Data from analysts Sophus 3 reveals that the government’s indecisive attitude towards incentives on new cars is hurting the industry.
Scott Gairns from Sophus 3 appeared on Car Dealer Live on Friday and explained how trends in other markets have demonstrated that clear guidance on incentives or a scrappage scheme have resulted in stronger bounce back for car markets coming out of lockdown.
He said: ‘I think it’s disappointing that the government is a bit amateurish when it comes to such basic objectives.
‘Either communicate something or don’t communicate. We can’t just backtrack every two weeks what we’re committing to.’
Looking at the increases in traffic from across the big five European markets, Gairns explained that while businesses have been asking him for guidance on what’s working, it’s more politics than best practices.
He said: ‘I think looking at the numbers, it’s not really down to the brands anymore. It’s really down to politics and governments putting in place incentive schemes or not.
‘We can see France and Germany had a massive increase in traffic because they were very quick and fairly clear in terms of their scrappage schemes and incentives for customers to buy cars.
‘We see other markets such as Italy, Spain and the UK, who either haven’t communicated any scrappage schemes or have been very vague for some time and a bit contradictory in their communication.
‘So clearly right now, what is driving the market is the scrappage scheme given by the government.’
In the Car Dealer Live session, which you can watch in full above, host James Batchelor added that this backed up what he had heard from a lot of car dealers – that they felt customers were holding off from buying new because they’re waiting for incentives.
Gairns added: ‘There’s nothing worse than letting people think that they might get an incentive.
‘They are just postponing their purchase, and in fact we even saw that there’s been an increase in interest around electric vehicles a couple of months ago which faded out, and this increase was happening at the same time that there was an assumption there would be a scrappage scheme around electric vehicles.’
The figures show that while all of the countries had recoveries in May, Germany and France had significantly greater increases.
In particular, Gairns said: ‘Germany is almost at the level they were at in January and February this year’.
He explained: ‘We’ve seen a significant increase since dealerships opened again but since the middle of June traffic is stagnating.’
This, Gairns said, is due to people holding off for a scrappage scheme when they compare the data to other markets.
Watch the Car Dealer Live session in full above for more detail.
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