Month: October 2011

Home / 2011 / October

used car prices reported as being ‘unusually stable’

CAP Black Book reports that used car prices are ‘unusually stable’ as a result of a ‘Fragile balance’ between supply and demand.

TRADE VALUES moving into November were ‘unusually stable’ for the time of year, according to the latest edition of CAP Black Book, the benchmark guide to used car prices.

Key to the dynamic is a fragile balance between muted consumer demand and relatively low volumes of available vehicles.

Typical used car market ‘seasonality’ tends to see used values dipping by an average of nearly 3% for November – with a slightly more severe downward movement last year of 3.1%.

In contrast, the November 2011 movement is just -1.5% at 3yr/60,000 miles.

Relatively low volumes of available cars is the principle reason for this unusual stability, forcing trade buyers into the open market to actively acquire stock.

Poor performance in the new car sector has meant that franchise dealers in particular are not receiving sufficient retail quality part-exchange vehicles. Together with the need to place more emphasis than usual on used car business as an alternative source of profit, this is forcing them to compete with independent used car specialists in the open market to acquire stock.

While retail demand is unsurprisingly muted by economic uncertainty and subdued consumer confidence, there is sufficient activity to justify continued stock purchase. Thanks to relatively lower volumes than have often been seen historically at this time of the year, this demand is sufficient to have stabilised used car trade values.

Another notable feature in the current market is a shift in the relative fortunes of franchise and independent dealers, Black Book reports.

Historically independents have had a distinct advantage in having little or no restrictions on the kind of stock they carry, compared with their franchised counterparts. This usually means they can flex their offering, depending on customer tastes, but currently they are having to compete harder for used stock, which is then putting pressure on margins.

This is because the lack of part-exchanges due to the still woeful performance of the new car market is forcing franchised dealers to go out into the market for stock. For franchise dealers it is proving easier to compete on cost by cutting margins on the metal because they also have the prospect of bolstering their business with the aftersales and service aspects of their offering.

For many large independents this has meant a much harder struggle to source the right cars in the first place, as well as undercut their franchised competitors. This, at a time when footfall is unsurprisingly reducing, is creating some real challenges in that particular retail sector.

Black Book editor, Tim Bearder, said: “Although there has been talk in some quarters of something approaching another market meltdown before the end of the year, we continue to see no evidence of anything like that. As long as supply remains in line with expectations and retail demand is maintained somewhere around the reasonable levels currently reported, this month will be stronger than is often typical for the time of year.”

ends

For further information contact Mike Hind, Communications Manager, CAP on 0113 222 2044 / 07710 152030
Follow MikeH_CAP on Twitter
Find Mike Hind on Linked In http://uk.linkedin.com/in/mikehind
CAP used car pricing and technical information has been trusted by motor trade professionals for more than 30 years. The company provides trusted and accurate pricing and technical information on cars, vans, motorcycles and trucks to the UK automotive industry every day. As well as helping dealers, fleet operators, insurers, vehicle manufacturers and finance providers, CAP information also operates at the heart of many leading vehicle marketing websites and car sales portals, including Britain’s largest – AutoTrader – helping consumers safely make the b

It must be true it's in the News

We all question the integrity of the media, how stories are “sexed up” to add sensationalism to an otherwise mediocre story, we see this as journalistic licence to sell papers, get us to watch or listen to one news channel over another.

The cynicism this propagates however vaporises when the reporting reinforces our own view, or mind set. Economic uncertainty provides fertile soil for this pesky weed, it turns ignoramuses into authorities, those who forecast doom, gloom and pestilence are in their element, they can’t lose. If their prophecies’ materialise it’s “I told you so”, if a positive result prevails it’s “ You were lucky”.

There is always greater success for those who start from the premise of success, rather than fear of failure, who start with the yes factor, for them luck has nothing to do with it, to quote a wise man “Success is all down to luck, ask any failure”.

