Car dealers feeling the credit crunch

Jan 20 2009 by Andrew Welsh, Perthshire Advertiser Tuesday

A SLOWDOWN in new car sales across Scotland has been mirrored in Perthshire showrooms, it was confirmed yesterday.

Trading was at its slowest nationally last year since 2000, with a third fewer motors being registered last month than the previous December.

Many dealers in the Big County are among those feeling the harsh effects of the credit crunch as would-be buyers fail to secure loans.

Perth Motor Mile chairman Colin Grassick told the PA: “Looking at early January, the new car market is down significantly over the same time last year.

“Those customers who are buying tend to be going for used cars.

“At least the equivalent of last year’s numbers have been sold this month and December was significantly up on 2007.

“We are only halfway through the month but the order taken for used cars is the same if not slightly better than January 2008.

“We are still selling new, but not at a level that will satisfy the manufacturers.

“The encouraging aspect is people are still coming in and looking.

“Thankfully our customers are a bit more optimistic than the doom and gloom they are reading in their daily paper.”

Despite the grim situation, Mr Grassick, whose firm has over 50 employees, said any thoughts of scaling down was “not in the immediate plans”.

“We are pulling back costs as hard and fast as we can and that is a situation we are trying to avoid,” he said.

“The decline was quite rapid and has maintained the level of fall. It is not getting worse but we are under-achieving by 25-30% on the level we need to reach.

“Some dealers are doing better and some a lot worse. Much depends on the franchise and the staff themselves.

“How clean in a green sense and fuel efficient a model is can also make a difference.

“Land Rover is back on 84% and it is very hungry on fuel.

“Honda is also down a lot overall but sales of its Jazz model have hardly changed.”

Charles Sandeman, who runs a used car venture at McLennan Road, agreed that after months of poor performance at the tills the slump in new sales had led to a belated boom.

“We have sold more cars since December 1 than we had in the previous three months,” he revealed yesterday.

“There was certainly a huge downturn in sales but it has picked up no end in the last four or five weeks.

“There has definitely been a marked improvement but I’ve not got a clue why.

“If I knew I would be playing the stock market!”

Mr Sandeman said the recent improvement had followed a “very quiet” spell since June.

“People just didn’t have any confidence in the market at all, but that has started to change,” he insisted.

“We had a bad six months but now people are definitely buying in Perth.”

Mr Sandeman said he now had no concerns about potentially poor winter sales.

“I am looking forward to it because things have definitely picked up.”

The Dunkeld Road trader, who also has a dealership in Dundee, said the recent improvement in fortunes had staved off the threat of redundancies.

“It was a case of wait and see what this month brings for a few guys who were fearing for their jobs,” he said.

“However, I am not aware of anyone in Perthshire being made redundant.”

But Mr Grassick said immediate prospects for new car outlets were still less than rosy.

“We are in for a very difficult first quarter,” said Mr Grassick.

“Then, if the pattern of recessions is similar, we expect to see it lifting within the second quarter, or an improvement at least.

“The one bonus is, if you’ve got some money, that the deals are as good as ever, or maybe better.”