The more things change… November 21, 2009
Posted by richard in : History , add a commentTWO decades ago, the car industry was in a recession, too. 1991 was a year of depression, sales shrinkages and dealer drama.
Sound familiar? Well, looking at the news of the day, the parallels extend far further than that. Yearly sales were around 1.8 million, well down on the all-time record of 2.3 million in 1989. Rather similar to this year’s prediction, too.
This led, explained Autocar & Motor’s David Sutherland, to ‘plant idling’ – shutting plants down for weeks and months on end. Honda, Nissan and MINI will be familiar with this.
He also looked at a few individual brands, rating their performance over the year.
Ford used to claim 30 percent, but the maker was suffering, mainly because of the rubbish Escort. 25 percent was the total experts said it would have to put up with (today, Ford commands 17.5 percent. There’s a difference).
Rover (remember them?) was still doing well – the Brit-built Metro was brilliant, as were the 200 and 400. Even the archaic Maestro and Montego were finding homes in large lease and daily rental fleets, albeit with massive discounts.
Citroen was on the up, with the ZX bringing market share up to around 3.5-4 percent. Again, oddly similar to what it holds today. Funnily, expert Garel Rhys noted the firm’s pricing throughout the ‘80s was competitive, ‘and it will have to beep up the aggressive marketing strategy’…
BMW was pleased: here is where the 3 Series really started its shift to the mainstream, with the launch of the E36. Sutherland reckoned the biggest problem would be getting enough right-hookers.
‘It’s a good time to launch a small car because in this recession a lot of people are considering down-sizing,’ said a BMW GB chief.
Lest we forget, Japanese makers were still selling under quotas, meaning they were cushioned against the recession. Nissan was the largest: it could sell 6 percent of the UK market total. Interesting, and not long to last.
But, today and quota-free, is there really that much difference in volumes? Toyota has 5 percent, Nissan has 3.2 percent, Mazda has 2.3 percent…
There were differences, though. In 2009, it’s been scrappage-boosted private buyers who have kept the market up. Company car drivers did that in 1991 – retail sales were knocked by price rises and high interest rates. The latter isn’t a factor now, and scrappage has reduced the impact of the latter.
18 years ago seems like only yesterday, yet you’d still think there would be huge changes in the UK market. And, with no Rover and more makers eating into Ford’s share, there have indeed been.
Still, though, the framework remains intriguingly familiar…
If Ford played chess, don’t take it on
Why scrappage is now inevitable
Ford gloom hides people carrier revolution?
Peugeot car ads give the game away May 23, 2009
Posted by richard in : News clues , add a commentI used to run a Peugeot 308 as a long-termer. Fine car, it was. Interior better built than a Golf, peachy HDi engine, and one of the nicest dial packs around.
Cost £20k, though. Bit much, I used to think, for a family hatch.
Ah, how things change. Now, 18 months on, 308s are a fair bit cheaper. Well, according to my local dealer they are. £11,995, they’ll do you one for. That’s £3700 off list – brand new.
This is cheap. And good. Unless you’re Peugeot.
See, last year, Peugeot told me they weren’t selling as many 407s, because everyone was downsizing, into 308s.
Fair enough, I thought. With prices like that, you’ll still be able to maintain profits.
But, if dealers are willingly offering ‘scrappage x2’ to customers before they even walk through the door – on new, unregistered (the ad states this – no pre-reg here) 308s, what does that say for the car’s fortunes?
Contrast this with the 107, a car so very much on the money. The saving there is £1k – which, conveniently, is exactly what the Government is asking car makers to put in to the new car scrap scheme.
In short, up to now, Peugeot’s easily sold 107s. But 308s have proven a fair bit trickier. Hence the respective savings.
The 207 sits somewhere in the middle of these two, which sounds about right to me, too. All of which means I’ve devised a new test.
You don’t need to look at SMMT figures. Find out which cars are doing well, and which aren’t by scanning the dealer offers in the local paper, instead. I’ll do this for a few weeks, then get onto the SMMT, and see how right I am…
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If Ford played chess, don’t take it on May 23, 2009
Posted by richard in : Uncategorized , 2commentsHEAVENS, I’m admitting something here. That I used to be in Chess Club at College.
OK, not for long. And I did used to put Breeders tapes (yes, tapes) on in the background. But, partake I did. Which is why I know Ford is like a member of said Club.
The feared member. The Club player I never dared play. The champ, the whizz, the one who nobody could beat – his moves were like a perfectly-placed onslaught of brilliance from the off. The git.
