In turn, grim acceptance has become frustration to get going again and now a mix of hope and despair, as pent-up demand unlocks good news tempered by the reality that it will, surely, run out of steam eventually.
After an initial dalliance, the UK government has now made it clear it is not ready to step in with incentives as it did so successfully in 2009 during the financial crisis, reasoning that there are more deserving cases for its limited resources and leaving the industry’s 35-plus car makers to come up with their own solutions. But how will they play out?
Fiddling at the edges
One market analyst who prefers to remain anonymous told Autocar that the majority of car makers have either been sitting back and watching the market unfold, potentially powerless with a shortage of stock and open retailers, or at best shuffling incentive packages around without taking any sort of decisive action.
He said: “With supply low and a deluge of customers who have to buy, largely driven by their lease deals ending, to date retailers and manufacturers have appeared happy to focus on profit margins rather than stimulating long-term demand.
“The fact that most car makers have removed sales targets for the time being, respecting the fears of retailers that they might bring workers back too early from furlough to service customers who aren’t there, seems to have taken the heat out of the market for now. But it won’t last. Nobody will want to come out of September looking like they’ve lost ground.”
SUV discounts to the fore
Pat Hoy, who studies the market for our sibling title What Car? in order to establish pre-haggled Target Prices for new cars, concurs. Hoy said that he has started to see a variety of trends that may shape how the market unfolds in the coming months.
“In June, the average discount we could offer was 7.97%, and this month it is 7.98%,” he said. “But that masks some huge shifts across the market that are likely to tell you where demand is, where the profits are and where the biggest crises are unfolding – although it’s not always straightforward to ascertain which is which.”
Most obviously, manufacturers appear to be pushing buyers towards SUVs, with discounts in the profitable family, large and luxury classes all increasing month on month by as much as 7% in relative terms. However – potentially acting as a counter-balance to that – discounts on small SUVs have shown a dramatic reduction of more than 18% in relative terms month on month, possibly hinting that demand is up, with many buyers reducing their budgets in the wake of economic uncertainty.
The only other mainstream sector to show a significant shift is city cars, where discounts have reduced almost 8% in relative terms month on month. Limited supply and demand from buyers eager to avoid public transport are likely to explain that change.