry point.
He said: “Motability represents a huge portion of the new car market and one that offers a wide range of profit opportunities to the well-prepared dealer. Certainly, it has the potential to take some of the sting out of the end of the scrappage scheme.”
Bruder said that dealers who were keen to commit to Motability needed to learn new skills such as how to market to potential customers, enable vehicle modifications where required and how to operate scheme paperwork.
He explained: “Motability is a specialised market and very few dealers find sustained success without some external help. It is a sector where we have been increasingly asked for advice and practical support during the recession.”