Retail - summary
  • New car registrations fell -4.6% in May with 183,724 units registered, whilst year-to-date market broadly stable, down -3.1% with 33,000 fewer cars registered compared with 2018. Diesel registrations fell -18.3% but demand for petrol and AFV vehicles increased
  • Consumer confidence index in the UK rose to -10 in May 2019, having remained unchanged for three months at -13. It was the softest decline since October of last year
  • 52% of dealers that responded to the Monthly Market Survey reported a YoY margin decline in May, while 13% said margins had improved, and the remaining 35% cited they had remained unchanged
  • Challenges continue to face the new car market, as 55% of dealers indicate an increase in consignment stock. Used car strength shows signs of easing in May’s Monthly Market Survey, as 53% of dealers cite an increase in days in stock
  • 55% of dealers cite negativity over the economic condition over the coming months whilst 22% are optimistic that sourcing stock will improve, as cited in the May Monthly Market Survey
  • Dealers know the market is changing, and are planning for the future:
  • 71% think fewer customers will buy a car but more will be buying ‘usage’
  • 77% dealers say they’ll have diversified in order to survive
  • 92% think servicing & aftersales will be more important to dealer profitability than it is today
  • 77% say more consumers will be buying cars with finance
  • 44% are unsure about the influence of brokers and third parties on attracting customers
  • 48% think the proportion of used car to new car customers will have grown
  • Dealers report sensible enquiry levels but quality and willingness to make a decision causes concern
  • May has been the first month this year to falter, with a distinct lack of footfall both on and offline
  • Overage vehicles showing signs of increasing as days in stock rises, whilst book values drop in line with the market
  • Overall new car resignations fall -4.6% driven by both the private and fleet sales channels at -5% and -12% respectively
  • 64% of manufacturers reported fewer new registrations in May 2019 than May 2018
  • Stock availability improved significantly, however lower levels of retail demand, coupled with political uncertainty led many retailers to invest cautiously
Wholesale - summary
  • Manheim saw vehicle volumes up slightly MoM, while the overall average price eased slightly by -0.8% reflecting a change in stock-mix rather than vehicle values
  • The average mileage for fleet vehicles sold through wholesale increased 14.7% YoY but down -7.0% MoM whilst the overall mileages decreased by -6.1% MoM and increased YoY by 8.9%
  • May showed a YoY increase of 12.9% and 18.1% MoM in the average price of alternative fuel vehicles, whilst both petrol and diesel eased further as the reduction in the fleet product continues to influence the profile of vehicles
  • Quality of work is the primary objective for two in five dealers; whilst turnaround time key focus for just 10%
  • Dealers are advertising their new stock online ahead of it being physically available. 64% of dealers have stock online within four days vs 46% who have it on a forecourt within that time
  • May demonstrated a turbulent few weeks with the auction market
  • As volumes increased, demand eased and therefore added pressure on both conversions and price objectives
  • The gap between grade 1,2 and some grade 3 vehicles show signs of increasing as the grade 4 and 5 struggle to find a home
  • The average wholesale price for AFVs increased both YoY and MoM, whilst prices for petrol and diesel prices eased
  • As fleet pressures in the new car market continue, this has clearly influenced the profile of stock entering the used wholesale sector, as the average age continues to increase and mileage remains in excess of 60K
  • Wholesale part exchange vehicle average prices eased both YoY and MoM whilst volumes increased 5% MoM
Funding - summary
  • The average vehicle value drops slightly to £7,463 (down £296 MoM and up £247 YoY) whilst the average value in 2019 remains ahead of both 2018 and 2017
  • The average number of days in stock rose to 60.7 (up 4.3 MoM), the third instance above 60 days during 2019
  • Nine in every ten dealers promote at least one additional product or service. Over half (54%) now offer a tyre protection product to customers, slightly more than those offering upholstery protection (50%)
  • The average age of funded units reduced marginally from the 6.2 years in 2018 to 6.1 years, while the average mileage eased slightly to just over 60,000 in May 2019
The Monthly Market Report includes our 2019 outlook for retail, wholesale and funding sectors as below:
Retail 2019 Outlook
  • Increasing appetite for Manufacturers and Dealers to embrace eCommerce
  • Demand grows for advanced vehicle imagery solutions to drive online buyer confidence
  • Dealers investing in PPC advertising to drive sales as consumers turn to online for their next vehicle
Wholesale 2019 Outlook
  • Demand for retail-ready stock will drive efficiencies in vehicle services, assisted by enhanced imagery
  • An increasingly agnostic approach to physical and digital sales streams will emerge to complement changing buyer behaviours
  • Buyers will expect increased transparency to drive stock confidence, leading to more detailed vehicle descriptions and assurance checks
Funding 2019 Outlook
  • A strong appetite for growth means cash flow remains a priority for dealers
  • An increased focus on digital integration is helping dealers to purchase stock hassle free from a variety of sources
  • Ease and flexibility remain key for dealers