According toEurotaxGlass’s, publisher of Glass’s Guide, the used car market is likely to bethe first to recover from today’s lows, followed by a steady – albeit modest -upturn in retail sales of new cars. However, fleet registrations are expectedto remain lacklustre, at least until late next year.
"In the shortterm, conditions will remain difficult for car dealers, reinforced by the usualseasonal decline in demand that accompanies the latter months of the year,”explains Adrian Rushmore, managing editor at EurotaxGlass’s. " However, webelieve the swift and painful downturn we saw in the summer months of 2008 wasprobably a one-off event. The arrival of the ‘09’-plate next March will clearlybe an acid test for both new and used sales, and analysis of the current marketindicators suggests there are reasons for cautious optimism.
"In the firstinstance, economists are agreed that the inflation rate has probably peaked,and that by the middle of next year the economy will be almost inflation-free.In the short term, this move will be helped by declining fuel prices andfurther falls in the Bank of England base interest rate, making a tangibledifference to consumer’s household finances.
"As thesepieces of good news are drip-fed into news bulletins, it is quite possible thatthe knock-on effect will be to inject a little buying enthusiasm into the mindsof consumers by the first quarter of next year. It is also worth rememberingthat many have deferred purchases of replacement cars during 2008, so therecould be some limited release of pent-up demand helped by a realisation thatprices will be at an all-time low."
Rushmore suggeststhe indicators are less positive for the U.K.’s fleet car market."Companies are feeling the financial squeeze and, once they make policydecisions around their business activities, they tend not to reverse them veryquickly. This has obvious implications for corporate fleet sales.
"Given thissituation, it is very difficult to see fleet sales improving in the foreseeablefuture. This means that those car manufacturers that rely heavily on fleetsales will continue to find trading conditions particularly challenging."(Tyres & Accessories/Staffordshire, U.K.)
