CARGURUS LAUNCHES INAUGURAL ONE VOICE REPORT
DEALERS CHANGE STOCK MIX OVER DIESEL UNCERTAINTY
- Inaugural CarGurus One Voice report reveals indecision over how diesel will be taxed has contributed to 68.2% of used car dealers surveyed altering their stock
- 43.8% of used car dealers saw profit margins fall in 2018 vs 25.0% experiencing an increase
- 2019 profit margin outlook is more stable with 26.1% expecting a decrease vs 23.0% expecting an increase
- Top three profitability pressures; vehicle preparation costs, advertising costs and Brexit
London, UK, 30 January 2019 - A lack of clarity on diesel and electric vehicle taxation policies has contributed to more than two thirds of used car dealers changing the types of car they stock, according to a new report by CarGurus, the UK's fastest growing online automotive marketplace*.
The inaugural CarGurus One Voice report was shaped from the hot topics identified by the CarGurus Dealer Council, an influential and broad mix of UK car retailers, and based on a survey of more than 400 used car dealers across franchised, independents and supermarkets.
Answering questions about how they'd changed their stock mix in 2018, 30.2% of the dealers surveyed said they had increased the number of petrol cars, 27.1% said they'd reduced the number of diesels they stock and a further 7.0% said they'd put more hybrids and full EVs on their forecourt.
As well as recording a shift in the type of cars retailers are stocking, the CarGurus One Voice report highlights a decrease in vehicle margins in actual terms for 2018. However, the report finds that the outlook for 2019 is much more stable with a near parity between the number of dealers expecting a drop in margins (26.1%) and those expecting an increase (23.0%).
For 2019, the report identified that the top three profitability pressures for used car dealers are; increasing vehicle preparation costs (13.0%), increasing advertising costs (11.3%) and the potential impact of Brexit (8.5%).
Not only did surveyed dealers note that ready to retail, higher quality stock has become more difficult to source, but they believe that cars are requiring more preparation time due to the proliferation of features, such as big screen multimedia systems and panoramic roofs.
Wendy Harris, VP of European Sales at CarGurus, said: "Dealers faced a tough year in 2018 due to challenges sourcing stock coupled with factors outside of their direct control. These included the lack of clear vehicle taxation policies and the ongoing uncertainty around Brexit.
"Our CarGurus One Voice report shows that despite these challenges dealers were both resilient and adaptable. They changed the mix of cars on their forecourt, decreasing the number of diesels offered in order to meet the needs of customers.
"The CarGurus report shows that more and more dealers are turning to the digital world as a way to drive business efficiencies. So whether it's adapting their stock mix or adopting new digital tools, the continued squeeze on margins means that any investments need to stand up to greater scrutiny in 2019."
Launched in the UK in 2015, CarGurus combines dealer reviews with comprehensive car valuation analytics to bring trust and transparency to the automotive marketplace, allowing buyers to quickly and easily find great deals from top-rated dealers.
*source: Comscore Media Metrix® Multi-Platform, Total Audience, Percent change in average unique monthly visitors from Q3 2017 to Q3 2018, U.K. (Competitive set: Cargurus.co.uk, Motors.co.uk, AutorTrader.co.uk, Pistonheads.com, Gumtree.com)