Auto Trader’s growth rate exceeds forecasts amid supply chain challenges

Auto Trader achieved forecast-beating growth last year, despite ongoing supply shortages significantly affecting the volume of vehicles available for sale.

Revenue at the online marketplace rose by 16 per cent to £500.2million for the 12 months ending March, with its core business seeing turnover expand by 9 per cent.

Record customer levels in the UK helped the Manchester-based group sell cars at the fastest pace since it was listed on the London Stock Exchange in 2015.

Nice drive: Record customer levels in the UK helped Auto Trader sell cars at the fastest pace since it was listed on the London Stock Exchange in 2015

Like the previous year, more than 75 per cent of minutes spent by consumers on UK automotive classified sites were on Auto Trader – seven times greater than its closest rival.

Britain’s car sector also continued to be impacted by semiconductor shortages that began during the Covid-19 pandemic as demand soared. 

As a result, the number of listings for new cars on Auto Trader’s platform dropped from an average of 29,000 to 25,000.

The company’s average revenue from each retailer forecourt still grew by 10 per cent to £2,437, thanks to price hikes and customers buying more premium products.

But due to the costs of acquiring Autorama, a vehicle leasing marketplace and the owner of Vanarama, Auto Trader’s operating profit fell by 9 per cent to £277.6million.

Nathan Coe, chief executive of Auto Trader, said: ‘Given the challenging economic backdrop and historically low levels of vehicle supply, these results are a credit to our people and the close partnerships we’ve developed with our customers.

‘The prospects for our marketplace are as strong as they have ever been, underpinned by the significant number of car buyers and retailers using Auto Trader.’

The group said the new year had started well and that its short-term focus is on ‘significantly reducing’ the operating losses in Autorama by integrating it further into the Auto Trader business and keeping a lid on costs.

It also expects a slight drop in car retailer numbers over the year ahead due to its move to sell off its Webzone business.

The figures came as it named former Tesco UK and Ireland chief executive and Pets at Home boss Matt Davies as its incoming chairman to replace Ed Williams when he steps down in 2024.

Adam Vettese, an analyst at eToro, said: ‘Looking forward, while supply remains tight, sales of new and used cars are improving post-pandemic, although it remains to be seen whether general belt-tightening among households will hit sales.

‘The big question on shareholders’ lips will be how Auto Trader plans to run around Autorama and become one of the leading players in the leasing space. If it can do that, it will bolster its already enviable position in the market.’

Auto Trader shares were 1.3 per cent lower at 621.8p on Thursday morning, making them one of the top ten fallers on the FTSE 100 Index.

This post first appeared on Dailymail.co.uk