Vertu Motors revealed that secondhand car prices have stabilised in recent weeks after falling significantly last year.
Wholesale used vehicle prices fell 10.3 per cent between October and December amid increasing market supply, continued high prices and rising interest rates hitting consumer demand.
In response, Vertu said it boosted stock-turn of used cars and lowered inventory levels by over £40million, thereby helping to ‘significantly’ cut net debt.
Prices: Wholesale used vehicle prices fell by 10.3 per cent between October and December
The company also noted margins had improved since January as it has bolstered stockpiles, while used car prices have been ‘more in line with seasonal norms.’
Consequently, its used vehicle gross profit per unit has improved in recent weeks, after falling to £1,241 in the five months ending January compared to £1,402 in the equivalent period the previous year.
However, the business remains affected by weak demand for new cars, with like-for-like volume sales down 5.1 per cent amid widespread cost-of-living pressures.
This was despite significant discounting and finance offers by motor manufacturers and the UK new vehicle market achieving its strongest performance since the pandemic started.
Vertu warned that orders for new cars this month were ‘tracking at levels’ below March 2022 ‘as order banks have been satisfied and the UK moves to a supply push market.’
Robert Forrester, chief executive of Vertu, nonetheless said he was ‘pleased with the team’s performance against a fast-changing market backdrop.’
Like other automobile sellers, Vertu’s trade took off around three years ago when many Britons with excess savings began buying more cars again after pandemic-related curbs on travel were gradually loosened.
Used vehicle prices soared significantly as semiconductor shortages forced motor manufacturers to scale back production, limiting the volume of new vehicles coming to market.
Vertu scored record annual turnover of £4billion in 2022 as a result, although this was also partly due to the firm making numerous acquisitions, including Helston Garages for £182million in December 2022, its biggest-ever takeover deal.
Based in Gateshead, Vertu is one of the UK’s largest car dealerships, with 188 outlets across the country selling vehicles from 31 manufacturers, including Audi, Jaguar Land Rover, Toyota and Volkswagen.
The AIM-listed company sells many products under the Bristol Street Motors, Macklin Motors and Vans Direct brands.
Vertu Motors shares were 1.9 per cent up at 68.8p just before midday on Monday.
