According to the Society of Motor Manufacturers and Traders (SMMT) the UK car market grew by 10.8 per cent in June 2010 with this growth being mainly driven by a 25% increase in company purchases. This goes against what some industry analysts had predicted and their pessimism was based on the end of car scrappage scheme.
According to the Financial Times, analysts agree that demand for cars grew among businesses. With the scrappage scheme now over, some carmakers are offering discounts to attract consumers accustomed to getting a bargain when they buy a car. We are seeing a lot of incentives around at the moment,” said Mike Steventon, partner with KPMG’s automotive group. “That is one of the reasons why retail sales have not fallen yet.” Ford, which experienced high demand for its Fiesta under the scrappage scheme, announced reductions on list price this week for several of its smaller models, all due to take effect from next month.
So, what does this mean for the car shopper? Whilst the manufacturers are offering great deals on some models, the supply for others is much tighter. Car shoppers opting for the models that are in high demand and wanting to buy a car or use car finance, contract hire or car leasing may have to wait up to 2 – 3 months for delivery. This is a consequence of the manufacturers implementing a cautious approach to supply and opting for a much more reactive supply strategy this year than the optimistic one they used in 2008. That strategy left them high and dry when the speed of the global credit crisis took many industries, not just the auto sector, by surprise.
Tags: car finance, car leasing, contract hire, discounted car prices