September update from Nathan Coe, Auto Trader CEO

I hope that you, your family and colleagues are well. It has been a week of announcements that we all hoped we could avoid but now seem inevitable. Further restrictions on our lives, in and out of work, feel frustrating but necessary if we are to avoid a more damaging second wave. It is particularly hard as it had felt like parts of life were beginning to get back to something closer to resembling normal.

No negative impact on consumer demand

It was good news that for our industry the lockdown measures were not more stringent and that businesses can carry on operating largely as they were. We continue to track the latest data and insight on how consumers are reacting to the changing situation. I am pleased to say that since the latest announcement, we have not seen a negative impact on consumer demand on site or in the intention of consumers to purchase their next vehicle.

Record audience levels continue

We’ve continued to see record audience levels, traffic was up 30% year on year in August(1) and in the past seven days visits are up 26%(2). In an hour by hour analysis following the government announcements on Tuesday we saw no change in consumer behaviour on site(3), you can see the full breakdown here. Across the UK we saw audience engagement increase(3) in the 24 hours following the government announcements, in all countries, including those where there are tighter restrictions. We’ve also been studying the impact of local restrictions in areas such as Leicester and Greater Manchester. Audience has remained strong and leads have increased(4) as consumers look to more ways to complete as much of their buying decision online.

People now want to buy cars for different reasons

There are a number of reasons to remain positive about consumer demand. Our recent consumer research shows that people now want to buy cars for different reasons, 12% want to actively avoid public transport by buying a car instead(5), and 23% of consumers said they wanted to buy an additional car because of the current situation(5). These are new consumers buying cars, in addition to those who would have bought this year anyway, which all bodes well for sales volumes. Our research also looked at people’s propensity to afford a car, 45% said they felt more confident in being able to buy a car now than they did a year ago, with 43% saying that they felt just as confident now as they did in August 2019(6). As public safety restrictions continue to reduce people’s leisure spending, some consumers appear to have more money for buying things like cars. In a survey we ran this week, immediately after the latest government announcement, only 10% of car buyers said that there was any change in their intention to complete their vehicle purchase(7).

Pricing is holding steady

Price remains a key indicator of market health, and the data we collate for our Retail Price Index has shown prices are not only holding but they have been steadily increasing, these trends show no signs of abating. Supply remains tight, but if demand continues and retailers stay strong with their pricing strategies and price to the live retail market, we don’t anticipate any negative impact on pricing. We’ll continue to monitor all relevant metrics and share the data with our customers in the coming days and weeks.

We’re here to help

It’s clear that your COVID safety measures are playing an important part in re-assuring customers and giving them confidence in the measures you have put in place to meet the new legal requirements for COVID safety. If you need any support or advice to ensure these reflect the measures you have put in place then please get in touch. Our teams are here to support you. We have evolved the way we operate over the last few months so the revised guidance around working from home will not impact the level of service you receive from us. Our Retailer Support Hub continues to be a source of excellent advice and insight from industry experts and we are launching our online Retailer Performance Masterclasses from 7th October to ensure you are getting the most from Auto Trader.

Now is the opportunity for us all to end the year in the strongest possible position. Ensuring all of your stock is visible online gives you the best chance of recouping some of the losses from earlier in the year and ensuring a run rate in to next year that gives you the start you would hope for 2021.

As always, if you have thoughts or feedback to share, please do not hesitate to get in touch directly or to contact the team.

Data Sources

1 Auto Trader internal analysis of Google Analytics data, total visits on Auto Trader daily, 1st August – 31st August 2020 vs 1st August – 31st August 2019 (inclusive).

2 Auto Trader internal analysis of Google Analytics data, total visits on Auto Trader daily, 16th - 22nd September 2020 (inclusive).

3 Auto Trader internal analysis of Google Analytics data, 22nd & 23rd September 2020 vs 15th & 16th September 2020 (inclusive).

4 Auto Trader internal tracking, increase in share of email, text and chat leads sent to retailers in LE, M, BL, OL, BB, BD postcode areas, during period of government restrictions impacting those postcodes.

5 Auto Trader on-site consumer survey, Aug-20, Why are you planning to buy a car?, n=1537

6 Auto Trader on-site consumer survey, Aug-20, Do you feel more or less confident in being able to afford your next car compared to a year ago?, n=3249

7 Auto Trader on-site consumer survey, 23rd – 24th Sep, The government announced new Covid-19 restrictions on 22nd September, has this affected your decision to purchase a new vehicle?, n=1922