Vertu Motors, a car dealership, has found that prices for used vehicles are steady again after a big drop, but sales of new cars are still struggling. They had seen costs of used cars go down 10.3 percent between October and December.
Although this meant more buyers could afford them, it also hurt Vertu’s profits.
Nowadays, they say, the prices of used cars have “stabilised in recent weeks following post-October wholesale pricing correction”. Sales of used cars went up 0.8 percent in the five months to January 31, which is an improvement from a 5.7 percent decrease earlier in their financial year.
Yet, new cars still aren’t selling as well, with sales down 5.1 percent in the same five months because of the costs on consumers and because car makers are trying to boost demand by giving discounts.
In relation to their new vehicle sales, Vertu stated: “The group’s new vehicle order-take for the important plate change month of March is currently tracking at levels below prior year level as order banks have been satisfied and the UK moves to a supply push market.”
They added that these trends may impact their profit and amount of sales, leading to uncertainty for the new retail market.
Robert Forrester, the boss of Vertu Motors, explained that the group was adjusting to a “fast-changing market backdrop, with used vehicle prices now stabilised at lower levels and consumer uncertainty impacting retail demand for new cars”.
The company reported that its profits from used cars have been bouncing back since January as it’s added new stock.
The group has said: “The group has worked hard and proactively to increase used vehicle stock turn and reduce overall inventory levels.”
It added: “Consequently, in recent weeks, improved used vehicle gross profit per unit has been generated by the Group.”
The team predicted their full-year pre-tax profits would be “broadly” in line with the recently reduced market expectations.
In the latest five months, the overall revenues for the group have gone up by 7. 8 percent, thanks to stronger results from its after-sales business, mobility sales and also cost cutting actions.
