16 April 2012

It’s always fascinating to hear the views of senior auto retail bosses like Ken Savage of Perrys and Robert Forrester of Vertu Motors. Not surprisingly, they were in bullish mood about the March new car sales figures when quizzed at last week’s Trusteddealers press briefing.

Forrester is due to tell investors his full-year financial results next month – so has to be circumspect – but Savage was open about that fact that Q1 has been “good” on both new and used car sales. What’s more, April is looking strong too and Q2 is expected to be well ahead on the same period last year.

So, what’s changed since this time last year? Certainly not the underlying state of the economy.

Perhaps rather tongue in cheek, the pair were quick to blame the BBC’s Business Editor, Robert Peston. If you believe the theory, his doom-laden predictions of economic meltdown last year were enough to persuade UK consumers to shut their collective wallets.

Jump forward nine months and it seems potential customers woke up on January 1 feeling better. Retail sales, year-to-date, are up 5.8% and have risen through the first three months. The facts speak for themselves: people are ready to buy new cars again.

Understanding why is more complex and, whether you blame Peston or not, a lot of it is down to confidence – especially among typical new car buyers.

Recent research by investment bank, Espirito Santo, showed that “easing inflation fears are driving an improvement in consumer confidence amongst the older, richer, home-owning consumer demographic”.

The analysts concluded: “We think it is too soon to call a genuine consumer recovery but we do see attractions in those businesses serving the older, richer demographic”.

Translated into rather simpler English: that means good news for M&S, Waitrose, Debenhams …. and most franchised auto retailers.

Rupert Saunders

So, do you blame Robert Peston? Email me if you do (or don’t) at Rupert@autoretail.com

Tags: car sales, Ken Savage, Perrys, Peston, Trusted dealers