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UK Defies European sales trends

Despite being in the grips of a recession with more dips than a supermarket condiments aisle, it seems the British appetite for cars remains undiminished. Furthermore, the demand for British-build cars abroad is greater than ever, with exports being at their highest since the 1970s.

The bare figures speak for themselves; according to the Society of Motor Manufacturers and Traders (SMMT) we Brits bought 2,044,609 cars in 2012 representing a 5% increase over 2011, and we’ve an appetite for our own products too, with domestic demand for British-made cars increasing by 15%. UK factories built 1.42 million cars of which 1.21 million were sent abroad. This represents an uplift in exports of 9% over 2011 levels.

Despite the figures, there is still a way to go before the UK market reaches the hedonistic pre-recession levels of domestic sales, but it’s a step in the right direction.

Europe, on the other hand, is not faring nearly so well. The market as a whole is at a 17-year low, 8.2% down on 2011 figures, with the full-year registrations ending at 12.05 million cars – not that the bare numbers tell the whole story.

There has been huge pressure on margins across the whole of Europe and manufacturers continually press distributors and dealers to improve their unit sales. A rise in self-registration is one inevitable outcome and in 2012, 29.3% of cars were ‘sold’ in this way across the continent.

The cumulative effect of the downturn on the continent has been, sadly, job losses at several major European manufacturer plants, including those operated by Renault, Honda, Ford, Peugeot/Citroen and Opel, let alone innumerable dealers that have gone under. The bad news for mainland Europe is that there is no let-up forecast for 2013.

Despite the recent upturn in UK sales, dealers are not only receiving continued pressure from the top to better their sales and margins; the squeeze is increasingly coming also from those consumers willing and able to splash their cash who are haggling hard. According to research by motors.co.uk, consumers now expect an average of £1,000 off a £15,000 car. Buyers even expect £500 off of a car priced up to £5,000.

This presents dealers with both a challenge and an opportunity. By offering transparent prices and low-cost ‘add-ons’ such as service plans, a dealer can inspire confidence and trust, generating both sales and loyalty. A caveat is that the web enables consumers compare deals at the click of a button, so offering them genuine value is a ‘must’.

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