The market remains robust, with no need for sweeping price reductions
By Richard Walker, director of data & insight, Auto Trader
If you’re a regular viewer of our bi-weekly webinars, then we truly hope they’re helping your business stay ahead of what’s happening in the market. If you haven’t yet joined one, you can sign up for future webinars or catch up on previous ones on demand here. Our position in the market gives us a unique view of consumer behaviour and marketplace trends, and we’re committed to making that insight readily available to you to help you make the most informed decisions.
My three biggest takeaways for your business
Here’s my three biggest takeaways for your business from this weeks’ webinar. If you missed it, you can watch it on demand here now.
1. The market remains robust
When we look at buyer behaviour on Auto Trader, visits are up 24% vs the same time last year, continuing to average about 1.4 million unique users daily. Ad views are up 23% YoY and leads sent to retailers are up 58% YoY, both of which are slightly higher than they were at the start of this month, so we continue to see growth in buyer demand. What’s more, map clicks are up 25% and traffic to retailers’ websites are up 16% YoY.
2. Vehicles are selling faster, for stronger prices
When we look at key metrics like the numbers of days vehicles take to sell, we’ve observed vehicles selling faster in June and July than they did in the same months last year. In addition, we’ve looked at the split of stock across independent and franchise retailers and split that stock into sub £10k and over £10k categories. In each of those price buckets, both independent and franchise retailers have sold vehicles faster than they did in 2019. What makes this even more positive is that the last advertised price before selling was higher than the same time last year. Put simply, this means retailers are selling faster and for stronger prices than last year.
3. Strong buyer demand means there’s no need for sweeping price reductions to sell
To help us understand pricing movements, we track three key measures:
1. The number of retailers making daily price changes
2. The number of vehicles being repriced
3. The average £ amount of the price changes
In terms of the number of retailers making daily price changes, this week just gone was the busiest day since the end of March, with over 2,000 retailers changing prices each day. Although that’s still 17% lower than this time last year. Normally we’d see about 2,500 – 3,000 retailing making pricing adjustments daily.
When we look at how many vehicles are being repriced, we saw 9,899 vehicles repriced each day last week, which is 200 more than the first week in August, although still down 33% vs last year. Pre-lockdown volumes fluctuated between 17.5k to 24k vehicles being repriced each day.
And lastly, when we look at the average £ amount of pricing changes, normal conditions would see average changes between £250-550 per day. Last week, the average reduction was £274, which is towards the lower end of ‘normal’. For independent retailers, the average change was £209. For franchise retailers, the average change was £333, which is more in line with what we’d normally expect to see. And it’s important to note that these price changes shouldn’t always be reductions. Prices can move up and down depending on demand for those vehicles. 22% of retailers increased prices last week, 8% held them and 70% reduced prices. This is interesting because we are seeing more retailers active but the proportion of the stock being increased as opposed to reduced is higher than early August, which is a strong indicator for pricing.
In summary…
Overall, when you combine the fact that the in-market audience levels remain significantly higher than this time last year and enquiries sent to retailers also significantly up, it continues to suggest a strong market with no need for wholesale price reductions to sell. I’d strongly recommend you continue to use the tools available to you such as Retail Check and Market Insight, both available in Portal to help you understand supply and demand in the market and to ensure your vehicles remain priced to market to help you achieve speedy and profitable sales. Also, make sure you lean on your Account Manager for support on how to maximise your response on Auto Trader.