MID-MONTH REVIEW – OCTOBER 2020
Our new series ‘mid-month market temperature check’ - Cox Automotive mid-month review – October 2020.
- Demand remains stable for now but expects it to ease into Q4.
- Wholesale prices add to dealer cash flow concerns.
Philip Nothard, insight & strategy director for Cox Automotive, shares observations on trends emerging in the car market at the mid-point during October.
Demand remains stable for now but expects it to ease into Q4.
Since lockdown lifted back in June, demand for used vehicles has been relatively stable. However, as more localised lockdowns are introduced across the country, we could see reduced consumer confidence and demand easing in Q4.
Supply on the other hand - which has consistently tracked below demand since June reopening – has seen a steady increase throughout September and the first half of October, currently sitting at +3 index points ahead for the first time this year.
Wholesale prices add to dealer cash flow concerns.
Cashflow concerns are growing across the automotive sector as the UK experiences localised lockdowns. Retailers are becoming increasingly cautious about their stocking levels and stock investment as we approach the end of the year, not helped by record auction prices.
With used car prices holding firm at +2.8 index points, these concerns are likely to continue for a while. However, as more supply enters the market, we expect to see some levelling in the market in Q4.
