- Dealers reporting strong demand just ran out of cars
- Constraints on car production on manufacturers continued to hamper supply
- First-time conversions 3% ahead of the same period in 2019
- Concern remains for the final quarter of 2020
Although dealers are reporting a positive continuation of sales in September for new and used (since lockdown was lifted in early June), the lack of availability for both has halted what could have been a record month for the UK car industry.
According to Philip Nothard, customer insight & strategy director for Cox Automotive UK, many dealers reporting strong demand just simply ran out of cars.
Nothard commented: “Demand for new cars in September started strong but ended-up behind last year’s performance in the same period in 2019, considering, both 2018 and 2019 had a severe impact from the introduction of new legislations (WLTP & RDE). Constraints on car production on manufacturers continued to hamper supply which subsequently hindered the delivery of new car customer orders. Reduced consumer confidence and pressures on the fleet sector also both remain a crucial influence on the new car market.”
The latest ‘Market Tracker for Cars’ produced by Cox Automotive UK revealed that dealers reported that demand for used cars remained robust throughout September, with many reporting good financial performances and margins for the month.
“Demand for used car stock remained high in September: Wholesale trade values remained ahead of 2019 for both September at 97.09% and post-lockdown (Jun 1 – Sept 30) at 96.95%. First-time conversions were also 3% ahead of the same period in 2019. Although volumes increased marginally in the month compared to the same period in 2019, overall volumes have remained down since lockdown lifted. The average age of vehicles in the wholesale market increased by 1.51% from 86.1 to 87.4 in September; while the average mileage reduced by around 3% to 62,510.”
Data from NextGear Capital, the stock-funding arm of Cox Automotive, also suggests similar trends with the average price-funded by dealers in September increasing by 21% to £9,388.74. This was an increase since lockdown of 2.3% month-on-month.
Nothard added: “Concern remains, however, for the final quarter of 2020, with ongoing supply constraints, economic uncertainly, reduced consumer confidence and lack of clarity on Brexit all combining to create caution amongst dealers.”