Car manufacturers face uphill battle to shift new cars

Car brands seeking to revive consumers' interest in buying face an arduous task.

If anyone in the automotive industry is hoping that the Bank of England's announcement of a 1.5% cut in interest rates, taking them down to 3%, is going to kick-start car sales, they will have a long wait. 

New cars are a particularly tough sell in the current climate. Sales have plummeted over the past few months, and the Society of Motor Manufacturers and Traders (SMMT) predicts that the trend will continue, with sales next year dropping below 2m - to 1.9m - for the first time since 1995. As an industry that employs more than 1.3m people and helps support many other sectors, including advertising, it cannot afford to surrender meekly to this fate.

Efficient messages

One issue that needs to be addressed is the lack of real incentives to give up an older car for a new one with lower emissions. Brands also need to find a way to shout louder about the fuel-efficiency of the latest models. The industry has always pushed design, performance, price and specifications. With the added need to promote efficiency and lower emissions, consumers are being bombarded with too many messages.

'There are still so many misunderstandings surrounding the efficiency of new cars, even larger family cars,' says Marc Raven, communications director at Citroen UK. 'We are doing a lot to increase understanding of our CO2 emissions, but we have a lot of messages to get out there.'

Its work may have passed most consumers by, but the SMMT has a policy of promoting the increased efficiency of new cars through the media. Each year it produces one report on sustainability and one on CO2 emissions. However, because it has limited funds, it is unable to emulate other trade organisations by running far-reaching campaigns promoting purchases of a new car.

In France, the government has introduced a raft of measures to boost the sales of new fuel-efficient cars and increase the numbers of older and more polluting cars being taken off the road. The 'bonus/malus' scheme pays purchasers a fixed amount, depending on the environmental credentials of their new car.

The SMMT will not be pushing for the programme to be introduced in the UK, however. 'We have put together a package of requests for the government to consider, one of which being a way of incentivising sales of new cars across both business and private sales,' says a spokeswoman for the organisation. 'What we don't want to do is create a false peak in the market that is unsustainable.'

The price of fuel has been forcing consumers to learn to use their cars less, while it is being drummed into them that a simple way to ride out a recession is to avoid spending on much more than the necessities. With credit less easily available, and reluctance among many consumers to commit to long-term finance plans, new car sales will go into freefall in the coming months.

There is a voluntary colour-coding system both for CO2 emissions and fuel-efficiency for car advertising and at point of sale in dealerships, but this is very unlikely to give consumers sufficient reason to buy.

 

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