Retail - summary
- UK new car registrations declined -1.3% in November, down from 158,639 to 156,621 registrations resulting in a YTD of -2.7%. This reflects the low consumer confidence and the headwinds faced in the new car sector throughout 2019. However, for the second consecutive month, AFV has increased market share to 10.2%
- Although the November UK Consumer Confidence remained in a double-digit negative at -14 for the fourth time this year, it will be encouraging to see how this will change in the months ahead
- The Modix monthly dealer sentiment survey results revealed a challenging month for dealers. 55% of respondents believed demand was down YoY. 55% also reported that physical footfall was down, although 44% saw an increase in online activity
- Supply pressures continued through November, as 69% of dealers reported no change or a further decline to overage used cars which resulted in 74% experiencing continued or shorter days in stock
- 58% of the dealers in the November Monthly Market Survey cited negativity towards the economic condition over the coming months, when surveyed before the election outcome. Additionally, 50% reported that they expected sourcing stock to remain the same whilst 12% felt it could improve
- Over half of respondents in the latest dealer sentiment survey from Modix reported a fall in both demand and margin retention YoY. Also, more than a third said that stock availability had declined since the same time last year
- Margin compression is certainly not unusual when consumer demand is low, and the issue was compounded in November as competition in the wholesale market kept used prices high
- Good quality stock will still be in short supply, and it’s unlikely that the first few weeks of 2020 will bring an end to the pressure on used car prices
- Despite an overall price increase, average values for diesel vehicles were down YoY in November
- In the short-term, there are a lot of unknowns, and the January market will certainly be affected by the election result. At present, it looks like good quality stock will still be in short supply, and it’s unlikely that the first few weeks of 2020 will bring an end to the pressure on used car prices
Wholesale – summary
- In November, Manheim reported a MoM increase in its average sold price, up 5.9%. Strong buyer demand across the month meant that 87% of vehicles were sold first-time, down 1% MoM
- Manheim reported volume increased 6.7% YoY as newer, fresher stock entered the wholesale market. Average age and mileage both fell by -8.8%, and this, combined with strong demand throughout the month saw the average selling price rise by 4.2% to £10,687
- Competition for used stock, coupled with a fall in average age and mileage saw the average sold price at Manheim increase by 5.9% MoM and 4.1% YoY
- Data from Manheim reveals that average prices for diesel vehicles fell -2.6% YoY in November, whilst petrol increased 9% to £5,238
- The top 4 positions continue to remain static for the most vehicles sold in wholesale for November, whilst the Fiat 500 and VW Golf switch positions and the Audi A3 returns to the Top 10, pushing the Merc E Class out
- In the fleet sector, volume increased 6.7% YoY as newer, fresher stock entered the wholesale market. Average age and mileage both fell by almost 9%, and this, combined with strong demand throughout the month saw the average selling price rise by 4.2% to £10,687
- Dealer-Auction.com recorded an increase in average price, up 10% to £5,028, and a 1% rise against guide values
- Manheim’s data revealed some good news for dealers looking to source quality stock, with fleet volumes up 6.7% YoY
- AFVs continued to see increased average values, but please note that the relatively low number of vehicles means that high percentage swings are likely, and the figures are more heavily influenced by changes in the stock mix
- Our data shows that taking a vehicle from Grade 3 to Grade 1 increases the margin by an average £470, so it’s worth considering, even when demand is strong
Funding - summary
- NextGear Capital, the leading provider of wholesale stock funding, also saw average age and mileage hold relatively steady YoY but reported average price marginally rose by 0.3% MoM to £7,698
- The average number of days in stock increased to 63 (61.6 October 2019 and 60.6 November 2018), continuing to reflect the increased age profile observed throughout 2019 compared to 2018 and 2017
- The average age and mileage increased marginally YoY in contrast to the data observed through the wholesale sector. Mileage increased marginally to 61,559 for vehicles bought using the NextGear stock funding plan. It also saw the average age of its funded units increase from 6.0 in 2018 to 6.2 years
