COX Automotive has reported high levels of competition for wholesale vehicles in December, driven by dealers’ optimism about consumer demand in the first quarter of 2019.
This comes as the Society of Motor Manufacturers and Traders (SMMT) reported a turbulent year for new cars, with registrations down 6.8% during 2018.
As dealers increasingly shifted their focus to the buoyant used car market during 2018, Manheim results for December showed a year-on-year increase in average vehicle values to £6,735, while average mileage (61,055) increased by 4.7%.
NextGear Capital, Cox Automotive’s wholesale stock funding business, also saw the average cost per vehicle increase for the fourth month in a row, reaching £7,877 in December.
Meanwhile, Dealer-Auction.com topped off a record year with a 12% year-on-year increase in volumes, with the average price up 14% to £4,911.
Philip Nothard, Customer Insight and Strategy Director – Cars, said: “Demand from dealers for used vehicles reached unprecedented levels in the final quarter of 2018. As we move into January, demand for ready-to-retail stock remains high.”
“For many dealers, locating the right vehicles at the right price proved a real challenge in December, and there was little evidence of a pre-Christmas spending spree as buyers waited to see if supply would improve in January.”
December was a challenging month for the retail market, and figures from Motors.co.uk, Cox Automotive’s car search platform, show average price performance up 2.2% on November, but 4% down year-on-year.
Nothard commented: “While some dealers are reporting a drop in enquiries for December, this has been off-set to some degree by good margins on vehicles sold in the month.”
“Interestingly, dealers are reporting a higher than usual demand for aftersales services – only time will tell if this is prudent drivers preparing for colder weather, or an indication that economic uncertainty is causing consumers to hold on to their cars for longer than usual.”
“Looking ahead, it’s likely that pressure on supply in the wholesale market will begin to ease in January, and dealers remain optimistic that consumer demand for used vehicles will increase steadily during the first quarter of the year.”
“Stock turn will depend greatly on model and specification, and the retailer’s ability to adapt to distance selling, competing on price across a wider area, and offering a full online experience to prospective buyers.”