The car price report from the Competition Commission will not force down new car prices, according to the Association of Car Fleet Operators.
Acfo welcomed the publication of the report. The fact that this is now in the public domain will help to remove a great deal of the uncertainty which has overhung the market in recent months, said the association.
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From an early assessment of the information, ACFO has mixed views on the various recommendations.
A spokesman said, “There is nothing which will actually force new car prices down. At its simplest, the proposed remedies will simply transfer a monopoly of manufacturers to a monopoly of dealers.
“We perceive a significant threat to the survival of smaller dealers, who will never have the capacity to buy vehicles at “big fleet discounts”.
Indeed, there would appear to be opportunities for the larger dealership groups to buy up smaller dealerships, to enhance their bulk purchase negotiating muscle.
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By GlobalData“There is an unwelcome focus on price alone, without regard to service, attention to detail or longer-term value-for-money and support issues.
“The continuing threat to abolish list price at some time in the future is highly unwelcome,” he said.
“This remains a sword of Damocles hanging over the fleet industry, which together with the assimilation of the Budget proposals for environmentallybased company car taxation, makes it difficult for some fleets to identify their best way forward.”
It is clear that the detailed report exonerates fleet operators and the fleet community from the responsibility for the new car pricing issues.
Most fleets simply try to optimise their vehicle acquisitions from the systems that are available in the market place, said the association.
Acfo notes that in all other markets, for virtually any commodity, volume buyers can and should receive more favourable prices than single-unit or low-volume buyers.
The terms of the proposed regulations should lead to some rationalisation, and an end to some of the marketing hype based on manufacturer aspirations, rather than intrinsic quality and value.
This, together with the actions to limit pre-registration of vehicles, should bring greater stability to both new and used car markets.
“Acfo sees no conflict in dealers being able to attain the same level of fleet discounts as fleet, provided all the terms of the deal are identical.”
It is widely accepted that the highest level of fleet discounts are available only to those who commit to single-badging, reduced choice, and frequently, minimum variation of specification. Some form of financial value must be applied to these qualities, so that the market is not driven on volume alone.
“There is continuing concern over issues such as the quality of the total service which will support vehicles not sourced in the UK.
It will be unacceptable, of course, for any dealers to try to limit their responsibility for after-care for vehicles sourced in an overseas market, simply on the basis that they had been supplied at a cheaper price.
There is also concern over the implications for future residual values.
“An initial view suggests that the risk of lower residual values from foreign-sourced cars may actually fall, but we will need the experience of future months and years to ensure that this risk is indeed reducing.”