Bit like Ford right now (well, apart from the git bit).
Market share is booming. The right cars are flying out of the showrooms just at the right time. The dealers find they’re still able to make all the right noises for customers.
Checkmate, rivals.
It’s almost momentous, Ford happening to launch the brand-new, brilliant, bedazzling Fiesta and pretty decent Ka, just as the country enters a major recession and switches wholesale (well, 35 percent or so, according to the SMMT) to superminis.
Think of the Blue Oval right now just as we thought of the St Georges Cross flag seller, in the 2002 World Cup. Yes, him, on the beach in the Costa del Sol right now.
Is this by chance or design? Did Ford foresee changing market conditions? Did it intentionally make the Fiesta so damn great because it KNEW the market was switching this way?
Whatever, it’s working. Historically so. Mainstream is back in vogue, and the blue collar’s fave is reaping the benefits.
Damn, it’s good. You won’t catch me taking it on. Now, where’s me Breeders tape…
The most depressing engines in esistance: Ford 1.8D
Ford gloom hides people carrier revolution?
Weller does a MINI Silverstone gig
The latest thing to sell cars April 2, 2009
Posted by richard in : News clues , add a commentFirst it was Honda. Then, Volvo. Then, Renault. With what? Something so brilliant, I’m amazed nobody’s offered it before.
Free payment protection insurance for those buying on the car makers’ finance schemes.
In other words, peace of mind that, if they buyers sign for a new car and then lose their job, payments on the new car will still be covered.
Genius, or what?
The more you think about it, the more sense it makes. It illustrates, for example, that while banks may not be lending, cash-rich car company finance houses most certainly still are.
After all, their very business is pitching out money secured against new cars, then pulling in the interest from the monthly payments.
If they don’t lend, they don’t trade or function. So, car makers tell me, they’ve certainly got the reserves to lend. And are trying their damndest to do so.
The whole car industry crisis has been borne of fear. Buyers, not buying, because they’re fearful. This one simple incentive reassures them, in three ways – by…
• Proving the cash is there
• That eye-watering finance deals such as Civic Type-Rs for £199 a month are available
• That buyers will be protected if the worst does indeed happen…
… I’d wager a successful uptake will mean these three companies won’t be the last to implement such schemes.
Volkswagen Golf looks to history for GTD inspiration
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Why car scrappage is now inevitable
Why car scrappage is now inevitable March 27, 2009
Posted by richard in : Uncategorized , 3commentsIt is now a matter of when, not if, the Government introduces a new car scrappage scheme. Because, such is the momentum now behind it, to not go ahead would be disastrous.
Renault has recently had to boost production of the Clio by nearly 10 per cent, just to meet demand. This comes on the back of previous swingeing cuts in car production.
And that’s just one example, of many. Ford’s Fiesta plants are working flat out and still struggling to meet demand. The Peugeot-Citroen-Toyota plant in the Czech Republic, which makes the sub-110g/km CO2 city trio, is also upping numbers. And so on.
Contrast this with new car sales in general across Europe. They fell by 22 percent. Manufacturers have responded to this, by cutting production. Officials say new car build has dropped by 40 percent.
Honda has even closed its Swindon Civic factory entirely for a third of the year.
But countries which have a scrappage scheme have seen the opposite. Sales in Germany last month rose by 21 percent.
Who has a scrappage scheme, then? Austria. France. Germany, obviously. Greece. Italy. Portugal, Romania. Spain. It’s hardly small fry. Not some harebrained scheme thought up by the SMMT. It works.
Remember the VAT farce? The Government announced it last year… weeks ahead of time. So, customers stopped buying until it came into forge. Big ticket items such as cars were particularly hit.
Chairman of Ford Retail, Chris Hayden, told me that car sales ‘simply stopped’ in November, as buyers waited for the VAT cut to kick in.
The risk is, such is the expectation of a £2000 rebate for those buying a green new car if they scrap their old one, confidence would simply collapse if the Government chooses not to do it.
This would be the exact opposite of intentions, and really threaten the future of an industry already under massive pressure. This is why such a scenario will not exist. This is why the Government will go ahead with it.
A scheme will be announced one day, and take effect the very next. Sending out a clear signal that it is OK to buy new cars. The Government will recoup the money in VAT. Buyers will get greener new cars. Dealers will survive. The environment will benefit. It really is win all round.
Surely the Government has to follow logic, rational argument and the public mood, by rolling out the scheme soon?
