The used car market will continue to gain in importance to franchised dealers operations over the next three to four years as it continues to take precedence over new.
According to the latest BCA Report, written by Professor Peter Cooke from Buckingham University Centre of Automotive Management, the used car market was worth £35.7 billion in 2011, compared to £29bn in the new car market.
Cooke believes the gap between the two markets will continue to increase.
UK dealers sold 6.7 million used cars last year and according to Cooke, is looking "pretty healthy" considering the economic pressures consumers are under. Sales of cars aged five years and under slipped back by 183,000 units last year. Dealers dominate in sales of these younger cars, but as supplies are under pressure they are increasingly focusing on cars aged six to eight years. Sales of cars aged over nine years continued to rise, by 177,000 to over 2.5 million units representing 37.8% of the totals with private-to-private sales dominating in this sector.
He also beleives manufacturers will also look to continue their influence on dealers' used car operations by helping to market that part of the business to consumers.
An example given at the BCA press briefing today was Vauxhall's Network Q advertising and Cooke believes manufacturers will look to boost marketing in this area.
He does not believe they will get more involved with "tiered pricing" beyond approved used programmes.
He said: "Franchised dealers' operations are changing. I believe we will see dealers appointing used car supply specialists, rather than just auction traders and we'll see ore dealerships linking with fleet operators to establish supply chains as a shortage of quality younger used cars continues."
Cooke also said there's likely to be a mismatch with demand with dealers looking at ex-fleet stock, as fleet buyers are biased towards diesel product and the highest proportion of used car buyers' next purchase will be petrol.
Half of new car sales are diesel, while just 30% of potential used car buyers say they will choose diesel next time.
Concerns over pre-reg
Cooke also echoed concerns made by Glass's over the impact of forced pre-registration in Q4 as European manufacturers look to offload surplus production into the UK market as demand vanishes across most of mainland Europe.
How customers prefer to be contacted by dealers
Email is also dominating the way consumers prefer to be contacted, sitting at the top of 12 options at 18% from a survey of 4,000 people across a UK representative demographic.
Snail mail was surprisingly the second highest with 15%. Telephone calls was below website information, press and TV with just 4%.
Facebook and Twitter were close to the bottom in eighth and ninth place with 1% each. This shows that while social media is a great way to interact with consumers, it's perhaps not the best way of contacting in the first instance for a "sale" or "service" type communication.
Key influencers on type of used car considered
Family and friends topped was the top influencer on consumers taking 24%, while personal experience dropped to second place with 21%. Internet sites and test drives took 16% and 15% respectivley, but social media was right at the bottom with just 2%. Cooke admitted there would be some cross over from the figures between friends and family and and how that communication may have occured through social media.
For more information about the future of the used car market book your place at AM's Used Car Conference at the National Motorcycle Museum on October 9. For more information head to www.usedcarconference.co.uk
Click on to page two to see what percentage of consumers are considering to buy in the next 12 months and Professor Peter Cooke's prediction for the new car market over the next three years.