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Post by johnc on Jan 5, 2018 8:19:33 GMT
New car sales were about 5.6% down in 2017 and the same fall is expected in 2018 - that's a significant fall.
What do people think is going to happen? Are the manufacturers going to limit supply and keep prices high (which will firm up the used car market) or are they going to discount in an effort to keep the volumes up? |
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Post by Martin on Jan 5, 2018 8:23:32 GMT
Put prices up (by reducing discounts) to maintain margin and keep the used car market stronger would be my guess.
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Post by Deleted on Jan 5, 2018 9:00:24 GMT
Keep playing the lease card.
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Post by johnc on Jan 5, 2018 9:25:54 GMT
I was just looking at a 440i GC and BMW are offering 1.9% apr and there is over £11K off list (M4 is 3.9% apr and £10.5K off list). On the other hand Mercedes and Audi are offering finance around the 5.9% mark and the discounts off the more interesting stuff is only about £5K to £6K, so perhaps a difference of opinion in how to tackle it, at least in the short term. The bottom line though is that the Mercs and Audi's are far more expensive in basic purchase price or monthly lease/PCP cost. Jaguar have taken a bit of a middle road with 4.9% apr and around £9K off an XE 3 litre petrol but with extras it is expensive in comparison to the BMW.
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Post by alf on Jan 5, 2018 9:59:13 GMT
Holding prices would be the normal supposedly correct strategy - depends how much they need volume for other reasons I suppose - economies of scale, servicing revenues, repeat business, etc
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Post by Deleted on Jan 5, 2018 10:03:15 GMT
Sales in Germany are not too hot I gather. Mostly due to the significance of VAG sales, or lack thereof. The local Nissan dealer is offering -0.99% finance. Yes, that is a minus sign  |
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Post by Big Blue on Jan 5, 2018 10:30:00 GMT
A lot of stock cars are long ago built and keep on coming out of the factory minute by minute so it will take a few weeks / months to restrict stock levels to change. We're a car-bunch so if we buy or lease a new car it has idiosyncratic specs which means "our" car is built whereas fleets and general customers that just need "some car" (where "some" indicates a quantity / weight) will take a car that has the things they really want plus some things that were just on the car as it is held in stock / on the ferry over already.
The issue is that factories are geared up to churn out cars; tier 1, 2 and 3 suppliers are geared up to churn out bits of cars and things like gearboxes, suspension parts and other major items aren't JIT that can be turned off in three days-week like rheostats and other switchgear. Consequently there will be a period of oversupply followed a normalisation followed by a period of undersupply.
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Post by johnc on Jan 5, 2018 10:41:25 GMT
Consequently there will be a period of oversupply followed a normalisation followed by a period of undersupply. Those are my thoughts too which might just lead me to take the plunge whilst the discounts are still here. I need to get January out the way first though! |
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Post by Bob Sacamano v2.0 on Jan 5, 2018 10:41:53 GMT
They'll discount to keep market share. No one likes losing market share. Is 5.6% down a lot? It's not exactly unexpected after the taxation changes that drove sales early last year. If it's down next year and the year after then I'd worry but I expect it to level off. Pay stagnation has tightened budgets but people will only put off buying a new car for so long.
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Post by racingteatray on Jan 5, 2018 10:56:47 GMT
I was just looking at a 440i GC and BMW are offering 1.9% apr and there is over £11K off list (M4 is 3.9% apr and £10.5K off list). On the other hand Mercedes and Audi are offering finance around the 5.9% mark and the discounts off the more interesting stuff is only about £5K to £6K, so perhaps a difference of opinion in how to tackle it, at least in the short term. The bottom line though is that the Mercs and Audi's are far more expensive in basic purchase price or monthly lease/PCP cost. Jaguar have taken a bit of a middle road with 4.9% apr and around £9K off an XE 3 litre petrol but with extras it is expensive in comparison to the BMW. This is, in a nutshell, why I have a 440i GC. Yes, it's a great car but I am not especially claiming it to be a greater ownership proposal than the MB/Audi/Jag alternatives, all of which are lovely in their own various ways. Rather, it was that the financials on the BMW were several leagues better than those for the MB/Audi/Jag.
