Will scrappage scramble save UK car dealers’ Q3?

September’s plate change may be more aggressive than usual due to manufacturers scrambling to drive sales with scrappage schemes.

Some of these offers can be stacked atop existing retail deals and it will be interesting to see what sort of effect they will have. September 2016’s private registrations were down 1.7% year-on-year.

Mike Jones, ASE chairman, said the impact of these offers on dealers will depend on whether money has been reallocated from existing offers.

He said: “Where brands are requiring a contribution from dealers, this will be a profit-and-loss hit, but again this may just replace money they were giving away already.”

The trade-off for dealers could be that higher volumes from this activity will result in them hitting Q3 volume targets, and the bonus money to see them through to the end of this year.

Vauxhall, BMW and Ford were some of the first out of the gate with scrappage deals, but most other manufacturers jumped on the bandwagon. Some manufacturers even told AM that they had no

intention of following Ford after it launched its scrappage scheme on August 22. This position changed days later.

Will the September figures show these manufacturers ahead of competitors due to that early lead?

Vauxhall has been combining its £2,000 scrappage offer with PCP and deposit contributions. This would mean a Vauxhall customer could get up to £4,400 in support towards a new Mokka X, which is available for £279 a month. Vauxhall has already boosted sales by 20,000 across its two scrappage promotions, with a 5,500-unit boost this year.

Vauxhall dealers will have to register more than 8,579 units to beat 2016 figures.

Ford’s offers in September look particularly aggressive when you factor in monthly payments of below £300 on all cars, 0% deals on the majority of its cars and discounts of between £2,000 and £7,000 through scrappage. If the September figures show registrations below last year’s 11,703 units for Ford, it will be a massive indicator that consumer confidence levels are badly damaged.

Audi had a better September than both BMW and Mercedes-Benz last year, but BMW was the first German premium manufacturer to launch its £2,000 scrappage offer, on August 9.

BMW has a good mix of deals for Q3, with 0% offers on 6 and 7 Series, 1.3% APR on its i-model range and 2.9% deals on core models such as the 3 Series.