Dealers highlight concerns over ‘unsustainable’ pre-reg activity

Dealers highlight concerns over ‘unsustainable’ pre-reg activity

Philip Nothard

2019 was a challenging year for automotive retailers according to a recent Cox Automotive dealer survey, with 58% of respondents saying the year had been worse than anticipated.

The year has been characterised by a difficult new car market with registrations down -2.7% year-to-date.

Philip Nothard, Customer Strategy and Insight Director said: “Pressure on new car sales has driven an increase in pre-registration activity. Take September as an example, when a reported 28% of new registrations took place in the last three days of the month.”

“Our survey showed that almost half of dealers expect the new car market to decline further in 2020, but 76% warned that the current level of pre-registration activity was unsustainable.”

When it comes to predictions for 2020 the survey revealed a mixed picture, with 52% of dealers suggesting that consumer confidence will improve, while 22% said it would remain the same, and 26% felt it would decline.

Dealers are certainly more positive about used car market performance in 2020, and 57% expect it to improve YoY while just 4% believe it will decline.

Nothard added: “2019 brought its fair share of challenges for car dealers. Political uncertainty has had a negative effect on consumer confidence, and rising costs and competition for the best used stock all added to margin pressures.”

“That said, we’ve seen some strong performances within the dealer sector, and 21% of dealers reported that they performed better than expected in 2019. This, coupled with the number of acquisitions and new premises opened this year suggests that businesses are still willing to invest in automotive.”

“Looking ahead, 2020 looks set to be another challenging year for new cars, and our Cox Automotive forecast suggests a -1.3% fall in registrations YoY to March. That said, I’m delighted to see that 52% of the dealers surveyed are optimistic about consumer confidence in 2020, and I’m hopeful that a majority government will reduce uncertainty and allow consumer demand to grow, easing pre-registration pressure as we move through the year.”

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