An end of year update from our CEO
I hope that you and your family are well and that you all have a peaceful and restful festive period.
True to form, this year was another year like no other in recent history. We had all just adapted our businesses to Covid and the changes that brought, only to be presented with a looming economic recession and rapidly rising costs. Also true to form the Automotive industry and all its people have shown their resilience, adaptability and commitment to keeping UK consumers moving.
We’re exiting 2022 with the mood feeling very different from the start of the year, but the automotive market was stable and healthy in 2022 and we’re exiting with good momentum into 2023.
Our year together in 2022
2022 saw the largest number of retailers working with us in our history, a fact we’re immensely proud of and is a testament to the trust our teams have built working in partnership with retailers to help drive their success.
We’ve seen a much more stable market in 2022 than in recent years. Demand measures have gradually returned to the more normal trading conditions seen pre-pandemic with some inevitable softening in growth compared to the huge surges seen last year. That said, consumer interest remains robust with 8 in 10 consumers telling us they’re as confident or more confident than a year ago in their ability to afford their next car(1). We also saw record growth in used car prices during 2022 driven by supply constraints, with pricing growth of 17%, and prices stable over the past 6 months(2). In further signs of market health, Retailers also saw speed of sale increase, a day quicker than last year and 3 days quicker(3) than in 2019.
Delivering industry-leading products
During 2022 we continued to deliver technology advancements to help our customers get the most out of their business. We launched Auto Trader Connect, with Retail Essentials available as part of packages for all retailers, a technology solution ensuring that your vehicles are described with the best data available and are immediately updated on our platform and across other channels you use, reducing delays, dual keying and potential errors. We have since announced the next stage of this solution, the integration through packages next April of our valuations data enabling you to easily price to the live retail market and ensure you are maximising the profit potential of every purchase and subsequent sale.
We have also been rolling out enhanced VIN Spec data directly from Manufacturers to take the hard work out of adding optional extras to vehicles. This has seen an average increase in profit opportunity of £361 per vehicle and as much as £5,587 on one premium vehicle(4).
Valuations will not just be available through our Auto Trader Connect platform, we have also integrate these into your Portal stock list so you can easily see our retail valuation and price position alongside your advertised price. We are also developing a new Vehicle Insight dashboard for Portal users that we’ll let you know more about in the new year.
Multi-million-pound marketing campaign starts on boxing day
On Boxing Day, we’ll launch the next phase of our Britain’s Biggest Matchmaker campaign, focusing on helping car buyers find the right car for them. The campaign will run through until the end of March and represents our biggest investment in marketing to date and is estimated to reach 98% of all UK adults, bringing more buyers to your vehicles. It’ll be running across TV, radio, on-demand services and digital and social channels. As we know, December’s browsers turn into new year buyers, so make sure your stock is visible and well-advertised ready to start the year strong.
Read more and watch the advert here.
Supporting Ben and our communities
At this time of year, many will turn their thoughts to how they might help others less fortunate than themselves. Community-minded is one of the Auto Trader values which has been shown in the 565 days of volunteering our team have spent across 2022 helping those in the community who need our support. We have also continued our close partnership with the automotive charity, BEN and I’m pleased to confirm again this year that in place of sending our retailer partners festive gifts, we have made a significant one-off donation to the charity to further support the vital work they do for our automotive family.
The outlook for 2023
As we look forward to 2023 there are three fundamental forces of change which we believe will shape the market and impact retailers in the year ahead.
Firstly, the supply shortfall. With nearly 2.5 million new car sales lost(5) by the end of 2022 growth in the UK car parc will be slow over the next few years. We’ll therefore see a greater mix of used and older vehicles for some time to come as fewer younger vehicles enter the parc. This means that used car prices are set to remain stable and franchise and independent retailers will likely continue to compete for the same stock.
The second force of change is the growing electrification of the parc. Whilst recent energy price rises and cost of living concerns have slightly softened EV demand, there’s no doubt the EV parc is growing, with 12% of all new car sales in 2021 and 17% forecast(6) for 2022. We expect that around half of used cars will be electric by 2030 and worryingly half of retailers tell us they are not yet ready to sell them and 1 in 5 don’t ever plan on selling EVs(7). This should be seen as an opportunity, not necessarily something to be feared. Electric vehicles are coming and will represent an ever-growing proportion of cars on the road, so it is important that we start to embrace this change. We are here to support this transition through our brand, data and technology.
The final trend is the growing demand to do more of the car buying journey online, with buyers completing more of the process before arriving at your forecourt. Two-thirds of consumers find the experience appealing, rising to 82% in younger audiences(8), which shows the direction of travel. We have made it our mission to ensure this is an opportunity for your business as opposed to a threat and are working to provide all Retailers the tools to sell online.
We covered our 2022 review and outlook for next year in more detail on our recent webinar, so if you missed that one, you can catch up here.
With that, I want to wish you all a good festive break and I look forward to working together in the year ahead. As ever, if you need any help from the team please do reach out, we’re always here to help.
Sources
Auto Trader internal data: Onsite survey (all searching for a car) November 2022, n=450
Auto Trader Retail Price Index
Auto Trader internal data
Based on a sample of 52,000 vehicles advertised on Auto Trader across the 98 brands providing VIN spec at the time of analysis
SMMT data
SMMT data, Auto Trader analysis
Auto Trader survey Sept 2022, n=484
Auto Trader survey, July 2022, n=2001
