22nd January 2018
An uphill drive for car dealerships in 2018
Getting a new car is great, but of course it is entirely dependent upon the level of disposable income and credit available to a buyer, and, the recent performance of the automotive sector indicates that car dealerships across the country may face a challenging start to 2018, which Duff & Phelps have recently highlighted.
The latest car registration data suggests profit warnings and a softening of used car values, and paired with the first rise in interest rates in 10 years, this is likely to impact a number of consumer sectors, particularly those reliant on credit. To put into perspective the size of the sector, there are more than 814,000 people employed across the wider automotive industry in the UK, an industry which accounts for 12% of total UK export of goods, and also invests £4billion each year in automotive R&D.
Overall, in the 12 months to December 2017, the car sales market was 6% down compared with 2016 and a significant 14.4% down on December alone. If this downturn continues, are manufacturers and dealership networks prepared?
With widespread uncertainty surrounding Brexit and the financial economy, dealerships need to ensure they are planning ahead and forecasting as accurately as possible, whilst embracing necessary rescue principles to manage the challenging period ahead. With over 30 manufacturers building in excess of 70 models of vehicles in the UK by some of the world’s most skilled engineers, they certainly won’t want to see long standing dealerships suffering, or even disappearing, due to the economic slowdown.
If you’re one of the dealerships facing tougher trading conditions as we enter 2018, have you considered an alternative route of finance to boost cash flow such as asset finance? Please don’t hesitate to get in touch with a member of our dedicated team on 0161 832 8484 and we would be happy to support you.
The latest car registration data suggests profit warnings and a softening of used car values, and paired with the first rise in interest rates in 10 years, this is likely to impact a number of consumer sectors, particularly those reliant on credit. To put into perspective the size of the sector, there are more than 814,000 people employed across the wider automotive industry in the UK, an industry which accounts for 12% of total UK export of goods, and also invests £4billion each year in automotive R&D.
Overall, in the 12 months to December 2017, the car sales market was 6% down compared with 2016 and a significant 14.4% down on December alone. If this downturn continues, are manufacturers and dealership networks prepared?
With widespread uncertainty surrounding Brexit and the financial economy, dealerships need to ensure they are planning ahead and forecasting as accurately as possible, whilst embracing necessary rescue principles to manage the challenging period ahead. With over 30 manufacturers building in excess of 70 models of vehicles in the UK by some of the world’s most skilled engineers, they certainly won’t want to see long standing dealerships suffering, or even disappearing, due to the economic slowdown.
If you’re one of the dealerships facing tougher trading conditions as we enter 2018, have you considered an alternative route of finance to boost cash flow such as asset finance? Please don’t hesitate to get in touch with a member of our dedicated team on 0161 832 8484 and we would be happy to support you.