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Pent-up consumer demand will prompt a rise in the new car market in 2012, according to Mike Allen, an analyst with Panmure Gordon, the investment bank.
Allen said demand in the prestige sector continues to outperform the volume market.
“The economy has come through a tough time and the car retailing market isn’t given credit for what it has done. From 2012 we’re looking at pent-up demand for new cars,” he said.
Allen acknowledged that some dealer had pre-empted tough trading conditions by focusing more attention on used sales and aftersales.
“Despite the supply and the age of used stock being well managed by dealers, question marks will remain over demand due to fragile consumer confidence.
“That said, this market is around three times larger than the new car market, and most dealers will find structural growth within this if they look beyond the 0-3 year market. A good used business helps drive new sales. Every quoted group would agree with that,” he said.
Allen also highlighted the importance of aftersales which he said were in decline, citing a decline in sales at Halfords on non-essential jobs.