Incentives and internet combine to boost new car sales
The motor industry may have been one of the biggest casualties of the current economic crisis, but recent figures suggest that there may now be light at the end of the tunnel.
New government initiatives to help protect the environment and stimulate new car sales, combined with the increasing popularity of car comparison websites, are playing their part in helping the industry emerge from the recession.
The Society of Motor Manufacturers and Traders (SMMT) believes recently introduced vehicle scrappage scheme is beginning to have a significant impact on sales of new cars.
According to the latest figures from the SMMT 29,796 vehicles have been registered under the scrappage scheme since it started on May 18.
In June, almost 10% of the total 176,264 new car registrations were as a result of the scrappage incentive scheme, giving a much-needed boost to the UK motor industry.
What’s more, figures for July show that the number of new cars sold actually rose for the first time since April 2008, up 2.4% on the previous month
SMMT chief executive, Paul Everitt said the scrappage incentive scheme is working well and has encouraged a lot more people to consider buying a new car and in coming months, there will be an increase in the rate of deliveries.
This will confirm further progress on the industry’s long road to recovery, he added.
Everitt’s optimism is backed up by government figures which show that more than 35,000 orders for new cars were placed in the first month after the announcement of the £2000 scrappage subsidy. This equates to one scrappage scheme order out of every five new car orders in this period.
Prime Minister, Gordon Brown, and Business Secretary Lord Mandelson have both welcomed the figures.
The PM said he was delighted that so many people had taken up the Government’s offer of help to buy a new car when they scrap their old one.
This scheme not only helps hard-pressed consumers, it also helps protect British jobs by stimulating demand for new cars, he explained.
Lord Mandelson added that he scrappage scheme has got off to a flying start, giving car sales a major boost and the offer of a great deal for consumers.
The Government has set aside £300m for the scrappage scheme, matched with funding from manufacturers.
It is intended to provide immediate support on a short-term basis to boost the car industry and its supply chain in the wake of falling sales. It will also get older vehicles off the road and encourage consumers to invest in new, safer, and potentially more environmentally friendly models.
For new car buyers, the £2,000 grant is made up of £1,000 from government with the remainder being met by the manufacturer.
In total 38 manufacturers have signed up for the scheme, including BMW, Mercedes Benz, Fiat, Volkswagen, Peugeot and Ford.
Meanwhile the internet is also playing its part in helping to drive sales of new cars by helping to match potential buyers with the best deals.
The lean times experienced in the industry have accelerated the willingness of both manufacturers and new car dealers to embrace the internet as a way of making life easier for anyone thinking of buying a new car.
It is estimated that as many as five million potential car buyers in Britain now browse the internet in an effort to find the perfect vehicle for their purposes.
Historically dealers have viewed the internet with suspicion but now they are finding that web-based searches and information exchange websites can help both customers and companies to meet their aims.
One leading website in this field, Mammoth Cars, has developed relationships with franchised dealers across the country in order to offer new car buyers the best prices without having to resort to third party brokers or time consuming journeys to find their ideal vehicle.
Jon Kirk, Marketing Director for mammothcars.com said “It’s a great honour to receive this award and we are very grateful to the Institute of Transport Management and its readers for recognising what we have achieved. We’re looking to actively grow our panel of dealers across the UK as quickly as possible so we hope this award will help increase awareness of how dealers and manufacturers can take advantage of the massive opportunity the internet offers but without taking too much risk. Our dealers only pay when people are interested in their deals so they can work with us in a very cost effective way.”
Customers simply access the website www.mammothcars.com to search for their desired vehicle, locally or nationally. What’s more, vehicles can be factory ordered to meet specific requirements and because they are being put in touch with a dealer they can take advantage of other incentives such as the vehicle scrappage scheme.
For dealers, the advantage lies in the inflow of sales leads and customer data needed to follow through and close a deal.
Its efforts have earned it the title of Independent Online Car Sales Portal 2009, an award presented by the Institute of Transport Management (ITM).
ITM Awards Liaison Officer Mr. Philip Leung, said that Mammoth is committed to providing a complete service of convenience to buyers and dealers, taking away much of the hassle and cost involved for the customer in traditional methods of purchase.
He added that it is also providing dealers with strong leads to boost sales, which is particularly important as the industry struggles to get back on its feet after the past year of hardship.
Jon Kirk, Marketing Director at mammothcars.com has over 12 year’s experience in internet marketing within the financial services and automotive sectors. He was responsible for the development of Norwich Union Direct’s online home and car insurance products during the late 90’s before being a founding director of online car insurance broker its4me.co.uk, sold to Swinton Insurance in late 2006. As E-commerce Director for Swinton Insurance, Britains largest high street insurance broker, Jon helped develop their online marketing strategy and products. Jon has been involved in the automotive sector in the marketing of online new car broker uknewcars.com and more recently as Marketing Director for the newly launched mammothcars.com website, comparing car prices across the UK to find customers the best deals on cars.
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