12:23 pm, December 20, 2024
The last 12 months have been a time of increased discounting and availability, strong used car demand, and a push to EVs – and dealers should be braced for increased competition, a ‘tight’ new car and a growing used car market in 2025.
That’s the verdict of Auto Trader. Commercial director Ian Plummer joined Car Dealer Live to look back on 2024 and give his predictions for the year ahead.
You can watch the interview in full by clicking the video at the top of this story.
‘In 2024, we saw a continuation of what stared in mid-2023 for new cars and that’s a pull market. Discounting and more availability returned, and lead times have come back to sort of more normal times,’ he said.
‘In used, we’ve seen very good levels of continuing demand and continuing sales growth of around 5%. In 2024 we’ve also seen a return
data-led decision making on pricing – at the back end of 2023 and the start of this year, there was a decline in trade values that led to some retail value declines which we didn’t think was justified due to strong consumer interest in buying cars.
‘On top of all of this, there’s a been a continuing transition to electric vehicles. It’s not been without its challenge and has certainly created additional push in the new car market, but EVs are flowing through into the used arena and actually selling extremely well. The three to five year old used EV segment is the fastest turning on our site.’
In the video, Plummer drilled down more into the push market and how the balance between demand and supply tilt considerably.
He also analysed the used car market, remarking that dealers are having to source more effectively than ever before.
‘We’ve seen 8% year-on-year increases in average monthly site visits, 83 million visits to our platform on average each month of this year, so general interest in car buying – new and used has been strong, and the overall sales volumes through the year have been 5% up on prior year,’ he said.
‘So, there’s been healthy flow through of interest into sale and potentially an opportunity for retailers to look at turning their cars slightly slower and retaining slightly more margin.
‘What we’ve got at the moment is speed of sale being extremely fast, which is very healthy for a financial point of view, but it’s three days quicker than it was last year and three days quicker than it was pre pandemic. And to a degree, for some cars, that’s slightly too quick.’
Plummer explained the effects of the ZEV Mandate on the new car market, along with giving some predictions for the year ahead.
‘We expect the new car market to be just below two million cars – that’s a reasonable market with not too much push, and hopefully a bit more rebalanced towards retail. That two million does still create a shortage of used cars for some players in the market, though.
‘For used cars, we’re expecting around a 1% growth up to around 7.6 million cars – still behind where it was in 2019 but still a very healthy overall market.’
2025 will also see even more brands on the market too, said Plummer.
‘More brands for a smaller market clearly means more competition – the pie is going to get smaller, and there are more people wanting to take a slice of that pie. This could mean more push and more incentives in the market.’
You can watch the interview in full by clicking the video at the top of this story.
