New figures recently released  by the Society of Motor Manufacturers and Traders (SMMT) revealed that the UK new car market fell by 20.5% in September 2018, with year-to-date performance 7.5% behind 2017.

According to the Restructuring Advisory practice of Duff & Phelps, there are resources and strategies available to independent dealers to confront the challenges posed by this declining market.

According to the SMMT report, new and more rigorous emissions testing requirements continued to affect supply and distorted the market as manufacturers underwent delays in getting their cars approved. The new restrictions affected private consumers, fleets and businesses, with only 338,834 vehicles registered in September 2018, declining by 87,000 from the previous year.

Michael Bills, Managing Director, Restructuring Advisory, Duff & Phelps, commented: "For dealers, September is what Christmas is to high street retailers. They need the bonuses that come with hitting and exceeding targets in September to firstly get them through the large VAT bill payable at the end of October / beginning of November, and then through the leaner winter months."

Paul Smith, Managing Director, Restructuring Advisory, Duff & Phelps, added: "In addition to the Worldwide Harmonised Light Vehicle Test Procedure issues, the performance of the UK new car market is strongly linked with consumers' confidence and access to credit, so it is no surprise there's a decline. Additionally, recent interest rate rises, the depreciation of sterling pushing up prices, the drying up of PPI payments - which gave consumers additional spending power - have all had a significant impact on the industry."

"It's been a tough year for the UK automotive market, but it is worth noting that there are some manufacturers performing well, so arguably this is not an industry wide trend."

"Manufacturers will not want to see long standing dealerships suffering and possibly even disappearing as a result of an economic slowdown.

Accurate forecasting, planning ahead and embracing of the rescue principles promoted by Duff & Phelps will be necessary to manage a challenging economic period. Our UK advisory team is uniquely positioned to advise dealerships and their stakeholders in a variety of distressed and special situations. Our team has sector experts, recruited from the industry and with real 'workshop floor' dealership experience and we understand the challenges being faced, so we would urge those dealerships facing tougher trading conditions to contact us," concluded Paul.