CONFIDENCE among independent used car dealers has dipped to its lowest level since the spring, reflecting a decline in sales, according to the latest research by CAP Automotive, the car information experts
It continues a trend that began in September when the first signs of a slowdown in used car retail sales marked the end of one of the strongest trading periods the market has seen in recent years.
Every performance indicator for the independent dealer sector is now registering lower than during the summer, when dealers were enjoying an exceptionally high level of demand.
Each month CAP questions a ‘Dealer Insight Panel’ of around 100 independent used car retailers. It is part of the research for Black Book Live, CAP Automotive’s unique real time used car trade values trending tool, used by businesses across the industry. This research also feeds into CAP’s unique Total Cost of Motoring tool, which reveals the true price of car ownership over time, by providing CAP experts with vital data to help forecast car value depreciation.
In the latest survey – reflecting dealer sales and sentiment during October – nearly a third said their sales were reduced on the previous month and a similar number described the current business climate as poor. This is in marked contrast to the summer months when dealer sales and confidence were at an all time high.
One of the biggest challenges faced by independents for much of this year has been the availability of good quality stock and this problem is exacerbated now by an influx of cars into the market which are in poor condition and carry high mileage. Therefore the CAP Automotive dealer panel is facing the double whammy of declining sales while at the same time many are describing their stock levels as too low. Only 6% of the sample said their stock levels were “about right” while 65% complained that they were too low.
Opinion is divided on whether market conditions will improve over the following quarter. While just over half predict little or no change, the rest of the sample is split between those who expect further decline and slightly more who think there are improvements on the way.
Mike Hind, of CAP Automotive, said: “It would be easy to interpret the latest survey as a story of doom and gloom but we should understand these figures in the context of a stellar performance for independent used car dealers for much of this year.
“When times have been exceptionally good, even a natural slowdown in the market toward the end of the year makes for a big contrast and that is what we are seeing in the latest survey.
“As our Black Book Live trade value trending tool has been reporting in recent weeks, the market has definitely cooled and November has been seeing a consistent decline in the prices paid for stock. This dynamic is driven by understandable dealer caution but our previously published view that this may well be a short term dip has not changed.”
To see the full Dealer Survey results you need to be a CAP customer.