AM Online

New car registrations hit the headlines, but the used market is also on fire

By Philip Nothard

As ever, the main focus of commentary in the media is the rise and rise of new car registrations. We saw it again in May – the 27th consecutive monthly increase – with a rise of 7.7% pushing year-to-date growth to 11.6% compared with the same period last year.  

     
 
 

Philip Nothard joined CAP in 2010 as its retail and consumer price editor, analysing pricing data and interpreting strategic market trends. In his role, he is able to apply two decades of experience gained in franchised motor retailers, which culminated in running dealerships for the likes of European Motor Holdings, Lythgoe Motor Group and Arnold Clark.

 
 

But what about the used car retail market? The short answer is, it’s also on fire.

One of the most reliable indicators of performance in the used car sector is CAP’s monthly survey of a ‘Dealer Insight Panel’ of about 100 independents. We have often seen that the trend in trade values does not always reflect retail performance because they are subject to different pressures. That is why it is important to keep track of the independent used car specialist experience, where it can be argued that the ‘real world’ market is at its purest.

To appreciate the strength of this year’s performance in the used car market, we can contrast the findings of our survey so far in 2014 with the same period last year. Remember too that last year was very strong for the used car retail sector, so improvements are effectively coming on top of improvements.

The chart (see graph on the next page) pulls together responses to four of the questions we ask each month. In every case, the results this year exceed the same period a year ago. In short, 18% more dealers reported to us in May that April’s sales had been stronger than March, compared with the March/April change last year. There is a 13.8% increase in the number of dealers who report this year’s used car sales to date higher than the same period last year. The bulk of this increase comes from the conversion of those who were previously reporting their used car sales performance as ‘stable’.

Given that dealers, as a breed, are not prone to optimism about the strength of the market, what is even more remarkable is the shift in sentiment around the general business climate. Back in April 2013, our panel was much more downbeat than today. Only 11.5% described it as good or very good. During April this year that figure rose to 48.8% – an increase of 37.3 percentage points.  

With all this positive feeling surrounding a good business climate and used car sales improving year-on-year, it will come as little surprise that the overall outlook for the next quarter is upbeat. But even here the sheer level of optimism is still striking, with 61.9% feeling that business will improve for them over the next quarter.



Click here for used car best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.