Used car dealers in an optimistic mood for 2021
Nearly half of used vehicle dealerships in the UK are in a buoyant mood for 2021, with 43% optimistically predicting that used vehicle profit margins will rise throughout the course of the year. That’s the key finding from the latest dealer sentiment survey carried out by NextGear Capital.
This optimism outshines the sentiment expressed in January 2020, when 54% were anticipating a reduction in their fortunes. Fast-forward twelve months and fewer than one in four think their margins face further compression. A third say they expect no change. This is in stark contrast to the projected fortunes for new vehicle sales, which the SMMT reported had fallen by 40% in January 2021 alone.
Liam Quegan, managing director of Manheim Auction Services & NextGear Capital, is optimistic about the used vehicle sector in 2021.
Quegan commented: “We’re seeing real hope among used vehicle retailers about their prospects, despite market conditions remaining highly challenging. The sector has proved remarkably resilient throughout the pandemic and with an easing of restrictions becoming a tantalisingly close prospect, dealers are rightly preparing for a return to growth.
“But we mustn’t be complacent and would advise dealers against over-stretching themselves as consumer demand begins to rise again. Cautious optimism should remain our collective maxim.
“As demand and optimism grow in the used vehicle market, NextGear Capital remains poised to work in partnership with dealers to help them buy the stock they need from the source they choose, with funding available. This helps used vehicle retailers free up the cash they need to fill their forecourts, as the used sector fuels dealership recoveries nationwide.”