Fear of public transport to fuel car sales post lockdown - investigation

[James Baggott 227]

Morning all,

I hope you've got a relaxing Sunday ahead planned. I've been working on this piece this weekend which gives hope to the trade that a fear of public transport could fuel car sales.

I'm undecided. I take the points, but think home working could mean many stay at home - not to mention a possible prolonged downturn as many people lose their jobs.

However, the surveys in this certainly point to some positive signs. 

Investigation: Fears of public transport could fuel new and used car sales when lockdown lifts

Let me know your thoughts below.

Enjoy your Sunday

James

[Casper 272]

21 minutes ago, James Baggott said:

Morning all,

I hope you've got a relaxing Sunday ahead planned. I've been working on this piece this weekend which gives hope to the trade that a fear of public transport could fuel car sales.

I'm undecided. I take the points, but think home working could mean many stay at home - not to mention a possible prolonged downturn as many people lose their jobs.

However, the surveys in this certainly point to some positive signs. 

Investigation: Fears of public transport could fuel new and used car sales when lockdown lifts

Let me know your thoughts below.

Enjoy your Sunday

James

Ive always said it will help the cheaper end of the market maybe up to 3k which people can afford to buy or have savings for however paying 10k on finance might be a bit different incase we go back in to lockdown at the drop of a hat as the government has said could and might happen .. I notice zoopla saying there is going to be a drop in house prices and sales . 

[Paul C 75]

For sure, there will be an amount of hysteresis in behaviours - more people working from home, less people using public transport. 

But don't forget also, longer term 1-3 years people will remember how clear the air was, and environmental considerations will be back with a bang! I predict any older diesel, or petrol cars over about group G tax, will be "encouraged" to no longer exist, either by some more daft rules in the MoT or a scrappage scheme or simply a raise in fuel prices for the petrols. Plug in hybrids will do another U turn and VW will actually finish writing the software for their ID3!

Edited April 26, 2020 by Paul C

[awc1000 93]

6 minutes ago, James Baggott said:

Morning all,

I hope you've got a relaxing Sunday ahead planned. I've been working on this piece this weekend which gives hope to the trade that a fear of public transport could fuel car sales.

I'm undecided. I take the points, but think home working could mean many stay at home - not to mention a possible prolonged downturn as many people lose their jobs.

However, the surveys in this certainly point to some positive signs. 

Investigation: Fears of public transport could fuel new and used car sales when lockdown lifts

Let me know your thoughts below.

Enjoy your Sunday

James

james, yes fear of going back to public transport will mean more sales but unlikely to produce any notable spike, and these sales will be wiped out by the inevitable down turn in sales anyway.

the reality is - when company's are allowed back to work they loose all the current benefits ie furloughed staff, but many will have no customers or orders for the get go, this will be fatal for many company's. a lot of company's were already servicing loans and will have no appetite to lend more money in the short term, and lets not forget things like vat have only been deferred not given away free.

forget the talk of getting back to normal, things have changed and that's a fact, some company's have already realised they can do without certain things since lock down and many are likely to want to continue those savings post lock down, its amazing what you can do without when you are told you cant have it.

sorry it sounds negative, but the reality is we are going to be in for a serious down turn in business for some time across many trades, and that will without doubt hit the motor trade hard.

hold on tight chaps, the ride is about to get very bumpy,good luck all.

[justina3 518]

This kind of chat is one of the main reasons i have decided to limit my interaction with the media be it news or social media. 

Its all pure guess work, one person i looking at a massive downward trend others see it people having more money to spend and there cars failing due to sitting for 3 months, holidays cancelled and not to forget main dealers are going to be giving cars away, the boffins in charge have no doubt some scheme to get the country going again.

its not good for the mind in my view sitting around dreaming up various options for this that and the other. 

And on that note i am off to find something to paint, have a lovely weekend. 

 

PS James, whilst i fully understand the need for adverts it was impossible to reply to this on my phone as the adds kept covering the reply button.

 

 

 

 

 

 

 

[James Baggott 227]

9 minutes ago, justina3 said:

PS James, whilst i fully understand the need for adverts it was impossible to reply to this on my phone as the adds kept covering the reply button.

Yeah I’ve found that too. On desktop for me. I’ll get it looked into tomorrow as it’s frustrating. But yes, you’re right, without the adverts we wouldn’t be able to host this forum for free. 
 

And on the article front, just trying to summarise findings from a cross sections of experts. If you take a look at it you’ll see I’ve canvassed a lot of opinion so as to not rely on one source. The more expert opinion in my mind the better. 

