Most people wouldn’t be surprised to learn that there are more searches for convertible models on the Auto Trader website in spring, than there are in the autumn. Nor, that exactly the same trend occurs for 4x4s, but the other way around. Seasonal demand trends are nothing new. It’s the reason car makers prefer to launch 4x4s and SUVs at the Paris and Frankfurt motor shows, which take place in the early autumn, rather than at events like Geneva and Detroit which take place in the first quarter of the year.
But factors affecting demand for individual models are varied and complex. Auto Trader has unrivalled access to data and intelligence and has been publishing data tracking the fastest-selling used cars on its website for the last few months and experts recently searched for trends within the data.
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The first model to catch the eye was the 2012 Toyota Prius. A London stalwart, it took fourth place in the capital’s top ten in March, April and May. That may seem surprising, given the withdrawal of the congestion charge exemption for the petrol-electric
hybrid. But for around £15k, used Prius owners can save themselves a fortune getting around the congested capital, thanks to a technology whose fuel consumption benefits perform more strongly than any other technology in a stop-start environment. Cashsavvy
Londoners seem to be wise to this.
The Nissan Qashqai also came under the spotlight. We may not appear to have the same drive as they do in France or Germany to support a national manufacturing base, but evidence from the North East suggests that ‘buying local’ may not have died out with the demise of the Rover Group in 2005. The 2012 Nissan Qashqai, topped the fastest-sellers list in May, having been number two in both March and April.
This is a car made in the North East, at the most productive car plant in Europe. And it appears that those who work there, as well
as those who live close by, are inclined to vote with their wallets when it comes to snapping up used examples. The Qashqai took an average of 20 days to sell in May in the North East compared with 55 as the average for all cars advertised on the Auto Trader marketplace.
But can we infer too much from individual examples like these? Can we, for example, make an educated guess about demand in the South, where we might expect prestige cars to populate the leader board? The figures don’t really bear scrutiny. London’s May top ten featured a host of mainstream models including the Ford Focus, the Vauxhall Corsa and the VW Polo.
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By GlobalDataThe truth is that, aside from a few examples, demand for individual models changes all the time, nationally, by region and at a far more local level. But putting models aside, there’s one constant in the data that does stand up to scrutiny. Hundreds of millions of searches are carried out on Auto Trader each month; more than 420,000 vehicles advertised on any given day and data pooled from other sources like auction houses means we collate huge volumes of data. That gives us access to a huge pool of dynamic retail pricing.
We’ve learned that cars priced between 95% to 105% of their retail market value sell more quickly than others. And this is borne out very clearly in the top ten regional data for May.
In the East of England for example, models in the top ten fastest selling cars were, on average, 99.6% aligned to their ideal price position. In the South West it was 100.4% and in Scotland it was 99.9%. This may seem obvious, but it’s a really important point that can help dealers: the correlation between close market pricing and speed-of sale stands out most clearly.
The same principle can be applied to each car on a forecourt: to sell quickly, price closely to the retail market. That’s the market as it is in real time, not as someone tells you it could, should or might have been last month.
The science on pricing, demand and speed of sale that feeds into high-level top ten charts also powers intelligence that can work on a targeted micro-level. And this is made available to every retailer.
Aside from seasonal trends, regional quirks or years of experience (that some describe as the feeling in their fingers) it can tell a dealer in Hull if a car he intends to buy at auction, or through a trade-to-trade service like Autotrade-mail, will sell quickly based on a desirability score that drills down to a local level.
It helps him work out what he should pay to maximise profits. And guides him on the price he should sell it for, to boost speed of sale.
Auto Trader hopes that continuing to publish top tens will illustrate the importance of pricing to market, the huge variations in desirability for cars at a national, regional and local level, and the support that intelligence-led solutions can bring to any business, from the independent in Hull to the franchise in Central London.
Karolina Edwards-Smajda is trade solutions director at Auto Trader
