Two things we’ve seen since showrooms re-opened

Analysis throughout the lockdown period showed that people were still researching cars, and with a good degree of intent. Sure, there were people using the extra time they’d gained looking at their dream car, but despite falling interest in almost everything apart from bread flour and TikTok, plenty of people were still looking for their next car. ‘Pent-up demand’ became the industry’s most-heard phrase, overtaking ‘unprecedented times’ as we moved into May – with loads of people looking, what would happen when showrooms re-opened on June 1st?

Big Thing #1: Engagement with new cars on Auto Trader didn’t stop on June 1st. In fact, it got bigger

Going back further than lockdown in the chart below, when the car market was stable and there was still an outside chance someone else might win the Premier League, there was a steady level of views of brand new cars and of people clicking to see more (‘engagements’). The week before lockdown was when we saw an impact in the data; there was a fall in interest as businesses sent people home and more serious measures fell under consideration.

However, with showrooms closed retailers and brands began to promote new cars on Auto Trader and with quickly growing stock levels the interactions returned. By the end of May, and the Government’s announcement that car showrooms would re-open alongside open markets, Auto Trader’s audience numbers had rebounded and new car numbers were back to pre-COVID levels. Car buyers, rightly cautious about the impact of COVID-19 on personal space and the economic outlook, were presented with 60%+ more cars to choose from and more retailers to contact, and they quickly accelerated their activity.

In fact, the appetite to engage with new cars on Auto Trader has only increased since June 1st. Views of cars in the first two weeks of June were 15% higher than late February, and the big increase really began in the opening days of June. What we’re now seeing is that trend continuing into the middle of June, evidence of improved interest, but our new car leads volume has also accelerated. The chart below shows the evolution of leads sent to retailers and the clear jump on June 1st. Buyers, for weeks unable to engage and progress the jobs they needed to do when deciding on their new car, emerged with questions, and day after day there’s been a record high volume of contacts with retailers.

The hope, of course, is that these enquiries continue and become sales, giving the new car sector the rebound boost, it needs.

Big Thing #2: There are new buyers coming into market. And they’re no different to everyone else

Surveys we conducted in late May told us that 27% of people intended to avoid using public transport, with a further 59% unsure if they’d get back on the bus, Tube, tram or train*. Ride hailing and car sharing were also hit – fears over safety, though, conflicting with the Government’s advice to go back to work. With people needing to return but not wishing to use public transport, cars became the alternative and when asking people on Auto Trader why they were looking for a car, 42% said it was because they wanted a car or an additional car and a further 17% because they wanted to avoid public transport. Clearly, the pandemic had a big impact on people’s travel choices, and the early speculation was that people normally using the bus or train would be buying older, cheaper cars.

Wrong. When we look at the prices of cars viewed on Auto Trader the mix has not seen any significant change, with all price bands recovering to pre-lockdown levels of engagement – there has been no swing to views of cheaper cars. Nor has there been a big variance in the types of cars people are looking at, or the share of interest seen by franchise and independent retailers – there is no evidence to suggest these buyers are behaving any differently to anyone else. The only early sign of any difference is a larger-than-average recovery in London, where views of cars are more than 30% higher than in February, with leads sent to retailers doubling. It’ll be interesting to see if this continues.

So all of the evidence and indications are that those buying cars to avoid public transport, or adding to a car they already have, are doing so in the same way as everyone else, with the same budgets, the same needs and the same retailers in consideration. And in doing so, they’re an opportunity for both franchise and independent sectors, on either new or used cars, and therefore the car brands themselves.

Cautiously, the trends have been positive, and we’ll be keeping a close eye on whether they are sustained through the Summer.

*Userzoom survey, 22 May to 3 June