In 2014 we anticipated in Fleet Magazine the “boom” in sales volume in the national car market, this, in view of the reluctance of most operators. One year later, we believe that the conditions are in place for 2015 to run even better.
A few days ago, the press conference of the Association of Automobile Importers (ACAP) took place. I was there and came with several reflections:
1- We are able to sell much more than expected again
Forecasts from the beginning of 2014. I wish many companies were like that, that they predicted around 5% and in the end grew more than 30%. This year, forecasts are for 11% but January is already there and… it rose by 31%. ACAP is careful to hold this press conference only after the end of the first month of the year is known, because of the surprises. There was no abnormal factor that caused January to have the sales it had. And, historically, the month of January is not a month that misleads you in relation to what will be the rest of the year. That's why…
2- Company purchases will not slow down, but private purchases will rise
It is fashionable to say: “companies are sustaining the car market”. This is not entirely true. The business/individual ratio remained the same in 2014 and, this year, it may change in favor of individuals. By companies, we mean: fleet management, leasing acquisitions and others, like the one in the next point. In any case, both channels should continue the renovation of the car fleet, which has been increasing every year. We are not in Cuba, but the average age of a national vehicle is almost 12 years. There is enormous pressure for renewal.
3- The rent-a-car is dealing cards
ACAP data say that rent-a-car grew from 20 to 23% of all cars sold in Portugal last year. It is a growth sustained by the golden period that the country is experiencing in tourism. There are many operators entering this cluster, many mergers and some innovations in the business models of large operators. Companies themselves are increasingly using short-term rentals, given the uncertainties of the economy in some sectors.
4- Renting asserts itself
Here is a cultural issue that is falling: for the Portuguese, the car really has to be theirs. Until now, it was said that one of the major barriers to the entry of financing other than credit was the fact that the car was in the name of the “finance company”. In renting, or operational leasing (notice the “rental”), this issue was extremely critical. The first customers were large companies. And then the averages. And then even smaller ones. And today, the main focus of fleet managers are private customers and individual business owners. Even brands realized this and are already advertising the financing! And today, renting has a 20% market share.
For all these reasons, I think that cars will continue to be sold in a good amount. The release calendar is vast and for all tastes. Banks are starting to run out of liquidity and can finally do business – read lend money. It's buying, gentlemen, it's buying!
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