2012: A challenging time for dealers

Seasonal patterns are likely to be influenced by short-term market distortions resulting from the Olympics and the Queen’s Jubilee celebrations.

But we do need to be ready for differences in the normal seasonal patterns, as evidenced by a slower January than we have seen over the past three years.

The year will also be challenging when considering the wider economic outlook and the ongoing Eurozone crisis. A weak new car market will result in an increase in pre-registrations which will put pressure on nearly-new prices in the second and fourth quarters.

The increased financial pressures on families may well lead to a reduction in vehicle condition and accompanying service history as they seek ways of reducing expenditure.

The extended fleet replacement cycles will also impact on the overall condition of vehicle returns. These pressures will ensure continued strength in the sub-£3k market.

The economic climate will increase competition among the auction houses and remarketers trying to attract fewer buyers who may be financially constrained if credit concerns return, though this is unlikely to be at anything like the level of 2008-9.

Current analysis shows great care will be needed in stocking hard top convertibles and 4x4s.

High volumes of the former have wiped the shine off that sector and everyone has now realised that 4x4s are not enjoying the same demand and price strength as they were in last year’s arctic conditions.

In summary, it is going to be a tough year, with opportunities for some and challenges for others. In terms of market stability, much will depend on the volume of pre-registering.