‘Retail sales are more emotional,’ Colin told Car Dealer. ‘Fleets are more rational, more educated – they’ll react faster to any return of optimism, which will lead to an upturn in sales.’
The MD spoke as he reviewed the sudden downturn in sales faced by all car makers. ‘Fleet has declined during the past few weeks – that’s because the ‘real’ recession only started in the past few weeks.’
Effects will be magnified in 2009, as many current fleet deals are the delivery of orders, placed several months ago. Harsh trading conditions will have an effect on the cars companies buy.
However, the change in tax regulations due in April may have a positive impact on buying patterns. Companies choosing low-CO2 models will benefit from big tax savings. Many will be keen to take advantage of the situation – and dealers must prepare for this expected shift in buying patterns.
Sub-160g/km and sub-110g/km cars will become crucial.
Colin also spoke of Peugeot’s dealer situation He is determined not to lose any strong dealers. ‘When we do, we suffer for years.
‘It takes 2-3 years to set up and establish a dealership. And 3-4 to make it profitable. Investment is needed for people, for the site, for the training; all this costs money, takes time.’
Colin would therefore prefer not to lose any dealers. But, if he does, he says the weaker dealers, once the market goes past a certain point, will be susceptible.
‘It’s all because banks are not lending cash. They need to start again. Otherwise, while stronger dealers will be OK, weaker ones simply won’t have any operating funds.’
A Peugeot spokesman supported this, saying that losing the weakest could have a ‘cleansing’ effect on the network.
But ‘Peugeot is doing all it can to help car dealers. We’re delaying payments as much as we can, not forcing cars on dealers, not demanding unreasonable housekeeping standards.
‘We understand the big banks are pulling out and not lending money, so are trying to make the situation as manageable as possible for all concerned.’
‘In this climate,’ concluded Colin, ‘cashflow really is all.’ Without it, dealers are doomed.
By Richard Aucock