U.K. motor lessors are increasingly alarmed at the fall in used-car values as retail demand continues to drop and second-hand vehicles remain stuck in showrooms.
In early August, automotive publisher EurotaxGlass’s International AG predicted that used-car values will fall by at least 12% between now and Christmas. Adrian Rushmore, managing editor at EurotaxGlass’s, explained: “We anticipate that trade prices will continue to fall at a greater rate, month on month, between now and the end of the year compared to one year ago.”
Tony Gannon, British Car Auctions spokesman, confirmed that July has proved “the most difficult month to date” for average used-car values. He added: “What is more important now is seeing if the market will bounce back in Q3 2008 as it has in previous years.”
Meanwhile, private sector new-car sales have fallen in every month of 2008, but the July drop of 13% was the steepest recorded since February 2005. Until July, fleet volumes have supported the market but, ominously, in July these began to recede.
The Society of Motor Manufacturers and Traders revised its new-car sales forecast for 2008, predicting a 6.6% decline in volumes in the second half of the year. Its forecast for 2009 was similarly cut due to concerns that the economic situation will remain subdued for a more prolonged period.
JAGUAR-LAND ROVER APPOINTS FINANCE PARTNER
Fiat Group Automobiles Financial Services (FGAFS) is to provide point-of-sale finance to buyers of Jaguar and Land Rover cars in Europe from the middle of next year, when the contract with current PoS finance provider Ford Motor Credit Co. expires.
Following carmaker Ford Motor Co.’s sale of the two brands to Tata Motors in June, it was announced that, from June 2009, point-of-sale finance products for customers of the luxury vehicles will be provided by FGAFS, a joint venture owned equally by manufacturer Fiat Group Automobiles and Crédit Agricole bank. The agreement covers 10 European territories — Austria, Belgium, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, and the United Kingdom
Although the partnership between Jaguar-Land Rover and FGAFS will be primarily retail-customer focused, FGAFS will also be able to provide finance for fleet customers via dealers, Foster confirmed.
ONLINE QUOTATION FOR PUBLIC SECTOR FLEET PROCUREMENT
A fleet leasing website designed to improve the way that as many as 100,000 vehicles are sourced to the public sector has been launched by NHS Purchasing and Supply Agency.
The website, the first of its kind in the public sector, will reduce costs and save time, and will support last year’s pan-government collaborative framework agreement. The site’s format is similar to private sector price-comparison websites, providing live price information from suppliers. The system will reduce paperwork and administration burdens, replacing the previous system of requesting written quotations, and offer potential savings of approximately 2% to 3% for participating public sector organizations.
Fleet tenders for public sector bodies are put out to nine suppliers, which can then opt to bid for the public body’s business, with contract management handled by NHS PASA.
REMARKETING MANAGEMENT SYSTEM ADOPTED BY MASTERLEASE
Fleet provider Masterlease Ltd. has opted for Manheim Auctions Ltd.’s new Remarketing Management System (RMS), covering logistics, inspection, reconditioning, and sales channels with the aim of centralizing control of all remarketing processes.
RMS will support more than 100 users across vehicle remarketing, information technology, service delivery, and finance departments, with room for upscaling without systems development.
CHEAP FINANCE DEALS FOR CONSUMERS
In response to a gloomy economic outlook for U.K. consumers, Hyundai Motor U.K. Ltd. is to offer two finance incentives for buyers of its 1.1-liter petrol GSi three-door Getz model.
For the first offer, a personal contract purchase (PCP) deal based on an annual mileage of 12,000, customers pay a deposit of just under £1,300 ($2,359), a one-off initial payment of £245 ($445), then £99 ($180) per month for 35 months, with the option of either holding on to the car at the end of the contract after making a balloon payment of £2,264 ($4,108), or handing it back to the dealer.
The second offer requires no deposit, with the first payment £285 ($517), followed by £139 ($252) per month for 35 months.
Q2 MOTOR INSOLVENCIES AT PEAK SINCE 2001
Information services company Experian reported the worst Q2 for automotive company bankruptcies since 2001, with a 30.9% increase on Q2 figures from 2007.
Despite a positive Q1, 72 businesses failed during April, May, and June, bringing the year’s total to 134 — 10.7% more than 2007’s first-half total.
The motor industry ranked No. 10 in Q2 insolvency levels out of 34 industries analyzed — the overarching figures of which showed a 19.7% rise in business insolvencies during the quarter.
—Courtesy of Motor Finance magazine