27 February 2017

You’d have to be living under a rock not to have heard about the government’s forthcoming VED changes. Concern over the impact on new car sales has been building in the trade press, not to mention the general confusion over how the ‘luxury tax’ element will be administered in the months and years to come.

It would appear that few outside of the industry have a decent grasp of the changes, though.I suspect the average consumer is more than a little confused, especially when it comes to the financial impact. I think it’s fair to say that the government could have done a better job communicate the changes.

Combine this with the plate change just around the corner and retailers will certainly have their hands full. How much the VED changes will affect your business really depends on what you sell and how well you’ve communicated the changes to prospective customers.

The much talked about ‘pull forward’ phenomenon will no doubt skew your forecasting abilities for a while, too. The simplistic view is that savvy buyers seeking to avoid April’s added financial burden will have brought their purchasing decisions forward, and retailers will be extra busy as a consequence. The downside is that the following few months might be disproportionally quiet.

Bottom line: against a backdrop of analysts saying that 2017 will be broadly a good year, retailers will do roughly the same volumes but the ‘feast and famine’ element on the graph will be more pronounced. While the forecast sounds encouraging, the unusual sales pattern will be taxing in a different way when you’re trying to predict the many operational variables for the rest of the year.

Iain Dooley

Editor, Agenda

Auto Retail Network

Tags: confusion, consumer, March, registration plate change, VEW