9:46 am, January 19, 2012
DEALERS are more confident about the prospects for 2012 but it will still be a challenging year according to Manheim.
A recent survey from the firm sent to more than 5,000 franchised and independent dealers showed that used car sales are predicted to rise, with 36 per cent of respondents expecting to see an increase.
The overall business environment could be better with 24 per cent of respondents expecting to experience an improvement in margins. The survey suggested that the used vehicle sector performed better than the new vehicle sector in 2011 and this trend is likely to continue in 2012.
Overall, 78 per cent of respondents believed that used car sales will either improve or stay at similar levels to 2011 and 22 per cent thought they will worsen. Meanwhile 65 per cent of respondents expected to experience either an improvement in or the same levels of margins but 35 per cent expected to see a decrease.
2011 was a difficult year with 52 per cent of respondents seeing a decrease in margins and 43 per cent a fall in used car sales. But it was not all bad news as 15 per cent of respondents experienced an improvement in margins and 27 per cent saw an increase in used car sales.
Of the respondents selling new cars 23 per cent experienced an increase in sales during 2011 but 51 per cent saw a fall in sales. Prospects for 2012 seem slightly better with 32 per cent expecting an increase in new car sales and 36 per cent a decrease.
When asked what the main challenges for 2012 would be the top five where:
o Sourcing stock
o Finding customers
o Buyer confidence
o Cutting costs and squeezing margins
o Cash flow
The top five opportunities in 2012 are expected to be:
o Selling more used vehicles
o Diversification
o Entering new markets
o Income from finance, insurance and extras
o Less competition and take-over opportunities
Craig Mailey, marketing director, Manheim said: ‘The fact that many dealers seem to be more confident about the prospects for 2012, even though challenges remain, is encouraging.
‘The economic uncertainty will continue to put pressure on dealers’ margins while an increase in consumer confidence will be the key to any improvement in both used and new car sales.’
