Wholesale market remains strong

Wholesale market remains strong as we head towards final quarter

Cars waiting at a Manheim auction

Cox Automotive figures released today revealed a steady August for the wholesale market, despite the usual holiday season pressures.

The data, which provides an overview of used car activity, revealed that volumes remained strong with growing positivity as the market enters the latter part of the year.

Manheim, one of the UK's leading providers of integrated products and services for the vehicle remarketing sector, saw volumes up 1% on July, as the average mileage of vehicles coming through the lanes held below 60k at 59,994.

Despite the seasonal fall in attendance driving average sales prices down by 11% month on month (to £6,493), the market remained more buoyant than the same period last year, up 3.6%. Meanwhile, diesel vehicles continued to make ground despite ongoing market pressures, as average wholesale prices increased by 3.4% on 2017 to £8,335, while petrol also remained positive, up 6.1% to £4,730.

Less affected by the summer period, the online market performed well, and the average selling price of vehicles through Dealer Auction remained steady at £4,607. The trade-to-trade online auction platform also reported an 11% increase in volumes through its lanes during August.

NextGear Capital, Cox Automotive's wholesale stock funding business, reported a 9.6% year on year increase in the average cost per unit, to £7,396 (from £6,746 in August 2017) while average holding days increased by 3.5 to 60, and the average age of funded units held steady year on year.

Commenting on the figures, Cox Automotive's Philip Nothard, said, "As usual, the holiday season had an effect on auction attendance, and as a result, vendors were more willing to work with dealers on pricing to keep the market buoyant. We have also noticed some manufacturers have been keen to support their own dealer networks by underselling, adding to the lower than usual average selling price."

"However, despite the quieter month, the market is holding steady and volumes coming through the lanes continue to interest buyers, especially car supermarkets who have been tempted by the varied mix of brands on offer. We also expect that the supply shortages in the new car market, caused by the pressures of the WLTP regulations, will help increase demand in used cars for the short to medium term, potentially beyond the year-end."

"As we move through September, demand will undoubtedly return to normal - we've seen a 2% increase in sales in the first week of September alone. Ongoing monitoring of the market along with careful stock management will be key as we head towards the final quarter of 2018."

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