Bring on the New Car Bargains

All industry observers have an opinion on how 2010 will pan out for new car retailers. The truth is that the next nine months are not all that easy to predict.

Scrappage has affected the sales dynamic, and it will take a while for franchised dealers and their customers to settle back into a familiar rhythm. How long that ‘while’ will last depends on how much sales activity they can generate, and where the business comes from.

Manufacturers have enjoyed excellent small car sales support via the Scrappage Scheme. Now the scrap taps have been turned off, will they be pulling the plug on small car production? No. Though fleet business is likely to increase as the economy rises slowly from recession, do company car drivers generally buy small cars? No.

Retail customers are as important to the motor trade as ever, and a rise in fleet business will not alter that. Car dealers still need to sell useful volumes of small and medium cars to Joe Public - so how are they going to do it?

When Scrappage was said and done, the Government was only putting a thousand pounds towards the cost of the new car. It is unlikely that manufacturers will now refuse to match or exceed that discount, to keep sales moving and prevent cars from piling up in factory car parks.

Small and medium cars must continue to find cash buyers. Without that useful £2k part exchange  incentive discounting expensive list prices, only an affordable cost to change will persuade procrastinators off the fence. Discounts are therefore very likely.

We’re already seeing supply of 1010 plate cars entering the supermarkets. Mainstream medium models are being advertised on a 2010 plate, with delivery miles only and almost £6,000 off the list price. It’s just a question of time before smaller cars follow suit.

Make no mistake: cheaper new or nearly cars are coming. The only question is when.