Dealers could see rush of customers as discounts on new cars fall

Time 8:43 am, April 30, 2020

Dealers could face a rush of customers to buy new cars as discounts driven by manufacturer incentives and campaigns are set to be reduced.

That’s according to What Car?, which is telling new car buyers to move swiftly if they want to save money on their next car.

It says a backlog of pent-up demand is likely to outstrip limited supplies rapidly because of factories closed by the coronavirus crisis.

It said its analysis of the UK new car market had found that manufacturers were likely to reduce discounts on new cars as consumer demand returned.

The advice to motorists comes after the government announced that dealers were allowed to sell and deliver vehicles remotely in the UK, as reported exclusively by Car Dealer, which had led to a spike in online leads to dealers.

Manufacturers are to open their plants and get production restarted gradually, which means new vehicle supply will depend on existing stocks and limited production, said What Car?.

Its Target Price analysis of discounts for January to March to the start of the lockdown found Citroen had the best deals, averaging 16 per cent off a new car. Seat and Nissan both averaged 14 per cent, Skoda 12 per cent, with Mercedes completing the top five discounted brands at 11 per cent.

Pat Hoy, head of What Car?’s team of mystery shoppers for Target Price, said: ‘While the market is frozen, dealers that remained open have been nurturing leads, making it harder to get a clear indication of what their plans are for when business opens up again.

‘But the clear expectation is that as soon as demand outstrips supply, they will look to reduce incentives and discounts and focus on profitability.

‘Of course, there will be variables within that. Some manufacturers will sacrifice profit for market share, but the likelihood is that most buyers will face the double whammy of discounts narrowing and waiting lists extending as soon as the market opens up.’

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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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