The biggest auto scandal in history is not going away yet…

Posted by Kelvin Brookes in Motoring News | Comments Off on The biggest auto scandal in history is not going away yet…

WEEK by week, day by day, the emissions saga rumbles on, with petrol engines now also implicated in attempts to cheat the regulators. Oliver Harry takes a look at what we know… so far. 

Q) So, one month has passed. Is the scandal still rumbling on?
A) You betcha, and it shows no signs of disappearing any time soon. There’s barely a day goes by without the German giant making headline news around the world.

Q) Was VW actually using the defeat devices in European emissions testing, then?
A) It was indeed. VW’s UK MD, Paul Willis, admitted as much to MPs during a select committee grilling on October 12. Willis handled the situation well, it must be said, and shed light on some pretty grey areas. He confirmed that 1.2 million cars had been affected on these shores, and he also acknowledged that VW had ‘mishandled’ the whole situation.

Q) 1.2 million? How on earth is VW going to fix them all?
A) Good question. Around 400,000 will need fuel injectors altering, as well as a software fix. The remaining number, made up of around 700,000 2.0-litre and 30,000 1.2-litre models, can be fixed with software alterations. It isn’t as drastic a change as feared, but the task ahead for VW UK is far from straightforward.

Q) It sounds promising, nonetheless. Surely a hardware change is needed, though?
A) Not according to Willis, who maintained that UK vehicles won’t need the hardware changes that will likely be applied to cars over in the US. Stateside vehicles will probably get a new urea tank, as part of an exhaust system overhaul. This is down to different regulations in the UK and US markets, apparently.

Q) Still, all these changes are bound to cost a bob or two…
A) You could say that. In fact, Volkswagen has admitted that it will cut spending by nearly £742 million to try to pay for it all. It sounds like a lot already but it’s bound to cost more. Much more. It’s going to have a big impact on future car development, that’s for sure.

Q) But the group must still have enough money in hand to cover the vast expenses?
A) Just about, we have been told, although the European Investment Bank, which has loaned Volkswagen some £3.4 billion since 1990, is threatening to withdraw its support. It has a point, perhaps, as the loaned money was (irony alert) intended for low-emission engine development, after all…

Q) So VW is beginning to react to the crisis constructively then?
A) Yes, although its slow reaction to the scandal didn’t go unnoticed by the parliamentary select committee. MPs questioned why it took so long for VW to take affected cars off sale, leaving customers to unknowingly buy them up.

Willis insisted it as logistically unavoidable. VW is a big machine with countless cogs, of course, and the long chain of command makes swift decisions difficult. But you can’t help but question why it hasn’t handled the situation as well as other giants have dealt with crises in the not-too-distant past. Toyota springs to mind…

Q) What will it do now, because surely no-one is going to buy a diesel VW any more?
A) Yes, it is pretty hard to see, isn’t it? VW much agree, because it has announced a cut back of diesels. It seems electricity is in and diesel is out at VW, with a huge refocusing towards EV powertrains.

We all thought the Phaeton would be the first to die in the name of a new era of frugality. Not a bit of it. In fact, it will be back as an electric, Tesla-rivalling flagship soon enough. VW is probably hoping it will distract people away from the here-and-now. That is, however, rather difficult to envisage.

Q) Interesting. So will VW begin repairing European cars from January onwards?
A) Er, not quite. Although VW has promised to begin fixing its cars from January, the German authorities rejected the plan. Instead, they issued a mandatory recall of 2.4 million cars.

It seems the German government is just as fed-up with VW’s slow response as the rest of us. Nevertheless, it’s pretty rare for it to be publicly snubbing VW, and demonstrates the government’s desire for some level of control over the deteriorating situation.

Q) Talking of governments, is this really the first that our government has heard of the emissions scandal?
A) This is where get even more interesting. It Appears that the government was warned about dodgy diesel emissions as far back as 2009 – at least according to an article in The Times.

Some clever bods from King’s College London and Leeds University found the NOx levels and particulate matter in London had risen by seven per cent in five years when they expected it to have fallen by 20 per cent. Something was clearly afoot.