This premise of success reflects well in the job market, no one ever complained their way into a job, or succeeded in it through apathy , attitude determines altitude; not what the media tell us, that’s just for the excuse hungry, easily manipulated failures.

The headlines may shout about recession, because bad news sells papers to those who revel in it, and have thrown in the towel. The smart cookies seek out the story on page eleven that Mercedes Benz have just announced that they have just sold more cars in one month than any other month in their 125 year history, Rolls Royce orders are up 60% on last year and they see opportunity on the horizon.

So forget the media’s agenda, set your own. If people ask what planet you are on, thank God it’s not the same one as them!

RECRUITMENT TIPS TO AVOID THE THINGS WE SEE TOO OFTEN …..

So if its a tough market with more people looking for less jobs how are people marketing themselves in this very competitive market place ?

On the whole very badly is the simple answer. I receive about 250-300 CV's a week in my region, some are very good, many are poor and some are to put it mildly laughable. Potential candidates don't always seem to understand the recruitment process so I'll try and explain how to improve your success rate.

Think of it as a sales process, you are a product looking to be sold to a employer, the market is filled with other 'products' for the employer to choose from so you need to stand head and shoulders about the rest and market yourself properly. When we advertise a job currently we will receive about 60 per job plus another say 20 people who we know are looking, have been interviewed by us and are ready to go so are in effect already ahead of the game. This means that normally we will have around 80 applications for each role.

So the odd's are stacked against you as only 4/5 people are going to be put forward by us for interview with the client and only 1 person is going to get the job. So how do you shorten the odds ?

Lets say I'm looking for a Sales Executive for a dealership, I'll look for skills, previous experience and quality of workmanship on a CV but most importantly I'm looking for somebody who can sell. Therefore when the CV does not contain the most basic of information, is difficult to read and looks like its been put together in a couple of minutes with poor grammar and spelling it only tells me that here is a person who either can't or can't be bothered to sell themselves so will never be able to sell a complex range of products in a dealership.

We see this far too often and I have to say that when I read a CV that's very poor and full of spelling errors where the candidate is saying that they are "an astounding communicator with fantastic attention to detail" (from a CV last week) and other such over the top descriptions of themselves in their profile. I move quickly on and look for a more suitable candidate to present to my client.

Its obvious I know but spend time on your CV, set it out in a recognised format, spell and grammar check it, get somebody else to read it and sense check it. Ensure you are stating facts and figures not fiction and above all don't lie or 'miss out jobs' you will be caught out ! If you are unsure about how to do this get it written for you, don't use anybody who doesn't know the Motor Industry well or a cheap fix off of eBay for £20 as you will only get a generic CV full of non-specific and tired old phrases and generic comments.

Then when you have submitted your CV follow the sales process, you would always follow up a customer who you have presented a brochure too, so follow up the recruiter within 24 hours and ask if we received your CV and can you add any information we may need. Suddenly you have moved yourself up the list, if you have taken the trouble to call you will be taken seriously and will have shortened the odds.

In next months Newsletter I'll talk about how to interact with your recruiter once you have their attention and how to work with us to ensure a successful outcome for both parties.

Regards

Andy

Andy Norman CAE FIMI
Associate Director
South Midlands, South Wales, Bristol, Swindon & Somerset
Email: an@jgauk.com
Tel: 07590 487885

Internet Sales

INTERNET SALES

The Internet moves ever forward and many dealerships web-sites remain ever the same. Having said that a number of players in the franchise dealer network are progressing their on-line offerings and the power of this medium is increasing enquiry levels in various areas.

People seem to be saying the next area to focus for selling products is Social Media, I have to say I would sound a note of caution here even though I'm a great Internet fan. I have spoken to a number of players who think Social Media is the place to sell product, in my humble opinion that is wrong. I think a good transactional web-site with the ability to complete transactions 24/7 is the place to sell product, Social Media is the place to promote yourself and let people know you exist.

