Used car demand fell by 22.1% year-on-year in November, according to insights from the latest INDICATA UK report.
Attributable to the return of national lockdown restrictions, the fall in demand coincided with a 2.6% year-on-year increase in stock levels, causing dealers to reduce prices.
Go deeper with GlobalData
According to the report, dealers made this decision in order to avoid ending the year with significant leftover stock.
Other dealers made reductions on the ageing and unwanted stock but continued to purchase cars at reduced lockdown prices, in anticipation of a strong end to December and the beginning of 2021.
Jon Mitchell, group sales director at INDICATA, explained: “We saw our online wholesale portal stock levels rise during November but not dramatically as many dealers have been investing in new stock at the lower lockdown prices,”
The data highlighted a decrease in prices of 2.1% between the end of October and November, as dealers stimulated online demand whilst showrooms were closed for business.
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 GlobalDataThis was the first time the market witnessed a price drop since the first lockdown, revealing the buoyancy of the used market throughout trading periods.
Mitchell continued: “While prices did fell during November our INDICATA insights have already seen a rise of 0.3% again in the first few days of December as dealers come out of lockdown.
“Our message is the same as last month – clear out your ageing and unwanted stock quickly by reducing prices and invest in the fast-selling stock as everybody is expecting a strong trading period over Xmas and into Q1.”
INDICATA also reported a fall in demand for electric and hybrid vehicles for the second successive month. Dealer stock turn of diesel was 6.2 in November, compared with 2.8 on EVs, as consumers sought better value.
If EVs are to remain competitive, dealer pricing will have to fall. Ensuring EV competitiveness will be critical in the coming years, as the sale of ICE vehicles will be prohibited from 2030 onwards.
