Car Sales During Covid Crisis - who is telling the truth?

Bachelorplace

On the one hand the SMMT are saying dealers are up a creek without a paddle. On the other, car dealer magazine say sales have marginal interest. There are other media reports that used cars have seen an increase; albeit like 1% or £200 a car (hardly worth reporting). 
On the street, dealers of one German brand I spoke with are showing sales numbers in June 2020 up YoY and enquiries through the roof. These numbers are across places like Surrey and Sussex where there may or may not be more disposable income or greater personal wealth. Dealers claim to be delivering the same number of sales with half the number of sales people. 
Conversely I read Mercedes are closing dealerships, stating "other factors and refining the business".
(It's probably really because they have run out of customers to insult)
Jaguar obviously were in some concerning waters before this anyway. 
My theory: 
As 90%+ customers are on a PCP - they have no choice but to replace their cars, this will happen every month. Granted there may be a rise in Voluntary Termination, and sure there may be percentage of hand-backs, downsizing or brand switching. All these factors don't really equate to disaster right? 
In the USA things do seem different VW for one, are doing 0% across new and used and low rates for finance, this does suggest that in the USA things are already deteriorating. That said every other car in California is a Tesla and there are EV charging points on every corner, VW may be trying to shift cars with engines, rather than it being a reflection of market. 
Large purchases:
Whilst some media outlets state that percentages of people are concerned about large purchases, this does not seem to be the case certainly now. And whilst you might say - things will change in the Autumn, why are people rushing out now when they know they may not be able to afford these things or they have no idea what will happen with their job... OR, are still on 80% wage! it makes zero sense. One dealership I know of has actually raised prices on inventory of 3/4 of their stock. 
Some may also be so depressed with all this that changing their car is a good thing to cheer themselves up. 
Others may have re aligned disposable income due to lower spending in lockdown. 
Demographic:
Looking at the beaches, it seems across the ages of 18 - 40 a huge percentage of the UK don't seem to give a hoot about the virus. It does seem 40+ age groups do however. 
Houses:
I do note much larger purchases have seen to slow down or be static, as it seems houses are simply not being put on the market.

So... I am not sure really what to think, perhaps we won't see ANY changes at all until way into late 2020....what do you know and what do you think?

facade

Bachelorplace said:

Looking at the beaches, it seems across the ages of 18 - 40 a huge percentage of the UK don't seem to give a hoot about the virus. It does seem 40+ age groups do however.

That is because the survival rate falls off a cliff once you hit 40. It makes headlines when an under 18 dies, or an over 60 survives

Speaking as a pushing 60, with a survival rate of less than 90%, I want to spend money now, as I could well die in the Winter wave and there seems little point in preparing for a long retirement that probably won't happen.  However, I don't want to order something on too long a delivery as I could well die before I get it.

Jonesya

People started reducing activity and lockdown began in March, so there's 2-3 months of pent up demand which is now coming back, orders from before then being fulfilled, people needing to replace old cars, lease and PCPs ending. So a strong bounce back in June even into July isn't surprising.

It's hard to draw any assessment because this is masking the changes in underlying demand and activity, I think it will only be later in the year, after August when the effects start to show as the delayed demand peters out and then again in Q4 as the furlough scheme ends.

forgotmyname

facade said:

That is because the survival rate falls off a cliff once you hit 40. It makes headlines when an under 18 dies, or an over 60 survives

Speaking as a pushing 60, with a survival rate of less than 90%, I want to spend money now, as I could well die in the Winter wave and there seems little point in preparing for a long retirement that probably won't happen.  However, I don't want to order something on too long a delivery as I could well die before I get it.

Exactly... I used to deliver to a small unit run by a guy and his wife, worked 6 days a week for many years to be in a
nice financial position when they retired. They set a retirement date for the following year.

3 Months before that date she was diagnosed with Cancer and passed away within 6 months. Gave me a new
outlook on life where I turned down a managers job as it would mean longer hours and less time at home.

The_Rainmaker

The question is what will happen to fleet sales?  How many will be unemployed by the end of the year etc.  Will the PCP bubble burst?

On the other hand assuming sales drop how will manufacturers react?  Heavy redundancies or try to keep the workforce as intact as possible?  If the second option what will their strategies be?

There will no doubt be some scrappage scheme at some point no doubt focused on EVs.

I think the storm if it comes will be in the new year, folk are still playing deck quoits and the band is still playing but............

MinuteNoodles

Bachelorplace said:

Demographic:
Looking at the beaches, it seems across the ages of 18 - 40 a huge percentage of the UK don't seem to give a hoot about the virus. It does seem 40+ age groups do however. 

For those of us able to do maths and understand numbers we're not really overly concerned about it. Looking at official ONS data deaths below age 70 involving COVID-19 are almost non-existent, the median age of deaths in the pandemic has been 81. Seriously for most of those dying from it they had an underlying condition or age which meant that anything they caught remotely serious could have finished them off. They may not have even made Winter 20-21 flu season. Worldwide there's been barely half a million deaths out of a population of 7.8 billion people from CV-19.

