15 Nov Market Softens as Demand Reduces
Online auction company G3 Remarketing has reported a dampening of appetite for used stock in the first two weeks of November as the historic seasonal trend appears to be returning.
Although prices and interest for ‘ready for retail’ stock remains relatively strong, cheque books are not being flashed for base models that requires bodyshop work to restore them to their former glory despite the relative lack of stock within the market.
“For the first time in 2012, daily online activity has declined by just over 4%. Although this is not a huge reduction, vehicles with a larger degree of damage have seen a double-digit drop – a clear indication that buyers are tending to shy away from vehicles that require excessive work at this time of year” commented Matt Dale, Director.
It would also appear that certain retail groups and car supermarkets are holding back on stocking-up, probably waiting for a further reduction values towards the end of November or early December.
“In past years, large dealer groups would enter the auction forum at this time of year and take advantage of slightly lower values, stocking-up for Christmas and New Year sales. With the reduction in the volume of clean stock plus very steady retail demand, these buyers are either recycling their current stock or holding back until volumes rise”
“Vendors have become far more astute and for those that have limited cashflow restrictions, it’s likely that some will take a commercial decision to reduce sales in December and stock-pill vehicles until the second half of January 2013 where demand for all stock will undoubtedly return”
Dale continued “Although this policy may work for certain vendors, we doubt if this is a commercially viable solution for all. Should larger vendors delay stock entering the auction market in December in anticipation of higher returns in January, the demand that exists currently however diluted, will force purchasers to pay a higher premium for stock next month therefore increasing prices on certain models in our opinion”
G3 Remarketing expects online activity to increase in December as workloads restrict buyers from travelling to physical auction to acquire stock.
“The last three years has seen a noticeable upturn in activity during the last month of the year. People are not ‘time rich’ in the run-up to Christmas and aim to find the easiest and quickest source of stock to prevent wasted days at physical auction. We expect to take full advantage of this online interest over the coming week and hopefully vendors can reap the financial rewards” Dale concluded.