An update from our CEO
I hope you are well and have enjoyed some time off over the summer. September is always a critical month in the automotive calendar, and I’ve got some exciting updates to share, from opportunities in the used car market, to our new marketing campaign and the exciting What Car? partnership we recently announced. Plenty is happening in both the used and new markets, with new market dynamics having significant knock-on effects to those selling used vehicles.
New Car demand grows and our new marketing campaign launches
We enter September plate change with high optimism as demand has ramped up ahead of last year, with new car visits to Auto Trader up 9% month-on-month in August and very healthy in September so far. As ZEV mandate pressures mount, we’ve seen a slight increase in discounting and so far in September private demand for EVs is at its highest point since 2022. 1 in 5 enquiries so far in September are now for EVs, which is a big increase – time will tell if this trend continues. While that is all positive, we have heard from plenty of our customers that both Retail volumes, particularly for EVs, and overall new car profitability are tough for some brands. So, as well as considering price to stimulate demand, many retailers are ensuring their new cars are visible to buyers online. As a result, we have seen a 49% increase in new cars advertised on our platform year-on-year. Our latest research shows that 1 in 3 buyers on site are open to considering both new and used options - a potential 3.6 million buyers deciding between used and new. This presents an opportunity for all retailers, with great pricing and merchandising.
To further drive activity, we’ve launched our largest brand campaign to date, ‘Found AT’. This campaign is a multi-million-pound investment designed to support our partners by showcasing the 20,000 brand-new cars and 37,000 nearly new cars available on our platform.
You can read more about the campaign here.
We also recently announced a significant extension to our existing partnership with What Car? which will see the UK’s two most trusted automotive brands come together to combine Auto Trader’s extensive live and available stock with What Car?’s trusted reviews and advice. We’re redefining the new car buying experience giving buyers a full view of the market covering new, nearly new and used stock. Retailers and brand partners advertising on Auto Trader will benefit from this greater reach, influence, value and performance. Our existing partnership on used cars has delivered huge impact to retailers; in the last 12 months alone 200,000 unique visitors have come to Auto Trader from What Car?, 60% of which are new to Auto Trader. These customers have viewed over 2 million retailer adverts and sent 11,000 enquiries on retailer stock.
Used market healthy as older, cheaper stock continues to perform well
As we look at the used car market, there are several key trends to be aware of and some sometimes overlooked opportunities for retailers. Unlike the new car market, August is still a big month for used transactions, accounting for 9% of annual sales.
One challenge you may be familiar with is the growth in short cycling activity and pre-reg, placing pressure on sub-1-year-old vehicles. Supply of nearly new vehicles is up +27% so far in September and is selling slower than the rest of the market; in August this was 36 days vs 28 on average. As a result, this is impacting pricing with retailers discounting this stock by -12% in August YoY and discounting is more pronounced in EVs. Retailers who are holding this stock will need to work harder to get it in front of buyers and into their consideration set and sold quicker. Your Account Manager can help if you drive the performance of these vehicles.
Looking at the rest of the used market, things look healthy; used car sales were up 3% YoY and 6% year to date with vehicles leaving forecourts quickly, 3 days faster than this time last year. Supply is the main constraint, especially in the 1–5-year age bracket, but all other factors are positive. From a demand perspective, activity on site in August was up 5% YoY after a turbulent July, affected by the General Election, Euros and Olympics. Declines in used car retail pricing are levelling off and beginning to improve on a YoY basis.
With pressures in younger stock, we’ve been asked recently how well Auto Trader performs for older stock over 7-years old, and cheaper stock priced between £2,500 - £7,500. Aren’t we a premium platform? Well, cars over 7 years old accounted for over 43% of all advert views on Auto Trader in the last 12 months and cars priced between £2,500 and £7,500 have seen a 22% increase in views. Lower priced vehicles typically sell faster on our platform, too, and the picture is positive from a demand and margin perspective. Demand for 5-10-year old vehicles is up and when we look at data from Dealer Auction, there are healthy profit margins to be made here too. Read the full detail here.
If you have any questions around your stock mix or advertising needs, please contact your Account Manager.
New enhancements to Deal Builder
We created Deal Builder to help all retailers, regardless of size, meet the growing demand for omnichannel retailing, enabling businesses to offer a seamless online to offline buying journey via their Auto Trader adverts.
Deal Builder has been going from strength to strength. We now have over 50,000 vehicles available to reserve on Auto Trader and retailers using the solution are seeing double the conversion to sale from these highly qualified buyers, so we’re keen to make sure more partners can benefit.
We’ll be rolling out some exciting new developments soon. The first of which is that Deal Builder will soon be available for Vans on Auto Trader. So, if you retail vans and would like to know more, speak to your Account Manager today.
Retailers who are yet to experience what Deal Builder can offer can find out more and request to join on an initial free trial here.
As always, thank you for your continued partnership. These are dynamic times for the automotive industry, but together, we’re well-equipped to meet the challenges head-on. Our goal is to drive success in both the new and used car markets, and I’m confident that the actions we’ve planned will help us achieve just that. We’re hosting our annual Retailer Awards in October, so I look forward to celebrating the winners and seeing some of you there.
All the best,
Nathan.
