Vertu Motors has reported a stabilisation in used vehicle prices following significant declines amid ongoing consumer uncertainty impacting new model demand.
The automotive retailer provided a trading update for the five-month period ending 31 January 2024.
Go deeper with GlobalData
Vertu said used car prices fell 10.3% from October to December.
The fall in prices was attributed to increased supply in wholesale markets and subdued retail demand, exacerbated by rising interest rates and high vehicle prices.
Vertu responded to these market shifts by accelerating stock turnover and reducing used inventory levels by more than£40m, which has improved the group’s net debt position.
Despite the challenging conditions, Vertu experienced a 0.8% growth on a like-for-like basis for the used vehicle volumes during the period.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe growth marked a recovery from the 5.7% decline in the first half of the financial year.
The pricing correction in the used vehicle segment, which had adversely affected the group’s performance, appears to have largely stabilised, with recent valuation movements aligning with typical seasonal patterns.
Meanwhile, the UK’s new vehicle market recorded its best performance since the pandemic began, with 1.9 million vehicles registered in the year to December 2023.
However, the market is still 17.7% below pre-pandemic levels, and Vertu saw a 5.1% decrease in like-for-like volumes of new retail vehicles.
Vertu highlighted the challenges faced by manufacturers in balancing the volumes and combination of internal combustion engine (ICE) and battery electric vehicles (BEV) due to the new legislation aimed at reducing emissions.
Currently, the company is focused on navigating this transitional period, where consumer behaviour is influenced by high-interest rates and the aforementioned industry trends.
The group anticipates its full-year FY 2024 adjusted profit before tax to align with current consensus expectations.
Vertu is set to announce its preliminary results for the year ending 29 February 2024, on 15 May 2024.
Vertu Motors CEO Robert Forrester said: ‘’I am pleased with the team’s performance against a fast-changing market backdrop with used vehicle prices now stabilised at lower levels and consumer uncertainty impacting retail demand for new cars. The work that has gone into cost control and optimising stock levels has contributed to an excellent cash performance.”
Last month, experts at CAP HPI reported a notable upward trend in the average used car value for three-year-old cars with 60,000 miles on the odometer.
