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Vauxhall pledges cut in daily rental to boost residual values

Vauxhall has pledged a cut in its short cycle business sales in order to improve residual values for customers.

Last year it reduced its annual sales to rental by 6,000 cars; this year it plans to cut another percentage point from its UK market share, a drop from 12% to 11%, by taking out a further 20,000 rental units.

"We have planned for this reduction in sales – that’s why we’ve got confidence in this strategy,” said Vauxhall fleet director James Taylor. "There will be no pressure to go back into it.”

“The object of the exercise is to make money. We have a different direction from the top of the organisation and it is on board with this strategy,” Taylor said.

He said residual values are likely to see a £400 uplift on average for seven to eight-month-old cars.

Some models will be in four-figures, such as the Insignia, where supply is being particularly constrained – volumes will fall by 60% to 70%.

“Those improvements will flow through to our three-year values,” said Taylor.

The strategy will also enable Vauxhall’s used car retail operation Network Q to buy back a greater proportion of rental cars. The target is 70%, which gives Vauxhall more control over how these cars return to market.

Click here for the full interview in Fleet News:


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  • kevthebass - 23/02/2012 09:29

    Let's hope that Vauxhall stick to this strategy. Every year most volume manufacturers state they are going to cut back on daily rental and Motability because there's no profit in them. It rarely lasts more than a few months as they get cold feet when registration figures fall.