7:37 am, July 29, 2022
Car dealers will soon have more stock than they know what to do with as new car production begins to ramp back up.
That’s the view of one industry leader, who believes levels could be back to normal as early as the fourth quarter of this year.
Peter Smyth, director at Swansway Group, says that recent increases in production figures are beginning to be seen on the shop floor.
He says that issues with new car stock are now becoming brand specific, with the likes of Honda and Land Rover among those still struggling.
However, Swansway are seeing increased production from Volkswagen Group brands in particular.
Smyth also expressed surprise at how long the production issues have lasted but believes a return to normal is now in sight.
He told Car Dealer: ‘I think there is a good amount of stock coming up later in the year with production problems starting to ease slightly.
‘By quarter four we could actually have more stock than we know what to do with if I’m being completely honest!
‘The issues we are experiencing now are very brand specific. For example there are still problems, for whatever reason, with Honda and Land Rover especially.
‘With the Volkswagen brands though we are getting a lot more stock in now.
‘I am surprised in some ways that these problems have gone on as long as they have but it looks like the OEMs are now starting to recover.’
The result of increased new car production is likely to be a dip in used car prices, although experts say any decline will be gradual.
Smyth believes there could be a fall around October and says that used car prices have been not been sustainable over recent times.
He added: ‘Used car prices have been at a level that is not sustainable for some time so you would expect there to be a correction in the market in the near future.
‘We have already seen one correction earlier this year around April and May time but I would expect another one probably around October.’
Peter Smyth (furthest right)
Cost of living not affecting customer behaviour
Another factor that has been tipped to affect used car prices in the months ahead has been the ongoing cost-of-living crisis.
Several dealers gave expressed fears that money previously put aside for the purchase of a car may now have to go towards household bills as families struggle to cope.
Smyth however, sees things differently.
He told Car Dealer: ‘I don’t think so, no [that the cost of living crisis is impacting customer behaviour].
‘I think if you look at most people, they pay their utility bills on a direct debit which are largely staying the same.
‘Where we could see issues down the line is once those plans are up and their bills go up by a long way.’