I can’t say I agree with them. I think working at home will be far more likely and could reduce the need for cars but it’s not my opinion I’m reporting in the piece it’s that of others. 

Enjoy the painting  

[Casper 272]

52 minutes ago, justina3 said:

This kind of chat is one of the main reasons i have decided to limit my interaction with the media be it news or social media. 

Its all pure guess work, one person i looking at a massive downward trend others see it people having more money to spend and there cars failing due to sitting for 3 months, holidays cancelled and not to forget main dealers are going to be giving cars away, the boffins in charge have no doubt some scheme to get the country going again.

its not good for the mind in my view sitting around dreaming up various options for this that and the other. 

And on that note i am off to find something to paint, have a lovely weekend. 

 

PS James, whilst i fully understand the need for adverts it was impossible to reply to this on my phone as the adds kept covering the reply button.

 

 

 

 

 

 

 

 

39 minutes ago, James Baggott said:

Yeah I’ve found that too. On desktop for me. I’ll get it looked into tomorrow as it’s frustrating. But yes, you’re right, without the adverts we wouldn’t be able to host this forum for free. 
 

And on the article front, just trying to summarise findings from a cross sections of experts. If you take a look at it you’ll see I’ve canvassed a lot of opinion so as to not rely on one source. The more expert opinion in my mind the better. 

I can’t say I agree with them. I think working at home will be far more likely and could reduce the need for cars but it’s not my opinion I’m reporting in the piece it’s that of others. 

Enjoy the painting  

Ive noticed it two with the adverts what i have noticed is if you click out and back in to it the add mostly goes away .do what you have to do james though frustrating do what you have to to keep the forum going ..   

Edited April 26, 2020 by Casper

[New year revolutions...... 197]

There will be less pie to go around

Hopefully noone will take offense at this succinct point

[Paul C 75]

Another aspect is 2nd car ownership - it doesn't take much of a change in use (especially combined with a recession or future economic uncertainty) for households with 2+ cars to make the saving and only use one. I am sure you can work out that a bit more working from home and a bit less socialising will have an effect here.

Also one thing I've seen is a certain amount of "talking up" the bounceback; or the stability in car values. The fact is, the car industry can only control the supply side of the equation and as shown in other posts and predictions, we don't know how big the recession will be. Entire sectors of the economy - like, pubs & restaurants - are wiped out. I've seen 20-35% contraction reported.

I think it will hit home only when a big scalp is gone - ie a big franchise (in addition to Lookers, who are dead anyway); perhaps even a big manufacturer such as Ford or BMW will go too.

[awc1000 93]

2 hours ago, Paul C said:

Another aspect is 2nd car ownership - it doesn't take much of a change in use (especially combined with a recession or future economic uncertainty) for households with 2+ cars to make the saving and only use one. I am sure you can work out that a bit more working from home and a bit less socialising will have an effect here.

Also one thing I've seen is a certain amount of "talking up" the bounceback; or the stability in car values. The fact is, the car industry can only control the supply side of the equation and as shown in other posts and predictions, we don't know how big the recession will be. Entire sectors of the economy - like, pubs & restaurants - are wiped out. I've seen 20-35% contraction reported.

I think it will hit home only when a big scalp is gone - ie a big franchise (in addition to Lookers, who are dead anyway); perhaps even a big manufacturer such as Ford or BMW will go too.

good well informed post.

the incoming problem needs discussing, whether you like it or not it will affect us all regardless of what end of the trade you are in...

if it came to it the manufacturers are likely to prop up the franchises if needed, cant see them having the appetite to let their brand fall in the public eye, car supermarkets are the ones who are not in a good position, and for them the mid year fca review is also going to be critical bearing in mind that their business model is already largely based on deal profit rather than chassis.

here's how i see it - fleet returns from failed business's,unemployment rise, public tightening there belt with worry over future work, all these factors are likely not just presumptions, the outcome being a reduction in sales and a surplus of cars, the million dollar question is by how much.

[trade vet 703]

5 hours ago, Casper said:

Ive always said it will help the cheaper end of the market maybe up to 3k which people can afford to buy or have savings for however paying 10k on finance might be a bit different incase we go back in to lockdown at the drop of a hat as the government has said could and might happen .. I notice zoopla saying there is going to be a drop in house prices and sales . 

I was interested to read the comments by some of the ‘experts ‘.

CarWow’s survey that 70% of Londoners would reconsider using public transport suggesting a boost in sales.How reliable is that,where are they going to park.

The Hey Car girl thinks people in cities will go out and buy electric cars.She appears to think they are good value.

I think the only one worth taking notice of is Mr Gupta who will have had first hand experience of the effects on trade after extraordinary events .

