What’s the data telling us about vehicle pricing and marketplace recovery across the UK?
By Richard Walker, Director of Data & Insight at Auto Trader
Throughout lockdown, we closely measured vehicle pricing movements. Reassuringly, the market held its nerve and pricing remained steady, evidencing that the market truly was only ever on ‘pause’. Now that many showrooms in England and Northern Ireland have reopened, and showrooms in the rest of the UK look set to reopen imminently, here’s a summary of vehicle pricing right now, based on the millions of observations from Auto Trader’s marketplace. I’ve also outlined a summary of how various different marketplaces are performing and the performance across all the UK nations. Don’t forget, you can unlock much of this insight yourself, just click the ‘Analytics’ tab in Dealer Portal then select ‘Market Insight’. You’ll be able to explore market trends based on filters including make, model, fuel type, age and much more.
We track 3 key measures:
With our unique view of the marketplace, we track these three key measures to help us and our retailer partners understand what’s happening in the wider market:
The number of retailers making price changes
The number of stock items that are getting re-priced
The average amount of the price changes
The above graph focuses on the number of retailers that are making daily price changes to their stock. The pre-lockdown volumes of 2,500-3,000 retailers making adjustments has declined as a result of the pandemic. This week the average volume of retailers making price adjustments was 1,697 which is 98 more than last week and the busiest week we have seen since the end of March. This is now 36% lower than we saw last year.
The second measure is the volume of cars that are seeing price changes based on the activity of those retailers. Pre-lockdown volumes fluctuated between 17.5k and 24k vehicles being re-priced each day. This week saw 8,626 vehicles re-priced, which is 433 less units than we saw last week still 50% down compared to last year. We are seeing a change in the most active customer type again this week with 42% of stock sat with franchise retailers and 58% with independents. We normally see a ratio of 48% indies, 52% franchise.
The third indicator is the average (£) amount of the reductions. Normal market conditions would see reductions averaging between £250-£550 per day, last week the average reduction was £269 which is £73 more than the previous week, and at the lower end of ‘normal’.
When we look at how this differs between independent and franchise retailers, we can see the average reduction for independent stock, who were the more active, was £149, which is £75 more than last week and for franchised stock the average reduction was £353 which is £39 more than the previous week.
We are still seeing that, of those changing prices, almost 30% are increasing prices, and for franchise customers this is higher at 32%. Very similar levels are holding prices with no real adjustments and again a slightly bigger proportion of franchised than indies, which means a smaller proportion than normal are reducing prices at this time.
In summary…
To summarise, we are seeing a few more retailers active, although the volume of stock re-priced was lower than last week. Price adjustments are lower than normal and we are seeing a higher than normal proportion of retailers holding or increasing prices. This is being reflected in our valuations and while demand continues to look strong there are no indications that a change is needed in retailers approach to pricing, we seem to be coming out of the closed market in a gradual manner with no knee jerk reactions which is being reflected in our stable valuations.
How are marketplaces performing?
To help inform your business decisions, it’s also important to understand how different marketplaces are performing. SimilarWeb provide an independent view of audience across different websites. We have set up an Auto Category made up Auto Trader, CGs, PistonHeads, Motors, Carwow, Cinch, HeyCar –. Looking at this Auto category for the week up until 13th June, we can see daily visitors are up 4.4% compared to last year with desktop up 19 % and mobile down -3.6%, both showing signs of improvement compared to last week and the first positive year on year result when looking at the whole category.
Looking at the Auto Trader internal data, the chart shows the volume of daily visitors compared to last year. We continue to see a much stronger performance as the volume of new audience increases each week. Up until 14th June our user volumes continued to show growth compared to last year up 25%. with an average daily volume of 1.4m users.
This improved performance is playing through to response and leads. We continue to see ad view levels higher than they were last year, up +24%, building on what we have seen in previous weeks. These improvements have had a very positive impact on leads, we continue to see very strong growth; up +95% compared to last year.
What is also encouraging is that this performance is not just on used vehicles. The record levels of new cars on the site are also seeing strong performance, with total ad views up 36% and leads being generated up 152% vs last year.
Performance across UK nations…
Now that forecourts in England and NI are open we have started to see a change in the performance of walk-in indicators. Web clicks are up this week 26% compared to last year, and map clicks are up 23%. This is on top of the massive increase in leads being generated as people who have completed as much of their process online or over the telephone are now preparing for appointment making or attending appointments, and as we hear some just turning up, in order to conclude purchases and collect their new vehicle.
We have been asked about the performance of the individual countries in the UK as we know they are not all aligned in terms of timings around re-opening for retailers. In England, where retailers are open, we are seeing the highest volume of visitors in 2020 with leads volumes continuing to grow. For Northern Ireland similar in terms of visitors, they are also at the highest in 2020 with more time being spent on Auto Trader than previously seen.
We have looked at Scotland and Wales with an assumption they will be opening in the coming week or so. We did this so we can compare what we are seeing in the metrics now to what we saw in the weeks running up to re-opening in England and Northern Ireland. It is very positive in that the increase in visits in both Scotland and Wales is higher than the increases we were seeing in the weeks running up to re-opening in England, and we are also seeing the volume of Leads being send in Scotland and Wales is higher than what we saw in England. I suspect there are people in these countries that are also now assuming that the re-opening is going to be days if not a week or so away. Very positive signs for Wales and Scotland that when they re-open it will be to pent up demand and a continued growth in leads from car shoppers.
I mentioned last week we had early indications suggesting strong sales activity with high volumes of stock being removed from our site, but also signs of early sourcing challenges with lower than normal volumes of new stock being added. A week into trading this is looking to be playing through as we see compared to last year 25% less new stock being added to the platform, which is understandable with the challenges for sourcing at the moment, but this compares to us seeing 8% more cars being removed than we saw at the same time last year, which in these market conditions can only be described as an amazingly strong performance for car sales.
Remember, make the most of the tools on offer to you in Dealer Portal, particularly Market Insight. And don’t forget to sign up for next weeks webinar here.