But at the top of the list is retail demand. Without end users or customers there is no demand and therefore no value in any product. At the start of the year we implemented the latest in a range of measures introduced over recent years, designed to strengthen our understanding of the forces underpinning the balance of supply and demand.
The CAP Used Car Performance Index is designed to measure retail used car sales activity by surveying a comprehensive sample of franchised and independent used car dealers. The overall sample is broken down into regions, weighted according to population and a representative mix of franchised and non-franchised dealers identified, with telephone and face-to-face interviews each month.
It has so far proved invaluable in providing a clear indication of the key drivers for the used market this year, confirming, for example that trade and retail demand are not always synchronous. That is, dealers and traders will occasionally anticipate changes in demand, thereby impacting on values whether or not an actual alteration at the retail level has yet taken place.
This is exemplified by the nervousness that preceded the onset of Euro 2004 Championships. With the competition yet to begin at the time of writing, dealers were almost universal in their concern that a long England run would slow forecourt traffic.
Indeed, many were citing this as a factor in exercising caution when sourcing stock – thus slowing the market before any actual alteration in conditions had taken place.
The Used Car Performance Index is designed to provide an indicator for such factors with an element measuring expectations for the immediate future. Over time this will enable us to evaluate the correlation – if there is one – between expectations and actual performance. In a market highly subject to trade sentiment this will deliver valuable additional insight into the dynamics impacting on prices and therefore strengthen the reliability of Black Book as a benchmark, enabling dealers to source stock with increased confidence and safety