When I ordered my 440i GC in October 2016, it was 2.9% APR and a touch under £10k off list (the list price was also rather lower), so 1.9% APR and over £11k is just making things even better given that MB and Audi haven't changed their tune. The discount on the XE has improved - it was max £6k when I was looking, but the APR is still silly. You also have to factor in the GFV. Jag and BMW set low GFVs. Audis are noticeably high.
I ran a spreadsheet at the time to calculate the total cost of each, assuming a £6k deposit, 4yr PCP and then payment of the balloon, and looking back the total discounted purchase prices (optioned up to parity)came out at:
BMW 440i GC: £42,060 (monthlies of £390, GFV: £17,448) BMW 340i Touring: £42,546 (monthlies of £418, GFV: £16,900) Jaguar XE-S: £46,311 (monthlies of £502, GFV: £16,717) Audi S4 Avant: £47,659 (monthlies of £437, GFV: £21,120) Audi S5 Sportback: £50,850 (monthlies of £429, GFV: £24,687) MB C43 AMG Estate: £53,341 (monthlies of £603, GFV: £19,000)
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Post by Tim on Jan 5, 2018 11:24:46 GMT
I'm hoping for some decent discounts on lightly used large capacity diesels (eg 335d).
In the short term it won't necessarily be the manufacturers who drive the market but, possibly, the dealers. I was looking through Grassicks (BMW dealer in Perth) used stock and, for a single outlet, family owned business* they have rather a lot of cars registered in June 2017 and currently showing 10 miles on the clock!
*I think they've recently been subsumed into Eastern group.
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Post by johnc on Jan 5, 2018 13:35:04 GMT
I'm hoping for some decent discounts on lightly used large capacity diesels (eg 335d). In the short term it won't necessarily be the manufacturers who drive the market but, possibly, the dealers. I was looking through Grassicks (BMW dealer in Perth) used stock and, for a single outlet, family owned business* they have rather a lot of cars registered in June 2017 and currently showing 10 miles on the clock! *I think they've recently been subsumed into Eastern group. The dealers all pre register cars at quarter end (as do BMW UK) and 3 months later they start to appear on the market (they have to keep them for 3 months to let them recover the VAT).
I think there will be plenty of deals around, it's just a matter of watching and waiting. Grassicks are also part of the Eastern Group now.
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Post by ChrisM on Jan 5, 2018 20:24:56 GMT
I think there is still concern over the way diesel buyers will be treated as the government is not sending out clear signs on CO2 or NOx emissions,plus for low emissions cars, you'd jump from zero RFL to £130 or is it £140 per annum if you change now - one reason why I intend to buy the mighty Fiesta in April rather than start a new PCP.
(there are other reasons too - eg new one is longer and wider, lousy choice of colours etc etc)
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Post by michael on Jan 5, 2018 21:45:33 GMT
I’ve seen a few new Fiestas and I think they look fantastic. I’d love one as a run around.
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Post by humphreythepug on Jan 6, 2018 10:31:48 GMT
Interesting with the fall of diesel sale, average CO2 figures have risen and manufacturers are concerned that they will struggle to hit CO2 targets.
