August Auto Mania

By Eason, Kevin | Management Today, August 1995 | Go to article overview

August Auto Mania


Eason, Kevin, Management Today


There are no holiday brochures in Richard Millington's house. While the rest of the country packs its suitcase and heads for the sun, Millington works day and night, seven days a week through July and August trying to cope with the barmiest sales boom in British industry.

Millington is a car dealer and the first day of August brings the annual change in the registration letter, this year from M to N. That one-letter change might seem insignificant but it is enough to double his showroom's business as customers queue for their fashionable registration plate. Instead of selling an average 200 cars in a month, Reg Vardy Nissan, where Millington is general manager, will sell about 500 in August and take in as many used models in part exchange. There will be no let-up, no breather from the rush, as the car industry tries to cram new car sales worth 4.5 billion[pounds] into one hectic month.

On the scale of British traditions, the August registrations hoo-ha almost rates alongside the Trooping of the Colour and the Cup Final. It demands so much attention. It is unique - although nobody seems sure whether that is commendable or not. No other country in the world is daft enough to ask its biggest manufacturing industry to pack 25% of its annual business into a single month. While the French relax in the August sunshine and the Germans are putting their towels over deck chairs, close to half a million Britons will be at home, clutching a duster waiting to polish up the paintwork on their new cars - complete with new number plates designed to engender the envy of neighbours and colleagues in the company car park.

The cars delivered to their doors on 1 August are exactly the same as those - if any - sold on 31 July except for that vital one-letter difference, the letter that allows British drivers to indulge themselves in the ultimate motoring snobbery.

Dealers say that they hate the August rush, and nearly 700 of them voted six to one in favour of abolishing it in a survey carried out by Automotive Management magazine last year. But they are also fearful that if it disappears, the biggest single stimulus to an erratic and nervous market could disappear, with the result that they will lose out overall across the year.

The carmakers, represented by the Society of Motor Manufacturers and Traders (SMMT), set up a committee to rail against the August blip, complaining that it cost dealers 1[pounds] billion in stocking and organisation costs, and decided to badger the Government into change. Now, apparently, the industry isn't sure whether it is for or against it as the fear of economic failure continues to haunt its members.

It is a spectacular and ironic conundrum dogging an industry at the leading edge of technology, more sophisticated than almost any other at advertising, marketing and selling, yet one which still cannot figure out a way to iron out the huge bump in the annual sales graph.

There is no other product which depends so entirely on when it is sold. No one orders a washing machine, or jewellery, or ironing board or television for delivery exclusively on 1 August because it is fashionable, nor does the date of sale so irredeemably condemn the product to its future resale price. In a car it is absolutely vital: a model sold at one minute to midnight on 31 July would be worth less on the used car market than the exact same model sold at one minute past.

Cecil and Blanche Stokoe decided to buy a new Nissan Sunny to celebrate their 50th wedding anniversary on 14 July. But the Stokoes, who live in Birtley, County Durham, realised there was little point investing 9,500[pounds] in a new car two weeks before the registration change which could make a difference of hundreds of pounds in its resale value later.

`It just happened,' says Stokoe, `that we wanted to buy a new car but buying a car in mid-July meant we might as well wait for the changeover. It made sense to wait. …

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