A positive outlook for 2018

Cox Automotive predicts positive 2018 for used and aftersales as it releases annual figures

Cox Automotive has released annual results outlining the group's performance across its wholesale and consumer portfolio over the past 12 months.

The data, released today, reveals that 2017 was a hugely positive year for the automotive service provider, countering the widely-held industry notion that 2017 was a tough year for the whole sector.

"Against the grain of market expectations, we've seen growth across the board, with all businesses reporting a solid 12 months," said Philip Nothard, Head of External Relations at Cox Automotive.

Reporting on annual figures, Cox Automotive's aution business Manheim confirmed that overall volumes at year-end through its online and physical lanes were stable (within 1% of 2016), and vehicles sitting within the £10k - £20K price banding in particular saw strong growth, up 9% for the year. Average mileage of vehicles throughout the 12 months decreased 7% (from 60,714 to 56,419).

The organisation's Dealer Auction platform, the UK's largest trade-to-trade online auction site, also reported positive annual results which exceeded forecasts, with a 7% uplift in volume sold, compared to 2016. The platform, which allows dealers to place bids 24 hours a day on auctions which take place every sixty seconds, 7 days a week, also recorded an impressive 12% increase in average sales value.

Nothard continued, "Both of our auction businesses, Manheim and Dealer Auction, recorded strong results over the past 12 months. We have performed well in terms of physical auctions, which can be attributed in part to the opening of our ground-breaking Bruntingthorpe site."

"In parallel, we have noticed a surge in dealers using our online auction capabilities, proving their effectiveness and simplicity, and we predict the uptake of these will grow even more rapidly over the coming years."

Meanwhile, the consumer market also performed well against a difficult year. Motors.co.uk, Cox Automotive's car sales platform, recorded a 9.6% growth in average retail price listed, from £11,954 in 2016, to £13,108 in 2017.

The sentiment from dealers is that used vehicles will continue to take prominence, and further investment in providing top class aftersales service will be a key priority for 2018
- Philip Nothard, Head of External Relations

The group has also released figures on fuel sales, which contrast with SMMT figures on the new car market, and show that both wholesale and consumer used car channels reported positive diesel sales for the year. Manheim recorded a 1% rise in sales volumes for used diesel vehicles (versus a 3% drop in used petrol vehicles), while Motors.co.uk reported positive growth for diesel vehicles in both the £20-£30k and £30-£40k price bands.

The car sales website also reported 5% growth in electric vehicle volumes listed on the platform.

Nothard continued: "The fuel row which came to a head in the latter part of the year clearly played a part in the performance of the new car market, but we've been less affected from a used point of view across both wholesale and consumer. There is clearly a continuing appetite for all variants which we expect to continue, specifically in the £20-40k price bands for diesel."

Concluding the figures, NextGear Capital, the stock funding arm of Cox Automotive, saw a 37% increase in units funded and reported a 3.7% increase in dealers using the business during 2017.

Nothard added: "Although the new car market proved tough in 2017, as many predicted, dealers showed resilience, with positive growth through used sales and aftersales servicing. Many have also done well to anticipate the shift in consumer demand and ensure used car stock levels remained high to compensate as they headed into January."

"We expect 2018 to be a positive year for the UK automotive industry. The sentiment from dealers is that used vehicles will continue to take prominence, and further investment in providing top class aftersales service will be a key priority for 2018."

"We also predict an ever-increasing appetite for, and greater reliance on, insight and data, not only to take advantage of profitable aftersales opportunities, but as dealerships look to understand customer behaviour and what's working - or not - in the market."

"Continued political pressure and intense media scrutiny on diesel will, at some point, see consumers in the used market mirror the shift we've already seen in the new car market. As such, we expect dealers will turn to their own data, and that of partners, to help them anticipate what customers are likely to want to buy next, and so effectively forecast stock profiles for the months ahead."