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March could be ‘challenging’ month for car dealers following February sales decline, warns Dealerweb

Martin Hill, Dealerweb

Dealers may have a sales struggle in March, as February figures show a decline in sales and enquiries for both used and new cars. 

Dealers are making proactive efforts to generate sales despite the Q1 decline, according to analysis from Dealerweb.

It shows the total new and used car enquiry volumes from all sources – including online, telephone and walk-in visits – fell by 9%. This is in stark contrast to the start of 2017 – the strongest sales quarter on record.

Overall orders on new cars fell by 10%, as online enquiries dropped by 2% and walk-in visits by 15%, dealers also saw a 13% decrease in telephone enquiries, Dealerweb said.

Used cars did not remain unscathed by the falling figures, as enquiries and sales both fell by 9% compared to the previous year.  There were substantial falls in telephone and walk-in leads for used cars, which dropped by 14% and 15%, respectively.

However, last month, outbound prospecting call volumes rose, on average, by 10% compared with February 2017 – including a 28% rise in prospecting calls relating specifically to used car stock.

Dealerweb’s managing director Martin Hill (pictured) said: “It is unsurprising to see lower enquiry numbers compared to 2017, when the UK dealer sector recorded its highest ever first quarter sales.

"New car orders declined by 10% in February compared to the same month in 2017*, while used car orders fell 9%, mirroring the decline in enquiries.

"However, our data paints a more nuanced picture, highlighting the continued shift towards online enquiries, as more customers seek to start the car purchase process online.”

Despite the fall in enquiries and sales, UK dealers are seeing an increase in sales of ‘add-on’ products for new vehicles.

During February, dealers sold 9% more GAP insurance products and 7% more paint protection products to new car customers, compared to February 2017.

The trend in monthly enquiry and sales data from Dealerweb provides an early indication that March has the potential to be a challenging month for dealers, as it could result in a registration decline in March.

However, first-quarter figures from 2017 were higher than usual, suggesting the decline may not be as dramatic as anticipated.

Hill said: “Whilst the data predicts first-quarter registrations will decline year-on-year compared with 2017, it is encouraging to see dealers responding proactively to the downturn with increased outbound calls to prospects.

“The relative growing level of consumer interest in used cars is also opening the door to higher GAP and paint protection sales, and greater profitability.

"A modern enquiry management system with robust follow-up procedures can help dealers react quickly to changing market conditions – particularly in the face of the challenging conditions we expect to see in March.”

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