Leap in pre-registration activity predicted by dealers

This year has seen record sales of new vehicles, and new research suggests this trend of strong sales is set to continue for the rest of the year.

A new survey by automotive data firm Cap HPI has revealed one in four dealers is expecting a leap in pre-registration activity throughout September, Motor Trade News reports.

The survey, which questioned 103 dealers, found that 26% of dealers expect pre-registration volumes to exceed 21%, while more than two fifths (43%) expect volumes to be between 11% and 20%.

Discussing the findings, consumer and retail specialist at Cap HPI, Philip Nothard, commented: "If new sales volumes match 2015, these figures would mean over 97,000 pre-registered vehicles in September.

"While many dealers have assimilated pre-registration activity into their business models, it can put smaller and independent dealers under pressure."

Nothard noted that there are wide variations in pre-registration volumes between brands.

But there are some negative effects of high pre-registration activity. Nothard explained: "While pre-registration helps drive some impressive new car sales figures, it can place pressure on the nearly new values."

It's possible that the record levels of new car sales in the first half of 2016 have had an impact on dealers' outlooks for the rest of the year.

The recent Cap HPI survey indicates a significant increase in expected volumes when compared to a similar study that was carried out in March of this year.

There was a drop in the number of dealers predicting pre-registration volumes of 6-10%, falling from 20% in March to 12% in September. Meanwhile, the number of dealers expecting volumes to be in excess of 21% hit 26% in September, up from 17% of dealers questioned in March.

Nothard said: "Market sentiment is pointing to a strong September. This comes on top of a record first half for new vehicles.

"How the industry copes with increasing volumes of vehicles returning to the market, and 'forced registrations' into pre-registration and daily rental channels, will underpin the stability of the used market into 2017."

Nothard also noted the importance of consumer demand when it comes to used vehicles and their residual value.

"Strong consumer demand for used vehicles is supporting positive dealer sentiment. Continued strong consumer demand will be the key factor in underpinning residual values over the coming months, as record volumes of vehicles return to the market," he added.