Will Coronavirus hit used car prices?
Discussion
Throttlebody said:
jammy-git said:
Given that we're seeing a move to online vehicle purchasing, at least in the short term, could that not translate to dealerships looking, or needing to lay off more staff because a certain percentage of new car purchases won't be done via a dealership, or at least in the dealership itself?
Online click and collect will be a growing element of sales but the traditional car dealership, salesmen model has been honed over many years. Small steps.What you will see is manufacturers and dealerships reacting to significantly reduced new car sales by becoming leaner and more efficient. That will result in complete dealership closures, reduced footprints.
That was all happening pre CV19, it will only be accelerated now.
If the show room experience becomes too much hassle, the new normal will be online purchasing, PlayStation type test drives etc.
jammy-git said:
Butter Face said:
All is correct.
And to be frank, since customers have been able to visit showrooms again we haven’t conducted a single ‘online’ sale. A few online enquiries granted, but those customers have then visited the showroom and bought.
Wouldn't most online sales of new cars have gone directly through the manufacturer though?And to be frank, since customers have been able to visit showrooms again we haven’t conducted a single ‘online’ sale. A few online enquiries granted, but those customers have then visited the showroom and bought.
Yep and also touching on what else Butter Face has said, we haven't conducted one single online sale; new or used, since we have fully opened, yes we've had online enquiries but they have either come in or indicated that they want to come in at somepoint to view the car.
Looks like the online car selling revolution that some insist is the way forward and what people want, even though it has been possible for a number of years already to not great success, but will definately happen now......... errr still isn't happening, maybe next week!
maz8062 said:
To compound this and based on anecdotal evidence, some dealership are not allowing prospective buyers to even touch cars never mind take the car for a test drive. There is such a rigamarole to disinfect cars, social distancing and the like that some dealers are only interested in those where there is a high likelihood of a sale.
If the show room experience becomes too much hassle, the new normal will be online purchasing, PlayStation type test drives etc.
I think dealers will want to make the experience - initially at least to get people in the door - as "normal" as possible. The squeeze will be on when people have to put their money where their mouth is and pay for a test drive. If the show room experience becomes too much hassle, the new normal will be online purchasing, PlayStation type test drives etc.
jsf said:
NASDAQ broke its record this week, other major composites are recovering at rapid rates.
My own pension funds are the highest they have been, but then i manage that split of funds myself rather than relying on what most people do of never switching funds, most still have their money in the split as it was setup when the policy was started, which gives pretty crappy returns usually.
Fair enough. My own pension funds are the highest they have been, but then i manage that split of funds myself rather than relying on what most people do of never switching funds, most still have their money in the split as it was setup when the policy was started, which gives pretty crappy returns usually.
fridaypassion said:
Yes there is another unintended consequence of ll this covid thing as well. Business are organising and streamlining how they deal with their customers. Remember that old saying customer is king? Well at the moment the company is king. You are directed what the rules are on how you transact with the companies that are open. Queue here pre order there etc. For the car retail sector this is a huge change. The days of the tyre kicker are numbered and it's great for these businesses. Interested in a car? Great you come to view that particular car at a given time slot. Totally removes the ease of going round tyre kicking. Want that test drive? £50 valeting fee thanks. The only traders that will be easy to deal with for timewasters are the crap ones who care as much about their stock as they do their vetting and hygiene processes. Car industry and many others will unfortunately realise they can survive on a much lower staff if they just flush the dithering out of the consumer and this will see many getting laid off whilst I think the vast majority of actually core businesses will be OK. I've long said that retail is not a leisure activity and somehow society has turned consumerism into a hobby. I think changing this attitude will be good for everyone in the long term.
Today we went out (first maccies in 3 months!) hardly any queue. You get told where to go. Limited menu. In and out very efficient. On the way we went past Halfords. They don't even let you in the shop. Want something? They go get it for you. No dithering no taking up time of the staff waffling about a satnav before ordering one from amazon in the car park. In the car trade you will be vetted before being able to take up a slespersons time. Arriving on a bike with socks/sandals/notebook and a tape measure? Might as well not even bother.
Spot on! Especially the customer is king bit - no more. Your experience is common place now yet a fair few people haven’t sampled the new normal so to speak. My view is that shopping has become such hassle now that consumers will look at other ways of shopping, or rationalise each purchase they make.Today we went out (first maccies in 3 months!) hardly any queue. You get told where to go. Limited menu. In and out very efficient. On the way we went past Halfords. They don't even let you in the shop. Want something? They go get it for you. No dithering no taking up time of the staff waffling about a satnav before ordering one from amazon in the car park. In the car trade you will be vetted before being able to take up a slespersons time. Arriving on a bike with socks/sandals/notebook and a tape measure? Might as well not even bother.
Shopping as a pastime is no more.
Throttlebody said:
Deep Thought said:
I had already agreed with you that there was a direct correlation between employment levels and new car registrations.
The point in hand was - does that perceived rise in unemployment equate to 150,000 redundancies in the car sales sector?
