An update from our CEO, Nathan Coe

I hope that all is well. As we approach the end of the year, I wanted to share my views on the market, what we’re seeing on our marketplace and how we’re continuing to enable your success.

The market today

As events in the UK and around the globe continue to impact on the economy I want to make sure you know how Auto Trader and the automotive market are being impacted, as shown through our latest data. There’s no doubt the cost-of-living crisis is a concern, and we do expect to see some softening in engagement on our platforms in the coming months as we enter the traditionally quieter trading period until Christmas. Our engagement metrics remain up against the more ‘normal’ trading conditions of 2019; with cross-platform visits up by +18% and advert views by +14% but both behind the very strong prior year levels1. So, we’re not seeing any material signs of slowing consumer demand yet, but we are continuing to track the data very closely as the impact of interest rate movements begins to flow through to the wider economy.

Despite the tough economic backdrop, retail market pricing remains stable. Supply challenges alongside consistent levels of demand means prices are robust; in October 2022, the average price of a used car was up £178 on September and 8% on prior year levels2. When we look at speed of sale, we see that used cars took an average of 25 days to sell in October, which is one day faster than in September. In fact, this marked the fastest days to sell since October 2021 (24 days) and is ahead of pre-pandemic levels3. So, whilst the world around us is turbulent, the automotive market is still in a relatively robust position as we approach what is typically a quieter trading period. Now’s the time to make sure all of your available stock is advertised, to the highest standard, so that you can build your pipeline for the all-important start to the new year. A typical buyer research phase spans 2-3 months, with over five in 10 January buyers typically researching on our platform in November and over six in 10 researching during December4.

We will keep a close eye on all of these key metrics as the market continues to evolve and will ensure we share any changes with you through our regular webinars and AT Insight channels. We’re committed to continuing to support our retailer partners, investing in your success and that of the automotive market as a whole.

Investing in you and the industry

We recently announced our half year results. Our performance enables us to continue to invest in your success and to improve the car buying experience for retailers and car buyers. Our marketing team continue to invest to bring buyers to your adverts and we’re planning another high-impact marketing campaign to launch on Boxing Day. We are committed to investing more each year in marketing and this year we’ll be investing more than ever. We’ll share more details of the new campaign nearer the time, so watch this space.

By investing in technology and data, we can provide our retailers and partners an advantage, offering access to powerful solutions for retailers enabling improvements in the buying experience for your customers. Our product and technology teams have grown by 8% in the last year and we’re now making 25 times more software releases than we did 10 years ago, with more than 1,000 changes per week.

This means we can deliver game-changing solutions such as our new Auto Trader Connect platform. We launched the Retail Essentials module as part of the platform last year – real-time stock management technology that puts our vehicle data at the heart of retailer systems and enables real-time stock management across channels. This has already resulted in huge amounts of time being saved for those using the platform, with more accurate adverts and increased profit opportunities. Parkway Volkswagen shared their experience with the solution and how it’s enabled efficiency and profit opportunities.

We’ve now committed to providing the industry’s most accurate pricing data, Auto Trader Valuations, into the platform as part of your package next year. We’ll make this available via retailers’ existing systems, enabling you to buy and price your stock with confidence, whilst maximising the profit potential of every sale. For retailers who use Portal to manage stock, we recently added our Retail Valuation and price position into your stock list, making it much easier to adapt pricing to today’s fast-moving retail market and maximise profit opportunities on your forecourt.

To further increase the accuracy of our vehicle data, we’re continuing to roll out enhanced manufacturer VIN Specification data, now with eight brands live including BMW, MINI, Renault, and I’m pleased to share that Volvo data will be available to retailers in the coming days, with more brands in the pipeline. Hear how this is helping transform Motorpoint’s customer experience and profitability here.

Celebrating your success

Last month we came together to celebrate the very best in our industry at the Auto Trader Retailer Awards 2022. It was a pleasure to welcome our winners and finalists in person again this year after hosting virtual events over the past two years. The top accolade was awarded to some truly remarkable businesses: Crompton Way Motors, Alex Scott and Peter Vardy who were crowned Retailer of the Year in their respective categories. My congratulations to all 18 winners and the many more finalists.

Finally, if you haven’t spoken to one of our account management team recently, please do get in touch. Over 3,600 retailers have now had a Focus Finder conversation with our teams, during which we understand your business goals and challenges, share unique market insights to identify opportunities and together we build a clear action plan so you can take the best steps to reaching your goals.

As always, please do not hesitate to get in touch with thoughts or feedback for me or any of the team.

Sources

1 Cross-platform visits use Google Analytics data, advert views is an Auto Trader internal metric. October 2022 compared to 2021 and 2019 as a pre-pandemic reference point.

2 Auto Trader Retail Price Index, October 2022

3 Auto Trader internal data

4 Auto Trader internal data, analysing prior visits from buyer location based on retailer sales data