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Post by PG on Jan 6, 2018 11:34:56 GMT
...The issue is that factories are geared up to churn out cars; tier 1, 2 and 3 suppliers are geared up to churn out bits of cars and things like gearboxes, suspension parts and other major items aren't JIT that can be turned off in three days-week like rheostats and other switchgear. Consequently there will be a period of oversupply followed a normalisation followed by a period of undersupply.... It'll be this. Plus the manufacturers and dealers will play off the stock buyers and the order buyers to equalise margins more quickly. The 2008 financial crash and 2009 fall out was when we were looking as buying a replacement for our Defender. The Land Rover dealer had a list of cars (in stock or already in build) on which he could give big discounts. If you didn't want one of those, then it was bugger all discount. Same as Mitsubishi. Our Shogun was ex stock and we got a great deal on it. Too many people seem to forget that everything is cyclical. Demand is good so people gear up to provide the supply (and this takes time), so as they are by then producing more they discount into the teeth of the early demand fall that inevitably eventually comes. Then at some point suppliers back off production and meet demand more accurately. Eventually prices firm up or demand goes up again and we're back at the start..... |
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Post by johnc on Jan 6, 2018 12:14:18 GMT
Interesting with the fall of diesel sale, average CO2 figures have risen and manufacturers are concerned that they will struggle to hit CO2 targets. A politician opens their mouth and then everyone else is left to clean up the mess. It will be interesting to see how this pans out especially with me and others like me who are contemplating trading their diesels for petrol cars which will consume up to 50% more of a finite resource and kick out more global warming CO2 just because the meddlers might be lining us up in their sights. |
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Post by Bob Sacamano v2.0 on Jan 6, 2018 14:15:59 GMT
Interesting with the fall of diesel sale, average CO2 figures have risen and manufacturers are concerned that they will struggle to hit CO2 targets. A politician opens their mouth and then everyone else is left to clean up the mess. It will be interesting to see how this pans out especially with me and others like me who are contemplating trading their diesels for petrol cars which will consume up to 50% more of a finite resource and kick out more global warming CO2 just because the meddlers might be lining us up in their sights. Petrol is a much less finite resource than diesel. |
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Post by johnc on Jan 6, 2018 14:46:38 GMT
Petrol is a much less finite resource than diesel. How do you work that one out? It's a long time since I did chemistry at school but I remember taking crude oil which we refined into diesel and then finally into petrol. The diesel was a by-product of producing the petrol. |
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Post by Bob Sacamano v2.0 on Jan 6, 2018 15:45:29 GMT
Petrol is a much less finite resource than diesel. How do you work that one out? It's a long time since I did chemistry at school but I remember taking crude oil which we refined into diesel and then finally into petrol. The diesel was a by-product of producing the petrol. In simple terms yes but on an industrial scale globally there is far more refining capacity to produce petrol. Our refineries were built when diesel was a niche product and to retrofit them to increase their diesel output would cost billions. As diesel car numbers increased it’s been an increasing struggle to meet demand. An increase in petrol demand would be no problem. Refineries are built to suit local demand and outside Europe that demand is primarily gasoline. Crude oil doesn’t become diesel which then becomes petrol, they are separate products requiring different process equipment. |
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Post by Alex on Jan 6, 2018 20:13:27 GMT
How do you work that one out? It's a long time since I did chemistry at school but I remember taking crude oil which we refined into diesel and then finally into petrol. The diesel was a by-product of producing the petrol. In simple terms yes but on an industrial scale globally there is far more refining capacity to produce petrol. Our refineries were built when diesel was a niche product and to retrofit them to increase their diesel output would cost billions. As diesel car numbers increased it’s been an increasing struggle to meet demand. An increase in petrol demand would be no problem. Refineries are built to suit local demand and outside Europe that demand is primarily gasoline. Crude oil doesn’t become diesel which then becomes petrol, they are separate products requiring different process equipment. I always thought that was the reason why diesel prices go up in winter as demand for heating oil reduced the amount of diesel available for road vehicles. |
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Post by LandieMark on Jan 6, 2018 20:18:57 GMT
In simple terms yes but on an industrial scale globally there is far more refining capacity to produce petrol. Our refineries were built when diesel was a niche product and to retrofit them to increase their diesel output would cost billions. As diesel car numbers increased it’s been an increasing struggle to meet demand. An increase in petrol demand would be no problem. Refineries are built to suit local demand and outside Europe that demand is primarily gasoline. Crude oil doesn’t become diesel which then becomes petrol, they are separate products requiring different process equipment. I always thought that was the reason why diesel prices go up in winter as demand for heating oil reduced the amount of diesel available for road vehicles. I can’t see that making a lot of difference. Heating oil is Kerosene which is basically jet fuel. There is already a massive demand for that all year round. |
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Post by michael on Jan 6, 2018 20:49:05 GMT
Heating oil is an absolute pain in the arse which I hope to soon to be done with. It’s incredibly hard work making your house energy efficient but I’m going my bit for my carbon footprint.