Q) So the scientists tipped the government off?
A) That is what we are being led to believe. Their analysis was commissioned by the Department for the Environment, Food and Rural Affairs, after all. A similar warning was delivered in 2011, too. We don’t know precisely how much the government actually knew about the issue, but it must surely have had at least an inkling following the investigations.

Q) Well, at least we know exactly which cars have been affected now, right?
A) You’d think so, wouldn’t you? What with revelation after revelation erupting in the past few weeks, you might imagine that everything is now fully out in the open. It seems, though, that we were wrong. Instead of slowing down, it turns out that VW’s EA 189 engine might not be the only one tainted…

Q) But didn’t VW insist that EA 189 was the only engine with the defeat device?
A) It did indeed. But US regulators are now claiming that the group’s 3.0-litre diesel unit fitted between 2014 and 2016 has a defeat device. It potentially affects 10,000 VWs, Audis and Porsches. Yes, you read that right – Porsches.

The Stuttgart marque has been dragged right into the heart of the scandal. It also drops group chief executive Matthias Muller into fresh controversy – he was in charge of Porsche when the engines were fitted, after all. If anything is even remotely amiss, he will find himself right in the firing line.

Q) Is Porsche’s involvement for certain?
A) Not as of yet, with VW vehemently denying the accusation and Porsche claiming that it has been ‘surprised’ by the allegations. The investigation is ongoing, and as Car Dealer goes to press, we are not entirely certain what this will mean for the sports car firm.

What we do know is that as more and more cars are brought into the spotlight, VW’s reputation is sinking further and further. How can we trust a manufacturer that could still be lying to us after we believed it had revealed all? It really (and literally) can’t afford for any more vehicles to fall under further suspicion now.

Q) That’s shocking. Surely VW can’t be hiding anything else from us?
A) You’d have thought not, but it has been. Just when we thought that the Porsche implications were damning, it emerged that the scandal has spread – massively – and that now petrol engines are involved. VW admitted there were CO2 irregularities in its smaller- engined vehicles, with reports pointing towards the 1.4-litre four-cylinder petrol in particular.

The BlueMotion diesel is also implicated. This revelation is a game-changer, dragging millions of new car owners into the crisis and costing VW an estimated €2 billion (£1.4 million) on top of the €6.7 billion it has already set aside for scandal fire-fighting.

Q) CO2 irregularities? How does this affect VW vehicles?
A) VW released a statement admitting to finding irregular CO2 levels in 800,000 of its vehicles – and in conflict with the manufacturer’s certified figures. What is so bizarre is that the scandal has been based entirely around diesel NOx emissions so far. This massively widens the crisis, and affects cars from the VW, Audi, Skoda and Seat brands.

Specifically, this implicates small models, with hatchbacks such as the hugely popular VW Polo and Golf, Audi A1 and Skoda Fabia being likely suspects. As this issue concerns CO2 figures, which is linked to fuel consumption, the road tax on UK roads for affected vehicles will probably rise. This is where VW really has an issue. As of yet, affected motorists have not lost any money, but with potentially higher road tax, the likelihood is Volkswagen will have some seriously angry customers on its hands.

Q) So is VW still the only company caught cheating? Surely it can’t be alone…
A) The finger of suspicion has now been pointed at Vauxhall after a German environmental organisation claimed that the Zafira 1.6 CDTi emits 17 times the legal level of NOx under EU6 emission regulations. Vauxhall firmly denies the allegations though, and there has been no confirmation of any wrongdoing.

Q) Has VW’s reputation been heightened or worsened because of all this?
A) Without doubt, VW’s reputation has been indelibly tainted, not only by the cover-up but also by the way that it has handled the situation. Poorly, in a word. The company has been slow to react. By keeping company execs away from the limelight – apart from when they are forced to face the music (cue Paul Willis) – the firm has failed to convincingly reassure customers.

