Dealers report a slow December as 2016 draws to a close

Automotive data expert cap hpi has revealed that this month motor dealers have experienced their highest decline in consumer demand for the whole of 2016. 61% of those responding indicated demand has worsened, compared to only 50% at this time in 2015. 

However, just over a fifth (22%) highlighted little or no change compared with 31% this time last year. 17% of dealers are bucking the trend, reporting an improvement in 2016 but still a drop of 2% compared to 19% in December 2015 who reported a demand increase.

As far as physical footfall is concerned, December has seen a boost to the number of dealers reporting an upturn, with 18% reporting customers setting foot on the forecourts compared 15% in November. A majority of 70% experienced a decline in footfall – however, in December 2015, those citing a decline was marginally less at 60%.

Dealers are reporting that activity online is not dissimilar to the physical footfall, although those reporting a decline significantly dropped since last month, with only 44% citing a drop in December, compared to 59% in November. With a healthy fifth (20%) indicating an increase in online interest, the remaining 37% reported little or no change in activity.

Looking ahead to 2017, two thirds (69%) predicted that new car profitability will decline with 9% predicting an upturn. Almost the exact opposite of the sentiment on new cars, 61% anticipate an increase in profitability on used vehicles.

Philip Nothard, consumer and retail specialist at cap hpi, said: “Overall, the last of this year’s dealer survey results generally support the sentiment and feedback from across the network, along with PCP penetration and profitability expectations for 2017. As we’ve seen throughout 2016, the focus on boosting revenue through after sales will be even more important throughout the year ahead, as 92% believe reliance on this will be more significant or the same.”