Used cars are key to success

Used cars are key to success as new car supply continues to falter

Philip Nothard

Cox Automotive reported continued demand for used car stock in November as new car availability remained challenging despite a modest increase in registrations.

Manheim saw wholesale volumes fall in line with seasonal expectations. In turn, the average selling price increased by 1% month-on-month to £6,305, while average vehicle mileage held steady at 62,414.

Figures from NextGear Capital painted a similar picture, with average vehicle cost up 2% month-on-month. The wholesale stock funding business also recorded small month-on-month increases in average vehicle age (6.0) and mileage (61,177).

Cox Automotive’s trade-to-trade online auction platform, Dealer Auction reported that average vehicle prices were up year-on-year to £5,028.

Philip Nothard, Cox Automotive’s Customer Insight and Strategy Director – Cars, said: “Supply was a major focus for retailers in November, with many choosing to widen their stock profile to increase buying opportunities.

“Four months after the introduction of WLTP, new car supply is patchy, with some manufacturers still struggling to get vehicles onto dealer forecourts. As a result, retailers continue to focus on used cars, and the trend looks set to continue, with 52% of respondents to our recent dealer sentiment survey confirming that they intend to invest in additional used car stock in 2019.”

In the retail market, Motors.co.uk, Cox Automotive's car search platform, saw dealer stock turn remain in line with prior year, with average days in stock holding level at 40.

Nothard added: “Despite pressures in the new car market, and the much-discussed consumer uncertainty caused by Brexit, dealers remain cautiously optimistic about the months ahead.”

“As new car supply returns to the market, we expect to see wholesale volume increase from January, although demand for ready-to-retail stock is likely to remain high.”

“These market trends are in line with the used car market forecast we published in October as part of the Cox Automotive and Grant Thornton Insight Report. Our prediction gives further cause for positivity as we expect to see 2.08 million used car transactions in Q1 2019, a year-on-year increase of 2.55%.”

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