NAMA NEWS MARCH Dear Colleagues
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1 NAMA NEWS MARCH 2016 Dear Colleagues It was great achievement for NAMA this month to receive the IMI Outstanding Contribution to the Motor Industry Award. This was given for the NAMA Grading scheme and in particular the appraiser training course run by Stephenson College. I was told that the NAMA application stood out the most of all the applications received for the award. I must thank all those individuals who have made this possible, including Andrew Walker, Mark Elliott, Jonathan Higham, Phil Squires, Graham Armstrong and of course our Chairman, Paul Hill. I would also like to thank Tim Hudson whose idea the grading scheme was so many years ago. Well done to everybody. Finally, special thanks should be given to Stephenson College who have made the training scheme possible. Wishing you all a happy Easter. Louise Wallis Head of NAMA Tel: louisewallis@rmif.co.uk
2 NAMA RECEIVES OUTSTANDING CONTRIBUTION TO THE MOTOR INDUSTRY AWARD The National Association of Motor Actions (NAMA) received the award for Outstanding Contribution to the Motor Industry at this week s Institute of the Motor Industry (IMI) Annual Dinner. NAMA has been recognised for its vehicle grading scheme which was developed to enhance transparency and make it easier for auction buyers to select the vehicles they want to buy, and in particular the NAMA Vehicle Appraiser Training Course. The course is accredited by the IMI and is designed to train members to standardise vehicle appraisals throughout the UK Motor Industry. NAMA has trained over 500 appraisers so far. Louise Wallis, Head of NAMA commented, On behalf of NAMA we are honoured to have received this prestigious award. The Automotive Retail Industry is one of the fastest moving in the UK and we have developed these schemes in order for industry professionals to increase their productivity and take pride in their career and industry.
3 NAMA VEHICLE GRADING We recently held a grading working group meeting at Stephenson College which was well attended by members and in addition the College were represented. Besides the usual items around the technical issues of the grading scheme, we also covered issues such as training and promotional material. In respect to training, we have agreed to move forward with a refresher course for auction staff who have completed the appraiser course. It is envisaged that refresher courses would need to be taken around 2-3 years after the original course. We will therefore be launching these towards the end of this year and the beginning of In respect to promotion of the grading scheme, we are in the process of developing a short video to highlight an inform auction customers of the benefits of grading for them. Also, we will have a new brochure to promote the scheme in the next few weeks. NAMA IN THE NEWS AM ONLINE GUEST OPINION: THE CHALLENGE OF PRE-REGISTRATIONS IN 2016 With the key March new registration period now underway, the issue of increasing dealer pre-registration activity is very real as dealers seek to drive through volumes that in turn will release the bonuses that are a vital part of profitability. While to date retailers have been able to absorb the influx of nearly-new stock that has grown over the last year the sustainability of such an approach must be questioned. Maintaining the supply/demand equilibrium in balance is essential to sustaining residual values, which, following the growth of PCPs is arguably more important than ever before in our market. Right now many dealers are resorting to extensive levels of pre-registration activity to achieve the volume targets, which form an essential part of their profit mode. The growing risk is that the flood of product is exceeding demand bringing with it an inevitable downward pressure on values. On the one hand, this may seem attractive to consumers, but we can see from historic experience that any significant fall in residuals has a knock on ripple effect that can seriously damage consumer confidence. The risk of negative equity could return and certainly guaranteed minimum future values will be reduced, making monthly payments higher.
4 The challenge is that while new car and LCV volumes grew in 2015 to a new record level, by the end of the year this growth was increasingly being attributed to fleet buying activity. To maintain the upward trajectory and achieve demanding volume targets, dealers preregistered vehicles at a level not seen in many years. In May 2015, Glass Guide suggested that the number of new cars on the market less than a year old and with next-to-no miles on the clock soared by 91% in the preceding six months. The evidence suggests that this trend has continued subsequently. Remarketing is an essential part of the unique car retailing landscape, used vehicle values inherently impact new car sales. If residual values decline there are no winners and consumer confidence risks being damaged. We need to let the market decide where sustainable volumes should settle, and residuals are part of this equation that excessive preregistering places at risk. Author: Paul Hill, NAMA Chairman (this article was also covered in Motor Finance) FLEET NEWS NAMA GRADING ENHANCES DIGITAL TRADER BUYING EXPERIENCE NAMA Grading is helping digital trade buyers in terms of speed, accuracy and confidence and vendors in terms of conversions and values. The online buyer is a key player in today s remarketing sector and it is making a difference to the wider remarketing model, says NAMA. Online trade buyers are comfortable with technology and use digital channels to access a wide range of stock, regionally and nationally. However, because they don t see cars before they arrive and have that opportunity to touch, feel and listen to potential purchases, the potential risks of making a buying misjudgement do exist, it says. NAMA has established clear condition grading as a minimum standard to minimise these risks. Launched in 2014, NAMA told Fleet News that its Stock Grading Standard has had a significant impact on digital trade purchasing, providing a level of product quality reassurance. Many NAMA members are going beyond the grading standards to ensure all buyers have a clear picture of the vehicle on offer with photographic evidence to support the condition report. Buyers can bid with confidence, it says. The impact of grading has been to increase first time conversions, which currently are returning a 300 premium. NAMA said buyers know this is stock they can market and turn around quickly and they are often prepared to bid strongly on it regardless of the auction location.
5 As with any online service, integrity is all-important, said NAMA s Louise Wallis. When it comes to used vehicles that dealers want to bring to market swiftly and eve mindful of regulation, notably the Consumer Rights Act, accuracy and depth of product information is a vital consideration. What we have been able to feedback to vendors is that a correct high integrity description significantly enhances conversion levels. Add this to good condition and the impact is to increase values achieved as well. For this reason, many of our members are successfully embedding their support into the fleet management pipeline helping the management of the de-fleet process. FEBRUARY NEW CAR REGISTRATION FIGURES NEW CAR REGISTRATIONS CONTINUE TO GROW AHEAD OF 16-PLATE CHANGE It is extremely positive to see the new car market has now achieved 47 consecutive months of growth increasing 8.4% over the period. New car sales figures, released today for February, traditionally one of the quietest months of the year ahead of a number plate change in March showed that 83,395 units were registered marking the biggest February since Consumers appear to be less reluctant to commit to new vehicles as employment prospects improve and interest rates and fuel prices remain low. Increased sales are supported by strong manufacturer deals and low cost finance offers that are encouraging consumers to buy. We anticipate the market to continue to grow, and have strong expectations ahead of next month s 16-plate change where customers will be likely to take advantage of a range of substantial discounts and savings, in addition to a variety of low rate finance packages being made available. DATES FOR YOUR DIARY NAMA Executive Meetings 2016: (all held at RMI London office) Thursday 14 April Tuesday 5 July Tuesday 18 October
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