OBTAINING stocking finance would be the number one worry for dealers selling the new wave of Chinese electric cars – and other new EV entrants – onto the used market.
To help overcome these issues, 65% of dealers say that they would be convinced by a long manufacturer warranty, 56% by good quality engineering, 47% by franchise dealer network support, 30% by low pricing and 23% by manufacturer investment in marketing.
Paul Burgess, CEO at Startline Motor Finance, said: “While it’ll be a little time before they start to make their way onto the used market in any sizeable numbers, it’s clear that Chinese EVs from manufacturers generally previously unknown in the UK – as well as a number of EV start-ups from the US and elsewhere – are going to start making a potential impact on the used car sector during 2023.
“There is a chance, especially at the budget end of the market, that these vehicles at least partially displace established brands, so this month’s Tracker seemed like a good opportunity to find out what dealers thought about their arrival.
“Our view of the results is that retailers have concerns about these cars but that many of these issues would be helped by manufacturers indicating that they are building a long term presence in the UK, for example by the creation of a franchise dealer network – which we are now starting to see – alongside the availability of finance and through a long-term warranty.”
December’s Startline Used Car Tracker also showed some interesting trends in dealer views about the biggest challenges they face for the future. Notably, since last month, there has been a 14% percentage point rise to 38% in those worried about compliance, a 27% fall to 49% in doubts about stock availability and a 21% increase to 51% in those concerned about electrification.
Burgess said: “A lot is going on in the used car market and the wider economy for dealers to think about. The jump in compliance worries is perhaps prompted by the recent FCA Consumer Duty announcement becoming more well-known while the change in stock availability could be a result of moderately improving supply accompanied by moderately falling demand.
“Electrification is a long-term concern and, as last month’s Tracker research showed, relatively few dealers feel they are really anywhere near ready to be selling EVs in quantity. There is certainly no shortage of issues for used car retailers to tackle at the moment.”
The Startline Used Car Tracker is compiled for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This month, 307 consumers and 79 dealers were questioned.