Retail - summary

  • New car market decline of -4.1% to 157,198 in July (the lowest July market since 2012), the Cox Automotive 2019 forecast remains in line with expectations. Although the New car market decreased in July for an unprecedented fifth consecutive month, EV registrations nearly tripled for the same period
  • Pre-Brexit consumers are marginally more bullish this month, as UK Consumer Confidence improves two points to -11 for July 2019
  • Signs of a positive start to Q3, with 40% of dealers* in July Monthly Market Survey reporting increased online activity and 60% improved footfall. Although pressures on margin remained, nearly half the respondents cited that they had remained stable
  • 36% of dealers* in July Monthly Market Survey reporting an increase in overage used cars and 40% citing increased days in stock. Supply and taxation deals influencing demand for aged and consignment new cars. 83% reported a decline in overage used cars, and 68% a decline for consignment stock
  • 39% of dealers cited uncertainty over the economic condition over the coming months whilst one in four are optimistic that sourcing stock will improve, as indicated in the July Monthly Market Survey*
  • New car market decreased for the fifth consecutive month; enquiry levels remain strong. Conversions, however, are taking slightly longer despite the plethora of available deals and discounts
  • Retailers and manufacturers are preparing for the introduction of RDE on September 1st. As a result, we have seen increased levels of tactical registrations by various manufacturers. Retailers are also taking advantage of potential incentives offered by the manufacturers
  • Increased levels of pre-registration product entering the sector will create additional much-needed volumes in the wholesale market. We also anticipate increased fleet disposals, as fleet operators replenish stock fleets
  • Unseasonal registration is expected to take place throughout August and September, however considering the current headwinds facing the sector, performance and activity remain reasonably healthy
  • Significant increase in stock availability, with 57% survey respondents citing that it had improved compared to July 2018

Wholesale - summary

  • The average wholesale prices and volumes experienced an increase of 5% MoM, whilst average mileage eased-up slightly to 61,463
  • Wholesale stock profiles in the second quarter of 2019 show signs of returning to 2018 age and mileage, as fleet volumes return to the market following a period of uncertainty and replenishment
  • Dealer part-exchanges also remained stable in July, with an increase of 8% in volume MoM and price levels. There was more optimism amongst fleet wholesale, with both volumes and prices increasing MoM to the highest levels seen in 2019
  • Ford, Vauxhall and Fiat continue to dominate the top 5 positions for the most vehicles sold in wholesale for July, whilst the Audi A3 replaces the BMW 1 series in tenth place
  • July trading started reasonably well and stock availability in the wholesale market did improve
  • Dealer Auction, the trade-to-trade online auction platform, enjoyed its best figures in July, with a 6% year-on-year increase on the same month in 2018. It also saw the overall average price fall MoM, down 6.0% to £4,402 from £4,603
  • The average price for Alternative Fuel Vehicles continued to rise again in July as it had done in June. All fuel-types experienced positive price increases, with a double-digit increase for AFVs
  • Whilst the wholesale market remains challenging and a tad inconsistent, it is positive to see stock availability improving. We are also seeing some dealers moving to Grade 3 product
  • Optimism amongst fleet wholesale, with both volumes and prices increasing MoM to the highest levels seen in 2019

Funding - summary

  • The average vehicle value remained inline both MoM and YoY at £7,600 (down £57 MoM and up £55 YoY) whilst the average value in 2019 remains ahead of both 2018 and 2017 with an average H1 of £7,688
  • The average number of days in stock ease to 61.8 (62.1 June 2019 and 58.5 July 2018), maintaining an average in excess 60 days during the first half of 2019
  • Almost a third of dealers surveyed reported experiencing a fall-off in demand for diesel stock, while a fifth expect demand to decrease more in the next six months compared to the first half of the year. Faced with such declining demand, 38% plan to buy less diesel stock
  • The average mileage marginally down to 59,406 for vehicles bought using the NextGear stock funding plan. It also saw the average age of its funded units up from 6 to 7 years

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