I think trade could take off with people missing out on holidays,getting refunds and the like.The might think that they deserve another car. Whatever happens,switched on traders will usually adjust to the market.

[Casper 272]

40 minutes ago, trade vet said:

I was interested to read the comments by some of the ‘experts ‘.

CarWow’s survey that 70% of Londoners would reconsider using public transport suggesting a boost in sales.How reliable is that,where are they going to park.

The Hey Car girl thinks people in cities will go out and buy electric cars.She appears to think they are good value.

I think the only one worth taking notice of is Mr Gupta who will have had first hand experience of the effects on trade after extraordinary events .

I think trade could take off with people missing out on holidays,getting refunds and the like.The might think that they deserve another car. Whatever happens,switched on traders will usually adjust to the market.

Guess we need to sit it out and see what happens and as you say thats the other side coin from what i was saying about people not want to take finance etc but customers all think different i guess  Luckily for us everyone is different which may help  They will be big changes everywhere not just this trade but construction industry plant hire etc etc 

Edited April 26, 2020 by Casper

[BHM 994]

32 minutes ago, trade vet said:

I was interested to read the comments by some of the ‘experts ‘.

CarWow’s survey that 70% of Londoners would reconsider using public transport suggesting a boost in sales.How reliable is that,where are they going to park. ANSWER: if that’s the findings of Carwow’s survey then it’s only fit for printing out & wiping your arse on it.

The Hey Car girl thinks people in cities will go out and buy electric cars.She appears to think they are good value. I’m sure her Powerpoint presentations show this to be true. What puzzles me is why on earth do dealerships prostitute themselves to these parasites & why don’t the manufacturers stamp these out? 

I think the only one worth taking notice of is Mr Gupta who will have had first hand experience of the effects on trade after extraordinary events .

I think trade could take off with people missing out on holidays,getting refunds and the like.The might think that they deserve another car. Whatever happens,switched on traders will usually adjust to the market.

 

[Paul C 75]

Indeed! Any realistically accurate market information is 1) historical 2) based on actual buy-sell prices of sales. Then what usually happens is trends or significant factors are taken into account by statisticians/economic experts, to make a future prediction which might/might not be accurate.

The fact is, the market is (obviously) paused at the moment so its impossible to gain any understanding of demand. And the upcoming factors to influence the market are largely unknown (we don't even know when lockdown is lifted? How? What Government influence or stimulus will occur, if any etc) Any comparisons with the 2007-8 recession need to be taken with a big pinch of salt.

The best thing you can do? Be adaptable to a wide range of scenarios which might occur and not tie yourself up in debt. And if you're going to make an assumption, that cheap cars will do well and expensive ones won't, is as good as any.

[trade vet 703]

11 minutes ago, Paul C said:

Indeed! Any realistically accurate market information is 1) historical 2) based on actual buy-sell prices of sales. Then what usually happens is trends or significant factors are taken into account by statisticians/economic experts, to make a future prediction which might/might not be accurate.

The fact is, the market is (obviously) paused at the moment so its impossible to gain any understanding of demand. And the upcoming factors to influence the market are largely unknown (we don't even know when lockdown is lifted? How? What Government influence or stimulus will occur, if any etc) Any comparisons with the 2007-8 recession need to be taken with a big pinch of salt.

The best thing you can do? Be adaptable to a wide range of scenarios which might occur and not tie yourself up in debt. And if you're going to make an assumption, that cheap cars will do well and expensive ones won't, is as good as any.

Good post Paul.It is difficult to call how punters will react.When I got my first pitch in 73 within 2 months we had an oil crisis.Opec raised the price 400% and there was an embargo and ration books were issued.The ‘experts’advocated only selling stuff below 2 litre which most dealers followed.What happened ,big stuff plunged in value and became attractive to the usual bread and butter buyers.Punters  suddenly realised they could own a nice Jag or a Rover for the price of a Cortina which they had only dreamed about.If big stuff drops in value again,similar could happen.

[justina3 518]

9 minutes ago, trade vet said:

Good post Paul.It is difficult to call how punters will react.When I got my first pitch in 73 within 2 months we had an oil crisis.Opec raised the price 400% and there was an embargo and ration books were issued.The ‘experts’advocated only selling stuff below 2 litre which most dealers followed.What happened ,big stuff plunged in value and became attractive to the usual bread and butter buyers.Punters  suddenly realised they could own a nice Jag or a Rover for the price of a Cortina which they had only dreamed about.If big stuff drops in value again,similar could happen.

