Market Tracker September 2019 – Limited supply met strong demand in wholesale market

  • 87% of vehicles sold first-time at Manheim in September as demand for stock exceeded supply
  • 62% of dealers reported that retained margins had declined Year-on-Year (YoY) in the latest survey from Modix


September wholesale data

Data released today by Cox Automotive reveals an extremely competitive wholesale market driven by unseasonably low September stock levels.

Manheim, a leading provider of integrated products and services for the vehicle remarketing sector, saw 87% of cars sell first time across the month, with many achieving or exceeding the guide price.

In terms of stock mix, Manheim figures reveal that average age and mileage increased slightly month-on-month (up 1.3%), while average price held steady at £5,679 (up 0.3%).

NextGear Capital, the leading provider of wholesale stock funding, also saw average age and mileage hold relatively steady, but reported an average price increase of 6% MoM to £7,761.80.

Philip Nothard, Customer Insight and Strategy Director – Cars, said: “A number of factors have combined to reduce the level of stock in the market throughout August and September. Low new-car sales, long lead-times, and scrappage schemes from some manufacturers have reduced part-exchange volumes, and dealers are choosing to retail those that they take in directly.”

“This, combined with the usual seasonal reduction in the number of de-fleet vehicles at auction, had led to a super-heated wholesale market in September.”

September 2019 fuel data

Data from Manheim reveals a dip in fuel prices for all categories except electric when compared to the same month last year.

These figures indicate an uplift in demand for electric vehicles, but the relatively low volume of electric vehicles when compared to other fuel types means that higher percentage swings are likely.


September dealer sentiment

In the retail market, challenges in acquiring stock added to margin pressures and 62% of dealers to the latest Modix dealer sentiment survey said that margins were down YoY.

On a more positive note, dealers were upbeat about used car sales, with 80% confirming that overage stock was the same or lower than last year, while 86% reported that days in stock had reduced or stayed the same.

Nothard commented: “September was a difficult month for the retail sector as dealers looked to the used car market to off-set challenges in new.”

“Overall, the Modix survey revealed a very mixed picture on demand, with just under half of dealers reporting that demand had fallen YoY, while 39% said it had stayed the same, and 15% saw an improvement.”

Looking ahead, Nothard confirmed that wholesale volume pressures are expected to continue into October:

“A lot of influences have come together to create a perfect storm in the new car market. Uncertainty around Brexit has created nervousness among OEMs and fleets, while the impending introduction of CAFE targets will see manufacturers hold back some of their lower emission vehicles.”

“This naturally has a knock-on effect on used vehicle supply, but retailers are reporting reasonable levels of demand for the right cars. With stock in short supply, dealers need to use all the data available to them to make smart buying decisions that will deliver the highest return on investment.”

Source: Cox Automotive

Get RMS Automotive updates sent direct to your inbox