June Market Report

Diesel volumes achieve double-digit growth in June

Vehicles waiting for auciton

Figures released today by Cox Automotive have revealed another healthy month for the used car market.

Manheim, the UK's leading provider of integrated products and services for the vehicle remarketing sector, continued to show strong increases across price and volume in June.

The average sold price continues to increase, up 3% from £6,649 in May to £6,816 in June, while wholesale volumes in the £10k to £20k price bracket experienced a double-digit growth of 16% reflecting the demand for quality, mid-market vehicles.

Diesel wholesale volumes reflected the overall increase in the mid-range (£10k to £20k) price bracket with a 14% year-on-year increase, despite continuing media negativity surrounding the fuel.

Continuing the momentum in wholesale, the volume of vehicles sold through Dealer Auction's lanes increased 19% year on year, while average sales price on the trade-to-trade online auction platform increased 11%, to £4,523.

NextGear Capital, Cox Automotive's wholesale stock funding business, also reported positive figures across the board. The average cost per unit increased 4.8% year on year to £7,194, with a -4.2% decrease on average age, and a minor 0.4% increase in average mileage. Average holding days increased slightly to 58, one more than the previous month.

Cox Automotive's Philip Nothard, said: "Despite an easing in terms of sales, demand and conversions as we approached the end of the month, overall, the used market remains steady."

"We saw price rises across wholesale for the third consecutive year in June with an 11% increase on 2017, as well as double-digit growth in volumes of diesels, which continue to outperform cap clean values."

"Ready-to-retail cars remain in huge demand and continue to attract top prices and conversions, with less interest in basic models which need more conditioning. The supply and acquisition of the right stock remains one of the biggest challenges for the wholesale market going forward, especially in terms of ex-lease vehicles, where we are seeing a surge of similar models coming through the lanes creating price pressures. Vendors who can differentiate will do well as we go into the second half of the year."

In contrast with wholesale, Cox Automotive's car search platform, Motors.co.uk, reported a slower retail market, with a reduction in average sold prices of vehicles, down 10% since May, from £13,373 to £11,970.

However, diesels continued to perform well, selling four days quicker than the same period last year (average 39 days), while petrol vehicles remained on forecourts two days longer.

The Cox Automotive figures follow results from the Society of Motor Manufacturers and Traders (SMMT) last week which revealed that new car sales fell 3.5% compared to June 2017, with diesel's share falling by 28.2% and petrol car sales rising by 12.3%.

Nothard continues, "The first half of the year has been interesting. As seen with the SMMT figures, the new market is underperforming, and we expect this struggle to continue into the foreseeable future. However, in stark contrast, the used market has been consistently healthy."

"The industry is facing many known unknowns - the impact of WLTP is still uncertain, there is a risk of increased pre-registration activity and there will be the usual availability struggles as September approaches. But despite this, we expect demand to pick up in July and we've seen many dealers stocking up in expectation of a rush.

"Looking further ahead, we expect the market for used will continue to outperform new. As such, we'll see retailers remaining optimistically cautious and resilient, relying on the used market as well as aftersales, to replace lost revenues from the easing in the new car market."

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