Credit Crunch Threatens Car Sales

Anthony Fontanelle
October 4, 2007

Speaking at the launch of the new generation Subaru Impreza, the boss of the east Birmingham-based importer said that some car buyers were going to find it much harder to finance car purchase as lenders made more cautious decisions, reported Motor Torque.

Edmiston, the son of IM Group founder Sir Bob Edmiston, said, “As a distributor with our own finance company we do not have problems but anyone who is using their own lending facility may find it much more difficult to finance a car.”

“I don’t think the effects of the current financial situation will be felt immediately and car sales this year will largely be as predicted by the SMMT, but possibly in a few months and into early next year we could see the effects,” he added.

Edmiston believes that there could be a strong divide between better off older buyers who largely finance their own purchases and younger buyers who rely on finance companies to borrow funds.

The hitting of the auto purchase button for the 57-plate were made before the current lending crisis suffocated the economy. But Edmiston predicted the 08-plate arrival could see the change.

The longer term affect of the financial situation may alter the market in a less expected way because better off older buyers choose different cars to younger people so the executive or luxury end of the market is less likely to be affected than the entry level sector. Even within sectors there could be changes as certain trim levels and models become less or more attractive depending on buyers’ circumstances.

Lawrence Good, the Subaru executive director sales and marketing, said that the new five-door only Impreza is priced to compete with the sector leaders and is £2,000 cheaper than the series it replaces. The seven-model 1.5 and 2.0 manual and automatic Subaru Impreza range is priced from £12,495 to £19,995.

Subaru officially introduced the next generation Impreza WRX at this year’s 2007 New York Auto Show. The car is available in 4-door sedan and 5-door hatchback styles. The EJ253 engine carries over from the previous generation to power the 2.5i and the EJ255 engine carries over from the previous generation to power the turbocharged WRX trim levels. In its home market the range comprises the 1.5 liter 15S, the 2.0 liter 20S and the 2.0 liter turbocharged S-GT. Variations are found in other markets around the world: in Australia, the range at launch included three 2.0 liter models (the R, RX and RS) and a 2.5 liter turbocharged WRX.

The new base model of the vehicle is 50 mm shorter than its ancestor but is wider and has a longer wheel base. Engineers and designers of the automaker made Impreza’s dashboard more open and easier to configure like that of the VW Golf part. Also, the windows feature innovative frames to improve NVH levels and rigidity of the car.

The Japanese automaker expects to sell 300 versions this year and 650 in 2008. The sales goal will be bolstered by the arrival of a 2.0 high performance diesel next year.

At present, the IM Group has 80 dealers and is on target for 100 by 2010, when it expects to sell 15,000 new cars compared to 7,300 this year as the entire range is renewed and refreshed, including reintroducing a two-wheel-drive Justy as an entry level model.

Source:  Amazines.com