Market tracker - July 2019

Used car market remains stable despite new car market pressures

July wholesale data

Whilst July trading started reasonably well and stock availability in the wholesale market did improve in July, according to results released today by Cox Automotive, there has been a drop-off in consumer demand.

Both average wholesale prices and volumes experienced an increase of 5% MoM, whilst average mileage eased-up slightly to 61,463. Dealer part-exchanges also remained stable in July, with an increase of 8% in volume MoM and prices level. There was more optimism amongst fleet wholesale, with both volumes and prices increasing MoM to the highest levels seen in 2019.

Dealer Auction, the trade-to-trade online auction platform, enjoyed its best figures in July, with 8,070 vehicles sold equating to a 6% year-on-year increase on the same month in 2018. It also saw the overall average price fall MoM, down 6.0% to £4,402 from £4,603.

In terms of stock mix, NextGear Capital recorded a small decline in average holding days (down to 61.8 days) and average mileage marginally down to 59,406 for vehicles bought using its stock funding plan. It also saw the average age of its funded units up from 6 to 7 years.

July fuel data

The average price for Alternative Fuel Vehicles continued to rise again in July as it had done in June. All fuel-types experienced positive price increases, with a double-digit increase for AFVs.

Philip Nothard, Customer Insight and Strategy Director, said: “Whilst the wholesale market remains challenging and a tad inconsistent, it is positive to see stock availability improving. We are also seeing some dealers moving to Grade 3 product. The significant hike in AFVs prices demonstrates that there is a growing demand from consumers and a real appetite to evolve their stock profiles amongst dealers.”

July retail data

Although the New car market decreased for the fifth consecutive month, enquiry levels remain strong. Conversions, however, are taking slightly longer despite the plethora of available deals and discounts.

Stock has started to return to the wholesale sector, with 43% citing a decline in consumer demand. 36% are also reporting an increase in overage used cars and 40% citing increased days in stock. Supply and taxation deals influencing demand for aged and consignment new cars. 83% reported a decline in overage used cars, and 68% a decline for consignment stock.

Nothard commented: “Retailers and manufacturers are preparing for the introduction of RDE on September 1st. As a result, we have seen increased levels of tactical registrations by various manufacturers. Retailers are also taking advantage of potential incentives offered by the manufacturers.

“From a used car perspective, increased levels of pre-registration product entering the sector will create additional much-needed volumes in the wholesale market. We also anticipate increased fleet disposals, as fleet operators replenish stock fleets.

“Although we could experience unseasonal registration throughout August and September, considering the current headwinds facing the sector, performance and activity remain reasonably healthy.”

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