New Car Sales Collapse....

wymondham

So, car sales have collapsed and the car manufactures are screaming for help:

http://news.bbc.co.uk/1/hi/business/7954349.stm

Well, if they had developed cars that people wanted, at a reasonable price (without all those silly 'add on packs' at extortionate additional cost) then they would still sell. They have shot themselves in the foot and it is entirely their fault on this one I'm afraid....

Moneysaving tip:

On a plus side, the great british car, the Mini (the real one!) is 50 this year - save costs and buy one of these and have the fun of doing it up!!! Cheap tax/insurance and one of the few cars people can still learn to look after themselves (so saving rip off garage costs).

dealsearcher

Hardly surprising really. First time buyers usually get second hand. Second time buyers already have a car which they can usually hang on to for a while longer. Cars are very expensive compared to other things we buy. So hardly surprising.

JasonLVC

As I've posted on these forums recently, the dealers don't seem to want to know.

Both myself and OH are in the market for a new car each. We visited Seat, VW, Mercedes, Audi, Suzuki and Skoda dealers and ALL OF THEM told us that sales were never better and 'the best month we've ever had' = how strange that all the car makes are enjoying such a resounding growth as this goes against what the SMMT are saying.

The Mercedes dealer told me they can't keep up with demand (despite the German manufacturer reporting a dramatic drop in sales that required the German government to introduce a cash buy incentive to the market place) and that he couldn;t do any deals as he doesn't need to. He also said there were no deals on 2nd hand cars as they too were flying of is forecourt faster than he could trade them in.

None of the dealers wanted to do deals. It was MRRP plus their ludicrous 10-12% APR. In the end we've both gone for personal leases.

Any help the government provide, be it direct grant or £2k cash vouchers to buyers will be wasted on them. They'll just raise selling prices by £2k and any grant will just disappear into the corporate machine.

Basic economics. No buyers = too expensive. To sell more cars = cheaper prices. Simple really, if only the manufacturers and their dealers realised this.

Graham_Devon

wymondham wrote: »

So, car sales have collapsed and the car manufactures are screaming for help:

http://news.bbc.co.uk/1/hi/business/7954349.stm

Well, if they had developed cars that people wanted, at a reasonable price (without all those silly 'add on packs' at extortionate additional cost) then they would still sell. They have shot themselves in the foot and it is entirely their fault on this one I'm afraid....

They simply need to reduce prices. It really is as simple as that. I've yet to see an 09 plate car, and see very few 58 cars, though see a fair few 58 commercial vehicles, mainly council and water!

People have caught on that a new car now simply means a car that has been sitting around doing nothing for a few months.

Instead of reducing prices, they know if the scream loud enough, they will get taxpayers money.

Personally I hope we don't bail them out. If we do, only british made cars. We would only be bailing out european car companies otherwise, with UK taxpayers money.

Someone on the radio the other day said the £2000 (or 2500 euros there) was helping because car prices in Germany are not that far above that for a new one, i.e. the balancing payment between 2500 euros and a super mini is a lot smaller than here. The same cars here cost a 3rd more he stated. He did give the figures and a VW polo worked out as £7180 here (basic, new) and £4900 in Germany. I'm sure if a brand new polo was the same price here, the £2500 for a car over 9 years old would help!

amcluesent

The world needs the Tata Nano at £1,300.

Cat695

why anyone would want to buy a new car and loose so much money the second you drive it away amazers me.

JasonLVC

Graham_Devon wrote: »

They simply need to reduce prices. It really is as simple as that. I've yet to see an 09 plate car, and see very few 58 cars, though see a fair few 58 commercial vehicles, mainly council and water!

People have caught on that a new car now simply means a car that has been sitting around doing nothing for a few months.

Instead of reducing prices, they know if the scream loud enough, they will get taxpayers money.

Last week viewing a Seat, the salesmen sai that I had to order before 31 March as there was goig to be a 5% price increase from 1 April 2009!!!!.

