Retail - summary

  • As expected, March new car registration figures made for disappointing reading, with the market down -3.4%. The Diesel share recovered marginally by 2% on February although -11% down YoY
  • Consumer confidence index remains level at -13 as overall new car registrations decline -3.4%; however, private registrations remain stable year to date at -0.8% YoY
  • Two-thirds of respondents reported in the March Monthly Market Survey* a decline in consumer demand whilst half cite that retained margins remain similar to the same period last year
  • Challenges continue to face the new car market, as a quarter of dealers indicate an increase in consignment stock. Used car strength produces encouraging results in the March Monthly Market Survey,* as 76% of dealers report a decrease in overage and 62% report a reduction in days in stock
  • In a time of uncertainty, 30% of dealers remain positive over the economic condition over the coming months whilst 54% report in the March Monthly Market Survey* that they expect it to decline. Nearly half optimistic that sourcing stock will improve
  • Concerns on margin pressures expressed in February’s dealer survey have lessened in March, but this is likely to be a continued theme in the coming months
  • Political uncertainty in the key plate change month had a big part to play, but private registrations have held relatively steady YTD, down just 1% year-on-year
  • According to the latest dealer sentiment survey from Modix, almost 60% of retailers feel that consumer demand was down in March compared to the prior year
  • The new car fleet registration headline figures don’t necessarily tell the full story, and manufacturers have worked hard to maintain a stable market by using all the sales channels available
  • The used car market sentiment reports of a fall in demand in March, but dealer sentiment around days in stock suggests that this area of the market is still performing strongly

Wholesale - summary

  • The introduction of WLTP and ongoing uncertainty around taxation in the fleet sector is continuing to cause owners to hold on to their cars for longer, and as a consequence, the wholesale market is seeing older, higher mileage vehicles
  • Part-exchange vehicle volumes rose by 10% month-on-month (MoM), while the average part-exchange price was up 1.7% to £4,150 and the average age increased by 2.6% to 87 months
  • Petrol and diesel prices fell year-on-year (YoY) in March, likely to be influenced by an increase in vehicle age and mileage. The average price of Alternative Fuel Vehicles (AFV) increased by 2.3%
  • Manheim report a double-digit increase in part-exchange volumes through its physical and digital wholesale channels in March
  • Manheim saw the number of part-exchange vehicles rise by 10% month-on-month, while the average part-ex price was up 1.7% to £4,150
  • March was a month of two halves in the wholesale market - strong prices and demand in the first two weeks, particularly for ready-to-retail stock, but the market was more challenging in the latter part of the month, possibly as a reaction to political uncertainty over Brexit
  • WLTP and ongoing uncertainty around taxation is causing owners to hold on to their cars for longer, and we’re seeing older, higher mileage vehicles entering the wholesale market
  • Majority of manufacturer’s sales continue to hit the dizzy heights of 90% conversion with cap prices close to 100%

Funding - summary

  • The wholesale stock funding business recorded an average cost per unit of £7,958, up 5% month-on-month and a 12.8% increase on March 2018
  • Average holding days funded increased 5 days YoY with a minor decrease of 3 days from February 2019
  • Four out of five dealers* surveyed said they considered integrated technologies either ‘important’ or ‘very important’. In contrast, only one in ten considered it ‘fairly important but not essential’ to their business
  • The average age of funded units reduced marginally from the 6.9 years in 2018 to 6.1 years, while the average mileage dropped below 60,000

The Monthly Market Report includes our 2019 outlook for retail, wholesale and funding sectors as below:

Retail 2019 Outlook

  • Increasing appetite for Manufacturers and Dealers to embrace eCommerce
  • Demand grows for advanced vehicle imagery solutions to drive online buyer confidence
  • Dealers investing in PPC advertising to drive sales as consumers turn to online for their next vehicle

Wholesale 2019 Outlook

  • Demand for retail-ready stock will drive efficiencies in vehicle services, assisted by enhanced imagery
  • An increasingly agnostic approach to physical and digital sales streams will emerge to complement changing buyer behaviours
  • Buyers will expect increased transparency to drive stock confidence, leading to more detailed vehicle descriptions and assurance checks

Funding 2019 Outlook

  • A strong appetite for growth means cash flow remains a priority for dealers
  • An increased focus on digital integration is helping dealers to purchase stock hassle free from a variety of sources
  • Ease and flexibility remains key for dealers