Trying to characterise a typical retail customer this year is quite challenging.
However, there are buying traits that have changed very little over the last 18 months. These include the obvious, such as the purchase price, make/model, and economy (both fuel and runn-ing costs).
Most franchised dealers are convinced that retail customers have been migrating from new, to nearly new and used, not just to save money, but because a new car is less justifiable during periods of austerity.
Also, there has been a strong inclination to keep finance payments similar, even though this probably means a compromise with smaller size, or a greater age of car.
Brand snobbery still seems to be alive and well, and there is a strong appeal for those products that are the latest offering to make an appearance in the used car market. This is particularly true for the Range Rover Evoque, with nearly new examples changing hands at very close to list price.
The pocket-sized SUVs in the shape of the Audi Q3 and the BMW X1 have also attracted a lot of attention from retail buyers, but it is less clear whether this is because they have ‘stand out’ looks, or because they are compact in size.
While the latest generation of Kia Sportage will not attract the brand conscious it does offer a large measure of individual appeal. The Citroën C-Crosser is also worth a mention because its unique styling gives it an identity in the overcrowded lower medium sector with lots of very similar offerings.
This sense that customers still want to be individual is also reflected in the strong demand for some models that are more mature in age. Examples are varied, but would include Mini, Mk 5 Golf, Fiat 500, Chrysler 300C, Audi A2, Alfa Mito, Smart Fortwo and Subaru Impreza.
The Golf appears to be a very acceptable trade down from a Mercedes, BMW, or Audi, because of a perception that a Golf is synonymous with middle England society. The Mini (more in two door saloon and convertible body styles), Fiat 500, Alfa Mito, and Smart all share similar virtues in that they appeal to the young at heart and they all exude style.
These cars give owners the opportunity to person-alise to individual tastes. Such is their popularity that they all enjoy some of the best residuals in the market. The others enjoy mixed claims to fame: the Impreza has something approaching cult status where a ‘go faster’ image is all important for street credibility, the 300C is the ‘all mod cons’ luxury on wheels, at a bargain basement price, and the Audi A2 offers quirky looks and wears the right badge.
It appears that customers do not want to compromise on specification. Generally, the car being exchanged sets the minimum requirement for the newer replacement. So while things like air conditioning were considered a very desirable option at the last time of change, now it is a given. This time around cust-omers may well be getting the experience of features like parking sensors, and Bluetooth for the first time. For those selecting younger used cars, dealer sales staff will be extolling the virtues of driver assistance systems which would include traffic sign recognition, colour and map display navigation, Xenon and LED lighting, and stop/start.
Just how much of a turn-on these things are remains to be seen. In particular, it is uncertain whether all these features command an ‘add-on’ price or whether they are merely recognised as selling benefits over similar cars without these items.
The other common factor is that this time around customers are returning to the market after a slightly longer period of absence. In other words, the replacement cycle has stretched by several months.
The same is true of fleets and business owners, and the evidence for this can be seen from the auctions. Over the last six months the average age has increased from 75 to 77 months and recorded mileages have increased more significantly from 45,000 to 49,000. Of course, any customer delay is bad news for dealers, but it is a reflection of our times.
There is no doubt that the future success of new and used car sales is entirely in the hands of car manufacturers. They must continue to strive to produce innovative, appealing, well differentiated products that excite the full spectrum of customers. In other words, give customers a reason to buy at prices that are irresistible.