Vertu Motors says used car prices have stabilized recently
- Wholesale used vehicle prices fell 10.3% between October and December
- Based in Gateshead, Vertu is one of the country’s largest car dealers
Vertu Motors revealed that used car prices have stabilized in recent weeks after falling significantly last year.
Wholesale prices for used vehicles fell 10.3 percent between October and December as increasing market supply, persistently high prices and rising interest rates affected consumer demand.
In response, Vertu said it has boosted used car inventory turns and reduced inventory levels by more than £40 million, “significantly” reducing net debt.
Prices: Wholesale prices for used vehicles fell 10.3 percent between October and December
The company also noted that margins have improved since January as it has increased inventories, while used car prices are “more in line with seasonal norms.”
Consequently, gross profit per unit of used vehicles has improved in recent weeks, after falling to £1,241 in the five months ended January, compared with £1,402 in the corresponding period the year before.
However, the sector remains hit by weak demand for new cars, with comparable sales falling 5.1 percent due to widespread cost-of-living pressures.
This is despite significant discounts and financing offers from car manufacturers and the UK new vehicle market posting its strongest performance since the start of the pandemic.
Vertu warned that new car orders this month “remained at levels” below those seen in March 2022 “as order banks are satisfied and the UK moves to a supply push market.”
Nevertheless, Vertu CEO Robert Forrester said he was “pleased with the team’s performance against a rapidly changing market backdrop.”
Like other car sellers, Vertu’s business took off about three years ago, when many Britons with excess savings started buying more cars again after pandemic-related travel restrictions were gradually eased.
Prices for used vehicles rose significantly as semiconductor shortages forced automakers to scale back production, limiting the number of new vehicles entering the market.
As a result, Vertu achieved a record annual turnover of £4 billion in 2022, although this was also partly due to the company making numerous acquisitions, including Helston Garages for £182 million in December 2022, its largest ever takeover deal.
Vertu, based in Gateshead, is one of Britain’s largest car dealers, with 188 outlets across the country selling cars 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 percent higher at 68.8p just before midday on Monday.