CLAIMS that sales of new cars in Britain rose by 20% last month were
challenged by a leading motor trade economist yesterday who argued that
nearly half of that volume involved models registered by dealers to
achieve manufacturers' target bonuses.
Mr Neil Marshall, economic affairs director of the Retail Motor
Industry Federation, said: ''Things are improving, but not as high as
the 20% figure. It is closer to nine to 10% because of the disparity
between genuine sales and registrations which sit in forecourts looking
for second-hand buyers.''
He blamed the ''grossly distorted market'' on manufacturers, keen to
protect market share, who encourage dealers to hit targets and earn
volume incentives. As a result, the retailer is tempted to ''buy'' the
car from the car maker and then faces the problem of selling them on to
genuine buyers.
Mr Marshall also alleged that the company car buyer was being put
under pressure to speed up the cycle of fleet replacement and cited
examples of large banks being offered discounts up to 40% to replace
cars every four months instead of two years.
''Obviously this produces six times the previous volume turnover but
it floods the second-hand market, damages residual values, and
intensifies the cross subsidy from private buyers who pay greatly
inflated prices, compared to their heavily-discounted corporate
counterparts,'' Mr Marshall said.
His logic was supported by the case of top-of-the-range Ford
Granada/Scorpio estate cars sold late last year for a knockdown price of
#22,000 and now appearing as zero mileage offerings in dealers'
newspaper advertisements for #16,500.
He added: ''When the Monopolies and Mergers Commission took a look at
the industry, it found that 29% of the 1990 volume were direct sales, or
those made between manufacturers and fleets with high levels of
discount. There is no point in creating a false impression from figures
claiming double the real market improvement.''
Mr Marshall's opinions were in contrast to the Society of Motor
Manufacturers and Traders, whose chief executive Mr Ernie Thompson said
the 20% registration increase showed the industry was ''continuing in
recovery mode''.
Mr Thompson, until recently Ford's British sales director, said it was
the highest January total since 1990, at 198,525, but still fell well
short of the record 1989 equivalent of more than 220,000.
Whatever the realities of the British market's recovery, it has
sustained last year's growth, allowing British manufacturers to
compensate for lost European export business. Rover, acquired this week
by Munich-based BMW, continues to add volume -- up from 22,465 to 24,876
units last month.
Ford recovered market leadership from Vauxhall with 22% of cars
registered, the General Motors subsidiary trailing its arch rival by
nearly 4%.
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