THE LAST 10 DAYS TELL THE REAL STORY

The volume of registrations in the last 10 days of the month (in any market) provokes a lot of conversation and discussion among dealers and manufacturers alike.

The reasons for this are very different; from the manufacturers perspective it is important that they move any sitting inventory. Aged inventory costs money. Normally  end of consumer campaign periods can influence some sales directly to the consumer.

The other way is to pre-register. These units once registered will find a way to the market and the end user as used cars. Most manufacturers have trade disposal  lines in place to move  pre-registered stock quickly and efficiently, be it through their dealer networks or through the trade.

The units are required in Ireland to feed the declining service parc (set to fall through to the end of 2014) and the subsequent supply of parts required as part of the vehicle service. From the dealerships perspective pre-registered inventory can represent either a profit opportunity  or a profit nightmare.

2012 is a different shape to previous years

In a market that is struggling with sourcing quality used vehicle stock pre-registered units, priced correctly can prove to be an efficient bridge. The opportunity is best afforded to those dealers that can purchase stock without additional financing. Those dealers tend to be low geared, long established businesses with efficient sales operations.

Highly geared dealerships do not have access to funds to purchase registered units. This can negatively influence profitability in two ways; current inventory values are reduced as the new registered units enter the market at lower prices. Sales volumes suffer as these dealers  cannot compete on price and if volumes suffer trade-in supply will reduce.

Long washout dealers look set to suffer  the most as profits tied into used vehicle stock will erode. 

Whatever your stance and point of view it should  be recognized that in 2012 the units registered in the last 10 days of the month as a % of the total months sales have exceeded those in any of the previous four year (February through April).

Its possible that the real SAR's rate is 75000

The seasonally adjusted sales rate (SAR) for the Ireland based on the last 4 years suggests that in 2012 the passenger car market will achieve between 75,000 and 80000 registrations.  What's hidden in the SAR’s rate is the real level of pre-registered units. 

If the number of units pre-registered was reported the immediate future for dealers would be better understood and they could plan accordingly.


 The immediate future for dealerships moving into the second half of the year suggests a landscape tough than the previous four years with no immediate governmental support or silver lining on the horizon.

The numbers don't lie

To ride the storm on the horizon will require  steadfast leadership, resilient sales processes, focused marketing and genuine implementation of CRM.


The best source of trade-ins and quality used car supply will come from the dealers own customer base. 


For a free copy of the market update report email brian@saleslynx.co.uk

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Brian