Its my view that it doesnt.
Perhaps if you could comment on that?
When some of the big players such as Mazda forecast an annual 47% drop in profits, Toyota an 80% drop due to reduced sales, you can see it has that potential.The point in hand was - does that perceived rise in unemployment equate to 150,000 redundancies in the car sales sector?
Its my view that it doesnt.
Perhaps if you could comment on that?
Edited by Deep Thought on Sunday 7th June 13:19
Plus, we're back to whats happening if people arent buying new? Are they buying nearly new or pre-reg because its cheaper (the franchised dealer can facilitate that), do they want to buy Approved Used (the franchised dealer can facilitate that). A significant percentage of lost new car sales will translate to a used car purchase instead - which could be more profitable for the dealer anyway.
Yes, there will be redundancies - particularly with the big franchises who were on the edge anyway - but i dont forsee your average car franchise lobbing 25% of their staff out on the back of new car sales being down.
I could be wrong of course, time will tell
maz8062 said:
Spot on! Especially the customer is king bit - no more. Your experience is common place now yet a fair few people haven’t sampled the new normal so to speak. My view is that shopping has become such hassle now that consumers will look at other ways of shopping, or rationalise each purchase they make.
Shopping as a pastime is no more.
Shopping as a pastime is no more.
Deep Thought said:
maz8062 said:
Spot on! Especially the customer is king bit - no more. Your experience is common place now yet a fair few people haven’t sampled the new normal so to speak. My view is that shopping has become such hassle now that consumers will look at other ways of shopping, or rationalise each purchase they make.
Shopping as a pastime is no more.
Shopping as a pastime is no more.
maz8062 said:
Spot on! Especially the customer is king bit - no more. Your experience is common place now yet a fair few people haven’t sampled the new normal so to speak. My view is that shopping has become such hassle now that consumers will look at other ways of shopping, or rationalise each purchase they make.
Shopping as a pastime is no more.
The customer is always king.Shopping as a pastime is no more.
Your example of halfords, i needed some wiper blades last week as i noticed mine was starting to split. I've used halfords the last few times so drove to the carpark to find a long queue.
I drove straight out and went home, ordered the same thing online elsewhere with a 60% discount for first order as a new customer.
So said:
Deep Thought said:
maz8062 said:
Spot on! Especially the customer is king bit - no more. Your experience is common place now yet a fair few people haven’t sampled the new normal so to speak. My view is that shopping has become such hassle now that consumers will look at other ways of shopping, or rationalise each purchase they make.
Shopping as a pastime is no more.
Shopping as a pastime is no more.
If i want or need something, i find out where does it and go buy it and leave. But yes, theres an awful lot of people who will go to a shopping centre as a leisure activity. It will be interesting to see how they deal with or feel about having to queue to get in, being told they must walk around the centre following a particular path, that they cant sit down anywhere, that theres going to be queues for each shop, they wont be able to browse through stuff, they are unlikely to be able to try stuff on...
Yes, theres ways round some of that, and it will ease over time, but it'll be interesting to see how people cope in the meantime. I've quite a few relatives who go to shopping centres just for a walk round. I'm wondering will they tolerate the restrictions or just not bother.
fridaypassion said:
Today we went out (first maccies in 3 months!) hardly any queue. You get told where to go. Limited menu. In and out very efficient. On the way we went past Halfords. They don't even let you in the shop. Want something? They go get it for you. No dithering no taking up time of the staff waffling about a satnav before ordering one from amazon in the car park. In the car trade you will be vetted before being able to take up a slespersons time. Arriving on a bike with socks/sandals/notebook and a tape measure? Might as well not even bother.
This will be a short lived thing, IMO. People are not going to accept the current rules (eg Halfords) when they can simply go and order online for next day Amazon delivery. The customer is still king, and places like Halfords will end up dropping the current way or working, or not be viable. As much as anything else, they are paying for a huge shop and all the staffing and rates, to serve 1 customer at a time which could easily be done from a small warehouse with half the staff. Condi said:
This will be a short lived thing, IMO. People are not going to accept the current rules (eg Halfords) when they can simply go and order online for next day Amazon delivery. The customer is still king, and places like Halfords will end up dropping the current way or working, or not be viable. As much as anything else, they are paying for a huge shop and all the staffing and rates, to serve 1 customer at a time which could easily be done from a small warehouse with half the staff.
Simple really all customers to wear gloves and face masks job done I'm sure similar has already been posted by others - I was on several Live Bid auctions last week and everything half sensible was consistently £200 - £300 over CAP clean - with the odd thing running to £1000 plus over CAP clean. Away from cars, plant and machinery has been making truly bonkers money.
Deep Thought said:
Throttlebody said:
Deep Thought said:
I had already agreed with you that there was a direct correlation between employment levels and new car registrations.
The point in hand was - does that perceived rise in unemployment equate to 150,000 redundancies in the car sales sector?
Its my view that it doesnt.
Perhaps if you could comment on that?
