Dramatic downturn in new car sales or just a correction?

The difference between the new and used car markets continues to baffle. As expected new car sales for March were down 30% year-on-year whilst the used car market seems to be showing no major signs of slowing at present. What’s especially baffling is that although there are examples of some dealers offering crazy deals on new cars, fully backed by the manufacturers the market, according to the headlines, continues to decline, or does it? Isn’t it really just finding its correct level, after all out of the near 2 million new cars ‘registered’ in the UK last year how many of them were actually ‘sold’ to proper customers and how many were used just to gerrymander the figures to give the appearance of the manufacturers having a larger slice of market share.

The ironic fact is that in real terms if you use the consumer price index to measure the actual effect of prices by comparing the average cost of a used car in late 2007 and now they are actually 13% down at today’s money whereas a new car despite the massively declining market is actually up nearly 2% in comparison.

Although there are some success stories in new car sales, it is a near certainty that the costly mistakes made by dealers and manufacturers relying on forced registrations will surely not be repeated in the future and therefore, at least when new car sales figure are reported, they will give a far more accurate picture of the true size of the market.

It stands to reason that car makers who have established brand strength and strong residuals will probably fare much better in the coming years.

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One Response to Dramatic downturn in new car sales or just a correction?

  1. mark April 8, 2009 at 8:30 pm #

    i worked for pendragon for 10 years,6 months again got made redundant and went work elsewhere,and let me tell you pendragon is by fair the best company to work for,im a bm for the company again now and the signs are very good,we will servive the best always do

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