1) Wholesale prices remain stable
Although there was a slow start to the year, the wholesale sector continues to see both strengths and weaknesses as buyers continue to be selective. There has been a slight increase in age and mileage year-on-year, but despite this, average sold prices have remained stable at £6,134 (-2.01% YoY).
2) Having the right stock is key
Many dealers that acquired stock in Q4 of 2020 ought to have been well placed for a fast start in 2021. However, due to a third lockdown some of this stock is now ageing. What’s clear is stocking the right car in terms of price point, model and good specification is key for the current trading conditions in 2021.
3) Trade values are easing
Cautious buying habits are causing a slight easing in auction prices. The sentiment from many retailers is that there are ’pockets’ of weakness in retail which could be a result of increasing financial pressures. As a result, buyers are being more selective and not increasing stock levels.
4) Used cars showing resilience
A third UK lockdown has caused used car sales to drop in January, however the used market continues to outperform new. 85% of dealers surveyed indicated they are down 10–50%, while 15% cited they had felt little or no impact. On an optimistic note, most of the used car sector operated more than 50% of usual seasonal performance and for many it’s business as usual.
5) UK new car market hit worse than Europe
New car registrations in the UK fell 39.5% to 90,249 in January—the worst result observed since 1970. In Europe, results were mixed with France (-5.8%) and Italy (-14%) performing relatively strongly compared to Germany at -31.5% and Spain, who felt the heaviest impact from the pandemic at -51.1%. Varying restriction levels across Europe likely caused these variations.