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Car dealers could see half the number of buyers in lockdown 3 – but there are reasons to be cheerful, says Auto Trader

Time 1 year ago

Auto Trader director Catherine Faiers has said the advertising giant believes dealers could see business halved during the third lockdown – but there are reasons to be cheerful.

In an exclusive Car Dealer Live interview, Faiers said that Auto Trader has been busy modelling scenarios this week and its experts think dealers can expect trade to be at around 50 per cent of normal levels for this time of year.

Faiers said that during the first lockdown in April and May last year, dealers achieved around 20-25 per cent of normal sales. 

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This rose to around 70-75 per cent during the second lockdown in November as they got their heads around click and collect solutions.

Faiers says while she thinks sales will drop there are positive signs such as a huge spike in searches for used cars on its platforms since Boxing Day.

‘I would hope we would see levels of about 50 per cent and we are basing that on audience levels on our platforms not on sold data,’ she said, in the interview you can watch above.

‘We don’t have the data just yet for the last few days of trading performance, but it does become slightly self fulfilling depending on the view that retailers take. 

‘The more retailers that are running skeleton operations and furloughing lots of people, clearly the less able the industry will be to support the consumer demand that is there.

‘We’ve heard some dealers returning to the staffing levels that they were at in April and May while others are keeping a lot more sites open and being more bullish about how the next few weeks will trade. 

‘To some extent it will be self fulfilling, but from a consumer demand perspective there are lots of reasons to believe that it could be as high as 50 per cent, but we’ll have to wait and see and we’ll keep sharing the data.’

Faiers said she thinks the tone from the government ‘feels different’ for this lockdown compared to November, though.

She added: ‘The nature of the restrictions are clearly more severe with regards to the nature of the reasons people can leave their homes. 

‘We are guessing where transaction levels will be over the next couple of months and we are hopeful they will be better than lockdown one, but I’m not sure they’ll be as strong as lockdown two. 

‘There are still good reasons to be positive though and to believe that underlying consumer demand will mean translations will be strong when consumers can make them.’

In a wide ranging video interview, Faiers also talks about:

  • Why Auto Trader decided to cut bills during lockdown 3.0
  • Gives insight into how many customers are out there right now
  • And gives her thoughts on used car pricing going forward

You can watch the interview in full in the video above or on our latest Car Dealer Podcast. Search for ‘Car Dealer Podcast’ on Spotify, Apple Podcasts or your other favourite platforms.

Auto Trader announced this week that January payment terms will be extended and advertising during February will be free.

The firm has also given dealers free advertising for three months in the last nine and offered a 25 per cent discount in June. 

Faiers explains that Auto Trader felt it was the ‘right thing to do to offer support’ to dealers hit by restrictions during the third lockdown and doesn’t think they were forced to act either.

The firm has also worked hard on offering dealers insight and information to support them in other ways during the pandemic too.

‘Our financial support packages have grabbed the headlines, but we have also helped dealers with the digital retailing journeys and been much more open sharing data and insight from across our platforms,’ she said.

‘We wanted to help again with delaying January payments and making February free to really help support the industry through what we think will be a difficult few weeks.’

Buyers are out there

Auto Trader said there are still car buyers out there actively searching for cars and the traditional Boxing Day bounce in searches was apparent again.

Faiers said they saw searches spike after Christmas and, even after the prime minister’s announcement on Monday, buyers were still looking for cars. 

‘I’m not sure January will look as strong as the period from September to December, but from the first few days of this year we have seen audience levels are up,’ she added.

Other positive signs come from consumer surveys by Auto Trader that reveal customer affordability levels have not dropped and the number of people whose confidence has fallen is still ‘relatively low’.

Faiers said that demand is being driven by customers looking for personal space while those who have remained in employment see a car as an ‘exciting purchase’.

She added: ‘Car ownership, and the importance of it to consumers, has increased significantly with 35 per cent of consumers in December telling us that owning a car is more important to them now than before the pandemic. 

‘That’s the highest number we’ve seen at any point since April.

‘The longer the pandemic has continued the more consumers are telling us that owning a car is important to them.’

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Auto Trader says it has continued to see used car prices grow as well – in December prices were up eight per cent year on year.

‘There’s no cause for panic or suggestion there will be big movements in used car prices,’ said Faiers.

‘When we emerge from lockdown and current restrictions I don’t think pricing growth will continue at those eight per cent levels over the long term, but equally I don’t think there is any cause for alarm.’

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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