Are Brits Losing Their Taste for Porsche and Mercedes?

911_AS · 24 Oct 2017

https://www.bloomberg.com/news/arti...s-losing-their-taste-for-porsche-and-mercedes

Interesting article: Pendragon suggests the 'Car Bubble' is close to bursting.

Thoughts?

MarkC4S · 24 Oct 2017

No real surprise here, manufacturers pumping and dumping and rampant loose credit, typical bubble plain to see. We should be leveraging our "Treasure Island" status to Germany in the Brexit negotiations.

neil_911 · 24 Oct 2017

I do think the arse is gonna fall out the PCP market pretty soon, Anyone can go in to a dealer with no deposit and walk out with a Vauxhall Adam or a new mercedes.

Theres that many new cars supplied to the UK, the market is over run with new cars. How are dealers gonna be able to guarantee it's value in 2-3-4 years time when theres hundreds and hundreds of other lease hire cars coming to the end of their terms.

Basics say, Too much stock and not enough demand means the values must drop.

I think the Porsche "brand wagon" is here to stay for the short term at least. Who'd have thought 996's would start appreciating, Plus they're clever car marketing introducing new options to the list. Manual GT3's, Clubsport and Touring editions. It's to cater for every "purist" enthusiast.

Stephen603 · 24 Oct 2017

definitely Mercedes not so much Porsches.... :hand:

Disco · 24 Oct 2017

I don't see Porsche as having the sales volume to be overly affected, but mind bogglingly cheap finance from particularly VAG and Mercedes since a few years ago (*) should indeed see an imminent glut of nearly news on the market which you would expect to impact new sales badly in the next year or so. There is almost certainly something in the story which could spell bad news for German car manufacturers in the current and imminent fiscal climate.

[ (*) I don't know about you guys, but I have heard stories from a number of people who financed things like AMG Mercs and Golf Rs for rates so low that it was cheaper than the depreciation if they had paid cash. The logical extension being that the discount/finance package was so cheap that taking it meant that the manufacturer/dealer was de-facto subsidising the car. ]

wizard993 · 24 Oct 2017

I have never a car on pcp. Toyed with the concept a few times but then just go and buy nice 3-4 year old something with low miles...but can see the appeal as the German manufacturers dealer networks are throwing deals out every week.

spongebob squarepants · 24 Oct 2017

Only suprise is Land Rover and a Jaguar are included in the prestige market!

cliffbase · 24 Oct 2017

In an ironic way, i have to thank the trials & tribulations of shaky vehicle/motor trade companies for my car.

Many years ago Pendragon went though a real rough stage & their shares dropped to 2p each. As the then largest vehicle distributor in the UK, i had a feeling they would recover so I invested in a number of them. When VW had the emissions scandal, i sold my pendragon shares and got all the VW shares i could.

The sale of them helped purchase my beautiful C4s 8)

Not sure about bubbles bursting, but historically the final quarter of the year is always quieter for car sales, this coupled with the approach of more electric cars, higher congestion charges, and brexit just makes more folk nervous in my opinion.

In the last 12 months "prestige" marques have publicly celebrated more new car registrations than previously seen, however many many of these are "self registrations" or "pre regs", i.e. static demonstrators cars simply registered to tick a box. Sadly though this then knocks the used car values into disarray. Suddenly the genuine used car with 1 owner and 5000 miles on the clock is no longer worth what it was as a brand new car, never driven but registered has to be priced below a new one, and so it goes down the line.

My sis in law decided her black mini cooper was 3 years old so she wanted to change it, i have friends at BMW/Mini, long story short, that dealer group had 57 (!!) brand new pre reg black (yes 57 in black, similar amounts in white, silver etc) mini coopers to choose from.

So every time a new car sales manager gets a pat on the back for having hit the (daft) targets set my the manufacturer, the used car manager sighs a long deep sigh.

Shurv · 24 Oct 2017

The Germans have been pumping cars into the UK market for many years. Loads of cheap PCP deals, with over inflated GFV's,all designed to give the punters low monthlies. The problem now is that most of these have been rep spec diesel models, fewer folk are buying diesel cars this year, also there are so many coming onto the market, it pushes used prices down.

Big groups like Pendragon, need big volume sales to make any money, so with the used diesel market slowing down significantly, they are stuck with lots of used stock they cannot shift.

They also have been relying on self registered sales to hit faintly ridiculous manufacturer targets, so when customer enquiries fall, they are struggling to shift them.

This has been bubbling for some 3 years now, and is starting to bite. Big PLC dealer groups like Pendragon, are usually pretty inefficient businesses, and at some stage they come unstuck.