It’s a dangerous game to play, because with the world’s media focusing intensely on the crisis, rumours can quickly escalate. What’s more, with further vehicles now suspected of emissions cheating, and the CO2 revelation further damaging public goodwill towards the company, it raises the question – could Volkswagen be hiding anything else?

LOOKING AT THE ISSUE FROM THE DEALERS’ POINT OF VIEW

IT’S estimated that 1.1 million cars in the UK are affected by the rogue software that led to the emissions scandal. So far, the spotlight has been on the VW brand itself and the impact on consumers. But how is the issue affecting dealers?

Alison Loveday, managing partner at independent law firm berg, said: ‘We have experienced first-hand what happens when businesses which rely on large institutions are let down by them. It can be terrifying to consider challenging them, as we saw with small businesses and the banks, as the various banking scandals started to emerge.

‘Yet for dealerships and fleet managers, the impact of the VW scandal could be huge. There
will be a need to consider the impact on sales as the extent of the damage caused to the VW brand in the eyes of its customer base and supply chain becomes apparent.’

Customers are cancelling orders and this will not only affect the financial performance of individual dealerships, but also the target and bonus arrangements of employees.

The financial and contractual arrangements in place may need to be renegotiated and bank covenants reviewed. The financial agreements entered into by consumers may be affected by, for example, a drop in residual values and the calculation of balloon payments, which, in turn, may impact the dealers. What of those business owners who are awaiting a deferred payment arising from the sale of a VW dealership? This payment may become unobtainable through no fault of the previous or current owner. More stories like this at traders-insurance.com – compare and save.

Loveday added: ‘We recognise the need dealers will have to engage with effective advisers, who can take these issues up on their behalf, and have those difficult conversations if necessary, but ultimately seek to negotiate a meaningful way forward. It is essential that dealers are invited to express their views and concerns, and to communicate any information they have which, with hindsight, now appears to be relevant, and which may assist VW in pulling together its strategy to rebuild trust in the motor industry.’

The source article can be found at http://cardealermagazine.co.uk/publish/the-biggest-auto-scandal-in-history-is-not-going-away-yet/101239

VW emissions scandal worries automotive property investors

Posted by Kelvin Brookes in Motoring News | Comments Off on VW emissions scandal worries automotive property investors

Oct 05, 15

The Volkswagen scandal over diesel emissions tests has been well-documented over recent days, and the financial implications for the company look severe.

To date, VW has set aside $6.5bn, but there is speculation that it could cost up to $18bn to resolve the issue.

The scandal is a particular cause of unease for automotive property investors.

VW Group is by a long way the most traded and sought after manufacturer covenant, with a large number of institutional funds, property companies and private investors exposed to the world’s largest automotive manufacturing group.

The company entered into attractive institutionally-friendly leases which achieved the keenest yields in the market, by leveraging its significant covenant as a way to unlock high value sites, yet retain control by granting under-leases to dealer partners.

But a survey of 62 institutional investors, by the investment banking advisory firm Evercore, shows 66% would not invest in VW for six months, or until it clarified what costs, fines, and legal proceedings it faced.

We have witnessed similar early sentiment from UK property investors, but in reality such investors are unlikely to shy away for long. It is perhaps reasonable to assume that investors would not willingly look to dispose of VW-let investments at present, and therefore in our view the likelihood is that we will see a cooling off of activity, rather than values, as the investment market settles.

There is also the impact to consider on dealer covenants, especially those trading with VW group franchises. The manufacturer will certainly witness a fall in sales volume – in the short term at least – which will impact on profitability for dealer partners.  Whether this can be recovered through possible legal action, or by side agreement is yet to be seen, and how long it will last will be down to how quickly VW Group can regain customer trust.

More motoring news at convictioninsure.co.uk – insurance for drivers with criminal convictions and motoring convictions.

Adam Chapman heads up the Knight Frank Automotive team

The source article can be found at http://www.motortrader.com/blogs/guest-blog/vw-emissions-scandal-worries-automotive-property-investors/

Ask Lawgistics: Google Plus and negative views

Posted by Kelvin Brookes in Motoring News | Comments Off on Ask Lawgistics: Google Plus and negative views

Q: WHAT can be done about a negative review that I might receive on Google Plus?

