A market with momentum…
Market momentum
Despite an uncertain back drop of political and economic turbulence, from what we’re seeing across our platforms and the wider market, 2023 has started with some real momentum behind it.
Firstly, we’re seeing and hearing reassuring signs of robust levels of demand in the market. On our marketplace, we saw a record 80 million cross-platform visits in January, which is an increase of nearly 10 million visits on the same time last year and marks the third consecutive month of year-on-year growth. With the outlook for household finance appearing more optimistic than expected, consumer confidence continues to show signs of improvement. In fact, the YouGov consumer confidence tracker reported a positive uptick in January.
This is reflected in our own consumer research, which shows that over 78% of in-market car buyers are planning on buying in the next six months, and 27% in the next three months. Over 80% of visitors to our platforms are at least as confident as they were at this time last year in being able to afford their next car. This percentage has stayed strong for UK car buyers on Auto Trader over the last six months.
And whilst the cost-of-living crisis may soften consumer demand somewhat this year, there’s a number of reasons why we believe the automotive market will be shielded from its full impact, not least the fact that for most, a car is a fundamental need. Our recent study found that more than three quarters of the 2,000 people we surveyed ‘needed’ a car to get around and considered access to one essential. Personal car ownership has only become more important in the wake of recent train strikes, and with no end to the disruption in sight, this trend is only set to increase.
There’s also the backlog of people waiting for a driving test, at circa 500,000, and the combined 5 million lost new and used car sales from 2020 – 2022, which still leave a level of unsatisfied pent-up demand in a market that’s been constrained by supply now for a number of years.
This demand is contributing to stable used car values. To date this year, the average price of a used car is £18,118, which is up 2.7% year-on-year off the back of the massive 31.3% increase recorded in January 2022. This marks the highest average used car price we’ve recorded in the 12 years we’ve been tracking prices. Figures like these serve as a reminder we’re in a market that’s still recovering from lockdown-inflicted supply issues.
Data at the heart of your decision making
So, prices are stable, demand is robust, and the feedback we’ve been receiving from many of our retailer partners in the last few weeks supports our cautiously confident outlook for the market this year. 2023, however, will present some notable challenges for retailers – not least the pace at which the market is moving. Levels of supply and demand for different makes and model, continue to change at record speed, making it more challenging than ever for retailers to base stocking and pricing decisions on experience alone.
What’s more, many retailers are also worried about the knock-on impacts of the new car shortfall, and the resulting competition for available used car stock (with more franchise retailers stocking older cars or unfamiliar non-network marques) and looking for new sources of supply. They’re also seeing the increasing electrification of the market, and changing consumer behaviours and expectations, with the growing demand for an omni-channel retailing experience. It means the need for accurate, granular, and real-time data sharing has never been more critical to success.
How we’re helping retailers navigate complex market dynamics
It’s for these reasons we’re committed to empowering all our retailer partners, regardless of size, with our full data and technology capabilities.
Whether via our powerful stock-management solution, Auto Trader Connect (which enables retailers to update multiple back-end and consumer facing systems with advanced vehicle data in real-time), or directly through their Portal accounts, we’re helping more retailers than ever to achieve greater operational efficiencies, as well as improve consistency and accuracy across adverts. This is not only helping to maximise vehicle margin, but also remove some of the biggest pain points for both consumers and retailers alike.
We’re also surfacing our award-winning valuations into retailers’ existing processes, by integrating the industry’s most accurate pricing data into Auto Trader Connect. As of April, this second iteration of the solution will be available to all our partners as part of advertising packages as standard. Retailers can have early access where their technology partners – including stock management and retailer website providers – have already integrated the solution into their platforms. Over 2,000 retailers are already onboarded.
We’ve just launched Vehicle Insight, an innovative new performance tool that enables retailers to access our powerful market data in one simplified view through their Portal accounts. Also available to all our partners as standard, it brings together key performance indicators in one single tool, providing easy-to-read insights into any vehicle, helping retailers to respond quickly to the fast-moving market and improve performance across their digital forecourt.
We know retailers are facing an increasingly complex and competitive market and enabling them to respond quickly and strategically to fast-changing dynamics is a priority for us. We believe that data will be critical to success this year, and hope these tools and insights, will help all our partners surpass their performance goals for this year.
If you have any questions or would like to know more on how we can help you, please do get in touch with your Account Manager who will be happy to assist you.
