Question to Steve Gowler:
Steve, has scrappage had an appreciable impact on new contracts at
RCI Banque, as there is some evidence to suggest that scrappage
customers are simply paying for new cars out of savings, or through
adding to their mortgages; new car sales have risen, but have
finance volumes risen in step with that?
Steve Gowler:
Renault and Nissan have enjoyed some incremental increases in
volumes, although the share we have had of the boost provided by
scrappage has been in line with our normal market share.
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A disproportionate share, however, has gone to
the Korean manufacturers – to Hyundai and to Kia. We have seen an
appreciable impact on new registrations from scrappage, primarily
because manufacturers have largely decided to continue their
consumer offers, including 0 percent offers, in addition to the
scrappage offers.
The way it was implemented was that
manufacturers either had to bin all their consumer offers, or to
keep them, and they decided to keep them. A lot of eminent industry
observers thought this wouldn’t work, but they were wrong. As
regards the penetration rate for finance for scrappage customers,
while I don’t have the exact figures to hand, my gut feeling is
that it’s lower.
David Betteley: We
have found at Toyota that while new car finance penetration is 50
percent plus, for scrappage customers it is 27 percent.
Steve Gowler: I
don’t think people are adding to their mortgages to buy a new car,
but they are definitely using their savings. It’s very hard to
convert these customers. Nissan and Renault dealers who also have
Kia franchises are reporting that customers are coming in with a
10-year old car and asking what the cheapest new car is – which is
currently a Kia Picanto at £4,200.
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By GlobalDataThey don’t care about extras such as
electric windows, either; they are happy with a very basic model.
It’s nearly impossible to sell finance to these people.
Peter de
Rousset-Hall: My question is, what happens when the
scrappage scheme runs out at around the same time as the VAT rate
returns to 17.5 percent later this year?
Dealers have dodged a bullet – for the time
being – but they risk an almighty hangover in a few months’
time.
