Discounts not desperation - Sales meant to make way for 2014 models

Chad Bryan, Gleaner Writer

Recently, a number of Jamaican new-car dealerships staged special sales events or have been advertising discounted prices. While this slew of price cuts may be mistaken for intensified competition among new-car dealers or desperate measures being taken to simulate sales, Automotives has learnt that it is simply a matter of making way for 2014 models.

So, while the models being sold are new, in the world of new-car sales
they are packing on the months - not old, of course, but certainly
ageing.

Fidelity Motors, the Nissan dealership staged
its two-day sale event from June 21 to June 22. ATL Automotive had a
36-hour sale, which began at 8 a.m. on Wednesday, May 15, and ended at 8
p.m. on Thursday, May 16. Silver Star Motors, which sells the
Mercedes-Benz, had its one-day sale on May 18 and in early May Toyota
Jamaica kicked off its three-month 'Toyotathon' sale, which is scheduled
to close at the end of this month.

Executive Motors,
the Mazda dealers, has been advertising discounted prices on certain
vehicles.

Marketing officer of Fidelity Motors, David
Crawford, explained that staging the two-day sales event was in response
to the pace at which the market had been moving, as well as the need to
move out older stock in order to make room for newer
models.

"Basically, the market has been a bit slow and
as one can see, everybody is doing things to get people into a buying
mode, to get people excited. A big motivation now for new-car dealers is
that many of us are getting our 2014 models, so we have stock that we
need to clear out. So we are looking ahead and we would not want to have
2013 models moving into the new year," Crawford
said.

MARKET HAPPENINGS

The
suggestion that the sale was prompted by desperation was put to
Crawford; however, he said that the decision was made based on what was
happening in the market. He also mentioned that a few cars did well and
explained how the discount percentage was
determined.

"Desperation is a very strong word. I
would say that it is just a sensible move. You see what is happening in
the market and you roll with it. We went through our inventory and saw
what we could do and still be profitable with and that is how we worked
the percentage out," he said.

Crawford added: "It was
basically 10 per cent off when you looked at all of our vehicles and, as
expected, the Nissan Versa did extremely well. We got out quite a few
Jukes and people always want Navaros and Urvans," he said. Crawford also
said several banks came on board for the sale.

Group
public relations manager of the Stewarts Automotive Group, Camille
Fender, said the Mercedes-Benz one-day sales event went over well, with
persons being able to take advantage of the sales prices even three days
after the event. She also said that the dealership had not staged a
sale of that nature earlier in the year and the decision was taken to
offer prospective customer value as well as the luxury that the brand is
known for.

Kent LaCroix, head of the Automobile
Dealers Association, the new-car dealers organisation, said that having
these sales is necessary.

"If one has to try and get
rid of inventory based on high cost, then you end up having to have
these sales. It's an effective way to move stock, particularly at this
time of year. We need to move as much as the previous year's stock or
the current year stock to make room for the 2014 model year," LaCroix
said.