An update from our CEO
As always, I hope that you, your family, and colleagues are well. I wanted to share my thoughts on the market and to make sure you’re aware of how the teams here at Auto Trader can support you. We are here to help you navigate this ever-changing market, be that with data and insight to aid decision making or expert advice from over 200 dedicated Auto Trader Account Managers.
The market today
There continues to be uncertainty and change as global events, and those closer to home, impact our industry. There’s no doubt they are weighing on the minds of business people and consumers, with the potential for rising interest rates to impact consumer spending and the cost of automotive finance. While we will not be immune from these changes there are some factors unique to the automotive market that should insulate us to some extent. Firstly, we know from research that car ownership is a fundamental need, not a luxury with 77% of buyers stating they need a car to get around [1]. Car buying intention remains unchanged for now with three quarters of consumers surveyed on our marketplace stating they are intending to buy a car within the next six months, consistent with the levels recorded over the last year [2]. What’s more, there is a significant backlog of people still waiting for a driving test.
This is all supported by the volume of vehicle advert views on Auto Trader, which remains up 17% on pre-pandemic levels in September [3], showing that buyers are still engaging with the car buying journey. There is no doubt that the events of the last few weeks will have some impact, but there are reasons to remain positive, particularly in relation to the longer-term outlook.
Used car pricing remains robust with prices up 11.2% year-on-year in September, which is flat versus August [4]. We’d usually expect to see slight seasonal month-on-month decline in prices from August into September, but continued supply constraints are seeing prices hold firm. Although used car sales volumes are tracking down year-on-year, sales remain strong where stock is readily available. As an example, over five-year-old stock levels were up 20% in Q3 on 2019 levels, resulting in sales increasing 17% over the same period [5]. This has translated into robust trading conditions for many retailers I speak to, with used cars in September selling on average 2 days faster than in September 2019 [6].
The increasing need for data & insight
We’re here to support you every step of the way to respond to these changes, the car market is big enough that any individual retailer can increase their share and drive profitability. The speed at which the market is moving presents opportunities to benefit from live retail pricing and demand data and to use it to enhance decision making. We have a range of insight tools to help you understand how the market is moving, which stock is desirable in your area, and how market pricing is tracking.
We’ve announced this week that we will provide access to Auto Trader Valuations as part of your advertising package through the Auto Trader Connect platform. The Retail Essentials module was successfully launched last year to meet the growing demand for live data and improved connectivity between systems. For customers who use Portal, we’ve added the Auto Trader Retail Valuation and Price Position data to the stock list to enable you to more easily review pricing at-a-glance and maximise profit on every single vehicle.
We continue to work hard to improve our award-winning valuations and recently introduced significantly more accurate data partnering with Manufacturers to bring enhanced optional VIN Specification data, which is now available for many brands, with more on the way. This is the best data in the market to ensure you’re describing and valuing vehicles accurately to optimise margin and vehicle presentation.
We’re here to help
I feel it is important in these uncertain times where others are implementing more frequent or unusually high price increases to assure you that we are focusing our efforts on continuing to deliver value to our retailer partners through product improvements, enhancements to the tools available to you and unrivalled support from our teams. We will review advertising packages as usual in the New Year with a view to changes being applied 1st April 2023 [7].
We recently launched our Focus-Finder tool where our account teams use the deepest and most relevant data and insight available to us to help guide your business decisions. This data helps you to cut through the noise, enabling you to identify, investigate and act on opportunities to achieve your business goals. Almost 2,000 customers have taken advantage of this so far, if you haven’t please do organise a time with your Account Manager, it takes just 15 minutes to get started.
As always, please do not hesitate to get in touch with thoughts or feedback for me or any of the team.
Best wishes,
Nathan
Data Sources
[1] Auto Trader Car Buyers Tracker, Jul-22 n=2002
[2] Auto Trader On-site Survey Sep-22 n=2098
[3] Auto Trader internal data
[4] Auto Trader Retail Price Index
[5] Auto Trader internal data
[6] Auto Trader proxy sold data, provisional for Q3
[7] These changes apply to your contracted stock advertising package. Other subscription and usage products may be subject to on-going review