Posts Tagged ‘Car Market’
AutolineDetroit asked:
December car sales were abysmal, but have we hit bottom in the car market? Nissan definitely drops out of the Detroit Auto Show. Fiat loses a copy-cat lawsuit in China. All that and more, plus a look at virtual tools Ford uses to design its vehicles.
credit plus asked:
Buying a new car is likely to be one of the biggest purchases you make other than buying a house, therefore when buying a car it is important to take many issues into consideration.
The current economic climate has left consumers struggling with cash flow. Therefore it is important for consumers to make sure they consider their own situation in terms of being able to afford certain goods. Cars, being a large cost yet important in most people lives, are available to purchase either by a lump sum payment or available on finance.
“while registrations of new cars for fleet and small business users are both expected to decline, Mintel believes that the downturn will have most impact upon sales to private individuals, which are expected to drop below 1 millions units for 2008” (Mintel 2008).
This market downturn has possible implications of increasing prices from dealers who need to maximise on each sale. The future car market is not set to recover from this for a few years yet. With no growth, and inflation increasing each year, the car market could suffer.
“Mintel forecasts difficult times ahead for the value of the total car market, with growth remaining stagnant. From 2008-2013 we expect the market to grow and decline by one percent. Without the effects of inflation on motoring this equates to a drop of 10%” (Mintel 2008).
There are some who believe that buying a car is something that consumers should consider doing whilst the country is in this downturn as dealers will become more competitive to sustain sales figures. The marketplace could be seen as an attractive proposition to those who are not as affected by the credit crunch or economic downturn as some others.
“A potential slowdown in the economy, cost of fuel and road charging are some of the factors that will make it difficult for this market to sustain growth. Furthermore competition is likely to grow strong, as people become savvier and aware of prices through searching on the web” (Mintel 2008).
Buying a car on finance is therefore an attractive option for some consumers, who are able to see through the now acclaimed recession. If the payments for a car are split to small monthly manageable payments rather than one large lump sum then it is more feasible to sustain a good cash flow for most consumers through these harder times.
The economic downturn is has a large effect on the lending market. Due to current banking conditions, banks are less willing to lend finance to consumers. The implications of which for buying a car or sourcing a car on finance for consumers means it will be harder for them to obtain finance without applying for a secured loan and or those with solid credit history.
However, it is still possible to get the finance for buying a car for those with poor credit as there are some banks, more stable than others, that are able to capitalise on the poor market environment.
Consumers seem to be less interested in the notion to buy a new car. New car sales a set to decrease by 17% but buying used cars is set to rise to 14%.
Used cars that depreciate less have become a more attractive option when looking to buy a car than buying a new car.
In the long term cars will remain essential for many, and as the economy regains strength there should be no reason why this market cannot return to strong positive growth, particular as the new concerns such as being greener impact on new car designs” (Mintel 2008)
Buying a new car is likely to be one of the biggest purchases you make other than buying a house, therefore when buying a car it is important to take many issues into consideration.
The current economic climate has left consumers struggling with cash flow. Therefore it is important for consumers to make sure they consider their own situation in terms of being able to afford certain goods. Cars, being a large cost yet important in most people lives, are available to purchase either by a lump sum payment or available on finance.
“while registrations of new cars for fleet and small business users are both expected to decline, Mintel believes that the downturn will have most impact upon sales to private individuals, which are expected to drop below 1 millions units for 2008” (Mintel 2008).
This market downturn has possible implications of increasing prices from dealers who need to maximise on each sale. The future car market is not set to recover from this for a few years yet. With no growth, and inflation increasing each year, the car market could suffer.
“Mintel forecasts difficult times ahead for the value of the total car market, with growth remaining stagnant. From 2008-2013 we expect the market to grow and decline by one percent. Without the effects of inflation on motoring this equates to a drop of 10%” (Mintel 2008).
There are some who believe that buying a car is something that consumers should consider doing whilst the country is in this downturn as dealers will become more competitive to sustain sales figures. The marketplace could be seen as an attractive proposition to those who are not as affected by the credit crunch or economic downturn as some others.
