- Optimism remains in the industry that demand within the used market will continue
- Desirable retail stock remains in high demand
- Many retailers are reporting that they are pleasantly surprised with the market’s performance
The latest Cox Automotive UK “Sentiment Survey” released today has revealed that dealers remain optimistic that demand will continue to be strong in the used car market.
The new survey also revealed that the used car market has been buoyant overall since restrictions lifted across the UK, and despite hesitations on the networks return to work, better than anticipated for some within the industry.
Manufacturers’ support has been positively received by most dealers surveyed, which assisted in a quick transition back to trading under the new Government guidelines and despite most retailers (and manufacturers) were operating with a reduced workforce.
Used cars sales are being reported as consistent but generally slightly fewer unit sales for increased margin. Supply has also been very diverse, dependent on stock profiles, with high prices in some instances. Desirable retail stock remains in high demand which reflected in the values and key performance indicators they are achieving.
Demand outstripped supply from June to mid-July and has stayed at a decent level. There is, however, further supply in the system, and therefore values have eased slightly.
Commenting on the latest survey, Philip Nothard, Customer Insight & Strategy Director for Cox Automotive UK, said: “As usual, three to five-year-old stock remains a premium and generally more difficult to source. It is good to see that optimism remains in the industry, and that demand within the used market will continue. We do also expect to see a seasonal flow through to the end of the year.
“Many retailers are reporting that they are pleasantly surprised with the market’s performance and are experiencing similar demand for both new and used cars to that seen pre-pandemic. The September market building is similar to levels in 2019, with no excessive order bank. With the first-time conversion rising by 7% and Cap Clean performance increasing by 3.08% in July, this reflects the strength in the market compared to the same like-for-like period in 2019. Although the average age (82.1 months in 2019 vs 87.5 months in 2020) and mileage (61,439 in 2019 vs 62,027 in 2020) increased year-on-year, the average grade of vehicles has remained level.”
“Other key findings from the survey highlight the pandemic has caused many consumer behaviours to change or accelerated those already taking place. Automotive retail is not exempt from this shift. And, it’s right that health is top of this list for dealers as we continue to navigate this global pandemic, but no surprise to see cashflow ranking a close second.”