Car dealers--brighter days ahead: the automotive industry, like most other sectors of the economy, has been sluggish over the last few years hardly managing to get itself out of second gear. A report.

AuteurHollingdale, Michael
Fonction Money

According to statistical data, new car registrations in Western Europe as a whole fell by 1.3 per cent last year to 14.2 million.

In Switzerland, sales of new cars dropped 8 per cent to little over 270,000 and the second-hand market fared little better. But with talk of an economic upswing now finally appearing more than just misguided optimism, car dealers are hoping for better times after a four-year period that has seen the shedding of much of the industry's excess fat.

Switzerland has no automotive industry of its own and is much more cyclical than other markets, "In comparison to the rest of Europe, the Swiss market has always been characterised by a greater brand variety. As a result, the performance of individual makes is much more dependent on the range on offer from the manufacturers," says Heiner Lehmann of the Swiss Automobile Traders' Association. Thus, Switzerland has the reputation of an international weather vane. The biggest importer of cars into Switzerland is the AMAG Group, which distributes Volkswagen, Audi, Seat, Skoda and Porsche. The most popular manufacturer in Switzerland is Volkswagen, which usurped the top spot from Opel three years ago.

Consumers Call the Shots

For those willing and able to splash out on a new set of wheels over the last few years, there have been some advantages to the downturn. Consumers are calling the shots these days and there is a greater degree of price sensitivity on the market than ever before, a trend that is set to continue according to Heiner Lehmann as increased competition comes into play. "The market as a whole is changing", he says, "New service providers are coming to the fore and the traditional garage as we know it today is coming under increasing pressure."

As in other areas, the Internet is making its mark on the sector and consumers are also considering alternative ways of financing their purchase: leasing for example. Others are looking into the possibility of importing a vehicle to Switzerland from a neighbouring EU country, which can make sense if you can reclaim the tax paid.

Car manufacturers are becoming more price sensitive as competition heats up. In addition, they have firmly set their sights on improved safety features, environmentally aware designs and the growing female market.

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