The PCP bubble, if it bursts, will affect manufacturer finance companies, not necessarily the dealers, as the GFV's are guaranteed by the finance house, not the dealer. If customers hand their cars back , the finance companies have to dispose of them. The next 12 months in the motor trade will be interesting, I have worked in it for the last 25 years, so have seen most things, so nothing will surprise me.

wizard993 · 24 Oct 2017

Shurv said:
The Germans have been pumping cars into the UK market for many years. Loads of cheap PCP deals, with over inflated GFV's,all designed to give the punters low monthlies. The problem now is that most of these have been rep spec diesel models, fewer folk are buying diesel cars this year, also there are so many coming onto the market, it pushes used prices down.

Big groups like Pendragon, need big volume sales to make any money, so with the used diesel market slowing down significantly, they are stuck with lots of used stock they cannot shift.

They also have been relying on self registered sales to hit faintly ridiculous manufacturer targets, so when customer enquiries fall, they are struggling to shift them.

This has been bubbling for some 3 years now, and is starting to bite. Big PLC dealer groups like Pendragon, are usually pretty inefficient businesses, and at some stage they come unstuck.

The PCP bubble, if it bursts, will affect manufacturer finance companies, not necessarily the dealers, as the GFV's are guaranteed by the finance house, not the dealer. If customers hand their cars back , the finance companies have to dispose of them. The next 12 months in the motor trade will be interesting, I have worked in it for the last 25 years, so have seen most things, so nothing will surprise me.

Good post/insight ðŸ‘

Poker2009 · 29 Oct 2017

To get into a decent spec 911 now costs in excess of £100,000 (basically over-priced) and takes it out of the reach of even more people.

This is what supports the prices of older cars, and why the 996 and 997 used prices are supported and will slowly go up.

Three years ago you could buy a decent spec 997 for, broadly speaking, 20k - now the same spec cars are three years older, but 25k or higher.

As more of these older cars become uneconomical to repair, prices of good examples will only go higher, especially "old skool" manual gearbox with NA engine!

imac · 29 Oct 2017

This is a very British problem. Credit is just too easy to get now. The house of cards is going to come down.

Global markets are strong, so manufactures have no need to worry. The problem is for the UK finance houses, distributors and dealers. Individuals may loose out as the value of their depreciating asset is worse than perceived.

Personally at the moment I won't buy a new car. Over £100K for a new 911....just not worth it. Others obviously feel the same. Much fewer on the road and in the used market.

pcat · 29 Oct 2017

imac said:
This is a very British problem. Credit is just too easy to get now. The house of cards is going to come down.

Global markets are strong, so manufactures have no need to worry. The problem is for the UK finance houses, distributors and dealers. Individuals may loose out as the value of their depreciating asset is worse than perceived.

Personally at the moment I won't buy a new car. Over £100K for a new 911....just not worth it. Others obviously feel the same. Much fewer on the road and in the used market.

+1
I bought my 997.2S 4 years ago, with 17k miles on it, for 45k. I dont know if you'd get a 2009 car for much less than that now - RSJ have a black one thats almost the same for 44k

Even after 4 years running it as a daily, i'm not trawling through the classifieds all the time, and when i do the conclusion is usually that to get something sufficiently "better" to be worth changing, they tend to have sticker prices with 6 figures.

Gareth64 · 29 Oct 2017

It never ceases to amaze me how well the used values of 911s seem to be holding up at the moment and have done for a while. I agree with everything above and when I look at BMW/Audi/Mercedes and their 'equivalent' cars, values just don't seem to hold anything like as well. I'm not exactly examining their new prices and adding up all extras etc, but they do seem to depreciate in a way that you would expect for a car that is 2-6 years old or so.

As above again, 100k for a nice spec cooking model 991 is big money and arguably a similar spec 997 is a better driver's car anyway, albeit a few years older. That's great news for owners of older models.

bludger · 29 Oct 2017

I drive a BMW 330ci at the moment but it's long in the tooth.I'm toying with the idea of getting a 997 gen2 instead of my original choice which would be a BMW435i.

I'm inclined to wait a little because I think we are in for rough economic times and prices may soften. However, do I get the drift here that in this case I may have to wait a long time as values seem to be hardening and I want to gen2 with PDK and am not prepared to go back to a gen 11?
Thoughts?

Are Brits Losing Their Taste for Porsche and Mercedes?

911_AS

Sao Paulo

MarkC4S

Spa-Francorchamps

neil_911

Monza

Stephen603

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Disco

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wizard993

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spongebob squarepants

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cliffbase

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Shurv

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wizard993

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Poker2009

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imac

Trainee

pcat

Spa-Francorchamps

Gareth64

Silverstone

bludger

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