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WLTP to spark September bonus shortfall for car dealers

Karl Davis, Coachworks’ Consulting’s managing director

Car dealers are set to miss their September new car registrations bonuses as a result of stock shortages sparked by the switch to WLTP vehicle emissions test regime, according to Coachworks Consulting.

AM readers have already given their verdict on the hurdles to be faced during August and September in the magazine’s survey into the effects of the EU’s Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and Real Driving Emissions (RDE) on September 1.

More than half of respondents (55.6%) from the car retail sector told us that they had been advised by their manufacturer partners to expect a restricted supply of vehicles as OEMs worked to re-test, and re-develop engine line-ups to abide by the new legislation.

Now industry consultants at Coachworks Consulting have claimed that dealers are set to miss out on third quarter manufacturer performance bonuses as a result of stock shortages.

“We are hearing of car brands who will not have some new models available to sell in September, so the introduction of WLTP will undoubtedly hit some dealers’ bottom lines,” said Karl Davis, Coachworks’ Consulting’s managing director.

“Any shortfall in new car sales during September is going to make some dealer targets difficult, if not impossible, to achieve and could pull down Q3 profitability.

“Manufacturers are desperately trying to get new cars type-approved under WLTP and into showrooms, so the problem could wash itself through by the end of Q4. But, if the stock shortages continue then some customers might take themselves out of the market until next year.”

While AM’s survey highlighted the risk posed to the September ‘plate change month by the legislation changes, 43.7% of respondents said they had been placed under pressure to self-register vehicles ahead of September 1 as a direct result of the switch to WLTP and RDE test regimes.

A total of 57.1% stated that manufacturers had introduced incentives in an effort to sell vehicles before then.

Davis said that “switched on dealers” had spent August finding homes for these cars by making sure they are keenly priced and using any additional manufacturer support they have by switching Personal Contract Purchase and Personal Contract Hire customers early.”

But he added: “Dealers need to trade out of these vehicles but in an orderly manner; the last thing they want is to be holding onto them for any length of time.”

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