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The start point for the best source of fleet information |
New cars that are popular now are likely to be popular in three years' when it's time to offload them, that's why it's worth assessing new car registrations - particularly in a key month like March, writes Rupert Saunders
March new car registrations provided a welcome, and somewhat surprising, boost to the auto retail industry. Quite frankly, nobody was predicting the monthly sales to turn out positive, let alone 3% up on March 2006.
Speaking to motor traders during the early part of the month, they were their usual gloomy selves (believe me, car dealers make farmers seem like optimists when it comes talking about business). But by the middle of the month it all changed. Suddenly there were customers at the door, talking deals and buying cars. As a result, the majority of retailers I spoke hit their targets and without the usual push to pre-register lots of unwanted demonstrators.
What happens in March is important to the industry as a whole because it has now overtaken September as the single biggest month of the year, with almost 20% of all new car registrations. That means sales in March affect every aspect of the business from new car supply, to pricing, to residual values in three years' time.
March is also primarily a retail sales month; most of the people doing the buying are private customers so the retail market share is around 50% of all new registrations, against 44% for the year as a whole. This is important to the retailers (they make more money out of private buyers than business buyers) but it is also important to everybody in the fleet industry.
Why? Because it is demand from private buyers that drives residual value. Broadly speaking, new cars that are popular now are equally likely to be popular in three years' time when they will be much more affordable.
So, instead of focussing on what's selling in the business car market, let's take a look at the top 10 car manufacturers and how they are doing in the private market.
“You don't have to be an economist to immediately spot the success of Vauxhall. With Astra and Corsa the hot tickets in town, here is a company finally shaking off its dependence on the business car market and appealing to retail buyers.” |
Rupert Saunders |
You don't have to be an economist to immediately spot the success of Vauxhall. With Astra and Corsa the hot tickets in town, here is a company finally shaking off its dependence on the business car market and appealing to retail buyers (By the way, fleet sales have not dropped - they are holding even).
On the other hand, what to make of Ford? While the company is still the clear market leader - 50% more private sales than Vauxhall in the first quarter of 2007 - the private figures are down and fleet numbers are up, which isn't such a healthy scenario for Ford. (Indeed, Ford fleet sales would have been higher still had they not reclassified dealer demonstrators as small business registration in March)
Notice, too, how Peugeot outsold Volkswagen in the private market over the first three months of the year (the 207 is doing well) and how Toyota is sneaking up on both of them. The Yaris is huge and, while the Auris might not have been well received by the enthusiast press, who cares? Toyota dealers can't get enough of them.
And see how Audi, often held up as a shining example of a successful brand, is actually quite a minnow in the private market. Indeed, in previous years, Suzuki has outsold it.
Are there any lessons to be gained from this? I think so. Too often we just take a quick snapshot of the headlines and fail to look beyond the obvious. Having a deeper understanding of where the market is going should help make you a more effective business car manager. And, if it means you are running business cars that private customers actually want to buy, then you will be saving money in the long run.
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