‘Uncategorized’ Archive

The Irish Times – Wednesday, June 2, 2010

A CHANGE in the current registration system is being sought by car distributors and dealers in Ireland in an effort to spread out the current glut of sales at the start of the year. As new car sales this year already exceed the total sold in 2009, with 57,898 cars registered, some industry figures say businesses in the industry face front-loaded costs at the start of the year and then struggle to justify the expenditure on staff and premises as business dries up towards the autumn.

“The key issue we have with the current registration system is that between 60 to 70 per cent of new cars are sold in the first four months of the year, so funding for everyone operating and costs is enormously front-loaded,” says Alan Nolan, of the Society of the Irish Motor Industry (Simi).

“And it’s not just an issue for ourselves – the National Car Test calls in cars based on the date of registration and in recent years they have witnessed a huge proportion of tests due in the first four months and far fewer as the year goes on,” he says.

Alternatives to the system are being discussed within the industry lobby group.

However, they are likely to get a lukewarm reception from Government and civil servants, who don’t believe the cost of changing the current system is either timely or worthwhile.

Also, not everyone in the industry agrees that the system is broken. One senior industry source warned that dealers and distributors need to be careful what they wish for.

“If people don’t have the incentive of the new registration on the numberplate, they may well revert to only buying new when the car is actually new. With many manufacturers fully updating models every seven years or so, that could mean people will hold onto their cars for longer. It may ease the rush of the early months but only by reducing the number of people buying cars,” he said. “For all the problems, there’s no doubting that the current system offers a tempting incentive to buy, for some.”

Apart from seeking to downplay or remove the year of registration, Simi is also suggesting that buyers be allowed to change the county of registration to their own after they buy a used car. According to Nolan, the transfer could generate significant revenue for Government and be assigned to local roads maintenance. It won’t affect the information on the used car either.

When the registration is changed, the old registration for the car would not be used again, but would reside with the car, allowing full background checks to be carried out through the various history check services, as at present.

MICHAEL McALEER

Source: Fleet News

1. TENDERING TAKES TIME

Getting the tender process right is crucial to selecting the best supplier. Be realistic about the time it will take to review fleet requirements, draw up the tender document, select candidates, evaluate responses and make a selection.

Above all, allow adequate time for implementing the contract after appointment.

2. BEGIN BY CONSULTING WIDELY

Get input from all departments in your organisation with a stake in the fleet and from drivers and their managers, before starting to draw up the tender document.

This will save time later by highlighting whether questions are critical or irrelevant.

It also enables fleet firms to identify potential areas where suppliers can add value to the basic requirement.

3. SEE HOW OTHERS DO IT

Talk to other fleets about the lessons they have learned while tendering.
Also, do not be afraid to talk to the leasing companies themselves.

The reputable ones will give good, unbiased advice on structuring a tender to obtain the best responses.

4. DEMAND CLARITY

Aim for a tender document that is as concise and unambiguous as humanly possible.

Set clear guidelines for suppliers’ responses and stick to the timetable.

Be just as ruthless when judging responses.

Clear questions demand clear answers and deadlines are deadlines.

5. SHORTLIST FROM A WIDE INITIAL SELECTION

Before sending out tender documents, it is a good idea to see a wide selection of suppliers’ CVs to identify companies that can definitely meet your high-level requirements.

Get these by issuing a Request for Information (RFI) questionnaire.

6. MEET YOUR SHORTLIST BEFORE INVITING TENDERS

Meet the companies on your shortlist to ensure that they will fit in with a company culture and that appointment would be considered.

If not, they should be taken off the list.

Pre-tender meetings are also an opportunity to fine-tune the tender document.

7. PLAY A LEVEL FIELD

When the tender is out, make sure the process is fair by communicating openly with all parties.

If a supplier asks for information that is missing from the document, provide the question and answer to the other companies.

Give candidates time to prepare a high-quality response, ideally no less than four weeks.

8. JUDGE ON VALUE AS WELL AS PRICE

Require suppliers to separate all elements of their prices to enable like-for-like comparisons.

Allow leeway in the tender structure for suppliers to demonstrate how they will add value beyond their basic pricing.

9. VISIT SHORT-LISTED CANDIDATES AND TAKE UP REFERENCES

A visit to a candidate gives a feel for the way they run their own business and for firms to meet the people who would handle their cars and drivers.

Always ask for references and follow them up: fleet contracts run into millions of pounds, so it is well worth taking time to visit referrers.

10. PRESENT AND APPOINT

If, at this stage, there is still more than one candidate for a contract, ask the leading two suppliers to make a final presentation.

This is the time to clarify fully the expectations of the relationship and deal with any issues highlighted by the references.
Source: Alphabet (GB)

One of Ireland’s leading Fleet Management Companies closes the door on car clocking!

It’s widely believed that rolling back the odometer reading on an ‘ex-company car’ is easy to get away with. Car clockers know that it’s difficult for a private consumer to identify the fleet management company in possession of the service record and even if this can be done, getting someone to confirm its odometer reading can be tricky!

However, that’s all set to change now that one of Ireland’s leading Fleet Management Companies has decided to take preventative measures in dealing with car clocking.