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Post by PG on Jan 8, 2018 10:54:52 GMT
Heating oil is an absolute pain in the arse which I hope to soon to be done with. It’s incredibly hard work making your house energy efficient but I’m going my bit for my carbon footprint. Have you decided what to do? In our house we keep the local oil merchant in business in the winter.... |
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Post by PG on Jan 8, 2018 10:57:11 GMT
How do you work that one out? It's a long time since I did chemistry at school but I remember taking crude oil which we refined into diesel and then finally into petrol. The diesel was a by-product of producing the petrol. In simple terms yes but on an industrial scale globally there is far more refining capacity to produce petrol. Our refineries were built when diesel was a niche product and to retrofit them to increase their diesel output would cost billions. As diesel car numbers increased it’s been an increasing struggle to meet demand. An increase in petrol demand would be no problem. Refineries are built to suit local demand and outside Europe that demand is primarily gasoline. Crude oil doesn’t become diesel which then becomes petrol, they are separate products requiring different process equipment. I'm also pretty sure that synthetic petrol, can be made easier then synthetic diesel / kerosene. Plus pterol engines can be made to run on ethanol. |
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Post by Tim on Jan 8, 2018 10:59:38 GMT
I don't have a problem with heating oil, we have it now and had LPG in our previous house and all you have to do is check the gauge occasionally and remember to order it (or be like my mum and have an agreement where they come and just top it up every couple of months).
Obviously it's not as convenient as being on mains gas but I certainly wouldn't let it put me off a house purchase, for example.
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Post by michael on Jan 8, 2018 11:05:57 GMT
Heating oil is an absolute pain in the arse which I hope to soon to be done with. It’s incredibly hard work making your house energy efficient but I’m going my bit for my carbon footprint. Have you decided what to do? In our house we keep the local oil merchant in business in the winter.... We are going for a ground source heat pump and panels. It should pay itself back in 5 years then payout a few years after that. However, we also need to insulate the house and finding someone who will do external wall insulation is proving tricky although we may have resolved that one now - depending on the price. We also need to change a load of windows, add radiators and various other bits. The mission creep element is now that we’re also going to dig the floors up and put in underfloor heating, reconfigure the ground floor involving a 3 metre RSJ and build the extension on the side where the outhouses that include the boiler room currently stand. It’s going to be a busy year. |
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Post by Alex on Jan 8, 2018 13:01:17 GMT
Have you decided what to do? In our house we keep the local oil merchant in business in the winter.... We are going for a ground source heat pump and panels. It should pay itself back in 5 years then payout a few years after that. However, we also need to insulate the house and finding someone who will do external wall insulation is proving tricky although we may have resolved that one now - depending on the price. We also need to change a load of windows, add radiators and various other bits. The mission creep element is now that we’re also going to dig the floors up and put in underfloor heating, reconfigure the ground floor involving a 3 metre RSJ and build the extension on the side where the outhouses that include the boiler room currently stand. It’s going to be a busy year. Sounds like it’ll be quicker to demolish it and start again! |
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Post by michael on Jan 8, 2018 13:14:44 GMT
Sounds like it’ll be quicker to demolish it and start again! There's a lot of truth in that! |
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Post by PG on Jan 8, 2018 13:52:37 GMT
Sounds like it’ll be quicker to demolish it and start again! There's a lot of truth in that! That does sound like some serious mission creep! Will you really get a payback in 5 years (on the heating bit)? |
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