According to the latest data from Auto Trader, despite the recently introduced three-tiered coronavirus system employed in England and the stricter 17 day national ‘firebreak’ in Wales, there has been limited impact on consumer buying intentions within those regions with the tightest restrictions.

The new measures were introduced against a backdrop of a very strong market. Not only are used car transactions for Q3 (July-September) predicted to be up 5-6% on the same period last year, but early indications suggest new car registrations in October will have increased approximately 20% YoY.

What’s more, with a 27% increase in visitors last week (19^th – 25^th October) and an average of 1.4 million unique users every day, the Auto Trader marketplace continues to see exceptional levels of consumer demand.  In Q3, Auto Trader saw a 10%^[1] growth in unique visitors compared with Q1 2020. In contrast, CarGurus, Piston Heads and CarWow have all seen their number of users fall during that period, declining -5%, -23% and -27% respectively, which suggests car buyers are looking to more well-known and trusted brands in times of uncertainty.

Wales maintains share of market performance
The most effective measure of performance on the Auto Trader marketplace is the share of total consumer response, including the proportion of advert views, leads sent and interactions (map views, location views and website clicks).

In Wales, where all non-essential businesses have been forced to close their doors from 23^rd October to 9^th November, retailers are recording the same share of response performance as they did prior to the firebreak. The share of people in Wales accessing maps, location and retailer websites via Auto Trader adverts (a typical signal of intent to visit a dealership) declined at the start of the firebreak. However, retailer’s in Wales have seen their share of leads and advert views increase, which at a national level have grown 30% and 23% respectively^[2]. This change in consumer behaviour indicates today’s car buyers are significantly more active and engaged digitally with retailers whilst they can’t physically visit a dealership.  It also suggests that for retailers that have been forced to close their forecourts, consumer demand for click and collect and home delivery services is strong and that there is significant pent up demand for when forecourts do re-open.

Commenting on the findings, Auto Trader’s Director of Insight and Data, Richard Walker, said: “With cases of coronavirus spiking across the UK, and reports of a second wave hitting Europe, it’s hard to predict when further restrictions may be rolled out. However, the market is in a strong position; not only are we recording sustained high levels of consumer demand, but six months of consecutive price growth is resulting in good profit margins for retailers. Our research is also pointing to new pockets of opportunity, with a growing number of people considering owning a car today to be more important than it was before COVID-19. 

“As a result, whilst localised restrictions may become commonplace over the coming months, as we’ve seen in Wales, the strength of the market means the impact on retailers should be contained to these short lock down periods. Outside of these periods, the consumer buying cycle is typically 3 months and so retailers are still able to benefit from their share of a market which is up significantly on the same period last year.”   

The North West shows resilience despite tier three restrictions
Looking at other regions across the UK affected by the new measures, the North West is showing particularly strong resilience despite Manchester and Liverpool being in the top tier. In fact, as of last week (19^th -25^th October 2020) retailers are taking a greater share of stock on Auto Trader than the same period last year (13.2% versus 12.4%). This is resulting in a strong share of advert views and leads on the marketplace, both of which currently account for 12.9%.

The North East, a significant part of which is in the tier two classification, is currently taking a lower share of stock than the same time last year, falling from 4.0% to 3.6% last week. As a result, the region is commanding a lower share of advert views (2.4% from 2.8%), leads (2.3% from 2.6%) and interactions (2.4% from 2.6%) than the same period last year. However, as volumes in the wider market are up 27% on 2019, retailers should still be recording a stronger performance on last year.

New three-tiered restrictions for residents across Scotland will be introduced on Monday. Currently, on Auto Trader, the proportion of stock attributed to Scottish retailers has declined, albeit marginally, from 4.2% last year to 4.1% last week. And whilst the share of advert views remains stable (3.2%), the share of leads has dipped, from 7.9% last year to 6.4%. Similar to the North East, despite the slight decline, retailers should still be benefitting from a market which up significantly on the same period last year.