Current level of pre-reg activity ‘unsustainable’, say dealers
Three-quarters (76%) of dealers have warned the current level of pre-registration activity is unsustainable as they also warn of challenging conditions over 2019.
According to a recent Cox Automotive dealer survey, 58% of respondents said the year had been worse than anticipated, reflected in the fact that new car registrations have fallen 2.7% for the first 11 months of the year.
And this pressure has driven an increase in pre-registration activity, says Cox Auto, which highlights that in September alone, a reported 28% of new registrations took place in the last three days of the month
When it comes to predictions for 2020 the survey revealed a mixed picture, with 52% of dealers suggesting that consumer confidence will improve, while 22% said it would remain the same, and 26% felt it would decline.
Dealers are certainly more positive about used car market performance in 2020, and 57% expect it to improve YoY while just 4% believe it will decline.
Meanwhile, Cox Automotive has also published its forecast for Q1 2020, predicting 692,000 new car registrations (down 1.3% YoY) and 1.96 million used car transactions (down 2.7% YoY) across the first three months of 2020.
Philip Nothard, customer strategy and insight director, commented: “2019 brought its fair share of challenges for car dealers. Political uncertainty has had a negative effect on consumer confidence, and rising costs and competition for the best used stock all added to margin pressures.
“That said, we’ve seen some strong performances within the dealer sector, and 21% of dealers reported that they performed better than expected in 2019. This, coupled with the number of acquisitions and new premises opened this year suggests that businesses are still willing to invest in automotive.
“Looking ahead, 2020 looks set to be another challenging year for new cars, and our Cox Automotive forecast suggests a 1.3% fall in registrations YoY to March. That said, I’m delighted to see that 52% of the dealers surveyed are optimistic about consumer confidence in 2020, and I’m hopeful that a majority government will reduce uncertainty and allow consumer demand to grow, easing pre-registration pressure as we move through the year.”