Dan Parnell takes a look at the likely trends in the first quarter of this year
Wherever you look in the motor industry, the first quarter of 2015 should see some pretty good results. The fleet sector is showing a high degree of stability and even a little growth, while retail customers continue to return to the new and used markets as consumer confidence grows.
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Here’s the analysis from Glass’s in a little more detail.
2015 looks set to get off to a strong start almost throughout the first quarter with new car sales up around 3-5% on a monthly basis. January and the first half of February will be especially active and, if there is any faltering, we would expect European manufacturers to step in quickly and provide additional support in the retail sector in order to keep production lines moving at the desired pace.
All of this is, of course, good news for captives, many of which will be currently enjoying a level of performance that very much continues or even improves upon the success that we have seen during the last couple of years.
There are only two potential grey spots, neither of which are exactly unexpected. First, we will see manufacturers continue to pre-register in fairly high numbers, evidenced by the increase in late plate advertised volumes. Secondly, as usual, funders can expect the usual seasonal reduction in the fortnight running up to the March plate change. Following this, however, we expect normal service to resume.
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By GlobalDataWhile not quite as impressive as the new car market, used sales should also see a fairly strong first quarter, with volumes up about 1-2% per month, made possible by increased volumes coming to market following post-recessionary new car sales.
The prevalence of new car pre-registrations mentioned above will also have an impact in the used sector, affecting buying power in the final days of each month, but this is something to which the trade has become accustomed in recent years.
The only issue we are likely to see is a relatively mild shortage of used stock in early January, late February and the first two weeks of March, the latter related to leasing companies defleet activity driven by plate change.
Otherwise, the outlook for independent leasing companies is generally good.
Overall, PCP performance will continue to be noticeably impressive, especially in the small car, C sector crossover, D sector crossover and 4×4 markets.
However, one trend that will affect values in 2015 is the practice of bringing PCP end of contract dates forward. This is happening more and more often to the extent that late plate used car volumes may begin to increase noticeably.
Towards the end of the year, this will definitely begin to put some pressure on values. This will not exactly be dramatic – we are looking at values dropping at a marginally higher monthly rate than in 2014 – but there will be an effect.
Dan Parnell is head of fleet and finance at Glass’s
