Despite the recent reports coming out relating to the improving trading conditions and dare I say 'coming out of recession' forecasts, the UK car industry continues to suffer. According to the Society of Motor Manufacturers and Traders (SMMT) the numbers of cars built in May has dropped by 43% over the same period last year. This drop equated to 67,754 cars which actually represented the smallest drop this year to date, maybe at last its the beginning of the end of this down turn for car manufacturers?
Regrettably the Commercial market still remains weak where production fell by 73.5%, we have already seen LDV go to the wall are there others waiting in the wings to follow? Paul Everitt, SMMT Chief Executive commented " Low business confidence" continued to depress demands for commercial vehicles - predominately Vans and Trucks. "Businesses across the economy are still holding back on new expenditure and will need to see better access to finance and stronger domestic demand"
Overall the down turn has been huge, car production down by 319,022 units compared to the first 5 months of 2008, this represents a staggering 54% reduction in output year on year.
The scrappage scheme launched by the government earlier in the year to help stem the downturn in demand has been slow to take off, however interest is beginning to grow and recent government figures show over 60,000 vehicles ordered under the scheme since its launch. The scheme is set to run until March 2010, the qualifying criteria is the part exchange must be 10 years or older,the person exchanging the vehicle having been the registered keeper for 12 months or more.
The £2,000 discount is split 50 50 between the government and the car manufacturer, with £300m pledged by the Government 300,000 customers could benefit from the scheme.
Clearly the manufacturers needed to halt the over production of many of their products as anyone could see it was clearly unsustainable to have disused airfields and docks full of unsold and unwanted vehicles, however have they now gone to far?
Feedback from many dealers and Contract Hire brokers is that increasing lead times on many popular models is causing problems to them and their customers, with some key models not being available until 2010 - 7 or 8 months for a base model Nissan Pixo for example has recently been quoted.
The impact for dealers and Contract Hire and Leasing brokers is pressure on cash flow which can spell disaster for large and Small businesses alike, this is compounded by the difficulty of many businesses in securing additional funding through their normal channels to enable them to continue running their businesses on a day to day basis.
However amongst all this Doom and Gloom Used cars are currently very buoyant with many customers deciding to opt for a used as opposed to a new car, coupled with the drying up of certain new stock, many late used cars are starting to fetch much stronger prices at auction. This is having a knock on effect with many Contract Hire and Leasing companies who are increasing their Residual Values (RV) in light of this improving market condition, which has a knock on effect by helping to reduce the monthly rentals, good news for the customer and Manufacturers alike.
If customers shop wisely there are still good bargains to be had, and where better to start their search than on Nationalautomotive's website where Contract Hire and Personal Contract Hire rentals are advertised by a selection of the best independent Leasing brokers in the UK
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