25 July 2012

Adrian Rushmore, managing editor of Glass’s Guide, has warned that a surge of forced registrations as carmakers push retailers to hit year-end sales targets would be a “disaster” for dealers in the final quarter.

“We could be going back to the situation in 2007, when there were more one-year old cars being advertised than three-year old cars,” Rushmore said. “If the market does go into reverse, it would be a crying shame because we would then start to see the value of used cars tumbling as well.

“And it would be a disaster for dealers because there is less margin in a one-year old car than in a three-year old.”

Rushmore’s warning came just hours after Vertu Motors issued a statement saying that increased pre-registration activity in recent months is distorting the new car market. The Vertu statement claimed there is an increasing trend for self-registered vehicles to be classified as private, rather than fleet.

Rushmore identified the final quarter of the year, after the critical September plate change, as the danger period.

“There is a growing likelihood that manufacturers will look to the UK market for growth,” he said. “The pressure in the European market is growing and some manufacturers, such as PSA (Peugeot-Citroen) and Fiat, are having a pretty torrid time.”

The statement by Paul Williams, chairman of Vertu Motors, has been supported by other senior auto retail executives who say they recognise the situation.

Auto Retail Network understands that national sales companies (NSCs) are putting increased pressure on retailers to register cars as retail sales, rather than the more usual route of NSCs registering the cars themselves to fictional fleet customers.

“Over recent months we’ve heard retailers complaining of more pressure to take cars they haven’t got customers for,” said Mike Pilkington, chief strategy officer for Manheim. “It reflects the tougher European market and the currently favourable exchange rate.

“There are not a lot more cars at the moment but there could be a temptation to come back into short cycle business come September.”

Tags: Adrian Rushmore, Glass's Guide, Manheim, Mike Pilkington, pre-registrations