Home Finance & Investments Bollington Insurance recaps 2017 motor trade sales and gives new year industry...

Bollington Insurance recaps 2017 motor trade sales and gives new year industry outlook

117

Sales within the motor trade industry started exceptionally well in the first quarter of 2017, with 3.4 per cent growth reported against the previous year.

A large part of the growth was a result of used diesel vehicles being identified within a higher tax bracket. This necessitated a change of vehicle for many people. There was also significant growth in electric/hybrids with consistent improvements in technology and renewed interest in brands outside of Tesla, with other high-end manufacturers showing their plans for what the electric revolution will look like.

Results showed that, in Q1 2017, the Ford Fiesta topped the used car sales chart, slightly above the Ford Focus with 101,840 and 94,889 units sold respectively. Following closely behind were the Vauxhall Corsa and Vauxhall Astra in third and fourth place, selling 91,264 and 76,615 units. Rounding out a top five dominated by hatchbacks was the Volkswagen Golf, selling 68,192 units.

The Ford Fiesta continued to be the staple vehicle for the motor trader, selling faster than any other vehicle with the average time bought, fixed up and sold between one to two weeks. This increases exponentially to a few days if the colour was silver or black.

Rachel Aston of Bollington Insurance Brokers said: “Motor traders were divided about what cars are best to have, some loved the speed they can sell popular cars such as the Ford Fiesta, while others prefer the bigger profit margins they can get from high-value brands such as Mercedes and BMW, that retain their value. Judging by the market, the easiest way to make money was to find Ford and Vauxhall cars for low prices, in a popular colour and advertise them heavily, rather than look for the high value vehicles that won’t sell as quickly. The problem with that is the popularity of the vehicles will drive down the price, meaning the profits aren’t as high. You may make more on one Mercedes E-Class than you would on several Ford Fiestas. It’s all about knowing your market and the area.”

“We noticed in 2017 that the majority of motor trade insurance policies sold were for cars that sell quickly, like the Focus and Fiesta. This seems to coincide with the recent increase in popularity for young motor traders to start selling vehicles”

The South East and North West were the most popular areas in Q1, with 311,114 transactions in the South East and 220,097 in the North West. West Midlands rounded out a top three, showing that there is still truth in areas surrounding big motorways being important for the motor trade.
Moving into Q2 we saw the same trends; however, we do start to see a decline in sales compared to the previous year, 0.7 per cent down on the same period in 2016.

New car registration numbers in Q3 were significantly down on the same period in 2016 also, with a reduction of 3.9 per cent. This had a knock-on effect on the used car markets too, with Q3 used sales down by 2.1 per cent against the previous year, some 46,000 units. The Volkswagen Golf emerged from December 2017 as the top selling vehicle. This strong month for the Golf, displaced the Focus in popularity and resulted in the 2017 figures for vehicle sales ending at:

1. Ford Fiesta
2. Volkswagen Golf
3. Ford Focus
4. Nissan Qashqai
5. Vauxhall Corsa
6. Vauxhall Astra
7. Volkswagen Polo
8. MINI
9. Mercedes Benz C-Class
10. Mercedes Benz A-Class

Rachel Aston added: “To summarise the year in motor trade, we saw a reduction in overall car sales, driven by economic uncertainty within UK car manufacturing industry.”

Domestic demand dropped by 28.1 per cent in 2017, however exports increased by 1.3 per cent, showing that demand overseas was still supplementing UK manufacturing. The market was down roughly 10 per cent year on year – however positive signs can already be seen for 2018. For example, economic stability with a declaration on Brexit will provide details on transition arrangements within the EU. Motor trade insurance companies were naturally affected by the reduction in new traders, however this allowed them to provide expert advice, drawing on their experience for their renewal customers.

“We did see the market change considerably in 2017 with the industry worrying about economic uncertainty. However, we’re seeing that 2018 will provide clarity on diesel taxation and air quality plans which will provide a surge in demand domestically, while Brexit deals will strengthen UK manufacturing exports”.

You can get a quote for your motor trade insurance or speak to the experts at https://www.bollington.com/