Many of us have witnessed the used car market navigate countless peaks and troughs. The recent data from CarCondor paints a concerning picture – a 5.73% decline in used car sales for the Top 200 UK dealerships in April compared to March. While this follows a modest 2.01% increase in March, it suggests a potential reversal in the positive sales trend we’d hoped for.
This isn’t just a sales blip – it’s a financial squeeze. The revenue decline of 4.78% underscores the urgency for dealerships to adapt. But before we delve into strategies, let’s dissect the data to understand the challenges at play.
👉 The Stock Squeeze and Its Impact
👉 Segmenting the Slump
👉 Location, Location, Location
👉 Learning from the Leaders
👉 Marsh Finance: Your Trusted Partner in Growth
👉 Strategic Responses for Uncertain Times
The significant 13.4% decrease in new used car stock acquired by the Top 200 dealers throws another wrench into the works. Sourcing high-quality pre-owned vehicles is proving difficult, limiting your ability to meet customer demand. This stock shortage seems to be impacting different segments of the market unequally.
Supermarket dealerships, known for their high-volume, low-margin approach, faced the steepest sales decline (14.49%). This suggests a need for a critical re-evaluation of their used car buying and pricing strategies. Perhaps a shift towards higher-quality, in-demand vehicles could offer better margins even with lower sales volume.
However, a glimmer of hope emerges from the data. Dealerships with a stock size between 1,000 and 4,999 units witnessed a marginal increase (0.08%). This could be attributed to their agility and adaptability in sourcing pre-owned vehicles. Perhaps a more curated selection with a focus on specific customer segments might be the key for them.
Interestingly, dealerships with 10-99 locations bucked the trend with a 0.44% sales increase. This could be due to several factors – a wider geographical reach, the ability to leverage economies of scale, or a more personalised approach to customer service in each location. Exploring multi-location strategies might be a worthwhile consideration for dealerships seeking to expand their market reach.
While the overall market faces challenges, some dealerships are navigating them more effectively. Arnold Clark continues to reign supreme with the highest average stock (19,156 cars). Analyse their stock management practices to identify potential optimisation techniques that can be implemented in your own dealership.
Similarly, the emergence of Skoda Karoq as the fastest-selling used car among the Top 200 dealers offers valuable insights. Consider diversifying your stock with in-demand models like the Karoq alongside reliable staples like the ever-popular Ford Fiesta.
At Marsh Finance, we understand that navigating these market fluctuations can be daunting. That’s why we offer more than just car finance solutions—we’re your strategic partner in growth. Our competitive car finance options will attract customers and facilitate sales, but we go beyond the basics.
Our team of experts offer partners free compliance, operational, and sales efficiency consulting – a strategic partnership designed to help you sell more cars.
Here are some key actions you can take to address the current market volatility:
These are just some of the strategies you can employ to navigate the shifting sands of the UK used car market. Remember, Marsh Finance is here to support you every step of the way. Contact us today to discuss how we can tailor our car finance solutions and strategic insights to help your dealership achieve long-term success.