This morning’s ‘news’ that there are now nearly 38 million cars on the road in the UK and that their average age is now 8.1 years will not come as a surprise to the average student of the motor industry and its many tributaries.
Manufacturers have, for years now, been building ever more robust and reliable vehicles and a few of them are providing OEM warranties to show their confidence. The social imperative, so strong up to the late Noughties to be seen sitting behind the most recent registration number, has pretty much faded and it seems that there is a measure of pride in pootling around in a well -preserved oldie.
This established a perfect scenario for our geniuses in government to make it more expensive to register a new car and, having spent years rewarding the populace for driving a diesel car, they now sow doubt and fear among those same citizens.
So, it’s little wonder that owners are sticking with their existing car and hunkering down to run their car on for its extended economic life.
Every situation brings an opportunity and, in these circumstances, possible two of them:
Franchised retailers are now operating almost exclusively in the nearly new segment and allowing customers to explore the murky waters of the new cash buyer operators. There is a huge opportunity for second tier ‘Approved’ programmes for the older car for those retailers who can see this as an incremental business. It means breaking away from the received wisdoms of margins and internal reconditioning costs and focussing more on ultra -rapid stock turn to provide exciting returns on investment.
The second opportunity comes from increased service and parts revenues if those retailers with adequate facilities provide a less scary experience for their customers in this market.
From an historical perspective the great noise about falling new car registrations in the UK is much over- hyped but customer attitudes have already changed and our industry should take careful note.