Credit crunch will cut SUV and sports car sales
Author: Robin Brown
Published: 16 May 2008
A report from Experian forecasts a further downturn in house prices and an increase in unemployment for the first time since 1992, with knock-on effects on the car industry likely.
A squeeze on consumer spending is likely to affect demand for SUVs, MPVs, luxury models and sports cars - meaning dealers need to be prepared, according to the information services company.
The report forecasts a decline in UK house prices of 7.6 per cent over the next two years, while UK GDP growth is predicted to slow down to 1.8 per cent in 2008 and further still to1.5 per cent in 2009.
Kirk Fletcher, Managing Director of Experian’s Automotive division, said: “A car is arguably the second biggest purchase a consumer will make and financial concerns were already affecting used car sales, which have been falling since 2005.
"More and more consumers have been delaying their car purchase decisions. However, we have still seen pockets of growth in the 4x4, MPV and sports car segments. Sales do not appear to have been slowed down by financial worries or environmental concerns.
"In fact, our analysis shows that the effect has been a growing demand for diesel versions of these cars.
“However, while sales are still strong in these segments, they are not as strong as in previous years. The introduction of higher tax on these vehicles and the consequences of the global credit crunch, highlighted in the latest Regional Planning Report, could finally be the factors that push these segments back.
“There will still be pockets of growth in the market, but these will change and evolve and our statistics show that one indication of this is the widespread switch from petrol to diesel cars. In the coming years, the least polluting cars are likely to become the top sellers.
“The challenge for dealers is to watch the trends, identify areas of growth and recognise what motivates different kinds of customers. The breadth and depth of knowledge that Experian provides to dealers enables them to make informed decisions to grow and protect their businesses by targeting the right customers, with the right products, at the right time.
"This combination of product investment and innovation provides our clients with the fastest route to identifying their most profitable customers.”
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