A: Unless the review is defamatory, otherwise unlawful or violates Google’s own policies, and you can prove it without attracting even more negative attention and incurring considerable costs, there may not be much that can be done about it.

That said, you may be able to report the review/comment to Google. Whether it will do anything about it in a timely fashion or at all remains to be seen, and each case will of course turn on its own merits.

Google’s relatively new Contact Us process appears to offer an improvement in elevating a form to contest reviews. The form sends a review removal request into the queued email response system and, typically, generates an intelligent response from a human. This contrasts with the review flagging process more typically encouraged.

In the field asking for content of the inappropriate review, add suitable comment. There is also now an option to ask for them to be moved from one listing to another. If all else fails, it may be possible to push down the negative comment and effectively have it buried.

Since less than one per cent of all searches go past the second page of search results this is worth considering.

The source article can be found at http://cardealermagazine.co.uk/publish/ask-lawgistics-google-plus-and-negative-views/103478

James Litton: Why Mercedes-Benz deserves its success

Posted by Kelvin Brookes in Motoring News | Comments Off on James Litton: Why Mercedes-Benz deserves its success

Dec 30, 15

I HAVE decided to accept a new general manager role with an ambitious and successful family-owned business on the South Coast starting in January 2016. This means that after an enjoyable four-year period, I will be leaving the Mercedes-Benz network.

There is a danger that this month’s column will read like an editorial written within the walls of Tongwell, but the collective performance in that time of Daimler AG, Mercedes-Benz UK and the Mercedes-Benz dealers has been very impressive. It is important for me to recognise how strongly I admire Mercedes-Benz and what they have achieved.

During my four years in the brand, Mercedes have experienced perhaps the most halcyon period in their history in this country. Manufacturers with similar aspirations should look to Mercedes as a case study of bringing together the perfect symmetry of the marketing mix. 

The product is obviously the most important element of any success in the motor trade.

Mercedes have launched a staggering number of models in the last four years, ranging from the competitively-positioned A-Class to bonkers niche offerings such as the C63 Black Series and G63 Colour Editions. For an everyday car buyer to see his or her new C-Class alongside the F1-inspired AMG GT truly reinforces the thoroughbred reputation of the cars.

However, whilst the product may stir the desire, it has been the aggressive and competitive nature of the finance campaigns which have delivered the bulk of this growth. Having been a part of the retailer group which works with the campaign team at Mercedes, I can say that it is no accident that the deals Mercedes-Benz offer have been right on the money.

The growth has come at the expense of mainstream brands who have struggled to compete with the PCP offer of Mercedes’ volume models. Mercedes have utilised social media, especially through a strong VIP campaign, to appeal to a new audience who would have never considered the brand before. This has been a vital part of the appeal of smaller models like the A-Class or SLK.

None of the above matters, though, without a dedicated team of people within Mercedes-Benz UK or the network to deliver the volume. It has been a great privilege to work with some of the best individuals in our industry and I wish them all continued success.

The source article can be found at http://cardealermagazine.co.uk/publish/james-litton-why-mercedes-benz-deserves-its-success/103472

Big Mike: Why my university challenge ended in disappointment

Posted by Kelvin Brookes in Motoring News | Comments Off on Big Mike: Why my university challenge ended in disappointment

BY NOW, you’d have thought I’d have learned. I have, to date, spent just over 42 years in the motor trade (a rather astonishing seven of which have involved contributing to Car Dealer) and with that amount of experience under my belt, it would be a reasonable supposition that I’d find it easy to spot a timewaster when I see one.

But no. Idiots, as we all know, exist. Wasting people’s time is often their favourite pastime. And for some reason, no amount of experience can stop me encountering them in all their bumbling glory. I must have some weird inbuilt timewaster filter that, simply, prevents me from spotting them even when they’re right under my nose.

My most recent experience with a timewasting idiot – for that, of course, is a logical amalgam of the words timewaster and idiot – came just last week, but on this occasion I should point out that there were mitigating circumstances.