Merrion Fleet Management (www.mfm.ie) has joined forces with Motorcheck.ie to ensure that anyone interested in purchasing a vehicle previously management by the company will have access to its odometer history.

Dave Wilkinson, Sales Director at MFM, commented on the partnership saying “At Merrion Fleet we pride ourselves on the quality of our ex-lease cars. One of the reasons we have enjoyed success in the corporate leasing arena is our ability to remarket cars at a premium price. We work hard to ensure that our vehicle’s service histories are carefully documented and that each odometer reading is properly recorded. Making this information available to any subsequent buyer through Motorcheck is a great way to ensure the integrity of our used cars and causes serious problems for anyone thinking of clocking one!”.

For a small fee, members of the public can consult Motorcheck’s mileage database for any Irish or UK registered vehicle at Motorcheck.ie. Motorcheck is the only Car History Check provider that has access to this mileage database (www.inmr.ie) and readings can be viewed within Motorcheck reports.

Michael Rochford, Director and Co-Founder of Motorcheck.ie welcomed Merrion’s contribution. “The Motorcheck mileage database is now well over 1 million audited Irish readings and growing on a daily basis. This makes it the largest database of its kind in Ireland and we’re delighted that Merrion are now a contributing partner.

The reasons for the drop in second hand values of an average of 20% – 25% but up to a maximum of 40% over the past 6 months or since 1st July are a result of pricing issues and over supply. These can be considered under the following 3 headings;

1. The impact of the move by the Government towards VRT being  based on CO2 emissions

This on its own should only have an average impact of a 5% or 6% reduction on second hand values due to the changes in car prices linked to the reduction of VRT for lower CO2 emission vehicles.

2. The general recession

There is a lack of demand for second hand vehicles as people are not spending money. The impact of the recession on car values has been exasperated by difficulties people are now experiencing in obtaining credit facilities to purchase second hand vehicles

3. Over Supply Issues

The importing of vehicles from the UK remains a real issue. The weakening in sterling from approximately 68 cent / £ to 80 cent / £ has lead to a flood of cars from the UK being imported into Ireland. This is particularly focused on larger and more expensive vehicles and models less than 2 years old. The more recent move from .80 to .86 is likely to cause even more vehicles to be imported. In addition to imported vehicles, bank repossessions are now hitting the market in big numbers

The industry clearly needs assistance from the Government especially in the area of UK imports. In particular they should enforce our existing laws in relation to driving a UK registered vehicle on Ireland roads. They could also introduce a VRT Refund Scheme for vehicles that are being exported which would make the disposal of vehicles abroad a viable option. There is a similar system currently operating in the Netherlands. The Governmant could also assist by encouraging the banks to make credit available to individuals and companies for car finance.

At this stage we estimate that residuals have fallen on average by about 20% to 25%.  At the higher end (large petrol engine vehicles in particular) residuals have fallen by up to 40%. This is because there is an increase in the popularity of diesel vehicles and a decrease in the popularity of large petrol models especially SUV’s. In the company car market there are no vehicles that are immune from this drop in value however the older and smaller sized vehicles have remained stable mainly based of the fact that there is still a high demand for these vehicles.

We do, however, believe that the second hand market should stabilise in 2009 as new car sales fall and the overhang from the July VRT changes clears.  New car sales have declined in 2008 and most anticipate a further decline in 2009.  A figure of 100,000 is now widely been adopted as the expected outcome for 2009. This should have a positive impact on the value of second hand values as demand increases.

Please see below for some examples of vehicles that Merrion Fleet disposed at the beginning of 2008 versus what they sold similar vehicles for at the End of 2008. Please note that these are trade figures.

2004 Volkswagen Passat 1.6 Base – 96000km
Feb € 8,000
Nov € 6,000
Percentage Reduction 25.00%

2004 Volkswagen Golf 1.4 Base 5dr – 40000km
Feb € 11,200
Nov € 8,250
Percentage Reduction 26.34%

2005 BMW 520i Auto – 80000km
Feb € 27,500
Nov € 17,000
Percentage Reduction 38.18%

2005 Volvo S40 1.8 SE – 100000km
Feb € 12,250
Nov € 9,000
Percentage Reduction 26.53%

2005 Toyota Avensis 2.0D4D Aura – 140000km
Feb € 12,500
Nov € 8,500
Percentage Reduction 32.00%

Initial sales figures for March show a drop of 23 per cent compared to the same month in 2007. This shows a drop of 6,466 new cars being registered. There has also been an estimated drop of 28 per cent in the amount of commercial vehicles being registered.

The slow up in sales is being directly linked with the changes in the Vehicle Registration Tax (VRT) due to come into place in July. From the 1st of July, VRT will be based directly on the CO2 emissions of a vehicle rather than the cubic capacity. The new rates range from 14% for vehicles with CO2 levels of less than 120g to 36% for those with emissions greater than 226g.

The majority of manufactures are due to release their updated pricing within the coming weeks and this should clear up any confusion regarding the VRT changes and pricing.

If you have any questions or queries regarding these new prices or changes in VRT, please do not hesitate to contact us directly on 01 2061118.