Car sales down by 25% but here's the real damage.

UKSBD said:

I took my car in to a small local garage today for a pre winter mini service
and got talking to the guy in there.
He said it's not so bad now, but it's next August when things will get really
bad, because very few cars were sold this August there will obviously
be fewer needing a 12 month service next year, and 2 years after that
less cars needing an MOT.

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Sounds like it could actually benefit this guy, more people keeping old clunkers for longer, need more maintenance parts etc, and of course these all need to have an MOT also.

It is how the businesses are geared that is the problem, quite a lot will have over extended forecasts due to the 'boom', so they have to restructure for a lower demand point.

The flexible businesses will probably reap the rewards in this downturn, those who don't change, streamline or find new opportunity will probably be hit the hardest.

Still, we could all be riding buggies and carts, having to pay for fuel by the hay load to keep Dobbin well fed

sirearl said:

Thats what we are hoping for our VW parts business ,not seen much change yet but early days.

Earl

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I knew there was an angle to the original post!

telemax said:

Sounds like it could actually benefit this guy, more people keeping old clunkers for longer, need more maintenance parts etc, and of course these all need to have an MOT also.

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It's interesting. We use a small independent garage who is trustworthy beyond belief-we first started using him around ten years ago after finally getting fed up of paying main dealer service rates.

I was in there on Monday night, discussing business, and as I expected, he's struggling to cope with the workload. As well as dealing with the people who are no longer trading in their cars, he is also benefitting from the people leaving the main dealers in droves.

At least one persons happy

Mister B

Yes. Regarding Earl's BBC report of car component suppliers...

But... my feeling is that these companies knew who they were supplying (just like people supplying Woolworth).

If you have a business that relies on making parts for just one sector, or just one manufacturer, or just one car type (like Land Rover = 4x4), then you will catch a cold if that sector is affected.

Like anything, these firms are happy in the good times and they should take the pill in the bad times.

There has to be some management responsibility here.

I am in the car biz in a sideways kind of way. However I am careful to spread my risk (many makes) spread suppliers (many suppliers) spread finance (many providers) spread customer risk (many customers, not just one big one).

Say I had a 2000 car supply contract with Woolworth. It would not have been sensible to structure my business to rely on that, obviously. So, I deliberately don't have ANY clients taking more than 5 cars, and 70% of my business is to personal credit-worth clients, spread over all sectors, spread over all the UK, spread over men and women, spread over all car sectors, all types. Spread over everything.

I set up the mobiles site which contributes several hundred a month (only) at the mo, and I have other small interests. I am always looking to diversify. I create cross-selling and benefit from additional income from other sectors. Anything to spread the risk.

Not suggesting I am brilliant, but these component companies MUST KNOW they are putting all their eggs in one basket? To have a factory, supplying one car maker (often with one product like plastic bumpers) with 50 employees and that's that... working on just in time volumes is a mentalist way of managing a business's security and stability. Surely? Great while the orders roll in...