Market still challenging

4:19 pm, May 17, 2011

NAMA’s latest report shows the average price for vehicles sold by its members outperformed initial market expectations.

However the NAMA – The National Association of Motor Auctions – report also concluded that the primary issues affecting the marketplace is falling conversion rates and increasing numbers of not-sold vehicles.

During April, average values of used cars sold at auction across the board improved from £5,875 to £6,075 – a three per cent increase. Much of this was due to a sizeable leap in the value of late year manufacturer/rental product which recorded nine per cent growth, says the report.

Values for fleet product underperformed the market average, with zero growth recorded, while dealer/PX fell by four per cent.

Year-on-year, the average price of cars at auction has decreased just under three per cent from £6,250 to £6,075.

The volume sectors of fleet and dealer/px recorded the biggest percentage falls in conversion rates between March and April at ten per cent and nine per cent respectively. Fleet sales have consistently recorded the lowest conversion percentages in 2011.

Andrew Hulme, NAMA chairman, said: ‘NAMA members have reported that trading conditions have remained challenging during the first half of May. Given the current level of demand, it is anticipated that the high level of stock will not be exhausted for another four to six weeks.

‘Much of this stock has been multiple-entered in recent weeks and remain unsold simply because they are over-valued compared to market expectations – it is critical that these cars are cleansed from the system because average values are likely to fall further as we get into June and July.’

Tim Hudson, NAMA vice chairman, commenting on vehicle sales entries, said: ‘Only in January did we see higher prices for second or subsequent entries, but it should be remembered that many of these cars would have been first offered during the pre-Christmas period when the market was at the seasonal low point for prices and was battling with poor weather conditions. For every month since January, prices at the second or subsequent time of asking became more depressed, culminating in an average difference of £275 for April.’