Dealers ready to drive used car growth in 2019

Dealers have their sights set on growth in 2019 according to the latest dealer sentiment survey undertaken by Manheim, with stocking and retailing a greater volume of used cars top of the to-do list.

Four in five dealers report having investment plans to support their used car business in 2019. Half say they plan to invest in additional used car stock, while one in five say they will be investing in preparation facilities, including reconditioning and retail ready capabilities. Seven percent plan to invest in additional locations for the retailing of used vehicles.

When asked about their confidence over stock availability to the end of this year, just over half of the dealers responding (52%) reported being ‘quite confident’, while a further 10% said they were ‘very confident’.

The sentiment corresponds with the uplift in buyer activity reported by Manheim last week. In response to wholesale prices strengthening and a shortage of used vehicle stock, dealers are taking a hands-on approach to sourcing used vehicles, creating a buzz in the auction lanes.

Commenting on the findings, Manheim’s Philip Nothard said: “It’s encouraging to find there’s a generally optimistic sentiment about current trading conditions amongst the dealers. Looking at both this sentiment and our latest trading data, there’s no sign of a slowdown as we head into the festive season, and plans highlighted for 2019 indicate a continued ambition for their used car businesses.

“It’s also interesting to note how dealers are looking to invest to support their used car businesses next year. The number of those looking to invest in preparation facilities suggests a rising appetite to accelerate days to sell and manage margin in parallel with increasing stock volumes.

“But for any serious ambitions of growth to be realised, we need new vehicle sales to return to normal patterns and the dam currently restricting the flow of used stock into the wholesale market breaching. Figures published in recent weeks about the volume of new cars yet to complete their WLTP testing does leave some cause for concern, but I remain confident significant ground will be made on this by the close of the year, paving the way for a very buoyant first quarter of 2019.”