2011 UK New Passenger Car Market Forecast

Since 1980 UK Recessions have lasted an average of 4 years.  If that pattern holds 2011 should see the UK economy rebound to its trend GDP growth of 2.5% – 3.0%. Will that actually happen? Probably not. This recession has been the deepest, excepting the 1930’s, with a cumulative GDP contraction of 6.3% . But, we’re now on the upturn – see the chart above. The question is, how long will it yet take? On current trends GDP will not regain its 2008 level until 2012.  Today GDP is back to where it was in 2006.  But, while construction, services and the public sector are at 2006 levels, industry and agriculture remain depressed. GDP did grow in 2010  – and the new car market benefitted  because consumers reduced their savings tempted by price discounting. It’s unlikely to recur in 2011. Most likely consumer spending will fall coinciding with a drop in government spending. Inflation is set to rise. Growth –   if it comes  – will be driven by building up stocks  of goods for export. With mainstream retail customers hoarding their money the fleet buyer will have to take up the slack. Will that happen?

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Pyramids, Voting Shares and Cross Holdings: Staying in Control in a family-owned dealership.

‘Born with a silver spoon’. That’s often how it looks to outsiders when a family-owned dealership passes successfully from one generation to the next. In truth, it’s usually taken a lot of hard work and hard bargaining for all concerned. In UK motor retailing, the dominant and most successful business model is the family owned dealership or dealer group. But, as a rule of thumb, only one in three family firms successfully make it to the second generation. Plus,of the one that succeeds, most grow very slowly. One reason is that many do not know how to attract new investment without losing control.  How do successful family firms structure themselves to overcome this challenge?

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