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18.7.08: How the credit crunch is hitting dealers

Time 13 years ago

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CONFLICTING messages are coming into the Car Dealer office about the effects of the credit crunch on the motor trade.

 

Not wanting to add fuel to the fire, fan the flames or any other burning cliché, but the people I’ve been chatting too this week are finding things tough on the shop floor this summer.

 

One dealer told me it’s like someone had ‘turned off a tap’ while a salesman friend of mine at a main dealer on the south coast was so furious buyers weren’t buying I got a 10-minute rant down the phone.

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It went something like this: ‘They’re coming in, looking at the cars, but won’t put their hand in their pocket,’ he raged. ‘It’s credit crunch this, credit crunch that – that’s all I’m hearing. If one more person mentions it to me again I’m likely to crunch something of theirs.’

 

Buyers on the south coast, you have been warned… 

 

Anyway, so what about those conflicting messages? Well, I’ve chatted with three big clients this week and all mentioned that their businesses were still moving along steadily. ‘We know our dealers are finding it tough, but that hasn’t translated into our figures,’ one director of a large automotive service provider told me this week. 

 

Only time will tell just how far the cancerous credit crunch will spread.

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My take on it? Well, I think unfortunately we’re talking ourselves into a recession. We’re all being told by the papers and the doomongers on the TV that we’re in big trouble – so we THINK we’re in big trouble. 

 

And that’s the problem. If you’re worried you can’t afford your mortgage repayments then you’re unlikely to spend on the high street, let alone on a new car. And that equals poor sales, poor profits and eventual job losses – which only makes everything worse.

 

I’m just as to blame as the rest of them. I fancied a KTM Duke motorbike – second hand, couple of grand, nothing big. I even had the OK from the The Boss (wife) and was searching Bike Trader and eBay for the right one – that was until I got worried. Do I really need it? I asked myself. Wouldn’t the money just be better off in the bank?

 

I know it sounds ridiculous, but it’s true. I’m leaving the cash there for no reason other than I’m a ‘bit concerned’. 

 

And it’s likely that’s just what your customers are doing too. They probably aren’t any poorer – it’s just that they feel poorer. And the worrying thing? It’s hard to see and end to the vicious circle turning.

 

I’d love to hear how you’re finding things – email me via the contact us page using the link at the top right of this page.

 

James

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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