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Increased manufacturer sales targets to lead to faster depreciation, warns CAP

The firm’s comments come as 2014 heads toward a year-end record total that could even exceed the officially forecast 2.45 million.

CAP said the intensity of the pursuit of new car volume is revealed in confidential daily registration figures seen by CAP.  These showed the rate of registrations ramping up in the second half of September – confirming private feedback from dealers to CAP detailing mounting pressure to meet big manufacturer targets.

While 41% of September’s registrations took place in the first ten days of the month, the final ten days contributed 45% of the total – many of which were registered to dealers themselves.

The list of incentives offered by manufacturers to dealers in October in many cases exceeds the September push, according to CAP’s experts who monitor behind-the-scenes market activity every day.

‘Our prediction that this September would be the biggest in a decade proved correct and it is now clear that some manufacturers are on a mission to push new registrations hard through the final quarter of 2014,’ said CAP’s retail & consumer specialist Philip Nothard.

‘I have been in the industry for 26 years and have never seen such determination to throw money at new cars in the pursuit of volume.

‘While it’s good news for anyone in the market for a new car, there really is no such thing as a free lunch and the ultimate impact will be on the secondhand values of cars.

‘The industry itself is already aware of the future impact on used car values because they have the benefit of professional forecasting tools such as CAP Automotive’s Gold Book system, which has already built this increased depreciation trend into its view of the next three years.’

He added: ‘The pursuit of volume is unlikely to ease now because the manufacturers are caught in a vicious circle. If one carmaker stops incentivising their new car sales they will simply lose market share to competitors, so the trend becomes self-fuelling.’

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Natalie Middleton

Natalie has worked as a fleet journalist for over 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.