Six months ago Jon moved to Italy. Having been married to an Italian for several years, he had increasingly found that the most natural place for them to locate to was Verona where her family lived and their business was based. Jon was a loyal customer of his local dealership. Every three years he replaced his car, purchasing from the dealer where he first bought, more than 30 years ago. Jon was a well-paid professional, who enjoyed a comfortable lifestyle. Cars were important to him and as well as his main vehicle he ran a Ford Focus, once again regularly replaced.
Last week I was chatting to the sales manager, and the conversation got round to Jon. He had sold his main car privately before moving, preferring to purchase his next one when he was established in Verona. This was bad news for the dealership – Jon would have been looking to upgrade this September. But what is most interesting and potentially worrying is that it seems that more and more customers like Jon are migrating to foreign climes, taking their money with them, and buying their next car once they are abroad.
Picking up the newspaper it’s hard not to read about the challenges facing the UK regarding immigration. But it also works both ways. The movement of people like Jon away from our shores may be about to present a challenge to the motor trade in the UK. As increasingly large numbers of affluent car buyers leave the country, there are fears that there could be repercussions for the motor industry.
In a market that is facing a difficult economic climate, the movement of affluent consumers to foreign shores simply adds to the challenge of remaining profitable. It is widely unreported, but it seems that the market could be losing an appreciable number of potential buyers to emigration. Recent reports suggest that the increasing absence of potential consumers could be significant in the years ahead. It’s a fact that swathes of the population are selling their cars for good and they won’t be purchasing another in the UK.
“These people all have cars and the vast majority will dispose of them before they leave, some electing to part-exchange them with left hand drive specialists in the UK before departure,” said John Glynn, Consumer Values Editor at EurotaxGlass. “Once gone, these people are unlikely to return to the UK car market at any stage in the future.”
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It appears that between 1966 and 1996 the UK lost more people through emigration than it gained through immigration. Four-and-a-half million British passport holders now live overseas, and the latest figures from the Institute of Public Policy Research reveals that 200,000 people left the UK on a long-term basis in 2004. Surveys also indicate that the levels of emigration will continue to rise.
The worry in the industry is that the apparent loss of 200,000 potential car buyers is going to be reflected in a further drop in sales.
I remain sceptical. Despite comments like those from the sales manager, I don’t believe emigration will have the potential effects suggested. Certainly, it could be a factor in decreasing sales, albeit not on as large a scale as reports suggest, but what about the new immigrants to the UK? A huge percentage will be in the business of buying a car - their contribution and spending power to the industry must not be discounted.
I am sure that as time goes on a natural balance will be achieved. In the words of Douglas Adams (and a certain Corporal Jones): “Don’t Panic!”