Volkswagen has cut the prices of commonly replaced parts on the current Transporter range by up to 70%.
In a market which continues to be extremely difficult it is easy to lose sight that some people are still enjoying considerable success. But the market certainly has changed. At one time you would have a guy specialising in cars up to £5,000 and he would make a good living out of buying and retailing small hatchbacks.
The supermini sector has seen an enormous amount of investment and development over the past year or so. Many of the biggest launches have been the smallest cars and there are very good reasons for this.
Dealers are bracing themselves for a tough final six weeks of trading in 1999 as customers delay new-car purchases until the new year, anticipating a cut in list prices.
Another motor show comes and goes, with all the razzmataz, glitz and glamour that the industry can muster. How impressive even the humblest new model looks under thousands of pounds worth of display lighting.
Where once there was Renault, now there is Volkswagen. After 18 months during which the French company dominated growth in new-car registrations, the official Society of Motor Manufacturers and Traders' figures for the first six months of 1999 show how powerful the German company has become.
The entire car retail market is in turmoil at the moment. New and used sales are not as strong as many had expected and everyone is looking for reasons. Confusion over the twin plates? Oversupply of good retailable cars? They may be factors but the dominant reason is the uncertainty felt by the average retail punter, bombarded by stories of massive impending price cuts.
One of the interesting features of the price realignment debate has been the continual repetition of one of the most fundamentally flawed assumptions made in the industry - that lower list prices automatically lead to reduced residuals. This fallacy has even been used by some to suggest that the much touted realignment of UK list prices with those in Europe would be damaging to existing car owners.
August registrations crashed from more than 500,000 last year to 74,444, a drop of 85.3%, as the market continued to re-adjust following the dropping of the annual plate change.
While it is too early to see exactly how things will pan out in terms of registration numbers, one thing is certain. There will be more V-plate cars registered in September than there were T-plates in August.
Patchy looks like being the word for the whole of 1999 - the year has not seen a universal mood across the industry. While some have reported nothing but gloom, others have undoubtedly had it very good. And everyone else has experienced all points in between.
Stronger than expected new car registrations in July have lifted industry confidence for the second half of the year and yet again forced market planners to revise their total sales projections upwards.
Retail optimism remains quite high but there is still no shortage of late-plate cars around - especially Ford and Vauxhall. This means 98 and 99S plate Mondeo LX and Vectra LS are available in reasonable numbers at around £8,200 if sourced individually.
Residual values are determined not by manufacturers, or indeed Cap Monitor, but the typical used car buyer. To understand the whys and wherefores of residuals you must get inside the head of that person.
The switch to a twin plate change seems to be paying off, despite a shaky start to the year, after June registrations leapt 15.7% on last year.
For a long time now we have seen the phenomenon of Scorpio, Omega and Renault Safrane 'executive' sector cars suffering far greater depreciation rates than smaller cars. And now we are beginning to see the ultimate proof of this with some used small cars retailing at more money.
The past few weeks have failed to bring the much-needed upturn in retail interest which is necessary to steady the fall in used car values. Car prices have by no means crashed, but they have fallen for well over a year, leaving most people surprised and disheartened.
The Government's fuel escalator now means that diesel is more expensive per litre than petrol and with the typical knee jerk reaction of our industry there are now widespread predictions that diesel car residuals will suffer as a consequence. This, however, is not the case.
Back in April I predicted that year and letter values might begin to give way to model year as the determiner of values, due to the retail customer's improved product knowledge. This is happening.
Motor industry bosses are revising sales forecasts for the year upwards as a result of another strong month for registrations.
Every one of us in the trade has fallen foul of the wrong car from time to time - it is an occupational hazard. But what is the 'wrong' car? Well, the answer to that can vary according to circumstances, but at the moment you have to be especially suspicious and cautious of big, older smokers - because everyone else is.
Whenever a new car is launched into the UK market it is accompanied by a massive marketing campaign. Millions of pounds are spent on hyping the car with TV ad campaigns, Alpine or other exotic test drive events, and promotions in magazines and newspapers. Add to that the huge sales push from the franchise network and you have a phenomenon from which there seems to be no escape.
Nothing illustrates the difference between the new and used car markets better than the perception of engine capacity by the customer. As the current Clio ad states, size certainly does matter – but the way in which it matters is different depending on the market.
Never are the differences between new and used car buyers more apparent than when it comes to spec. Referring to the corporate sector, because of its dominance in the new car market, enhanced specification is often a badge of success. This is why many higher spec cars show their differences on the outside.
March finished with registrations 73% higher than the corresponding month last year, and the industry at odds over its significance.
At last all the speculation about the T-plate and its impact on late plate values is over and instead, we are seeing the results and it has to be said 'they ain't pretty'.
For the second year running, sales of the Renault Megane are growing faster than those of any other car in the UK. Analysis of detailed registration figures, published by the Society of Motor Manufacturers and Traders, shows the Megane added more than 25,000 units last year, a growth rate of 44%.
Everybody assumes that vehicle condition appraisal only applies to used cars. But I would suggest that appraisal should start even before the car is bought. We are used to having our ears bent by colleagues in the disposals world. But the situation is worse than normal.
The upturn in trade and retail activity has turned out to be a blip, rather than the start of a significant recovery and one of the factors causing this is the continuing realignment of new prices by manufacturers. The trade is increasingly wary of price cuts, such as the recent slashing of Citroen Saxo by up to £1,200. This is bound to impact on late-plate values and therefore 99Ss are the latest big worry.
Last month I promised to explode a few myths which plague the world of future residual values. And what better way to start than with the simple and dangerous way of setting residual values as percentages of list price.
