Auto Trader has confirmed it will continue to make its advertising packages free for car dealers following the three week extension to the COVID-19 coronavirus lockdown into May.
The online classifieds site made the announcement to the London Stock Exchange this morning (April 17), after it indicated in its own webinar briefing earlier this week that it would continue to support dealers through the COVID-19 pandemic.
In Government's daily coronavirus briefing yesterday, the foreign secretary Dominic Raab said that social distancing and lockdown measures would continue for "at least" another three weeks.
Ministers are required by law to assess whether the rules are working, based on scientific and medical expert advice, every three weeks, with the next formal review due on May 8.
Nathan Coe, Auto Trader chief executive, said: "We remain committed to supporting our customers, our industry and our people.
"As our customers are not able to meaningfully trade, we will do what we can to support them such that when restrictions are lifted, they are able to get back to business."
The classifieds website has already stated that it will suffer April losses of up to £7 million in a bid to help car retailers mitigate the impact of coronavirus after it axed fees and deferred March payments for 30 days.
Coe said at the weekly Auto Trader webinar on April 15 that the company was ready to step in and would have announced something before the end of April regardless, but wanted to wait for further clarity from the Government briefing on April 16 before doing so.
Home delivery and distance selling
Coe confirmed part of Auto Trader’s strategy for helping dealers when lockdown measures are either reduced or removed, would involve a solution to help with distance selling and home delivery.
He said: “We’re looking at what we can put in place with Auto Trader as well as logistics solutions.
“Even if the lockdown is lifted, we expect social distancing to continue to a degree after that.
“Looking longer term, we’re looking at how we can move more of the buying journey online even more than before and make retailers less reliant on face to face transactions.
“We’re looking at further solutions for the finance and part exchange process.”
Leads down but traffic has stabilised
Chris Penny, Auto Trader brand director, franchise, said the share of calls generated through Auto Trader has dropped by up to 80% year-on-year.
Web referrals to retailers have also dropped by 50% year-on-year, although overall lead volumes have fallen by 25% year-on-year.
Auto Trader attracted 840,000 daily users over the Easter Weekend with signs of an upward trend on traffic. Daily visitors were down by 29.8% YoY.
There has been a shift towards chat, text and email as the preferred method of communication.
Penny said that some retailers had complained that leads coming through have been from consumers expecting £5,000-£6,000 discounts due to thinking dealers are in crisis mode and will sell at any cost.
He said: “There has been some increased activity of this kind, but what we’re saying is that there are still customers that are researching their next purchase and waiting for the right time to contact dealers.
“We might not be seeing the green shoots of recovery yet, but hopefully it will be rapid when it comes.”
Richard Walker, Auto Trader data and insight director, confirmed there has not been market wide distress discounting and the majority of retailers are holding firm with prices.
He said: “Vehicle pricing adjustments are 80% down YoY for franchised dealers and 65% down YoY for independent dealers.
“This indicates that there is minimal erosion of valuations.”
Penny said that as well as pent up demand as a result of the lockdown, there could also be a surge due to the potential for vehicle ownership to be boosted as a result of some looking to avoid public transport or “transport distancing” in the short to medium term.