Vertu Motors flagged up what it described as an “uncertain” new car market in a trading update prior to the release of its full year results on 15 May.
IT sais while the used car market had stabilised falling price falls in 2023, carmakers faced a “daunting” task to manage volumes of ICE and BEVs with the ZEV Mandate while also offering incentives to shift stock as the market returned to a push model.
“Manufacturers will be seeking to avoid heavy fines due to non-compliance and this may lead to significant supply and pricing disruption as they balance manufacturing and supply into the UK.
“High new vehicle prices, particularly of battery electric vehicles, has impacted retail demand.
“Customers may choose to purchase a used vehicle rather than a new one, particularly as prices of used vehicles are more attractive following the market pricing correction.
IT said its new vehicle order take for the March plate-change was lower than last year as order banks have been filled and the UK moves to a push market.
“These trends have the potential to impact margin and volumes and leads to an uncertainty for the new retail market,” it said.
The Group worked hard to cut stock levels and boost stock turn and in recent weeks has delivered improved gross profit per unit.
Group delivered £5.2m growth (28%) in core gross profits in the booming fleet and commercial vehicle markets and said full year, the performance in aftersales was “robust” and the group was on track to deliver adjusted full year operating profit in-line with current consensus.
Robert Forrester, chief executive of Vertu Motors said: ”I am pleased with the team’s performance against a fast-changing market backdrop with used vehicle prices now stabilised at lower levels and consumer uncertainty impacting retail demand for new cars.
“Our resilient aftersales business continues to thrive aided by higher technician numbers. The work that has gone into cost control and optimising stock levels has contributed to an excellent cash performance.
“Despite the impact of the complex market dynamics on the short-term performance of the business, the current market presents opportunities for Vertu with our strong balance sheet providing; financial flexibility, portfolio of strong brands, robust and scalable systems, and a great team.”