Just how did Auto Trader get so big? – Car Dealer Investigations

Car Dealer’s latest Investigation video documentary looks at how used car advertising giant Auto Trader got so big – morphing from a traditional magazine publisher into the tech giant it is today

Time 8:00 am, July 29, 2022

Ask anyone with a passing interest in cars where they search for them and it’s highly likely they’ll say Auto Trader.

The classified car advertising giant has been a staple of the motor trade for four decades and has morphed from a magazine picked up from newsagents’ shelves to an app available on smartphones.

After years of paper-based publishing, the company conceived a website offering before Google even existed – and it was this early adoption of technology that set it off on a path of monumental growth.

But just how did Auto Trader get so big? How did it grow from a well-thumbed mag to a tech titan that last year made £25m profit every MONTH?

As part of our special Car Dealer Investigations series, we’ve chatted to car dealers, consumer and motoring experts, as well as the very people leading the business to look at how Auto Trader grew into the advertising giant it is today.

You can watch the video now (above) on our YouTube channel or listen to it as a Podcast on your favourite platforms by searching for ‘Car Dealer Investigations’.

Is Auto Trader now a technology business?

In a word, yes. Bosses like to compare the business to Zoopla or RightMove – similar marketplaces in the property world that don’t own or make anything, but instead simply connect buyers with sellers.

Today, the brand is built around a huge website that attracts a staggering 10.8m visitors every month.

Each week it displays 3.7bn pictures of cars to consumers and has on average more than 400,000 models advertised for sale at any one time.

Auto Trader says its visitors spend 8.8m hours every month on its platforms and 14,000 car dealers across the country currently use them.

Steve Fowler, editor-in-chief of Auto Express, said: ‘Auto Trader is a necessary evil for car dealers isn’t it? They just can’t avoid being on it. It’s the biggest used car classified platform in the UK. And if you want to sell cars, you’ve got to talk to them, whether you like it or not.’

What happened to the Auto Trader magazine?

Before the huge digital transition fired up its success, Auto Trader was a successful magazine publishing company. 

It all started in 1977 when entrepreneur John Madejski launched Thames Valley Trader after bringing the idea back from the States. 

That idea eventually morphed into Auto Trader.

In its heyday, nearly half a million magazines rolled off the presses every week, and were split up into 13 editions that spanned the length and breadth of Britain.

Auto Trader had 70 offices around the UK and even owned two regional presses that not only printed its magazines but those of other publishers too.

But in June 2013, the final print edition was published and the firm went 100 per cent digital.

Auto Trader is now a web-based giant with millions of users logging on to its tech-laden platforms every day.

The car search function is so popular that at its busiest times it serves more than 5,000 requests every second.

When was Auto Trader first published?

When did Auto Trader become fully digital and stop printing the magazine? 

The transition from print to digital wasn’t a quick one.

The website was launched in 1996 by a small team of engineers – two years before Google was even conceived – but it was a full 11 years later before digital revenue matched print for the first time.

And it took a further six before time was called on the physical print edition for good in 2013.

These days, it likes to think of itself as more Google cool than stuffy mag publisher.

In its offices in Manchester and London, the firm has winched classic cars through the windows of its fourth floor offices to be used as meeting rooms.

There are free drinks for staff, soft seating breakout areas for collaborating colleagues, while software engineers can doodle on the walls as they come up with new ideas.

It’s all a far cry from the old-school publishing days where print adverts were collected by local sales staff who’d visit car dealers weekly, even taking pictures of the cars for them.

400k cars advertised on Auto Trader

How much money does Auto Trader make?

Auto Trader’s digital shift helped the business slash overheads and ratchet up profits.

In 2021, the firm posted its best-ever results with pre-tax profit up a staggering 91 per cent to £301m.

That’s an operating margin of some 70 per cent.

It’s these huge figures that have got up the noses of some car dealers, who look on enviously at their margins when they are lucky if they return two per cent on sales themselves.

301m profit Auto Trader

What do car dealers think of Auto Trader?

Ask car dealers what they think of Auto Trader and most will tell you it’s a love-hate relationship.

They love the results they get, but hate the bills they have to pay to get them.

In our video, most tell us they love the fact the firm generates impressive leads for them and don’t mind paying for the results.

Sean Kelly, MD of Vines BMW, tells us he ‘loves’ Auto Trader as it has ‘the biggest market reach’.

But he added: ‘We get lots and lots of prospects and customers that might not naturally come to our business. But I hate that [Auto Trader] is a bit of a monopoly as well. 

‘The danger with that is there’s great power in that and, a bit like Spider-Man, you can only have great power if you have great responsibility, too. And sometimes I’m not sure they do.’

Independent Motor Dealers Association chairman Umesh Samani said he has a ‘love-hate’ relationship with Auto Trader.

‘It does sell cars for me,’ he explains in our video. ‘So I like it from that sort of perspective, but it comes at a cost. It’s very, very expensive.’

Sean Kelly Vines BMW

What does Auto Trader think of its relationship with car dealers?

In the video, we speak to both Auto Trader’s CEO Nathan Coe and the firm’s chief operating officer Catherine Faiers.

Faiers explains that Auto Trader thinks of its relationship as a ‘partnership’ and says it helps that the firm has ‘huge influence over the car-buying journey’, which means it delivers ‘value for money’.

She added: ‘We’d say that we influence more of [car dealer] sales than any other partner they work with – we’re their most effective marketing channel. 

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‘When we look at our influence over the car-buying journey, typically 70 to 80 per cent of retailer cars are advertised on our marketplace and we influence a similar percentage of those sales.

‘We know that the ROI from that investment is really, really strong.’

You can watch the video now on our YouTube channel or listen to it as a Podcast on your favourite platforms by searching for ‘Car Dealer Investigations’. 

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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