Thursday 29 September 2016

Canny consumers driving harder bargains than ever

* Acute staff shortages also adding to industry headaches

Published 23/09/2015 | 02:30

Car buyers are arming themselves with extensive knowledge
Car buyers are arming themselves with extensive knowledge

Car buyers are driving harder bargains than ever, a leading motor industry expert has revealed.

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They are turning up to bargain in dealerships armed with extensive knowledge of cars, equipment - and the prices being asked in other outlets.

As a result they are profiting from their strong bargaining position in many cases, while margins for dealers are squeezed.

Dealers have to reduce prices and/or add equipment or make other concessions to win sales and hold on to customers.

Even in a rising market, it appears that many dealers are having to scrap like mad to make sales and retain custom.

The increased level of sales is welcome, after so long in the doldrums, but it is creating its own difficulties too as there is a growing need, and demand, for staff to service and sell new and second-hand vehicles. The changes sweeping through the business on so many fronts were outlined this week by Nissan Ireland chief executive James McCarthy.

He outlined how much the market place has altered, not least with the number of franchised dealers well down on the good times.

But the manner of car buying has also changed dramatically, he said.

And he gave the example of customer expectations on what deals they can get and what sort of service they expect from dealers.

"Customers know so much more," Mr McCarthy says. They can compare costs across the spectrum and have done so in advance of calling into the dealership. They know how to "squeeze deals". He adds: "They certainly know how to get the best deal."

And that is making the whole after-sales element vital for dealers to hold onto buyers.

Dealers have other headaches too. The shortage of staff, especially technicians, is acute but there are signs the situation is improving or at least it looks like it will in the medium term, Mr McCarthy feels.

"People are seeing technical training as a real alternative to Arts. Vocational training is on the way back."

He welcomed the government's recognition of the importance of such training because the complexity of modern cars and vehicles requires highly-trained technicians.

On the sales front, they are finding that graduates are coming in to make careers in the industry. "There is good money to be made."

Adding to the competitive element in the business is the availability of finance.

Personal Contract Plans (PCPs) appear to be more of an urban than rural solution for potential buyers, possibly because of the mileage restrictions that accompany most deals.

But the volume is growing all the time. And it is likely to continue with most observers expecting significant growth in the number of new-car and LCV purchases again next year.

There is general agreement that north of 140,000 new cars is on the cards with experts, Mr McCarthy among them, disposed to broaden that forecast aperture to '140,000 to 150,000' and 28,000 to 30,000 commercials.

Indo Motoring

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