Most dealers believe economic conditions are going to improve in the months ahead with a minority saying conditions will deteriorate.
That’s the conclusion of the January automotive market report from Cox Automotive, which found that over half (55%) dealers felt the economic conditions would improve over the coming months, with 23% feeling it could worsen.
The report found, not surprisingly with showrooms shut, that the third caused a fall in used car sales. Seven in 10 (67%) of those surveyed indicated they are down 10 – 30% whilst one in six (15%) said they had felt little or no impact.
On an optimistic note, most of the used car sector operated more than 50% of usual seasonal performance and for many its business as usual.
Seven in 10 (70%) dealers cited the third lockdown had caused between 10 – 30% reduction in new car orders, whilst 17% indicated it had hit them badly, with sales falling up to 50%.
Philip Nothard, Cox Automotive UK’s Customer Insight & Strategy Director, said: “The sentiment from across the network is that there are ’pockets’ of weakness in retail which could be caused by increasing financial pressure – two-thirds of dealers reported an increase in both days in stock and overage vehicles. The advice given is to hold firm where possible.
“Many dealers acquired stock in Q4 of 2020 to be well placed for a fast start in 2021, although unfortunately some of this stock is now ageing. What’s clear is stocking the right car in terms of price point, model and good specification is key for the current trading conditions in 2021.”