Motor Month

  • The new car market continued to surprise with its strength. The
    October 2007 volume was on par with the 1999-2006 average for
    October of 166,429 units, but almost 10 per cent above expectations
    for the 2007 market. A slowdown had been expected, in light of
    concerns over the economic setting. Confidence appears robust with
    consumers keen to take advantage of new car deals, despite fears in
    the banking sector over credit levels and the price of fuel.
    October’s rate of growth was the best since December 2005. It
    pushed the market up 2.5 per cent or 51,573 units over the
    year-to-date. Almost a quarter of this growth took place in
    October. The 12-month rolling total currently stands at 2.40m
    units, over 20,000 units ahead of the recently revised full year
    forecast of 2.38m units. However, concerns remain that the market
    will cool in the future, as the rate of economic growth eases and
    if the banking crisis gathers pace. 
  •  The used car market has experienced a marked downturn in
    activity over recent weeks, with the usual seasonal weakening in
    trade demand and prices coming more suddenly and more sharply than
    many dealers had anticipated. “Following an encouraging summer for
    used car prices, October’s sudden slowdown has quickly transformed
    this into a buyers’ market,” comments Adrian Rushmore, managing
    editor at EurotaxGlass’s. A number of factors are being blamed. In
    September there was a frenzy of new car registrations as dealers
    clamoured to hit their manufacturer-imposed sales targets. Enticing
    deals on new cars inevitably affect the saleability and, therefore,
    prices of equivalent nearly-new models. This situation has been
    made worse by the influx of cars that are being pre-registered by
    dealers as ‘demonstrators’ before being moved to the used car
    forecourt within a matter of months.
  • Furthermore, with dealers preoccupied with finding buyers for
    their nearly-new vehicles, auction attendances and prices have
    suffered. However, it is not just the values of nearly-new cars
    that are suffering. The market has also had to absorb significant
    numbers of cars registered by fleet and contract hire companies
    following the introduction of the ’54-plate in September 2004. “The
    ready availability of stock at most ages will continue to affect
    values until at least mid-November,” suggests Rushmore.
  •  Three companies are believed to have been shortlisted by
    Ford Motor Company as the potential owners for its up-for-sale
    Jaguar and Land Rover brands. As the sale process moves into its
    final stages the three companies battling it out are understood to
    be: Indian vehicle manufacturer Tata and its carmaking rival
    Mahindra & Mahindra and private equity company One Equity,
    which is fronted by ex-Ford chief executive Jac Nasser. Ripplewood
    and Cerberus, both private equity groups, which have expressed an
    interest in owning the two companies, are thought to be outsiders.
    Ford plans to sell the businesses by the end of the year or early
    in 2008.