Yes, I know about exchange rates...but surely they should be reducing their margins in tough times, not trying to retain or increase them?. Or were they putting it up by 5% in advance for any government new for old scheme?.

SKoda put their prices up in March already - it is just stupid and like Gordon Brown, the manufacturers and dealers are deluded.

On saying that, I've got my new 09 plate coming next week so if you're in the Midlands anytime you'll at least get to see one 09 plate (and I agree, I've not seen any 09's anywhere).

Cat695

Some one made and excellent remark on here the other day about new car sales

surely its better to sell a 10k car for 9k and make 1k loss
than
to not sell a car at all and make a 10k loss

Graham_Devon

Cat695 wrote: »

why anyone would want to buy a new car and loose so much money the second you drive it away amazers me.

This is also something that only appears to happen here. Apparently!!

Because the prices are too high in the first place.

JasonLVC wrote: »

Last week viewing a Seat, the salesmen sai that I had to order before 31 March as there was goig to be a 5% price increase from 1 April 2009!!!!.

Ford has also announced a 5% increase after 31st March. So have Vauxhall.

Ford however already put their prices up in January, adding £500 to all new fiestas, as they were doing well.

luvpump

JasonLVC wrote: »

As I've posted on these forums recently, the dealers don't seem to want to know.

Both myself and OH are in the market for a new car each. We visited Seat, VW, Mercedes, Audi, Suzuki and Skoda dealers and ALL OF THEM told us that sales were never better and 'the best month we've ever had' = how strange that all the car makes are enjoying such a resounding growth as this goes against what the SMMT are saying.

The Mercedes dealer told me they can't keep up with demand (despite the German manufacturer reporting a dramatic drop in sales that required the German government to introduce a cash buy incentive to the market place) and that he couldn;t do any deals as he doesn't need to. He also said there were no deals on 2nd hand cars as they too were flying of is forecourt faster than he could trade them in.

None of the dealers wanted to do deals. It was MRRP plus their ludicrous 10-12% APR. In the end we've both gone for personal leases.

Any help the government provide, be it direct grant or £2k cash vouchers to buyers will be wasted on them. They'll just raise selling prices by £2k and any grant will just disappear into the corporate machine.

Basic economics. No buyers = too expensive. To sell more cars = cheaper prices. Simple really, if only the manufacturers and their dealers realised this.

Having been in Car Sales some years back , An Explanation can be this...Most Bonuses are based on a car salesman (Consultant :rolleyes: ) & Dealership hitting Targets, if they dont have a Prayer of doing that then the next best alternative is to build as much profit into any sales that are going ..So a lower than normal discount & include say a Supagaurd, Warranty Extension etc etc & hope the Customer doesn't notice , you could then turn a single discounted sale, worth an unbelievable 20 quid to me !! Into a hundred or so...much better

JasonLVC

luvpump wrote: »

Having been in Car Sales some years back , An Explanation can be this...Most Bonuses are based on a car salesman (Consultant :rolleyes: ) & Dealership hitting Targets, if they dont have a Prayer of doing that then the next best alternative is to build as much profit into any sales that are going ..So a lower than normal discount & include say a Supagaurd, Warranty Extension etc etc & hope the Customer doesn't notice , you could then turn a single discounted sale, worth an unbelievable 20 quid to me !! Into a hundred or so...much better

Thanks for this. I used to work in the automotive industry many years ago (in accounting at manufacturer level, not at dealer level) so I guess things haven't changed much then!.

Yep, the dealers are probably trying to claw back profit via higher car prices/margins - but ultimately this is just stalling sales further and in my view, is a matter between the dealer and the manufacturer which the customers is getting caught up in.

I suppose this just shows that the old model of bonuses, discounted demo cars, etc never really worked and just hid the problem (ie, dealer got his cash so was happy, manufacturer got to record good 'sales' figures). Like many other sectors are now finding out, when there's no customers about, the weaknesses in any business model are really going to test the survival of the fittest.