When some of the big players such as Mazda forecast an annual 47% drop in profits, Toyota an 80% drop due to reduced sales, you can see it has that potential.The point in hand was - does that perceived rise in unemployment equate to 150,000 redundancies in the car sales sector?
Its my view that it doesnt.
Perhaps if you could comment on that?
Edited by Deep Thought on Sunday 7th June 13:19
Plus, we're back to whats happening if people arent buying new? Are they buying nearly new or pre-reg because its cheaper (the franchised dealer can facilitate that), do they want to buy Approved Used (the franchised dealer can facilitate that). A significant percentage of lost new car sales will translate to a used car purchase instead - which could be more profitable for the dealer anyway.
Yes, there will be redundancies - particularly with the big franchises who were on the edge anyway - but i dont forsee your average car franchise lobbing 25% of their staff out on the back of new car sales being down.
I could be wrong of course, time will tell
Condi said:
fridaypassion said:
Today we went out (first maccies in 3 months!) hardly any queue. You get told where to go. Limited menu. In and out very efficient. On the way we went past Halfords. They don't even let you in the shop. Want something? They go get it for you. No dithering no taking up time of the staff waffling about a satnav before ordering one from amazon in the car park. In the car trade you will be vetted before being able to take up a slespersons time. Arriving on a bike with socks/sandals/notebook and a tape measure? Might as well not even bother.
This will be a short lived thing, IMO. People are not going to accept the current rules (eg Halfords) when they can simply go and order online for next day Amazon delivery. The customer is still king, and places like Halfords will end up dropping the current way or working, or not be viable. As much as anything else, they are paying for a huge shop and all the staffing and rates, to serve 1 customer at a time which could easily be done from a small warehouse with half the staff. Effectively retail is running a click and collect model. The only traditional benefit to this for a bricks and mortar retailer is that customers will buy something else on physical display when in the premises. Many customers still like to look, touch and feel before purchase. And the impulse purchase / up sell is a big factor in retail.
Without this benefit available, they are currently competing against online retailers and face two massive disadvantages... a) retail overheads vs warehouse & courier b) the customer has to drive to collect and wait vs just sitting at home waiting for a van to drop it off next day.
Customers will twig this soon enough. See the one poster earlier... went to Halfords, massive queue, went home and ordered cheaper online, delivered next next which is less hassle.
Traditional retail is currently adapting to survive, but this is a ‘jerk point’ in shopper behaviour that will fundamentally change the industry going forward. What that looks like is occupying many boardrooms right now. But anyone who thinks this is ‘phase’ and that we’ll go ‘back to normal’ is deluded.
ETA, this is about high street retail in general, not necessarily car trading which I don’t have a working knowledge off outside of being the occasional customer. So apologies if a bit of thread drift.
Edited by The spinner of plates on Sunday 7th June 14:45
Throttlebody said:
Toyota has recently sourced a $100 Billion credit facility from Japanese banks. Their profit warning is linked to the expected future annual sale reductions of 15%.
Pretty sure Toyota will be ok, huge cash reserves and if the above is true, access to $100 Billion credit if they need it.https://www.bloomberg.com/news/articles/2019-11-07...
Fiisch said:
I'm no economist, but even as an optimist I have to concede it is inevitable we will see a big drop in used car prices. The last quarter saw a dip in GDP, despite only incurring a week of lockdown. This quarter will inevitably see the greatest drop in GDP in history, and I suspect a second dip in the stock market.
The very fact that GDP drops could well mean used car prices rise as we are currently seeing across all sectors atm.This drop in GDP is mirrored in UK stock markets which are forward thinking and forward pricing.
jsf said:
The customer is always king.
Your example of halfords, i needed some wiper blades last week as i noticed mine was starting to split. I've used halfords the last few times so drove to the carpark to find a long queue.
I drove straight out and went home, ordered the same thing online elsewhere with a 60% discount for first order as a new customer.
meanwhile .. if you want to buy a sofa, or bed, etc.. straight in, follow the arrows, and that is about it. and handgel at the entrance.. and yes, you are allowed to sit on them.. All sofa shops opening in the retail park near Reading prison.. oddly, not Benson beds though.Your example of halfords, i needed some wiper blades last week as i noticed mine was starting to split. I've used halfords the last few times so drove to the carpark to find a long queue.
I drove straight out and went home, ordered the same thing online elsewhere with a 60% discount for first order as a new customer.
and yes, i need these items, finally completed on an apartment purchase in Weymouth.. have zero furniture for it..
fridaypassion said:
Arriving on a bike with socks/sandals/notebook and a tape measure? Might as well not even bother.
We have a mid 30s chap that looks at our cars every now and again who matches this description.Over the past few years he had been to look several cars as he’s local but did not buy. Last time was a really cheap Dacia Sandero, he checked his bike fitted, noted tyre depths and lots of other stuff, said he was buying but last we heard he was asking his mum to borrow some money (serious).
He was on the phone Monday wanting to look at a 1 Series. Was politely told him we would need a holding deposit to view and he told us he would take his custom elsewhere.
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