Car retailers report better start to 2012 than previous year

First published in Business Daily

CAR retailers have defied the economic odds to report a better start to the year than in 2011, according to a survey.

Many are upbeat about the rest of 2012 as they adapt to changing market conditions and receive a boost from the “feel-good” factor of the Olympic Games.

Nearly three-quarters (71%) of retailers believe the first six months of this year were better or as good as last year, while one in three (36%) are more optimistic now than they were at the start of 2012.

The online survey was carried out by grs, which supplies more than 6,500 franchised and independent car retailers across the UK with used cars and commercial vehicles for their forecourts.

The positive findings chime with the latest industry figures from the Society of Motor Manufacturers and Traders, which reported that new car sales were up 3.5% in June, while May’s 7.9% rise was a 23-month record, reflecting improved demand from private buyers.

Looking ahead to the next six months, the retailers surveyed by grs were more evenly split, with more than a third (35%) expecting the positive news to continue, while a further third (35%) are yet to be convinced that the improvement will last.

When considering the main opportunities for growth, more than half the retailers (51%) identified smaller and more economical vehicles, while 29% cited small commercial vehicles, with many already selling vans alongside cars on their forecourts to help boost sales.

When asked what factors will be most important for their business success this year, more than three-quarters (77%) said buying stock from a reliable provider was “very important”, followed by half (56%) who identified the need to have a wide range of vehicles and prices to meet different customer needs and budgets.

Diversification, including stocking different makes and models of cars and commercial vehicles, was considered “important” by 56%, while a quarter (24%) believe the “feel-good factor” of 2012 - including the Queen’s Diamond Jubilee and the Olympics - is also providing a boost.

Theo Kortland, managing director at grs, said: “The research shows that there is still a healthy market for good quality used cars and vans. After all, people still need them to get to work, go shopping or take the children to school.

“Many families are looking for something smaller and more economical to keep running costs down, while small businesses starting up are looking for good quality vans, all of which represent opportunities for retailers, so long as they understand their customers’ needs and adapt to the changing conditions.”

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