Times are different now, road tax on these big cars would scare most people off who are used to paying £145 a year no matter how cheap the car is, and whilst petrol is currently low the public are not that stupid to think they will stay low forever, the tech is quite heavy also again the public would worry about taking it to the main dealers instead of dave down the road to be fixed.

Even Yoda would struggle to call the future.

 

 

[Rory RSC 596]

17 minutes ago, justina3 said:

Times are different now, road tax on these big cars would scare most people off who are used to paying £145 a year no matter how cheap the car is, and whilst petrol is currently low the public are not that stupid to think they will stay low forever, the tech is quite heavy also again the public would worry about taking it to the main dealers instead of dave down the road to be fixed.

Even Yoda would struggle to call the future.

 

 

Yet cars are emotional and a style purchase for many and that goes out the window.

 

TV is right the savvy traders who adapt will be fine despite any challenges.

 

 

[awc1000 93]

lots of reports on other forums / groups that plenty of business is still being done remotely, by the larger groups and other smaller independents,  some dealers even complaining they cant buy stock, it would appear anyone who is in the market currently for a car is finding a way to buy it and take delivery, and as the weeks roll on these dealers and others will get more adapt at it, note vardy say from this coming monday they will start delivering the 1000 units they claim have been sold during lock down already, so that puts paid to any thought of a future pent up demand come post covid, some franchises are also already having customers ask to cancel new cars that were currently on order, regards the sub£2k market i'm convinced these punters are also still being served, but sadly by the many social media group type street traders.

of course a lot of these dealers need to do some business as they are hurting, if you can afford to stay shut or will stay shut due to your morals then that's great, if you can't afford to close but are just uncertain on how to proceed i would suggest you have another look at a solution, of course the government will be watching how the trade cope and if they are operating safely - ironically if they see things are working o.k then that will give them no reason to let premises fully reopen in the short term, in other words a happy compromise.

 

[have a word with the wife 299]

Bus companies got a 167 million pound rescue package to ensure they keep running at the height of the virus, the rails got some too, part of a 397 million pound package, they all have to provide adequate spacing too, so going forward from this, it seems [following other countries] the future will bring being temp tested before getting on, wearing a mask, and keeping distance, this will put confidence [  other cleaning methods maybe  applied too] back into the traveller.

Any money left from this rescue package should pay for the above?

I would be more worried to think the "traveller" cannot afford the repayments on his car, or repairs, sends it back and gets on the bus to the job centre ?

 

[Paul C 75]

Temperature testing and wearing of masks is completely irrelevant. There simply isn't the accuracy in a handheld thermometer to be useful. Also, masks.....they're only really useful if you actually have the virus to stop spreading it to others, and only then if its not valved; and if you have the virus the current guidelines are to stay at home and self-isolate. Staff wearing masks.....probably make infection transmissability worse! 

N100 (FFP3) Mask + face visor + apron + gloves in a care setting (ie if need to get closer than the 2m or so) is effective IF they are taken off using proper aseptic technique, pretty useless otherwise. Are car dealers going to "suit up" then go for a test drive? Then be trained (nurses all have a degree now) to remove and dispose of them safely? Or keep them on all day?

"Plain old" social distancing ie keeping your distance would work. Except it jars with selling. No more trying to get the customer inside, then to sit down any more. Its bad enough in a spacious posh showroom but most other places are, errrr.....cramped? And sitting in the back in a test drive.......not really. Same goes for any dealer who is going in now deep cleaning after a few weeks not at work......you know its already dead, don't you? Viruses don't survive outside their host.....this is GCSE Science stuff......

Given they're basically ineffective, temp testing and masks are likely to give a false sense of security meaning the ACTUAL measures which do prevent spread are not as well applied, meaning R_effective would be worse.

[Halfpenny 114]

The Institute of Social and Economic Research are predicting the motor vehicle sector to be one of the worst hit. 47% of jobs going...,

https://www.iser.essex.ac.uk/2020/04/18/new-analysis-of-the-impact-of-lockdown-on-uk-jobs

My own view is that its going to be bad, very bad. Expect defaults on leases and PCP etc. Far too many punters have overreached themselves, especially the small business guys and sole traders who wanted 'big face'. Many are going to be on the bones of their backsides. Public sector will be your best customers.

People are going to have priorities other than a new/er car. Be very debt averse. Expect sub-£5k to do well.

Brexit adds another dimension - expect the pound to take another nosedive as the country blows its brains out. Inflation will pick up.  Some marques will pull out of the UK (Subaru ?). Expect Tata to offload JLR at a fire-sale price - maybe to some Chinese manufacturer who will want the badges to stick on their own electric vehicles.