Predicting the unpredictable
Much like the horses competing in the world famous Grand National, the Motorcaravan industry has had to jump numerous hurdles this season. The fences appear to have been trickier than in previous years, but is the final straight in sight?
Industry statistics released by the National Caravan Council (NCC) may suggest that the new market is performing to a similar level to last year, but general market confidence does not reflect this. Back to the starting blocks in the early autumn, confidence was high, and why shouldn’t it had been? The new market had been excelling in recent times, year after year. However, there was a false start. The initial stampede of new business experienced by dealers in previous years, never fully arrived and eyebrows were raised as the first testing hurdle approached, the Caravan & Motorhome show at the NEC. A boost and injection of pace was required for the market at the show, but it didn’t quite materialise. The week went smoothly, but there was an air of quietness around the familiar halls. As always, Christmas and the New Year were approaching fast. As time sped on, the market seemed to fall further back. It was clear something was not quite right and possible factors emerged.
The industry is in a complicated place when it comes to how it is affected by the economy. Traditionally, a good proportion of the customer base are in a position where they are able to make purchases with disposable money. This is confirmed with no significant increases in finance penetration recently. But could the economy be hindering the market more than thought? According to PricewaterhouseCoopers – Consumer spending growth will have dropped from 3.1% to 1.1% since 2016. A significant drop like that would suggest that consumers, financially stable or not are being cautious. Price increases are inevitable in any industry, especially during a long period of inflation like we have seen in the UK. Those introduced for the 2018 season perhaps came at the wrong time.
Market gains were reportedly made in January and February, aided by the Camping, Caravan & Motorhome show. The show had a similar feel to October though and still raised more questions than answers. Questions like –
- Why has demand dropped off? Especially customer footfall at dealership sites?
- Why does there still seem to be large amounts of stock available - Despite sales statistics mirroring 2017?
- What will happen with the rapidly unpopular twin axel stock?
- Will the market recover and exceed the successes of the 2017 season?
Once again, momentum was hoped for leading up to the early Easter break. Unfortunately, much like the famous race’s water-jump dampens it participants, the market suffered its own fall. The wave of snowfall that hit over late February and early March scuppered that. There was understandable frustration and concern once more, but, since then the market appears to be catching up. The weather has been supreme, just in time for the outdoor show Season. More importantly, customer’s ever-changing mentalities are being taken on board. Dealers will know only too well how many private sellers have sniffed around the market in recent years and this has contributed to potential customers changing the way they shop. The world is becoming more tech savvy, especially when it comes to online advertising. This is not a new feature for the Motorcaravan industry, but customers are taking their time to browse online to the point of purchase, instead of being guided around a showroom by a sales assistant. Sales conversions are up which suggests the reaction to these changes are positive.
There is reason to be optimistic as we head into the summer months. The weather has been brilliant since April, a huge difference compared to earlier this year. Ultimately demand is still there. The industry is still proving to be popular with new and old customers and whilst that is the case, confidence should remain. It seems the hurdles have been cleared now. It’s now all about how fast the line will be crossed.