You see, the timewaster in question came recommended by a friend, who had been having a conversation with said chap at work. My friend, who isn’t involved in the motor trade but has a passing interest in cars, learned that his colleague was very keen to get his hands on a 14 to 15-year- old Jaguar S-Type, having seen how stupidly cheap they’d become in recent months.

As it happened, I had one in stock, which I’d taken in part-ex against a lovely XJ8. It was a 2001 3.0-litre auto in mid-spec SE trim with leather, sensible miles, some history, sort of reasonably nice, but not perfect condition. Being a 14-year-old S-Type, it wasn’t worth a tremendous amount. I’d allowed £700 for it in PX and had it in the paper at £1,195, but on the basis it was still ‘awaiting preparation’ and a mate was involved, I decided to let it go out the door for what it came in at. The third party involved in all this, though, was currently vehicularly embarrassed.

His previous ancient Mazda had finally wheezed its last after spending 15 years without ever being serviced – a testament to Japanese engineering, but not to his ownership skills. I should have known…

But rather than hear the warning alarm, I decided to be helpful. Although there was absolutely nothing in it for me, because my friend was involved, I agreed I would drive the Jaguar to the university where both of them worked on my lunch hour, whereupon Matey Boy would take it for a quick run round the block, fill out the V5 and disappear into the sunset. That was the plan…

I stood, freezing cold, outside in the car park

What really happened was the following. I arrived at the agreed time and stood, freezing cold, outside in a car park. Matey Boy eventually strolled over, expressed surprise that the Jaguar had hardly any gas in the tank (us car dealers get free petrol, don’t we?) and asked if he could take it for a run around the block, taking my friend and his colleague with him so I knew he wasn’t going to nick it. I shrugged and chucked him the keys, and popped into the university cafe for a sandwich. Twenty-five minutes later, the sandwich a distant memory, he hadn’t returned, so I called my acquaintance (who was slowly ebbing towards being slightly less than a mate) to check all was okay.

It wasn’t. His colleague, paranoid that the yellow light on the dashboard meant the S-Type was about to splutter to a fuel-deprived halt, had pulled into the local Esso for a top-up. After splashing a princely fiver into the tank, he pulled out of the petrol station and promptly clobbered the kerb, which had an immediate and negative effect on the condition of the nearside front tyre. The pair of them were in a state of panic, desperately trying to seek out the whereabouts of the Jaguar’s locking wheelnut (centre armrest, where I always leave them).

I eventually got bored of waiting and set off down the road on foot to see if I could help. Twenty minutes later, I was met by what appeared to be a roadside remake of a Benny Hill sketch, as one of them danced merrily upon the wheelbrace and the other stood quizzically alongside. Neither had ever changed a wheel in their life.

Relieved at my sudden appearance, they both declared themselves ‘a bit late for work’ and dashed across the road to a waiting bus, leaving me alone with a deflated Jag, a wheelbrace, and a lovely crease in the nearside front sill where the jacking point hadn’t been taken into account when raising the car off the ground. Genius.

And to compound matters, when I eventually drove back to the lot (at least I had enough fuel), I opened up my phone to find a text from my mate saying his friend had decided the Jaguar ‘wasn’t for him’, which was a ‘terrible shame’. Yes, and so was the dented sill and buggered tyre, you timewasting idiot. Anyone want a cosmetically challenged S-Type on a spacesaver? £550 ono.

MORE: Now independents can access cash-for-cars market with new website

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On SuperUnleaded.com: Lorry tries to beat level crossing, doesn’t go well

The source article can be found at http://cardealermagazine.co.uk/publish/big-mike-why-my-university-challenge-ended-in-disappointment/103286

Mitsubishi’s UK boss unveils plans to take the brand upmarket

Posted by Kelvin Brookes in Motoring News | Comments Off on Mitsubishi’s UK boss unveils plans to take the brand upmarket

THE boss of Mitsubishi in the UK has revealed ambitious plans to take the brand upmarket.

