The National Association of Motor Auctions (NAMA) has seen a 20% drop in volumes of vehicles under two years old in October, showing dealers are effectively managing near-new stock.
Paul Hill, NAMA chairman said: “The capacity of retailers to absorb an increase in the nearly new market is important to sustain residual values.
“A sustained increase in such stock into the remarketing cycle would clearly be a concern. Encouragingly, the latest NAMA data suggests that that this is not the case.”
Hill said that while concerns of over-supply of nearly new stock into auctions have been “unfounded”, he said it was important to recognise supply and demand need to be finely balanced.
He said: “Less stock may have come to market in October, but demand also lightened with a 6% fall in first time conversions.
“Tellingly, the vehicles under two years old category saw a shift towards younger stock.”
Much of the slowing of demand is in line with seasonal trends.
Hill said: “Seasonality is certainly reflected in lower month on month demand for nearly new stock and this reduced demand is evident across most age categories.
“Our overall confidence in the resilience of the market is derived from a strong year-on-year increase in remarketing activity.
“Overall sales this October were up an impressive 12 per cent on the same period in 2014. It does seem that we are seeing sustained consumer confidence feeding through into higher used vehicle sales activity.”