Cox Automotive Market Tracker - April 2019

WLTP uncertainty sees higher mileage cars hit the used market

• Cox Automotive reported a 22% increase in average fleet car mileage for April
• Wholesale channels saw a ‘value gap’ as both vendors and buyers held out on price
• 52% of dealers saw margins fall year-on-year (YoY), according to the latest dealer sentiment survey from Modix

Wholesale stats from April 2019

Cox Automotive continued to see a trend for older, higher mileage ex-fleet vehicles at auction in April, as uncertainty around WLTP and company car taxation continued to affect the market.


Average mileage for fleet vehicles sold through Manheim in April was up 22% YoY and 2.4% MoM.


Philip Nothard, Customer Insight and Strategy Director for Cox Automotive, said: “It’s been in the news for a while now that businesses are holding on to their vehicles for longer as they wait for clarity on taxation, and we’re seeing the evidence for that in our auction lanes.


“While new car registration in the fleet market were up 2.9% in April, we know that this was largely driven by daily rentals, while traditional fleet and business sales are down around 9% YTD, and this is a trend we expect to see continue.”


In the wider wholesale market, Manheim saw vehicle volumes up slightly MoM, while the overall average price increased by 2.2%, although this is more likely to reflect a change in stock-mix than vehicle values.


Meanwhile Dealer-Auction.com reported a 12% YoY increase in volume, a reflection of the increasing popularity of online wholesale channels.


NextGear Capital, Cox Automotive’s stock funding arm, saw the average vehicle value drop slightly to £7,759 (down £200 MoM), while the average number of days in stock dropped to 56.4 (down -3.4 MoM).


Nothard commented: “Overall, April was an unpredictable month in the wholesale market, with vendors and buyers in something of a stand–off on price ahead of the update to cap hpi’s valuation index, which saw values fall by more than 2.5% on average.”


“As we move into May, we expect to see vehicle volumes hold steady, and it’s likely that sensitivity around price will remain, as both vendors and buyers adjust their expectations based on current market values.”

 

Fuel comparison data - April 2019

As with March’s data, April showed a YoY increase in the average price of alternative fuel vehicles.

Dealer sentiment - April 2019

In line with the latest figures from the SMMT that show new car registrations down -4.1% in April, 56% of dealers responding to the latest sentiment survey from Modix, the digital marketing specialist, said that retail demand was down YoY in April.

Nothard continued: “While April’s new car figures may look disappointing, context is key, and when you take the prevailing economic and industry-specific headwinds into account, a fall of -2.7% year-to-date is actually a fairly solid performance.”

“It’s clear though, that increasing expenses and competition in the used market are affecting sales margins. 52% of dealers that responded to the Modix survey reported a YoY margin decline in April, while 3% said margins had stayed the same, and just 15% reported an improvement.”

Nothard concluded: “Traditionally a quieter month than March, this April was also affected by the sunny weather over Easter, which undoubtedly affected consumer demand. Looking ahead, the used car market remains robust and stable, and while we expect a softer market than we saw in Q1, we know there’s still plenty of consumer demand for the right used cars.”

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