Manufacturer pressure pushes up car dealership stock

Recent data analysis has revealed that the UK car dealership inventory has been pushed up by 46 per cent in the last five years, reports AM Online.

UHY Hacker Young, which analysed data from more than 10,400 car dealerships across the country, said that there had been a push by manufacturers to add 13 per cent more cars between 2014 and 2015 alone. The huge push over the last five years increased the overall value of the stock held by UK car dealerships from £16.1 billion in 2011 to £23.4 billion in 2015.

With any changes in the stock that your car dealership or garage holds, whether that’s an increase or decrease, be sure to get another motor trade insurance quote to ensure everything is protected.

UHY Hacker Young said that, after the recession, car manufacturers encouraged UK car dealerships to add more and more stock in order to reduce their own ever growing stock levels. There was also an obligation placed upon car dealerships to ensure each manufacturer a larger market share with specifically contracted targets.

Paul Daly, a partner at UHY Hacker Young, said of the analysis: “Dealerships are under pressure to add increasing amounts of stock to their balance sheets in order to meet targets set by the manufacturers. This approach can put unnecessary strain on dealerships, with many facing the risk of termination of their lucrative contracts with manufacturers if they don’t take on stock.”

Mr Daly went on to say that this situation could force some car dealerships to reduce their prices in order to shift the additional stock, so that they did not lose out on manufacturer contracts in the future.