11:49 am, December 19, 2008
CAR dealers are suffering an industry-wide decline in used car sales, says a new report by Manheim.
The vast majority say used car activity is down by over 10 per cent.
Less than a quarter said used car sales remained at the sale level as 2007. Just 12 per cent reported a rise in used car activity.
In response, three quarters of dealers are lowering the average value of used stock. Furthermore, 3 in 5 dealers are stocking more superminis and small hatchbacks.
Nearly half are shying away from large executive models, and over a third are avoiding SUVs.
Economic difficulties have seen more than half of all car dealers reduce their used stock levels. Furthermore, 38 per cent reduced the amount they spend on used car marketing. Only 1 in 5 had invested in more second hand car stock.
John Simpson, MD of Manheim Retail Services, said, ‘Dealers seemed to be split in their strategic approach to used car retailing. Many are doing what seems natural in hard times, and cutting back where they can.
‘Yet others are taking a more aggressive stance. These dealers are investing more in a market where there is still healthy demand, and certainly profits to be made – providing stocks, values and customers are managed very carefully.’
Retail used car sales – dealer experiences
• 54 per cent – DECLINE of more than 10 per cent in retail used car sales
• 5 per cent – DECLINE of between 5 per cent and 10per cent
• 8 per cent – DECLINE of up to 5 per cent
• 21 per cent – no change
• 7 per cent – INCREASE of between 5 per cent and 10per cent
• 5 per cent – INCREASE of more than 10 per cent
Retail used car stock profile
25 per cent of dealers have not changed the profile of their used car stock. For those who have, the survey discovered:
Large/executive cars
• 8 per cent of dealers have MORE
• 42 per cent of dealers have FEWER
4x4s
• 8 per cent of dealers have MORE
• 37 per cent of dealers have FEWER
Medium cars
• 29 per cent of dealers have MORE
• 12 per cent of dealers have FEWER
Smaller cars
• 63 per cent of dealers have MORE
• 4 per cent of dealers have FEWER
