Market Tracker - October 2019

High demand for stock drove strong October wholesale market

 

October saw mixed fortunes for automotive according to the latest data from Cox Automotive. In the latest dealer sentiment survey from Modix, 55% of dealers reported that consumer demand was down YoY.

On the other side of the coin, the wholesale market recorded increased volumes and good levels of demand as retailers competed for the most desirable stock.

October wholesale data

Manheim reported an 18% MoM increase in the volume of vehicles offered for sale in October, driven by an increase in both part-exchange and fleet vehicles, up 18% and 22% respectively.

Strong buyer demand across the month meant that 88% of vehicles were sold first-time, up 1% MoM.

Manheim also reported a MoM increase in its average sold price, up 9%, although the figure remained level YoY. Dealer-Auction.com also saw demand push prices up, and vehicles sold on the trade-to-trade online auction platform achieved an average 99.4% of CAP clean across the month.

Philip Nothard, Customer Insight and Strategy Director, said: “October saw the availability of younger stock (up to three years old) improve slightly with a 22% MoM increase in fleet vehicles at Manheim.”

“This increase brings fleet volumes up to a normal level for the time of year, but buyer demand is even higher than usual because this type of stock has been in short supply over recent months.”

October fuel comparison

Data from Manheim reveals that average prices for diesel vehicles fell YoY in October, this reflects demand to some extent, but is also influenced by a lower number of 1-3 year old diesel vehicles in the market.

The 53.8% increase in the value of electric vehicles is a sign of growing dealer confidence in stocking these vehicles.

*These figures indicate some trends in demand for hybrid and electric vehicles, but the relatively low number of vehicles mean that high percentage swings are likely, and the figures are more heavily influenced by changes in stock mix.

October retail data

Modix, the digital marketing arm of Cox Automotive, reported that October was a challenging month for automotive retailers.

The Modix monthly dealer sentiment survey found that 55% or respondents believed demand was down YoY. 59% also reported that physical footfall was down, although 34% saw an increase in online activity.

For used cars, retailers reported that days in stock and the number of overage cars reduced in October. This result was borne out by data from NextGear Capital, Cox Automotive’s stock funding business, which saw average holding days reduce to 61.6, down 1.7 MoM.

Nothard explained: “Retailers faced two big challenges in October. Firstly, the new car market has been fairly slow, and 45% of the dealers surveyed reported an in overage new car stock.”

“Secondly, good quality used stock has been in short supply, and higher prices put pressure on margins. While larger dealer groups have been able to offset this with smart use of part-exchange stock within the network, smaller independent retailers will certainly have found margins a challenge in October.”

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