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I wonder when respondents say that they think that the recession will end in 2011/12, if what they are really saying is “actually it’s tough now and I’m not sure I can see an end to it”? Certainly for some dealers who have done well out of scrappage, it is difficult to be positive about the immediate short term. Suddenly, 50% of their new car customers have disappeared and the uncertainty that surrounds any election may have an effect on showroom footfall.

Most dealers are reporting an increase in profits last year and it would seem that these profits are going to be needed to ride out the rest of 2010 and some of 2011. The survey also shows the polar effects that the scrappage scheme has had on dealers depending on where their manufacturer was positioned in the market. You can almost hear the disappointment of the 71% of dealers as they answered in the negative as to whether their manufacturer had proposed any post-scrappage support and the majority who are less than happy with their manufactures post scrappage retail programmes.

Focus for the future

Dealers need to choose carefully now where to focus their efforts. Many of the larger players in the market are stressing the need for focus on customers’ retention and after sales, but the respondents to this survey are looking to concentrate their efforts on used cars – a market that they also tell us is quiet at the moment.

You’d have to be brave to go against a strategy not focussed on customer retention and given the predictions for public finances going forward and the effect on customer confidence, we would urge dealers to think again about focussing to switch on one part of their market.

What’s certain is that there will not be many second chances going forward in what could be a time of increasing consolidation and change.

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