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Sales of new cars have slowed sharply but October figures raise hopes for end-of-year improvement


2012-11-04



The extent of the slump that has hit new car sales in recent months is difficult to account for. Even the fast-deteriorating macroeconomic picture does not explain a decline of such proportions. An answer that naturally suggests itself is to blame the media and the politicians, whose exaggerated doom-and-gloom narratives are denting consumer confidence. Tellingly, fleet managers appear unshaken by the dramatic news stories, as illustrated by the fact that the level of orders from big customers has remained virtually unchanged, in contrast to the consumer market and small and medium-sized enterprises.

In October PGD Group dealerships saw a 18% m-o-m surge in orders, so I would like to believe that the worst is behind us. It is evident too that the marketing campaigns and promotional tools deployed by importers have had their intended effect, which is particularly important for volume brands such as Ford. The observed increase in customer traffic at dealerships gives grounds for expecting that the positive trend will continue throughout the remainder of the year. However, since car inventories are not high, and as December will have exceptionally few trading days due to Christmas, the uptick will definitely not be sufficient to fully make up for the declines recorded during the summer. Therefore my forecast is that in 2012 as a whole new car sales will be about 8% lower than in 2011.



Andrzej Trawka
Vice President for Sales at PGD Group

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