After a tough few months, the car industry is breathing again, but things are not yet normal. The dealers are whatever they can to attract customers and increase sales. They are providing discounts to the customers and facilitating them in the process.
If we look at the numbers of the last four months that were badly affected by the crisis, the car registrations in the UK fell to up to –96%. So now that restrictions are being lifted, dealers are eager to sell as many cars as possible and cover for that period.
The UK government has announced that it will not be able to give incentives to the car industry, like after the 2009 crisis, because there are more deserving cases. The car industry has to come up with its solutions as the government is planning to use its limited resources to provide financial aid to the severely affected community.
One of the market analysts told us that some of the car manufacturers are doing nothing and waiting for the market to unfold. They have no other options as they are facing stock shortages and open retailers. While others are not taking any crucial action and are shuffling incentive packages.
He also told us that manufacturers are focusing more on earning profits than to worry about long-term sales. The supply is low, while demand is high, probably because the lease deals are ending, so they are happy to make money as of now.
You can already see different trends that predict how the market would unfold in the next coming weeks. Last month, the average discount on offer was 7.95%, whereas this month its 7.97%. The market is witnessing some big shifts that will tell what the demand is and how much profit is expected.
We have also seen that most manufacturers want customers to buy SUVs, as they are providing discounts in all classes, which are increasing with each month. The demand is high, but many customers have reduced their budgets as there is financial uncertainty.
Companies are using different tactics to lure customers, while some are still waiting to see how things turn up. One thing is for sure, the demand is high and budgets are low, so companies would have to offer some high discounts and this could work in favor both, the manufacturers and customers. Only time can tell what would happen.