70 plate will serve up profit bonanza for dealers

Strong public demand for the range of newly launched 70 plate models will make this a profitable quarter for many dealers, motor trade sales expert Fraser Brown predicts.

Business in used cars has been brisk and has allowed dealerships to make a strong recovery, especially those that responded to the reopening of showrooms on 1^st June by reinstating their sales and marketing teams.

However, the profusion of new models from most manufacturers and the arrival of the 70 plate has combined to unleash a second round of pent-up demand.

There are several factors. The volume of new cars coming off the production lines since June has been limited although dealers have been busy stimulating interest in the run-up to 1^st September by offering significant discounts.

Fraser, who is managing director of MotorVise Automotive, said: “It takes around three months for vehicle production to return to full capacity, which coincided nicely with the much-anticipated appearance of the 70 plate. This means that customers have a wide variety of choice and the cars are available for purchase.

“The pent-up demand for used vehicles has also driven up second-hand values in recent months, making the prospect of a new car even more attractive.

“Many potential buyers are also cash-rich. Months of staying in has resulted in limited opportunities to spend, including such big-ticket items as foreign holidays. It’s no accident that what money is being spent remains close to home on such items as home and garden improvements, hottubs – and cars.

“The 70 plate is also the first to bear the green flash that distinguishes it as an electric vehicle, an initiative that is sure to build on the growing interest surrounding EVs.

“There is no doubt about it that September is pivotal for the industry – a month that is shaping up to generate some of the biggest activity in terms of new car sales for some time.

“The real question is, how long will it last and will this expected bonanza stretch into the far reaches of Q4?”

“I believe that those dealers that are going to be successful in Q4 will stage a sales activity event. This will certainly reap dividends, especially given that customer databases haven’t been touched since the early part of this year.”

“Groups that have been successful with sales events in the past have generally run them in October and November. This means handovers, deliveries and invoicing fall in November and December, which are the traditionally quieter months for a car dealership. This will also reap dividends in future years by driving aftersales revenues from due dates for vehicle ownership and service anniversaries which will fall in these naturally lower profit months.”

ENDS