Auto Trader has announced that it will axe car dealers advertising package fees for February following the announcement of renewed COVID-19 lockdown measures across the UK.
The online classified advertising giant said that retailers’ payment terms for January services will also be extended by 30 days as part of the assistance which aims to offer a “helping hand” to businesses in what chief executive Nathan Coe hopes will be the “final hurdle” of the pandemic.
Coe said: “We had all hoped that by now, with news of vaccines, that there would be a clear end in sight and that we could put this incredibly challenging period we’ve all experienced behind us.
“But once again, we face new challenges and further lockdown restrictions - certainly not the start to 2021 we were all hoping for.
“We remain committed to doing the right thing to support our customers and the wider automotive industry, which is why we have taken the decision once again to financially support our customers.
“By offering them a helping hand, through what we all hope will be the final hurdle in this pandemic, it will set them up to hit the ground running when their businesses are able to fully re-open.”
Prime Minister Boris Johnson announced Government’s latest to increase the level of COVID-19 restrictions in England until at least February 15 in a public address on Monday (January 4).
His announcement followed that of Scottish First Minister, Nicola Sturgeon, who placed Scotland in lockdown until the end of January.
The action once again forced all car retailers to close their showrooms, but allows a continuation of aftersales services and click and collect sales.
AM reported yesterday how many car retailers harbour concerns about the duration of the latest measures, however, with many suggesting the impact of ‘stay at home’ guidance will deliver a blow to consumer demand which could extend into March.
In its statement, issued via the London Stock Exchange today, Auto Trader said that its support would help to ease retailers’ cash flow and enable them to come back quickly as soon as the restrictions are eased.
It stated: “It is understood that retailers in England, Wales and Scotland will be allowed to operate both home delivery and Click & Collect services.
“This, coupled with the high levels consumer activity seen through December and the early part of this month, will help to sustain some sales during this lockdown.
“Since Christmas, we have seen strong audience growth as well as consumer engagement, which has in turn boosted the numbers of leads sent to retailers.
“In fact, if we compare the Christmas period to the 28th – 3rd Jan, audience levels were up by 30%, advert views by 33% and leads by a huge 65%.
“The growth in leads is indicative of the shift in consumer buying behaviour, with buyers unable to visit forecourts, they are inevitably connecting more with retailers online.”
Auto Trader has supported the industry throughout the COVID-19 crisis.
Its advertising packages have been free for three out of the last nine months and charged at a 25% discount in June.
Back in November Coe said that Auto Trader's six-month reported period to September 30 had been “heavily impacted by our decision to support our retailer customers”.
Average revenue per retailer declined by £745 per month, to £1,206 (H1 2020: £1,951), in the period of which £695 was attributed to the offer of free advertising for car retailers in April and May and a 50% reduction in June.
Total revenues declined to £118.2m (H1 2020: £186.7m), with trade revenue down 38% to £100.2m (H1 2020: £161.8m) as operating profit down to £68.5m (H1 2020: £131.4 million) as its operating profit margin decreased to 58% (H1 2020: 70%).