“A potential slowdown in the economy, cost of fuel and road charging are some of the factors that will make it difficult for this market to sustain growth. Furthermore competition is likely to grow strong, as people become savvier and aware of prices through searching on the web” (Mintel 2008).
Buying a car on finance is therefore an attractive option for some consumers, who are able to see through the now acclaimed recession. If the payments for a car are split to small monthly manageable payments rather than one large lump sum then it is more feasible to sustain a good cash flow for most consumers through these harder times.
The economic downturn is has a large effect on the lending market. Due to current banking conditions, banks are less willing to lend finance to consumers. The implications of which for buying a car or sourcing a car on finance for consumers means it will be harder for them to obtain finance without applying for a secured loan and or those with solid credit history.
However, it is still possible to get the finance for buying a car for those with poor credit as there are some banks, more stable than others, that are able to capitalise on the poor market environment.
Consumers seem to be less interested in the notion to buy a new car. New car sales a set to decrease by 17% but buying used cars is set to rise to 14%.
Used cars that depreciate less have become a more attractive option when looking to buy a car than buying a new car.
In the long term cars will remain essential for many, and as the economy regains strength there should be no reason why this market cannot return to strong positive growth, particular as the new concerns such as being greener impact on new car designs” (Mintel 2008)
Kuku Sa asked:
Sales of New and Used Vehicles Are Strongly Interrelated, According to a New Study from the Car Internet Research Program OTTAWA and PARIS (March 15, 2007) – The used car business is here to stay and will increasingly impact the new vehicle market in a variety of ways, including residual values, pricing, brand strength and customer relationships. As a result, manufacturer involvement in inventory management and used vehicle branding is crucial for enabling dealers to carry out successful remarketing programs.
These are among the findings from a new report focusing on the used car market published by the Car Internet Research Program (CIRP). The study, titled “Anatomy and Physiology of the
Used Car Business,” provides an in-depth analysis of the used vehicle market with a particular focus on four key markets: U.S., Canada, France and Germany. The research examines:
(i) The growth of the used car business, in both size and importance,
(ii) Global trends affecting the used car business,
(iii) The customer buying process, including Internet usage,
(iv) A comparative analysis of the four markets, and
(v) Success strategies for dealers/manufacturers.
The importance of the used car market is growing significantly. In both the U.S. and France, for example, the used-to-new vehicle ratio has increased since 1999 from 2.4 to 2.6, showing a steady growth of used vehicle sales by volume. In addition, used vehicle sales in the U.S. are today more than twice as profitable for dealers as new vehicle sales (a roughly 2.7% profit margin, as compared to 1.2%).
“Franchised dealers’ used vehicle operations now act as a hedge against uncertainties in the new vehicle market and even support new vehicle sales,” said Dr. Christian Navarre, Director of the Car Internet Research Program. “With declining margins in the new car business and the aging of vehicles on the road, the used car business is likely to be a growing and increasingly important component of franchised dealers’ sales, both in North America and in Europe.”
It is clear from the research that the key to continued growth will be transparency and symmetry of information, as consumers apply the same approach to research and collection of information in their search for used vehicles as they do to the new car buying process. For example, although consumers still use local newspapers and word-of-mouth when researching used car purchases, they are turning to the Web in increasing numbers, highlighting the importance of having a strong Internet strategy for used vehicle programs.
While national used vehicle markets differ in character and structure due to a variety of socio-economic, regulatory and other factors, the report identified six core strategies that are essential for growing used vehicle sales:
• Continually improve the customer experience, from the Internet to the showroom.
• Rationalize customer relationships through Customer Relationship Management (CRM).
• Perfect online promotion and merchandising efforts to reach prospective and existing customers.
• Manage inventory and pricing with network-wide IT solutions.
• Maximize high-margin sales opportunities.
• Optimize certified used vehicle programs.
