asked to visit a dealership whose owner was in a flat spin. The
business was recording few sales, with some at break even and most
loss-making – the business was distressed.
the sales team what I wanted and shutting up they just simply kept
reducing the price, in the vain hope I would cave in at a price
point, and sign on the line. I am sorry to say I didn’t buy, no
value building took place, the process was all about price, and
no-one offered me a way to pay for the damn thing.
So let’s have a look at the Bank of England – constantly
reducing rates to try and cajole the retail public into buying
goods and services before the high street implodes. May I humbly
(hmmm, humbly…) suggest we need to ask the powers that be in the
banking network that we need to quickly clear the LIBOR pipes and
get the money flowing again.
I heard some overpaid prune from a manufacturer being
interviewed last week. He said they had the ‘foresight’ to
understand what was happening to the market, and took unilateral
and decisive action to reduce the number of models produced for the
foreseeable future. This then meant they could do the deed with
several hundred jobs. Their funding partner accordingly decided to
tighten up their underwriting criteria, to minimise risk on loans.
Now, if you pop into a dealer, they will tell you they probably
can’t get the model you’re looking for, and if they can, the build
week isn’t until November due to staff reductions, oh, and you may
struggle to get finance approved. Self-fulfilling prophecy
The decision for most car buyers is emotive. It depends
substantially on the confidence the customer has to get them into a
dealership and spend. We all know customer confidence is low, but
the thing is, it isn’t – which is why those few positive dealers
and funders are right now, today, doing brisk business.
Our customers are fed a daily diet of negativity from all sides,
but so many of them have deferred their decision to renew or change
their current car, and there is a point at which that dam will
break. Our customers are looking for someone to show them the
newsprint is wrong.
Our mystery shopped dealership has already turned the corner,
the staff are all positive and upbeat – and the word is out. It is
as if the local community have been given permission it is ok to go
there and buy a car.
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Perhaps the Old Lady of Threadneedle Street could take a leaf?
Stop discounting money to the point there is no value, but be
positive, be bold, and make sure the clearing banks, finance houses
and lenders understand the role they have to play in making the
economy move, instead of becoming its victim.