In the good old days when I joined the industry a dealerships marketing budget was viewed in two ways, firstly some spend was for specific vehicle newspaper ads (the only medium available then !) and this was often costed back to the individual car as a sales department marketing cost, secondly were general marketing costs for things like generic dealership newspaper ads, promotional events and flyers (remember them !!). Internet marketing spend should be viewed in the same way, if you try and justify your Social Media spend on increased vehicles sales/profit you are likely to be disappointed but it will increase your generic profile.

WHAT DO WE OFFER ?

We will look to find you the job you want, we will interview you, present your CV to a client and discuss you with them in detail with a view to securing an interview. You can apply to us by responding to a particular ad or send us your CV so we can discuss opportunities as they arise. Our web-site also has the function of a 'Candidate Dashboard' where you can register, log-on and manage your own CV, job applications, updates and details and get to know about new jobs as soon as they arrive 24/7.

The above service is free to all Candidates, when we successfully place you we get a fee from our Clients so its in both our interests to place you in a suitable and long term role where both you and our Clients are very happy with the outcome.

Additionally if you would like your CV to be professionally written, receive a face to face & 1 to 1 mentoring session to help you with your approach and interview style or even have a psychometric test completed we will gladly provide those to you for a fee.

Lastly and most importantly any conversation you have with us is strictly confidential.

If you would like to know more about the way we operate please feel free to contact us.

MARKET TRENDS

The money markets are not looking any better, Greece seems to be the centre of the Universe and has stated it is going to default on part of its debt, a bank in Belgium is about to run out of money, Italy has just had its credit rating reduced and the good old British banks don't seem to be lending any money to anybody. I don't know where this is going to end, the optimist in me says that some very clever people somewhere will see this is getting really serious and will do something really clever to sort it out ?

I have to say I'm losing the plot a little and I don't fully understand the twists and turns of what is needed to get us all back on track and the stable but my partner put this into context for me so I will leave you with her thoughts before moving on to September's figures.

" If all the countries haven't got any money left and can't repay what they owe, the stock market seems to have lost all their money, business's don't have any and can't borrow any because the banks don't have it either, where has all the money gone ? It was there, governments printed it so it existed but everybody seems to have lost it, so where is it, somebody must have it !! "

I had to stop and think about a sensible answer to this and then couldn't !!

In amongst all of this turmoil the Motor Industry seems to be holding its own. September's figures show a now familiar trend. New car registrations were slightly ahead of expectations at 0.8% down on last year, if you dig a bit deeper you will see that retail sales are down 9.3% but fleet and business sales pulled the figures back being up 7.3% & 13.4% respectively.

Van sales continue to forge ahead up 9.4% (18.5% YTD), trucks are up 3.6% (21.3% YTD) and if you are lucky enough to be into Artics they are up 29.4% (101.4% YTD) and nearly back to pre-recession levels. This seems to be a combination of long term confidence in the business market, the fact that vehicles are wearing out and the need for newer more economical fleets.

I'm sure it doesn't need pointing out but anybody with a showroom full of retail sales people should be re-directing some of them toward business users for the time being until the retail market bounces back.

I would be pleased to receive any thoughts or comments that you might have on what I have said and am always happy to engage in exchanging views.

Andy Norman
JGA Associate Director
South West Region

Following on from a conversation last week regarding used car shortages

We see some good signs here:

•The recession reduced lease company/fleet and retail new registrations greatly in 2008/9.
•This means 2-3 year old used car stock in 2011/12 will be in short supply as there are less vehicles to de-fleet.
•80% of 2-3 year old used stock is from leasing companies so it has a big impact.
•With used sales increasing and used stock reducing plus a poor September for new (compared with traditional levels) producing even less decent used stock, used prices are likely to rise further.
•Rising 2-3 used car prices plus good deals from manufacturers on new will mean the cost to change difference between used and new will narrow resulting in better chances for good sales people to convert used to new.

This looks like it will result see some increased showroom traffic and good chance for dealers to increase sales on used and push some of those into new with a lower difference in cost.

This has already happened in the LCV world with shortages of decent used and increases in new sales.