July update: hot weather, cool trade

Those of a certain age will remember The Sun’s famous headline, “Phew! What a Scorcher,” during the heatwave of 1976. Here we are, 50 years later, in another heatwave and, for once, I think dealers have every right to blame the weather for affecting trade.

Talking to dealers, everything has felt lethargic and slow. Admittedly, July is always a tricky month, as it’s the first month of the plate-change quarter. The start of the summer holidays and the extreme heat only add to this. Customers simply haven’t been focused on buying cars. As a result, the month has felt like a bit of a grind.

New cars continue to perform strongly. Attractive manufacturer offers and the relentless drive of Chinese new entrants to gain market share are helping fuel this. The heritage brands have finally woken up to the threat and are now taking the fight to them.

However, one area where the Chinese brands appear to be winning is finance. Many offer 0% finance with very small deposits. While several heritage brands also have 0% offers, they often require a deposit of between 10% and 20%. For hard-pressed consumers, finding that initial lump sum can be a significant barrier. A low monthly payment may look attractive. But it means little if the customer cannot afford the deposit needed to unlock it.

Despite July’s heat-induced drift, there are still buyers in the market. The challenge, as ever, is identifying them quickly and taking them out of the market before a competitor does. That means keeping a relentless focus on every lead. It also means understanding clearly which marketing activity generates those opportunities. And it means having a robust process to follow them up properly.

Without that focus, the only thing likely to improve during the hot weather is dealers’ tans, from all the laps they do around the dealership while waiting for someone to walk through the door.

Author: Harry Bott