This year has proved a challenging one for automotive retailers, with 58% saying it has been worse than expected – according to a recent dealers’ survey by Cox Automotive.
The new car market has also proved difficult with registrations down by 2.7% year on year.
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Philip Nothard, customer strategy and insight director said: “Pressure on new car sales has driven an increase in pre-registration activity. Take September as an example, when a reported 28% of new registrations took place in the last three days of the month.”
“Our survey showed that almost half of dealers expect the new car market to decline further in 2020, but 76% warned that the current level of pre-registration activity was unsustainable,” he added.
Predictions for the future in the survey revealed a mixed picture with 52% of dealers suggesting consumer confidence will improve.
However, 22% said it would remain the same and 26% said they felt it would decline.
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By GlobalDataNothard added: “2019 brought its fair share of challenges for car dealers. Political uncertainty has had a negative effect on consumer confidence, and rising costs and competition for the best used stock all added to margin pressures.”
“That said, we’ve seen some strong performances within the dealer sector, and 21% of dealers reported that they performed better than expected in 2019. This, coupled with the number of acquisitions and new premises opened this year suggests that businesses are still willing to invest in automotive,” he added.
Nothard said he believes 2020 will be a challenging year for new cars and the Cox Automotive forecast predicts a -1.3% fall in registrations year on year to March.
“Looking ahead, 2020 looks set to be another challenging year for new cars, and our Cox Automotive forecast suggests a -1.3% fall in registrations YoY to March. That said, I’m delighted to see that 52% of the dealers surveyed are optimistic about consumer confidence in 2020, and I’m hopeful that a majority government will reduce uncertainty and allow consumer demand to grow, easing pre-registration pressure as we move through the year,” Nothard concluded.
