Car industry has it bad?

Screaming Eagle

Hi there,

I work in the delivery industry and part of that is organising deliveries to car dealers and I was wondering if anyone else noticed how tuff that industry was at the moment? The housing market is fairly news worthy and popular conversation but I am been left with the impression that all is not healthy in the car industry. There seems to be a lot of redundancies happening at the moment. Anyone else notice this or have a different angle?

When it comes to tightening the purse strings does it get reflected in servicing and repairs?

colm_mcm

I think the media has given a fair amount of coverage to the motor industry's situation this year.

Screaming Eagle

Hi colm,

I agree the industry did grab a few headlines with the new emission laws pre July etc. so I apologise for that but I was more asking about the industry in general terms rather than car sales. It seems well known that car sales have slumped and that jobs are being lost because of that but it appears to be deeper? That was more my question. Sorry. The recession seems more multi faceted that most know.

colm_mcm

By deeper, what do you mean? seems pretty simple to me,
Some businesses are under pressure because they're spending more than they're taking in and aren't as busy as usual.
As a result of this, some people are losing jobs. Happens in every industry.

Unless there's something else? Anyone who thinks the "recession" only affects builders is naive

Stky10

Sorry to drag this up again, but I'm just wondering with end of quarter coming up at the end of the month, is the car industry like a lot of manufacturing businesses where you get tend to get a better deal in the last week of a quarter rather than in mid quarter?

ie... are quarter sales targets a big thing?

Darragh29

I had a chat yesterday with a friend who works in a Peugeot dealership in the Leinster area and they were all called in for a meeting this week and the story was that every part of the business was losing money and sales had to sell more, service had to service more and parts had to sell more parts. The way it was put was that everyone in the business had to make more of an effort to sell the business, mechanics should be actively bringing in work to the workshop and trying to get their mates in the trade to buy parts from the business, sales, well thats a basket case at the moment but the long and the short of it is that there will be salary cuts & job losses across the board next month if the situation is not turned around between now and then...

daveharnett

Darragh29 wrote: »

service had to service more and parts had to sell more parts

Sounds like Pugeout need to make their stuff less reliable.

Biro

You could see all this coming for the last 3 years though. It's just that it's starting to take effect now. As it's taking effect, people are becoming aware of it. You can't have the rug pulled from under one industry and have nothing else affected. Take the building industry, you have a sharp decline in that. Contractors are left with a few million worth of housing estates not selling. They can't pay the building suppliers, who also sell to farmers maybe, and might be coal merchants too. They have outstanding debt from the builders, and in turn can't afford to pay their bills. Then you have hauliers. Sales guys working for companies who supply these places. These people then tend to keep the car they have a bit longer, no need to upgrade as the one you have is fine and money is now tight. Car sales guys get the rap from their employers, as no one is selling cars. Wives of all these people start being careful when shopping as the money isn't as handy any more. Less toys for the kids, less luxury shopping items. Less eating out, pubs and restaurants suffer. Jobs are lost, income tax is down, Government aren't making money. It's like a great big snowball! The only question is how far will it fall before it bottoms out?
What the Government should have done when the snowball was being built on the economy rise is increase taxes and try to curb spending a little to slow down the rise. A smaller snowball causes less damage when it falls. Too late for that now though!

bazz26

I pass by a certain garage locally everyday and keep a glancing eye on the stock and pricing. Like lots of garages at the moment their stock has grown to the point where they physically do not have enough room to park their used cars.

Anyway noticed this particular car, a black 06 Passat Highline which has been sitting there since about February, inititally the sticker price was €26,500, then down to €24,500 in July and noticed it the other day at €20,500 now. That is some hit in 7 months (even assuming it was overpriced to begin with last Feb) and this is a very large main VAG dealership so it seems even the big boys are feeling the squeeze now.

kmick

Funnily enough its only when people are not buying they bring down the prices. The price of second hand cars should have fallen 3 years ago at the start of oversupply. Now its too late and car dealers along with builders are going to go to the wall.

Stky10

Biro wrote: »

You could see all this coming for the last 3 years though.

Tell that to the thousands who bought property in the last 3 years, or the thousands who "released equity" from their property in the last 3 years, or the thousands who wasted their SSIA's, or the thousands who borrowed heavily to get a shiny new car to go with their shiny new house. Or even tell that to the thousands who still think that this is a tiny blip we'll be out of in no time.

The reason I asked about the quarter sales targets is because I'm half thinking of trading in my 02 3-series petrol for a 03/04 3-series diesel. I'm willing to spend a few grand on it, but I'm not too bothered if it doesn't happen because I'm expecting lots of "distressed sales" (ie repossessions) in the next 6 months.

Mc-BigE

heres a pretty good example of the state of the car industry, have a look at the price on the window compared to the selling price.

http://www.carzone.ie/used-cars/Peugeot/207/Hiredrive-Savings/1195310/
(dont mean to pick on any one garage, im sure all dealers around the country have dropped their prices)

Biro

Stky10 wrote: »

Tell that to the thousands who bought property in the last 3 years, or the thousands who "released equity" from their property in the last 3 years, or the thousands who wasted their SSIA's, or the thousands who borrowed heavily to get a shiny new car to go with their shiny new house. Or even tell that to the thousands who still think that this is a tiny blip we'll be out of in no time.

People did mention it, but they laughed.

Stky10 wrote: »

The reason I asked about the quarter sales targets is because I'm half thinking of trading in my 02 3-series petrol for a 03/04 3-series diesel. I'm willing to spend a few grand on it, but I'm not too bothered if it doesn't happen because I'm expecting lots of "distressed sales" (ie repossessions) in the next 6 months.

What you might be better off doing is selling your 3 series petrol, buying a €500 run-about, and buying back your 3-series petrol in 6 months for a few grand less!

bazz26

Mc-BigE wrote: »

heres a pretty good example of the state of the car industry, have a look at the price on the window compared to the selling price.

http://www.carzone.ie/used-cars/Peugeot/207/Hiredrive-Savings/1195310/
(dont mean to pick on any one garage, im sure all dealers around the country have dropped their prices)

€3k is a pretty normal drop for a ex hire-drive car over a similar new car.

Altreab

bazz26 wrote: »

€3k is a pretty normal drop for a ex hire-drive car over a similar new car.

Yeah its less than 3K drop

Stky10

Biro wrote: »

What you might be better off doing is selling your 3 series petrol, buying a €500 run-about, and buying back your 3-series petrol in 6 months for a few grand less!

I doubt there's too much of a market for a 3-series petrol on the private market unless its very seriously discounted. The mileage I'm doing at the moment though, a Yaris would be perfect (if I could wedged into it)