An update from our CEO

As we enter the second quarter of the year, our priority is on partnering with you to deliver the best results for your business. There is certainly a lot going on in Automotive. Including recent US tariff announcements, ZEV mandate changes and rising costs from minimum wage and NI contributions. Given this backdrop, the focus needs to be on controlling the controllables to drive performance. Our research from “The Road Ahead for Automotive Retail” highlighted used car profitability as the biggest opportunity. That means doing the fundamentals right; sourcing the right stock, getting it in front of buyers and pricing to the market for the best returns.

Market trends remain stable 

The market backdrop is robust. Consumer demand is rising, up 1% year-on-year in March. Cars are selling faster than we’ve seen in the last eight years, at just 25 days in March on average. This has led to an increase in used car retail sales for March of 6% year-on-year. Supply remains the biggest market challenge, with production shortages now flowing into the 3–5 year-old stock segment. These market dynamics present both a sourcing challenge and a margin opportunity for retailers.

3 ways to unlock Performance 

The fundamentals remain true. Having the right cars on your forecourt, priced to market and well presented will reach the largest pool of potential buyers. Whether that’s walk-ins, leads or deals on that vehicle. Ensure your business has strategies in place to deliver on these three fundamentals for driving retail performance and get the most out of your Auto Trader investment. Our team of account managers are here to ensure you have these strategies in place, so don’t hesitate to reach out.

1. Source for success 

The stock shortage from the pandemic is flowing through to 3–5 year-old vehicles, so the availability of supply differs greatly by stock profile and age cohort. Year-on-year supply of petrol cars is flat, and diesel is down 12% year-on-year. However, supply of electric and hybrid models is up over 40%. This combined with the quickest speed of sale we’ve seen in eight years is making sourcing a key area of focus. Retailers now have to find new sources and profiles of stock. We are already seeing this in the data. 40% more independent retailers are now stocking electric vehicles (EVs) than last year – and they’re selling quickly in line with the market.

Auto Trader data can help you decide which stock will sell well and give you confidence in the specification of the vehicles you’re buying. This is especially key if it’s stock you’re less familiar with. Making sure you buy the right vehicle and pay the right price to sell on the retail market.

· Retail Rating and Expected days to sell let you know how in-demand a vehicle is and how long we’d expect it to take to sell in your local area, so you can buy the right stock for your forecourt.

· Target buy price enables you to set the maximum price you should pay for that vehicle to achieve profit on the retail market. Input your desired margin and costs, including preperation costs and you’ll receive a personalised buy price.

If you missed it, I strongly recommend you catch up on our recent webinar on sourcing strategies, as well as watch our Sourcing Masterclass.

2. Stock that gets seen, gets sold.  

It is key to ensure your stock is online and in front of the largest audience, with the right level of prominence. Powerful new analysis reveals that retailers who advertise all their stock on Auto Trader sell 3 cars instead of 2, in the same time. This leads to a higher share of sales and a higher profit across the month.

Auto Trader’s unrivalled audience is a unique opportunity to drive sales. With 10.3 million unique visitors per month, of which 6.3 million don’t browse anywhere else, Auto Trader is the place to get your stock seen. This means you don’t need to advertise everywhere to reach consumers. 70% of consumers who visit competitor sites also visit Auto Trader and they spend longer with us. That could mean £70 in every £100 you spend with a competitor is duplicated. At a time where external costs are impacting your business, we firmly believe Auto Trader is the best return on investment.

With buyers taking around 90 days from the start to the end of their buying journey, your stock needs to be online consistently, so you don’t lose buyers. With Stock Boost still live until 2nd June, now is the perfect time to list any unadvertised stock on Auto Trader at no extra cost. To make use of these additional slots, or to find out how you can unlock even more, reach out to your account manager. 

 3. Make more profit per vehicle

A good pricing strategy and strong advert performance are fundamental drivers of profit. Whilst pricing strategies will be different, almost every retailer has an opportunity to increase margin on some vehicles, especially with speed of sale the fastest we’ve seen in 8 years. Today, we see over £25 million in profit opportunity for stock with a Retail Rating above 61 – meaning it is in high demand and expected to sell well, so you should be confident to price to market. That equates to £390 extra margin per vehicle in this category. Don’t leave margin on the table if you’re holding this stock.

Once a vehicle is in stock, your focus should be on pricing it to market. Use Retail Rating and Price Position to keep the vehicle within your pricing strategy and avoid unnecessary discounting. Last year we launched a new pricing page in Portal. Now you can instantly see how that vehicle is priced against your strategy. The aim is to highlight margin opportunity so you can make more informed pricing decisions, faster.

Finally, use the tools available to ensure advertised stock is well presented and has the right level of prominence to attract buyers. Co-Driver, powered by our Vehicle Data ensures you can advertise any stock confidently and easily. Performance Rating helps you understand your share of response to optimise advert performance. If your advert performance needs a boost, upgrading your package gets your stock in front of more buyers enabling a confident pricing strategy.

On 23rd April we’ll be hosting a live webinar on pricing strategies for retail success, so register now to watch that update. You can also view our Pricing Masterclass now for an overview of pricing strategies and how to use our data effectively.

Our team are here to drive your success 

All of this data is available to you as part of your package in Portal and is increasingly available in many third-party tools outside of Portal, through Auto Trader Connect.

If you need any support in finding these metrics or reviewing your advertising, pricing or sourcing strategy, reach out to one of the team.

There is opportunity in the market to drive greater profit and I firmly believe Auto Trader is the best partner for you to do that. Our goal is always to work in partnership with you so please reach out to review your strategy and take advantage of our Stock Boost offer.

Regards,

Nathan.