Also interesting is the dynamic around PCP. One dealer told us that prospecting past customers reveals that more are changing six to 12 months later than they used to.
There is also evidence that many are choosing to settle the GFV at the end of the term, rather than change their car. This will inevitably impact on the volume of ‘prime’ used stock in the marketplace.
The all-important three to four year old bracket is diminishing in volume.
The proportion of older cars is steadily increasing. With consumers keeping their cars for longer this situation will continue.
The data and market intelligence clearly demonstrates that consumers are holding on to their cars for longer.
The industry can’t continue if the fall-out of three to four-year-old cars continues to decrease at this rate.
We need to adapt to the current economy and understand what the customers are buying and when.
Many dealers are already diversifying and reviewing their stock profiles, stream lining the sales process from the initial internet enquiring through to the showroom.
With the recently revised forecast of more than 2 million new registrations for 2012, there needs to be some serious consideration to how the consumers are going to be enticed to change their cars.
It is clear that the landscape is changing for dealers.
Stock profiles will have to change to take account of the evolving mix of age bands, but it will take more than that to survive and prosper in these new conditions. With the SMMT forecasting more than 2m registrations, supply is bound to increase at the nearly new end.
With more customers keeping their cars for longer the biggest challenge will be to persuade them to change more quickly or we will see a return to a serious supply imbalance.