Scrappage ‘great success’
June 15th, 2010 by Richard Aucock
9 in 10 scrappage sales were additional ones that did not pull forward further sales, reveals a new Glass’s report.
The firm has thus called it ‘one of the most successful ever collaborations between car manufacturers and Government’.
Doom-sayers said the scheme would make people who were planning to by a car later in 2010 choose to buy earlier, instead.
Not so, said Glass’s. Fewer than 10 percent of scrappage buyers were planning to buy a car in the next couple of years.
Instead, most scrappage customers would have bought a used car instead.
‘The scrappage scheme was a great success as a stimulus for the industry during difficult economic times, generating much-needed showroom traffic and car sales,’ said Glass’s MD Andy Carroll.
‘Close to 400,000 cars were registered under the scheme, but only one in 10 of these could be said to have been pulled forward – in contrast with experiences in other European markets.’
200,000 of the 700k German scheme sales were pull-forward.
‘Now that the UK scheme has ended, the market is once again exposed to lacklustre demand for new cars, reflecting prevailing economic uncertainties.’ There’s not going to be a fast recovery, either – both new and used car markets are going to emerge from recession slower than the mid-90s.
June 15th, 2010 at 11:10 am
A really interesting and valuable insight from Glass’s and intersting to note the difference from other European markets (which ties in with our own statistics on lead types generated across Europe).
For me the big issue is what is the industry going to do about it, given that further government support looks less likely with each passing week?
By implication from the article, there is a huge untapped audience who can be persuaded to by a new car IF the deal is right for them. There is a great opportunity for Manufacturers, Dealer Groups and individual dealers, to really step up their efforts and engage with potential prospects online to try and guide them further into the into the sales funnel.
Typically for every 1000 visitors to a dealers website, as many as 990 leave without completing a lead form (and probably went straight to one of your competitors!) – whilst a lot of emphasis is placed on trying to convert the 10 who did submit a lead, very little time is spent on understanding what the 990 were looking for and why they didnt get it from your site (if 1000 people walked into your dealership and 990 turned around and walked straight back out, who you sit there and just watch them?).
Getting a good understanding of what they actually did on your web site, why they left and why they came in the first place is key to increasing your share of sales in the current tough environment. Your web supplier should be able to do a lot of work for you in this area and if you think its going to cost a lot, ask them to take a share of the risk – its in their interest as well as yours!
June 15th, 2010 at 11:30 am
Very interesting points you make, Stewart. Scrappage really did show that new car sales will come if the incentives are right. By using metrics to analyse website visitors, as you say, how many more new car sales could be achieved if the dealer is able to better tailor deals?
The 990 site visitors leaving is a striking analogy…
Richard.