Sluggish Car Sales Mark Challenging Times for Dealers – KPMG

Michelle Remo, “Big 4″ observer
December 15, 2011 /

New car sales in November 2011 was 4.2 percent down on the same month a year ago, though new car registration figures remain better than the SMMT forecast at the start of the year, according to KPMG.

“In the face of rising unemployment and low consumer confidence the sector has remained surprisingly resilient. That being said, the industry remains concerned that demand is likely to weaken further. In recent months production schedules have been revised downwards in anticipation of a tough 2012,” said John Leech, partner in KPMG’s automotive practice.

“Furthermore, dealer profits have come under pressure in recent months so dealers will be looking to capitalize on manufacturers’ incentive plans to be announced in the run-up to Christmas which will be key to their profit aspirations – even though, it is expected that most dealers will record significant profit falls this year.

“Some dealers have prospered however – they tend to be those that have benefited from the shift to smaller fuel efficient cars or have been affiliated to manufacturers who have offered big discounts to purchase and pre-register vehicles.”

 

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