Target Price Market Report – March 2021
Target Price market report
The average cash Target Price discount is more than 20% lower, in relative terms, that it was 12 months ago. This means that buyers can typically expect to haggle a 7.1% or £2796 discount when purchasing a new car.
At this time last year, just before the true effects that Covid-19 would have on new car retailing became known, the typically achievable transaction price saving had seen six consecutive monthly increases, because dealers had appeared to have lost the latest battle to boost trading profitability to more sustainable levels.
While the pandemic has undoubtedly been challenging for many car dealers, it has also presented an opportunity to reset the transaction price negotiating dynamics to a more sustainable footing for dealers.
Reduced vehicle supply, reduced pressure on sales targets from manufacturers, pent up customer demand and sales teams more able to focus just on people who are intent on buying has allowed salespeople to drive down average Target Price discounts and keep them at these lower levels for the last three months.
Covid-19 has also given many dealers some space away from the usual hectic pace of motor retailing to recalibrate their operations and really see where efficiency and profitability opportunities lie, including a more focused approach to obtaining and selling stock vehicles.
If the retail dealer network can embed these changes and hold their nerve when lockdown lifts and manufacturers resume piling on the pressure for more sales, then a far more profitable future awaits.
Renault has recorded the highest month-on-month increase in the average cash Target Price saving, too, with the typically achievable showroom discount across the model range up by 5.3% to 13%.
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