Just how loyal are the super-rich? March 23, 2009
Posted by richard in : What I learned today , add a commentBentley customers are, sometimes, a loyal bunch. 82 per cent of those who bought, back in 2006, an original GTC still own the car.
Why the ‘sometimes’ proviso? Because that’s for the GTC range, Bentley Board member Stuart McCullough revealed. If you’re looking at the Flying Spur, of course, the loyalty rates are even higher. Customers hold onto their cars for years.
The coupe, however, is different. Such is the fast turnover trend in the market, Bentley Continental GT buyers, on average, keep their car for just 11 months. Less than a year!
That’s the luxury car market for you. In certain sectors, it really is less about the car, and more about what’s ‘new’.
Could part of Bentley’s current troubles run deeper than the credit crunch, then? Be down to the fact its Continental GT is getting on a bit nowadays?
Judging by all the activity at the Crewe HQ, I’d wager the maker realises this, and has been working on the solution for years now… ‘new product is always crucial, a spokesman told me.
‘We’re going to be moving the Bentley story on in due course…’
Watch, he implored, this space. OK…
What I learnt… from Fleet News, 20 March 2009 March 20, 2009
Posted by richard in : What I learned today , add a commentSo far, new car sales have fallen by 28 percent. The new car market is predicted to fall from over 2 million new car sales, to 1.7 million sales, or less.
Yet the SMMT says it could be boosted by 250,000 sales in an 18-month period by a new car scrappage scheme.
It would have to incorporate nearly new green cars to be of any benefit, though, a leasing company boss told Fleet News. Surprisingly, he said this would have to cover cars up to four years old.
This would stimulate the used car market and thus boost the new car market.
But, isn’t the used market already thriving, as buyers seek extra value? Aren’t car auctions seeing record results and a shortage of stock? I think he’s barking up the wrong tree here.
… Fleet sales once accounted for over half the new car market. Now, due to the recession, it’s down to 44.8 percent. Retail sales are, relatively, booming, taking 55.2 percent.
This is despite reports that retail customers are sitting tight, waiting for the Government to decide on a scrappage scheme. If it comes, I’d expect the proportion to become even more skewed.
… Those fields of cars we keep seeing on the news are just an illusion. Actually, fleet bosses say, there are not loads of cars sitting ready to go. So, huge fleet discounts are not on the table. One chief told Fleet News that swingeing cutbacks by car makers last year have slashed inventories.
… Car makers making the best of the recession include Ford, whose market share is approaching 20 percent – a massive increase on 15 percent last year. French makers are struggling, though. Citroen has 2.8 percent, Peugeot 3.8 percent (down from 6.1 percent) and Renault just 2.7 percent (down from 5.7 percent).
China’s green example to the world March 13, 2009
Posted by richard in : Uncategorized , add a commentEarlier in the year, I had dinner in London with visitors from China’s motoring media. They were here on a fact-finding mission, and were keen to touch base with like-minded sorts from the UK.
It was a superb evening, full of lively debate and contrasting viewpoints. I tried to give them lots of insight, but reckon I took just as much from the evening, if not more. I promised in particular to follow one tip-off closely: mark my words, said several of our Chinese guests – new car sales back home are going to skyrocket.
This was in complete contrast to the dreadful 2008 gloom we in the UK had been suffering. What made them so confident? Over to Kevin Chen, CEO of Gasgoo: ‘From January 20, the Government will cut the sales tax on cars 1.6-litres and under, from 10 percent to 5 percent…’
In other words, smaller, more eco-friendly models were to be given an incentive: they’d carry half the tax of thirstier ones.
And how it’s worked. From being in the doldrums, China’s new car market was up a startling 25 percent in February. A quarter! To get a measure on how many cars this is, consider that in February alone, over 600,000 new cars were sold…
The net effect is huge. Massive. Even though 1.6-litres and under doesn’t sound that green compared to UK green schemes, it’s a big difference for China. Over there, the European ‘downsizing’ trend has yet to catch on. This is thus an admirably green and eco move – and, with the promise of more cash in its back pocket, has seen a generally save-not-spend society hit car dealers in droves.
Why do I mention this? Well, I’ve just been called by City Talk Liverpool, to speak on their Sunday morning show with Edward O’Hara MP. Rob McLoughlin is the presenter, and we’ll be debating this week’s potential good news for Land Rover Halewood, plus the implications of what Mandelson’s been saying.
The relevance of China, then? Well, the car tax reduction is a useful case study of how the world’s biggest car market responded to green new car sales incentives…
