18 Apr 2023
More than a third (35%) of car dealers say 2023 is turning out better than they expected, new research shows.
April’s Startline Used Car Tracker shows that 15% are maintaining profitability, 12% believe stock availability is improving, 10% say the economy is showing signs of recovery and 9% judge that consumer confidence is getting higher
However, 62% report stock availability remains a problem, 32% say that staying profitable is difficult, 27% believe consumer confidence remains low and 10% think that the economy is still in the doldrums.
Overall, 20% of dealers said they felt more optimistic about the used car sector than last month while 27% were more pessimistic
Paul Burgess, CEO at Startline Motor Finance, said: “It’s probably a measure of how low expectations have been across both the used car sector and the wider economy that a significant minority of dealers are saying that this year has, so far, been something of pleasant surprise. Certainly, while conditions are not as bad as some experts predicted, they still remain tough.
“Our view is that the economy is doing a little better than expected but that the personal finances of many people continue to worsen. Inflation remains very high, especially for some everyday goods, and wages are not keeping pace. There are some credible predictions that the situation will improve in this respect towards the end of the year but really, we are still awaiting the moment when things stop getting worse.
“In light of this situation, the used car sector remains remarkably resilient but there is no question that most dealers are having to work hard to make money and continually find new ways of maximising the potential of their business against a difficult backdrop.”
Stock availability was also named as the biggest challenge for the future retailing of used cars in the Startline Used Car Tracker, mentioned by 70% of dealers, followed by the changeover to electric vehicles (EVs) at 55% (up from 46% in March) and increasing compliance requirements at 45% (up from 30% last month).
Paul said: “Stock shortages are proving something of a double edged sword – getting hold of retailable vehicles is a constant battle for dealers but poor supply is also keeping values high.
“Also, the impact of the recent dramatic fall in EV values has clearly raised some fears about the process of electrification while worries over compliance are probably the result of Consumer Duty, which is very quickly become a subject of concern for many car retailers with FCA deadlines rapidly approaching in April and July.”
The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This time, 300 consumers and 60 dealers were questioned.