“Consumer attitudes to used vehicles have become more sophisticated as vehicles themselves have improved in quality and reliability,” said Nick Gill, Global Automotive Leader for Capgemini. “The tools used by consumers have also evolved, resulting in the need for dealers and manufacturers to fundamentally change their approach to the sale of used vehicles, as this report demonstrates. While these changes involve significant financial investments, they hold the potential for great returns and are, in fact, necessary in today’s market.
Dealers and manufacturers face a rapidly evolving car market; they must evolve with it if they do not wish to be left behind.”
About Author
Kuku Sa is a researcher, analyst, automobile expert and author at CarJunction.com, one of the world’s foremost exporters of Japanese vehicles. He provides its clients with insights and
Capabilities that boost their freedom to achieve superior results through a unique way of working, which it calls the Collaborative Business Experience
www.CarJunction.com
Sales of New and Used Vehicles Are Strongly Interrelated, According to a New Study from the Car Internet Research Program OTTAWA and PARIS (March 15, 2007) – The used car business is here to stay and will increasingly impact the new vehicle market in a variety of ways, including residual values, pricing, brand strength and customer relationships. As a result, manufacturer involvement in inventory management and used vehicle branding is crucial for enabling dealers to carry out successful remarketing programs.
These are among the findings from a new report focusing on the used car market published by the Car Internet Research Program (CIRP). The study, titled “Anatomy and Physiology of the
Used Car Business,” provides an in-depth analysis of the used vehicle market with a particular focus on four key markets: U.S., Canada, France and Germany. The research examines:
(i) The growth of the used car business, in both size and importance,
(ii) Global trends affecting the used car business,
(iii) The customer buying process, including Internet usage,
(iv) A comparative analysis of the four markets, and
(v) Success strategies for dealers/manufacturers.
The importance of the used car market is growing significantly. In both the U.S. and France, for example, the used-to-new vehicle ratio has increased since 1999 from 2.4 to 2.6, showing a steady growth of used vehicle sales by volume. In addition, used vehicle sales in the U.S. are today more than twice as profitable for dealers as new vehicle sales (a roughly 2.7% profit margin, as compared to 1.2%).
“Franchised dealers’ used vehicle operations now act as a hedge against uncertainties in the new vehicle market and even support new vehicle sales,” said Dr. Christian Navarre, Director of the Car Internet Research Program. “With declining margins in the new car business and the aging of vehicles on the road, the used car business is likely to be a growing and increasingly important component of franchised dealers’ sales, both in North America and in Europe.”
It is clear from the research that the key to continued growth will be transparency and symmetry of information, as consumers apply the same approach to research and collection of information in their search for used vehicles as they do to the new car buying process. For example, although consumers still use local newspapers and word-of-mouth when researching used car purchases, they are turning to the Web in increasing numbers, highlighting the importance of having a strong Internet strategy for used vehicle programs.
While national used vehicle markets differ in character and structure due to a variety of socio-economic, regulatory and other factors, the report identified six core strategies that are essential for growing used vehicle sales:
• Continually improve the customer experience, from the Internet to the showroom.
• Rationalize customer relationships through Customer Relationship Management (CRM).
• Perfect online promotion and merchandising efforts to reach prospective and existing customers.
• Manage inventory and pricing with network-wide IT solutions.
• Maximize high-margin sales opportunities.
• Optimize certified used vehicle programs.
“Consumer attitudes to used vehicles have become more sophisticated as vehicles themselves have improved in quality and reliability,” said Nick Gill, Global Automotive Leader for Capgemini. “The tools used by consumers have also evolved, resulting in the need for dealers and manufacturers to fundamentally change their approach to the sale of used vehicles, as this report demonstrates. While these changes involve significant financial investments, they hold the potential for great returns and are, in fact, necessary in today’s market.
Dealers and manufacturers face a rapidly evolving car market; they must evolve with it if they do not wish to be left behind.”
About Author
Kuku Sa is a researcher, analyst, automobile expert and author at CarJunction.com, one of the world’s foremost exporters of Japanese vehicles. He provides its clients with insights and
Capabilities that boost their freedom to achieve superior results through a unique way of working, which it calls the Collaborative Business Experience
www.CarJunction.com