Vehicle valuation firm CAP has estimated the UK will be flooded by franchised retail deals in 2013.
According to research by the company, franchised dealers are concerned about manufacturer pressure to register more new cars this year which, if retail volume stutters, may lead to price-cutting ahead of March’s new registration plate change.
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Particularly, with interest rates and finance deals having little room to be more generous to consumers, some dealers fear they may have to increase their discounts already in place and lose money on units in order to move stock ahead of the 13 plate.
However, CAP also speculated this may have a knock-on benefit for car supermarkets with an influx of nearly-new vehicles from franchised dealers in 2013.
Similarly, independent dealers could expect a rise in part-exchange stock, the supply of which had dwindled in the three-to-four year period after the tightening of credit in 2008.
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By GlobalDataLast week Derren Martin, senior editor of CAP’s Black Book Live service, said brands would look to the UK, one of the few major European markets to record growth in new car sales in 2012, to compensate for declining sales across the continent.
Across the globe, brands and their captive finance providers have recorded stuttering results; Ford has seen sales impinge on its worldwide finance performance while General Motors and Fiat Group have each vowed to break even in Europe by 2015/16.
Ford, the biggest-selling brand in the UK, and Volkswagen, the biggest-selling brand across the continent, have each seen UK sales outstrip their European averages.
This bucking of the trend in the UK has seen CAP and retail network Vertu Motors warn about the practice of pre-registering sales – registering cars to themselves to qualify for volume sales bonuses – and which Philip Nothard, retail and consumer valuation editor at CAP, has called the industry’s "worst kept secret".
richard.brown@timetric.com
