2021 in review and a look to what's next in 2022
Following a strong market in the autumn, this was not the end to the year that any of us had hoped for, with COVID once again dominating the headlines. That said, I am confident that whatever the next few weeks brings, the industry will adapt once again and continue to operate successfully. During the last lockdown in Q1 of this year, sales on average were down just 16% on 2019 levels¹. I hope that non-essential retail is a long way from the enforced closures we saw in previous stages of the pandemic, but this current scenario is still an outside case.
Consumer behaviour continues to shift even more online
We’ve also seen that many of the changes driven by necessity in previous months have now become the preferred way of transacting for many consumers and retailers. We continue to see this shift to online in consumer behaviour on our platforms, where our remote selling features and COVID secure measures remain as important as ever. You will be very familiar by now with us sharing updates on consumer engagement, which is no different this month where we’ve seen 10 million unique users onsite, 14.7% more than 2019 and this year have delivered 2.5 million more leads to retailers than in 2019². We have not seen any impact on these trends from the Boris announcements of the last few days and expect consumer demand to remain strong into 2022.
Pricing growth will remain strong whilst beginning to stabilise
Used car pricing growth continues to dominate headlines. We have now seen pricing growth that would normally take 5 years occur over just the last 6 months, with the average price of a used car rising to £20,109.³ I have heard some commentators predicting a dramatic cliff edge moment when pricing suddenly falls. We see no evidence of that happening beyond the usual seasonal trend we see at this time of year, with pricing softening in the run up to Christmas. If you have been following our data through your Market Insight tool in Portal, our regular webinars, and social channels, you’ll know that we expect the rate of growth to slow down from the current highs of c. 28% year on year growth⁴. As some of the pressures on sourcing are relieved, growth rates will stabilise, but demand will continue to outstrip supply for some time to come.
Embracing change and building consumer trust
This is a great time to reflect on the previous 12 months and look forward to the year ahead. Despite the many challenges this pandemic has thrown at us, the industry has continued to embrace change. There is no doubt that buyers are looking for more information about the vehicle they want to buy and more ways to complete as much of that transaction from home as possible. We have continued to innovate by increasing the transparency consumers and retailers alike are asking for with industry changing initiatives such as Admin Fees, Guaranteed Part-Exchange pricing and the recent launch of Auto Trader Connect.
Admin fees are now included in vehicle pricing and reflected in price indicators, a move many retailers had been asking us for and that we have delivered in an industry first move. This enables consumers to compare like-for-like prices between retailers and make more informed choices. It is also a point of differentiation for retailers.
Buyers also want to know what their current vehicle is worth but don’t always want a negotiation on the forecourt, which Guaranteed Part-Exchange enables. This transparency will increase consumer confidence and their likelihood to part-exchange rather than choosing an alternative method to dispose of their car. With the price underwritten by Manheim, retailers are never out of pocket or left with stock they don’t want to take in. We have also responded to the sourcing challenges by ensuring that any stock we bring in through Instant Offer or Guaranteed Part-Exchange is presented straight back to retailers via consumer sourced stock in Dealer Auction.
These are just a small number of the initiatives we’ve worked on with you this year and below you can see even more of the things we’re proud of delivering in the last 12 months that strengthen our partnership and ensure we continue to provide exceptional value year in year out.
Our biggest ever investment in driving consumer awareness
We’ve invested more spend in marketing to drive consumer awareness than any year in our history. Our new ITV partnership means we’ve been more visible throughout 2021 and we will be ramping up our activity again with the launch of our new TV campaign on Christmas Day. Look out for more information on this and a sneak preview next week. The focus remains on helping buyers to find their perfect vehicle, showcasing our partnership with retailers that enables buyers to do more online. 42% of January’s sales are created in December so it’s a really important time for us to invest to ensure those Christmas browsers find your vehicles on Auto Trader and become buyers. Please do talk to your account manager for advice on maximising opportunities from this campaign to ensure you start the year in the strongest possible position.
Support for Ben, the automotive charity
One thing I am particularly proud of is our continued support for Ben, the automotive charity, who are doing such important work. This year, we have once again made a significant donation to their Christmas appeal and partnered with them throughout the year in many important fundraising activities. They have seen a surge in demand for their services during the pandemic with over 17,000 people turning to them for help. That’s someone from the automotive industry contacting them every 15 minutes⁵. Particularly at this time of year, I would encourage you all to make sure all of your colleagues are aware of the services and support Ben provide; they really are always there to help. You can find out more about the brilliant work they do here.
20 new product developments to help your business thrive
Our teams are always busy working year-round to improve how Auto Trader works for you. Here’s a summary of the key improvements we’ve made this year to help you win consumer trust, drive your performance and bring you the latest insight.
I wish you all the best for a successful new year. I am confident that whatever 2022 brings for us all, we can successfully navigate the road ahead together.
Nathan Coe, CEO, Auto Trader
Data sources
1. SMMT Used Car Transaction Data
2. Auto Trader Internal Data Jan 1st – dec 12th 2019 vs 2020 (inclusive)
3. Auto Trader Internal Data
4. Auto Trader 6th -12th dec 2021 Versus 7th – 13th December 2020
5. BEN Internal tracking