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Unit sales fall as conversion rates increase

The average number of used car sales per month fell to 6.5 units in December from 9.8 in November, according to Manheim’s Dealer Dashboard figures.

Despite the drop in sales activity, conversion rates actually rose by nearly 3% on the back of strong figures from the small hatchback segment.

John Simpson, Manheim retail services managing director, said: “As we move into 2010, although there appears to be pockets of retail confidence as the scrappage scheme draws to an end, a spring or early summer General Election followed by inevitable tax increases and cuts to public spending are likely to force motor dealers to work harder than ever to drive as much opportunity out of marketing budgets.

“Ensuring that prospects are converted to customers at the earliest possible moment will be key.”

In the wholesale market, stock for retail fell by £473 in December and conversion rates rose 3% to 76%.

Manheim auctions and remarketing managing director Mike Pilkington said: “This suggests a sensible and pragmatic approach to vehicle pricing by vendors and healthy demand at a time of the year when, traditionally, the wholesale market is quiet.

“The strength of the dealer part- exchange disposal market continued unabated with prices up again in December by £73 compared with the previous month, albeit on the back of slightly younger product.”

Conversion rates rose to a very healthy 83%.

This brought to an end an extraordinary year in used vehicle remarketing which saw huge month-on-month price increases.

Pilkington said: “For what it’s worth, I would expect values in 2010 to return to much more seasonal patterns with modest increases in the early months of 2010, flattening out nearer spring and without the upward spirals that we have experienced in 2009.” 

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