Managing Director Lance Bradley says the standard of new models coming through, starting with the Outlander, which went on sale in the autumn, ultimately means ‘the brand will be positioned higher than it is now’.

Bradley said there was space in the market for a specialist 4×4 manufacturer that offered better value than Land Rover, and he explained how marketing would play an important role.

‘Our plan is to continue to spend at the very high level that we are now,’ he said. ‘You can’t move your brand upmarket and increase your sales without that kind of commitment.’

He warned that the Mitsubishi dealer network would need to take on more staff ‘to cope with the demand that’s coming’, and he called for a focus on used cars.

‘It’s essential dealers increase their used car sales,’ he said. ‘It’s a major focus of ours. If we are going to move the brand upmarket, and we need to move ourselves upmarket because of the quality of the cars that we are getting, we need to make that brand experience better. A key element of that is improving our residual values. We need to put more energy into building the customer’s perception of the value of a used car.’

Bradley also described the need for Mitsubishi workshops to hire more staff as a ‘time bomb’, with dealerships facing the prospect of losing out on the more lucrative retail business because of an increase in warranty work and internal work.

He said: ‘The internal work is going to increase because the new and used car volumes are increasing, the warranty work is going to increase because the new car sales are increasing, and we have gone from a three- to a five-year warranty, so if you don’t increase capacity you will have a massive squeeze on retail business and that’s where the profit is, so it’s a huge issue.’

MORE: Motors.co.uk reveals most searched and sold cars across their network

MORE: Slide in the value of used cars during December, reports CAP

MORE: Staff get their Christmas jumpers on to raise money for charity

VIDEO: Dealership puts a musical spin on selling a Toyota

On SuperUnleaded.com: 1,000hp MX-5 drift car gets 360-degree camera

The source article can be found at http://cardealermagazine.co.uk/publish/mitsubishis-uk-boss-unveils-plans-to-take-the-brand-upmarket/103502

Motorpoint preparing for Stock Market debut, according to reports

Posted by Kelvin Brookes in Motoring News | Comments Off on Motorpoint preparing for Stock Market debut, according to reports

MOTORPOINT is preparing to float on the Stock Market, according to reports circulating this morning.

The company, which operates one of the UK’s most high-profile chains of car supermarkets, is working with bankers at Rothschild on a listing that is ‘likely to take place in the second half of next year,’ according to Sky News.

Sky says Rothschild is understood to be in the process of appointing a number of banks to work on the project – and Rothschild could also opt to look at potential takeover offers alongside the listing process.

City sources reckon that any flotation would value Motorpoint at several hundred million pounds.

With eight large showrooms across England, Scotland and Wales, and more than 5,000 used cars for sale on its website, the company says its aim today is the same as when it opened its doors in 1998 – to provide customers with low prices on a wide range of low-mileage new and nearly new cars.

The company’s used car dealerships are in Birmingham, Burnley, Chingford, Derby, Glasgow, Newport, Peterborough, Widnes and Birtley.

The most recent addition to the Motorpoint network was its £5m supersite in Birtley near Gateshead, which began trading last month.

The branch, stretching over nine acres, will house 500 new and nearly new low mileage vehicles from 35 different manufacturers.

There was no reply at the Motorpoint press office when Car Dealer called for comment today.

MORE: Motors.co.uk reveals most searched-for and sold cars of 2015

MORE: Seasonal slide in the value of used cars during December

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On SuperUnleaded.com: Kimi and the gang wish you a Ferrari merry Christmas

The source article can be found at http://cardealermagazine.co.uk/publish/motorpoint-preparing-for-stock-market-debut-according-to-reports/103491

Motors.co.uk reveals most searched and sold cars across their network

Posted by Kelvin Brookes in Motoring News | Comments Off on Motors.co.uk reveals most searched and sold cars across their network

MOTORS.CO.UK has revealed the most searched for and sold cars across its network in 2015.

In a move designed to support dealers planning their stocking policies for next year, Motors.co.uk has shared the top 10 vehicles clicked on and sold in each of seven key body style categories: 4×4, convertible, coupe, estate, hatchback, people carrier and saloon.

