The challenge: how to get owners of middle-aged cars into new ones
* New SIMI president forecasts 100,000 sales next year * He warns of struggle for many with ageing motors
OWNERS of middle-aged cars are faced with a widening chasm in trying to bridge the price gap to a new motor.
That is now a key problem for the motor industry, a key figure warns today.
James Brooks, who becomes president of the SIMI today, told Independent Motors he sees three overriding challenges.
He forecasts 100,000 new-car sales next year (89,000 for 2014) but says the difficulty lies in getting owners with a low-value trade-in to buy a new motor. It is becoming more difficult as the average age of our cars tops the nine-year mark.
He also foresees the requirement for additional working capital as sales improve and dealers take more trade-ins. "If this is not available it may restrict their ability to grow the business."
Thirdly, he warns of a real need for more motor mechanics to be trained to service the 1.9 million (ageing) vehicles on our roads. Asked if this year's sales increase had dashed hopes of a swappage deal for middle-aged cars, he says last year's SIMI Budget submission – which was rejected – made a strong, realistic, business case.
He warns: "The industry is still a long way off where it needs to be and every additional 1,000 cars sold supports 130 new jobs so we will review it in time for this year's submission."
The industry is hoping for some growth on last year's July sales spike. "Initial enquiries and orders would seem to reflect this."
And what does he expect in the Budget?
"It will be a Budget with an election in the mind of those developing it. I think it will offer some hope but the reality is we still have a Budget deficit to reduce. But I hope this will come from economic growth rather than more cuts."
Mr Brooks joined the motor business with Opel in 1994. He joined Kia as general manager in 2005 and was appointed managing director in 2007.