Market news in brief: April 2015
Written by: Annie Milner
New car registrations
492,774 new cars were registered in March 2015 according to SMMT figures released this month, which is a 6% increase compared with March 2014. This is the best month since the twice-yearly plate was introduced in 1999.
New products and attractive finance packages underpinned by low interest rates helped deliver this record result, which was led by the fleet sector, with 11.6% year-on-year growth (YTD growth is 14.6%); the private sector grew 2.7%.
Business registrations fell by 6.6%. Total registrations so far this year (YTD) have increased by 6.8%. The commercial vehicle market grew by 25.3% in March.
FLA motor finance providers reported new business volumes – business and consumer – up by 3% in February. The value of this business has increased by 7%. New car finance volumes for consumers contracted by 3% in February compared to the same month in 2014, however consumer used car finance volumes increased by 9% compared to February 2014.
Advertising on RAC Cars is now free for all dealers
Car advertising on the RAC website is now free for dealers in a move it hopes will revolutionise the car portal sector. The change, according to RAC, could save the average dealer about £50,000 per year. The move is designed to lower the cost of selling cars for dealers and help RAC Cars become the leading online market place of its kind, with a target of 500,000-plus cars advertised at any one time. Currently the site has c. 130,000 adverts.
CarSnip launches new car search engine
CarSnip is launching a new universal car search for used cars, which is set to go live as a beta version later this month. Dealers can advertise their vehicle free of charge. The designers of the site have described it as ‘the Google of the used-car world’. Eventually, founder Alastair Campbell aims for it to be so simplified that you’d only need to type in ‘seven seater £6000’ and it will search for those options across the whole dealer database.
Connected cars will shift the balance of power from dealers to manufacturers
According to Professor Michael Porter of Harvard Business School, embedded technology within cars is set to shift the balance of power from the dealership to the manufacturer. Manufacturers now have the capability of knowing all about the car’s performance, how it is being driven, when it needs servicing, but on top of that can know everything about the customer. With PCP’s being commonplace, it gives the manufacturer a range of options to develop the financial services part of the business. Connected cars also give manufacturers the option of moving into areas such as insurance in a much bigger way than previously attempted. This raises the question of who will own the customer in the future. There are currently a number of manufacturer-owned dealer groups; we could see a rise in these type of groups as manufacturers want to offer a full range of services directly to the consumer.
Europcar to launch car share subsidiary Ubeeqo in the UK
Rental giant Europcar is to launch its business-to-business car share subsidiary Ubeeqo in the UK in the second half of 2015. Ubeeqo already operates in France and Belgium and is being set up in Germany. The move towards what Ubeeqo calls ‘corporate car fleet pooling’ is reflective of what the company says is a trend for employees and directors to book a car from a central stock rather than have exclusive use of one. Car sharing demand is also reflective of changing trends from one of car ownership to car usage.
Finance providers ‘need’ to become more innovative
Companies offering finance to the fleet industry need to improve their IT systems and be more innovative with the products they offer, research suggests. They also need to embrace opportunities arising from delivering mobility solutions, as fleet managers are increasingly being asked to provide a range of options for getting from A to B. In fact, more than two-thirds of respondents to a study organised by IAFN (International Auto Finance Network) and sponsored by Grant Thornton, said they expected to see significant growth in the demand for mobility services in the next few years. Mobility solutions encompass alternatives to the company car like car sharing, car clubs and public transport.
Enterprise acquires City Car Club
Enterprise Rent-A-Car has acquired City Car Club, Britain’s biggest independent car sharing company. Enterprise’s existing CarShare business is currently operational across public sector organisations across the UK. With City Car Club being aimed at private and corporate renters, Enterprise will utilise the acquisition to support fast-growing demand for car sharing and mobility services amongst businesses as well as for leisure motoring.