Last year, UK car sales hit a record high of 2.63m – according to recent data from the Society of Motor Manufacturers and Traders (SMMT). This figure marks a 6.3% increase in sales in 2014 and signals great and continued growth for this competitive consumer market.
Today, Tori Atkinson, finance blogger for The Car Loan Warehouse, puts this sales spike under the microscope – exploring the variety of contributing factors and extracting anything retailers can learn from this record-breaking year in the motor industry.
In spite of last year’s VW diesel emissions scandal, confidence in the world’s leading automakers appears to be alive and well. Volkswagen is responsible for no less than 20% of British car sales – and while VW experienced a drop in sales during the last quarter following #dieselgate, many of the UK’s favourite car brands experienced a sales surge.
Chief executive of the SMMT, Mike Hawes, remarked that “consumer confidence is at its highest level since since the recession” – revealing that “drivers have decided now is the time to make a significant spending decision.”
Business Secretary, Sajid Javid, attributes this success in the automotive sector to “innovation of firms and the skills of their workforce” – describing the industry as one of the British economy’s “shining lights”.
The lesson: build a brand your customers can trust. Gaining the confidence of your demographic is half the battle – and by staying true to your company ethos through rain or shine, you can inspire genuine loyalty in your customer base.
As the British economy continues to improve, so too does each buyer’s chance of finding an attractive deal on their next car. By the end of 2015, the strength of the pound meant that manufacturers were able to offer customers incredible discounts – alongside the low interest rates available through leading finance providers.
According to Mike Hawes, general economic confidence is a crucial factor where 2016’s figures are concerned – as an increase in interest rates “could affect sentiment about how affordable cars are.” This matter of perceived value for money will always play a part in retail success – with critical sales periods affected directly by the trade-off of product quality and price.
The lesson: seize every opportunity you get. Keeping an eye on industry trends at all times gives you a chance to capitalise on peak periods and go all-guns-blazing into times of great opportunity – offering customers the right product at the right time, and for the right price. That way, you won’t have to miss out on your fair share of the market.
Car finance deals
As ever, affordability is the name of the game – and it looks like low-interest car loans are one key contributor to 2015’s record break. With the continued rise of bad credit car finance deals, more and more drivers on lower incomes are realising they can drive the car they want without breaking the bank – and it’s cost-effective alternatives like these that are driving car sales into the stratosphere.
According to the SMMT, 80% of cars are bought through some sort of finance deal – with Personal Contract Purchases (PCPs) in particular accounting for around 60% of car sales. Available with an optional deposit and flexible around each buyer’s circumstances, finance options like these are giving drivers without the means to buy up-front a chance to own more innovative, efficient, and hi-tech models than ever before.
The lesson: give the people what they want. Finding out what the industry-leading USPs are is the first step toward identifying how you can tailor your offering for the best results. Whether it’s exclusivity, expertise, value for money, or whatever else, put your finger on what customers are looking for in a retailer – then give it to them.
By looking for inspiration across the big, wide world of retail, you can use case studies from a range of diverse industries to create your own blueprint for success. Business development is a process that never ends – and any retail success story can give you the insight you need to kickstart yours.