What I'd be more concerned about are the coming number of deaths as a direct result of things like cancer treatments not being carried out and referrals for cancer specialists dropping several thousand PER MONTH, people not being able to see their GP or deliberately staying away from hospitals. They'll make CV-19 look like a minor blip.

AdrianC

MinuteNoodles said:

For those of us able to do maths and understand numbers we're not really overly concerned about it. Looking at official ONS data deaths below age 70 involving COVID-19 are almost non-existent, the median age of deaths in the pandemic has been 81. Seriously for most of those dying from it they had an underlying condition or age which meant that anything they caught remotely serious could have finished them off. They may not have even made Winter 20-21 flu season. Worldwide there's been barely half a million deaths out of a population of 7.8 billion people from CV-19. 

Woah, woah, WOAH!

In a normal average year, around 550k people die in the UK. Let's call that 10k/week. It goes up a bit and down a bit through the year.

You want to look at ONS stats? Sure. Here they are.
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/deathsregisteredweeklyinenglandandwalesprovisional/weekending12june2020

At the peak of the pandemic, 10k MORE people were dying per week than the 5yr average for that week of the year. Roughly double. It's still north of 500/week - one more for every twenty. Over the year so far, it's about 53,000 more than the five-year average - about one more for every five.

To put that into perspective, if you personally know six people who have died in the first six months of this year, one of them would still be alive if it wasn't for this...

https://virusncov.com/covid-19-age-sex-cases-and-deaths
Catch Covid, and what's your chances of dying? Over 80? About 15%. In your 70s? 8%. In your 60s? 3.5%. In your 50s? 1.5%. In your 40s? Half a percent.

Only half a percent? One in two hundred people in their 40s who come down with Covid are going to die of it. Go back to the ONS doc. There are 7m people in their 40s in this country. 1 in 200 x 7m = 35,000 people. There are 8m people in their 50s. There's another 120k. There's 6m in their 60s. There's another 210k. 5m in their 70s. Another 400k. And, obviously, anybody over 80 is disposable. All 3m of them. But it's OK, only 8% of the 2.5m in their 80s are going to kick the bucket, and 15% of the 0.5m over 90s - 275k or so.

But what about younger? 10-40? 0.2%. 1 in 500. It's nothing... But multiply that by 21.5m people in that age group... 43,000 10-40yos.

Add those together, and that's just over a million dead. In the UK alone. Two normal years-worth. Without all the other things that people normally die of. Call it 10m worldwide.

How many of them are your friends and family?

Oh, but it's OK, they were disposable, because they were ill anyway, and I haven't been for a pint/been to the beach/had my hair cut for ages...

Bachelorplace

Nice one Adrian, very interesting reading despite it being marginally off topic. Great to see someone with some proper theories and thanks everyone so far for your thoughts. 
Back to the main issue then, it it at all possible that things will revert back to normal? If we are using the beach analogy? 
I note the June July pent up demand idea. Which brings me on to my next post.
For this one the pent up makes sense as does the "i am going to die anyway" btw Facade you are not going to die - unless you keep saying things like that which will start to shut down your cells. Don't let an old person move into your body!

AdrianC

Bachelorplace said:

Back to the main issue then, it it at all possible that things will revert back to normal?

In the short term? No. Not without a very hard second-wave hit. We are still in the first wave.
There are more daily new cases now than there were when we went into lockdown.
There are more daily deaths now than there were when we went into lockdown.
It is generally acknowledged that we went into lockdown too late.

So why on earth are we coming out now?

facade

Bachelorplace said:

btw Facade you are not going to die - unless you keep saying things like that which will start to shut down your cells. Don't let an old person move into your body!

I don't want to- I am hoping to win on the pension, and get more back than I've paid in

However this COVID has thrown a spanner in the works, pretty much seems that you can get it just by looking at somebody!

Bachelorplace

AdrianC said:

Bachelorplace said:

Back to the main issue then, it it at all possible that things will revert back to normal?

In the short term? No. Not without a very hard second-wave hit. We are still in the first wave.
There are more daily new cases now than there were when we went into lockdown.
There are more daily deaths now than there were when we went into lockdown.
It is generally acknowledged that we went into lockdown too late.

So why on earth are we coming out now?

Are you sure brother? - Media reporting 100s not 400s am I missing something really basic... R Rate 0.7 not 1.8 etc ???

facade said:

Bachelorplace said:

btw Facade you are not going to die - unless you keep saying things like that which will start to shut down your cells. Don't let an old person move into your body!

I don't want to- I am hoping to win on the pension, and get more back than I've paid in

However this COVID has thrown a spanner in the works, pretty much seems that you can get it just by looking at somebody!

ahhahahahahahahahahahahahaha
You should have seen me in my hotel near Brighton after sitting on the beach on Friday. 2am - eyes both open.... "that bloke with the ice cream, he had it"