Why do dealers sell certain cars at high prices?

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There is an emergency for the dealers. After two months of closure due to containment, the auto market literally died out, dropping 88% in April. Since May 11, these salespeople have reopened, with a large stock of cars to sell.

Faced with this, a solution is imperative: practice new discounts. 30% on certain cars, such as the Micra at Nissan, offset of the first monthly payments as at Citröen, or even a bonus of 2,500 euros or more for the purchase of one vehicle in exchange for another (which is implemented Peugeot). Indeed, brands and dealers almost come to sell off some of their products, as if to get rid of them.

For good reason, they need to destock. Two months of sales stop and at least 400,000 new cars would be available for sale today. This represents almost 10 billion euros. Today, the stock of new vehicles from manufacturers represents a third of annual production in France. “Usually, car dealership stocks are between one and four months“, Explains Christophe Maurel, dealer and president of the dealer trade at the CNPA (National Center of the Automobile Professions).

The importance of the second-hand market

These stocks have not moved in two months and they must be sold“, He explains, adding in parallel that due to the fall in production, there will however be a two-month lag on future stocks. And this surplus is expensive, confirms the professional, since it is necessary to take care of maintenance, insurance or even parking. Especially in the Paris region where prices are higher.

All the same, since May 11, a glimmer of hope has emerged among dealerships, who feared this date. “It was either one or the other“Explains Christophe Maurel. Understand: recovery or collapse. Today, he assures that there are few order cancellations, enough to draw a positive balance from these first days, despite the persistent fragility of the market.

For us, the second-hand market must be fluid, because 60% of sales are made by taking over a vehicle“Continues the expert. He explains that with around 500,000 used vehicles on the market, in addition to the vehicles that will soon be taken back against the purchase of a new car, it is precisely this sector that will have to function to help dispose of the surpluses. .

This is why used cars are particularly targeted by the discounts. “A car that has been registered since October, even with zero kilometers on the odometer, is still a used car“Explains Christophe Maurel. It is therefore subject to discounts, sometimes significant, because the value of these cars decreases day by day. Dealers and brands therefore have every interest in selling them quickly.

On the other hand, a vehicle in store since March 17, but not registered, has not aged in two months. It will not be a priori affected – or to a lesser extent – by these discounts. Christophe Maurel also recalls that the automobile market is “very aggressiveWhich naturally leads to strong price competition. All of this comes at a cost to brands, as well as to dealers. On the one hand, the value of the vehicle decreases with the discounts, on the other, the margins melt. “If we resume, it is because we have to resell“, Concludes the concessionaire.



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