While Land Rover, Mercedes-Benz, Ford and Vauxhall topped the charts across the various segments in terms of sales, the search results were a little more open. Here, MG, Bugatti, Alfa Romeo, Honda, Mayback, Mercedes-Benz and SEAT all took the top honours. Unsurprisingly, the data on searches also revealed a much wider range of models within the manufacturer categories.

Dermot Kelleher, director of marketing and business intelligence at Motors.co.uk, commented: ‘Clearly, we would expect to see the mainstream manufacturers represented across both sales and searches.

‘However, it was interesting to see some of the difference in how people search for cars and what they ultimately buy.

‘For example, while no one would be surprised to see Mercedes-Benz top the sale list for both convertibles and coupes, SLK and C Class respectively, the search results features the MG MGTF and the Bugatti Veyron – a lot further out of most peoples’ price range.

‘This kind of data can be really useful for dealers when it comes to pulling together their stocking policies for the next 12 months.

‘Understanding what consumers are searching for and what they ultimately spend their money on can help to inform which vehicles should be on the forecourts and, also, which models are likely to draw attention from which you can then move on to sell something else.’

MORE: Slide in the value of used cars during December, reports CAP

MORE: Staff get their Christmas jumpers on to raise money for charity

MORE: New Mitsubishi dealership is the 12th to open this year

VIDEO: Dealership puts a musical spin on selling a Toyota

On SuperUnleaded.com: 1,000hp MX-5 drift car gets 360-degree camera

The source article can be found at http://cardealermagazine.co.uk/publish/motors-co-uk-reveals-most-searched-and-sold-cars-across-their-network/103462

Seasonal slide in the value of used cars during December, reports CAP

Posted by Kelvin Brookes in Motoring News | Comments Off on Seasonal slide in the value of used cars during December, reports CAP

THE used car market weakened during December as used values dropped by 1.8 per cent, in a predicted seasonal slide.

Derren Martin, pictured, senior editor at CAP Black Book, said: ‘Buyers were back in the market early in December, looking for stock for January, but they were not buying in bulk. Demand softened as the month progressed, and volumes in the wholesale marketplace remained steady.

‘The number of actual trade sales through auction was around nine per cent lower than in November. However, auction sales were up 6.5 per cent on December 2014.

Overall, prices within the data received by CAP continue to weaken at a similar rate to the previous six weeks, and as a result, values dropped in Black Book Live by 1.8 per cent at the three-year, 60,000-mile point.’

CAP predicts 2016 will be a challenging year, as volumes in the used car marketplace continue to rise thanks to record levels of new car registration. Stability in the market will rest on strong retail demand.

We are predicting there will be more pressure on prices during 2016

Martin continued: ‘Late plate cars are likely to be an issue in 2016. Many manufacturers continue to register tactically and rental registrations increased in 2015. These cars enter the used market and compete with new car offers.

‘We are predicting there will be more pressure on prices during 2016 than there has been over the last 12 months. The seasonal pattern is likely to be similar to that of the last few years: stability for quarter one, steady drops in values for quarters two and three, followed by a heavier decline in the final months of the year.’

CAP data showed different sectors reacted very differently in 2015. A city car measured at the three-year-old point at the end of this year is worth 15 per cent less than the same car a year ago, where a three-year-old SUV was just four per cent less.

City cars have faced the most price pressure due to the attractiveness of new car offers, increases in used volumes and pre-registration activity. The volume of used city cars within CAP’s sold trade data has doubled in the last five years.

A three-year-old vehicle in the luxury executive sector had a higher value than the same vehicle a year ago, by around 1.5 per cent, with luxury vehicles holding their value due to low volumes, and steady demand from more affluent consumers.

MORE: Staff get their Christmas jumpers on to raise money for charity

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On SuperUnleaded.com: 1,000hp MX-5 drift car gets 360-degree camera

The source article can be found at http://cardealermagazine.co.uk/publish/seasonal-slide-in-the-value-of-used-cars-during-december-reports-cap/103393