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Dealers turn focus to pre-registrations as new car market puts the pressure on

Dealers have had to switch their focus to selling pre-registered vehicles in Q4 at the expense of new and used car sales departments, according to ASE.

Pat Cambage, head of business development for profit optimisation at ASE, believes there are hidden dangers for dealers in a booming new car market.

The September registration figures saw the highest number of new cars registered since March 2008 and drove volumes towards the pre-recession monthly average of 416,778 units.

Many commentators feel that, with over 400,000 new cars registered for the first time in more than five years, the UK market is reflecting growing economic confidence and that is certainly the image which the industry has portrayed to the press.

However, industry commentators have said as much as 25% of the total new car registrations volume for September was registered on the last day of the month.

Cambage said: “The figures do suggest that the market has been artificially inflated by dealers registering cars, either to hit their base or an enhanced level of bonus.

“So, the signs are that the trend to pre-register is back with us. Any surplus vehicles from September will have an impact on new and used vehicle sales during the final quarter.”

Cambage said the pressure of pre-registration activity will impact every dealer who has another dealer in their area who has taken part in any pre-registration activity.

He said: “Operating in a narrow margin industry will demand robust policies and systems to ensure the inevitable changes in pricing do not adversely affect your used vehicle sales strategies.

“There will be a need for dealerships to have tightly managed control on new, pre-registration purchase, stock and selling, while ensuring benefits are reaped also through greater vigilance over used vehicle purchase, stock monitoring and determination of the sales strategy.

“Dealers with good used vehicle strategies will prove to be winners in the current and changing market conditions.”

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