Auto Trader profit rises to £377m as dealer demand fuels platform growth

Digital marketplace Auto Trader has reported an 8% profit boost to £376.8 million on £601m group revenues, as the company capitalised on its dominant market position and doubled down on its platform capabilities.

Reporting financial results for the year ended 31 March, Auto Trader’s core business performed particularly well, with revenue from its main platform up 7% to £564.8 million.

Average revenue per retailer rose by £133 to £2,854 per month, as product innovation and annual pricing helped offset a muted stock contribution. The platform now supports a record 14,013 retailers, up 2% year-on-year.

Its newly launched Co-Driver AI suite featuring tools like AI-generated descriptions, smart image management and vehicle highlights has been adopted by nearly 10,000 retailers and interacted with over 33 million times by buyers.

The company also significantly scaled Deal Builder, its end-to-end retailing solution enabling finance, part-exchange and reservations. With usage tripling to 49,000 deals, Auto Trader said Deal Builder will now be included in every retailer package to shift the focus from leads to actionable buyer engagement.

Used car market

Over the past year, Auto Trader experienced a steady increase in used car supply compared to the previous year, which was matched by rising demand. This drove a 4% year-on-year growth in used car transactions.

Although these market conditions could have supported higher prices, used car pricing remained largely stable. As a result, cars sold more quickly, which in turn limited growth in live stock levels and negatively impacted the stock component of average revenue per retailer.

The faster pace of sales also reduced the need for retailers to invest in what it called “prominence products”, which affected overall product revenue growth.

Nonetheless, customer retention remained resilient, with 33% of retailer stock on a package above standard - slightly down from 35% last year - although upsell opportunities were fewer. These trends are reflected in average revenue per retailer growth of 5% year-on-year.

New car market

Despite a subdued new car retail market, Auto Trader said it made solid progress. By year-end, approximately 2,200 franchise retailers were paying to advertise new cars on the platform, up from around 2,100 the previous year. User engagement also grew, with an average of 1.9 million people viewing new cars on Auto Trader each month - a 28% increase year-on-year.

As the market continues its shift towards electric vehicles (EVs), Auto Trader said it remains well-positioned, with EVs making up 21% of its new car listings.

“We continue to work with manufacturers that are looking to sell direct to consumers; however, we are yet to find a solution that fits with their operating model that is both scalable and effective,” it noted.

Market dominance

Auto Trader’s platform recorded 81.6 million monthly visits - more than 10 times its nearest competitor - and captured over 75% of all minutes spent on automotive marketplaces. Engagement levels remain strong, with over 67 billion search appearances and 15 million retailer enquiries.

In parallel, Auto Trader said it would continue strategically investing in digital retailing and platform capabilities.

Its data-driven tools are now integrated across 120 technology partners and accessed 91 million times monthly. Over 70% of retailers now use its Trended Valuations and Retail Check tools, which provide real-time and forecast vehicle pricing insights powered by machine learning algorithms the business has developed.

Looking ahead, the company sees major opportunity in scaling its automotive finance platform and expanding the Co-Driver product line.

CEO Nathan Coe commented: “Our growth is testament to the hard work from everyone at Auto Trader to deliver value for all our partners. While the car market generally is in good health, retailers face headwinds from shifting market dynamics, which we’re committed to helping them navigate using the strength of our data and technology.

“Consumer behaviour is changing. That’s why we’ve invested in the technologies to help all retailers confidently meet buyer expectations. And it’s for the same reason that we’ve made the decision to make Deal Builder available on all vehicles on Auto Trader.

“This means that all our partners will now be able to benefit from receiving more deals from highly engaged and ready to purchase buyers, rather than simply leads alone, helping to drive their performance through unique buyer and vehicle insights. We believe these innovations, along with our other investments this year are the most effective way we can continue to deliver more value to our partners.”