Cazana: driving vehicle manufacturers towards a mobility services future

Find out how vehicle manufacturers can navigate various challenges and explore new ways to unlock revenues in a time of unprecedented change.

Vehicle manufacturers are currently facing significant challenges. Targeted from every side, they need to shift their focus to new ways to unlock revenues. This free white paper explores how vehicle manufacturers can survive and thrive in the future mobility space by providing both consumers and new B2B clients with optimised vehicle solutions.

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Cazana’s data-driven insights reveal the truth about vehicles, what sells, what doesn’t, what’s future-proof, who’s getting it right, and how. To find out more about how we can help you, please get in contact via sales@cazana.com.

Cazana’s Rustmap – rusty cars and where to find them

Over the last 6 months, there has been an array of bad weather conditions including one hurricane (Ophelia) and 21 storms in the UK including the more notable ones such as Storm Brian, Storm Georgina and Storm Aileen. All of this rainfall and harsh weather takes an unfortunate toll on our vehicles.

With this in mind, we have searched the extensive Cazana database and highlighted the counties in the UK that have the highest proportion of rusty cars, and identified which are the most rust prone. This was identified by looking at the volume of cars that have rust and corrosion warnings noted on MOT data.

It will come as no surprise that 5 of the rustiest counties for car owners in the UK are situated in Scotland where the weather conditions can often be harsher.

Top 10 rustiest counties in the UK for car owners

Here you have it, the worst offending counties for rusty cars.

Another unsurprising fact is that the top 3 counties with the highest proportion of rusty cars are close to the sea. While living close to the ocean may look stunning and have so many wonderful perks, unfortunately, it can be a tougher environment for cars. Certain environmental factors such as salt and fog near the coast can cause rust on a vehicle and accelerate vehicle corrosion.

  1. West Dunbartonshire, Scotland
  2. Fife, Scotland
  3. Northumberland, North East England
  4. Roxburghshire, Scotland
  5. Banffshire, Scotland
  6. Midlothian, Scotland
  7. Herefordshire, West Midlands
  8. Durham, Central England
  9. Lincolnshire, Central England
  10. Yorkshire, Northern England

Other counties that are high on the list include Lanarkshire, West Lothian, Angus and Flintshire. There is a clear pattern of either being close to the sea and somewhere where the weather conditions are tougher.

The counties with the lowest proportion of rusty cars

So in contrast to the list above, the counties with the lowest volume of rusty cars are mostly in the south and Wales.

  1. Antrim, Northern Ireland
  2. Middlesex, South East England
  3. Hampshire, South England
  4. Oxfordshire, South East England
  5. Surrey, South East England
  6. Denbighshire, North East Wales
  7. Kent, South East England
  8. Caernarfonshire, Wales

The top 10 rustiest cars in the UK

It’s surprising to see the nations favourite Ford Fiesta on here and not only that but it is top of the list. With so many on our roads and often older it is possible that they are also less well cared for. Land Rover and Jeep, however, are not as surprising to see on this list as they are often used heavily in off-road conditions where water and dirt are commonplace.

  1. Ford Fiesta
  2. Vauxhall Corsa
  3. Land Rover Range Rover Sport
  4. Ford StreetKa
  5. Toyota Rav-4
  6. Jeep Wrangler
  7. Volkswagen Polo Hatch
  8. MINI Hatchback
  9.  Ford Ka
  10. Fiat Grande Punto

What are the main causes of rust in vehicles?

rusty car in the sea

Rust is the reddish-brown/yellow colour that coats iron or steel when exposed to air and moisture. Our vehicles can be a big investment and financial commitment and to ensure we protect them we need to first understand what the main causes of rust are.

  • Location  

As fun as living near the coast is, as we mentioned above, it can take a toll on your car. Both the salt and moisture (water) in the air can cause vehicles to rust. Therefore it is no surprise that 6 out of the top 10 rustiest counties in this list are close to the sea.

  • Salt

Most road users in colder places will use salt to get rid of ice and snow from their vehicles and it is also used extensively to keep the roads clear. However, lengthy exposure to salt can be harmful to vehicles and make them more susceptible to corrosion as it gets caught in the nooks and crannies of the car.

  • Weather conditions

As we already mentioned water and moisture is a big cause of rust on and in cars. Rain, snow and fog are big factors in why our cars rust and corrode over time.

  • Neglect

Like anything in life if we ignore a bad situation it will eventually get worse. Not checking your car regularly and not keeping up with maintenance and more important cleanliness will cause minor instances of rust to flourish and turn into more serious issues.

Top 6 ways to prevent rust in vehicles

prevent rust in vehicles

  1. Regular maintenance. This may sound obvious but keep up with regular repairs as it can make all the difference when something is caught early.
  2. Inspect your car regularly and act on what you find covering body scratches and dings as quickly as possible
  3. Wash your car regularly. Make sure wheel arches and the underbody are regularly cleaned.
  4. Keep your car in a sheltered area. If you are lucky enough to have a garage or sheltered area to park make sure you use it to help protect your car from harsh weather conditions. If you don’t have a sheltered place to park then consider getting a car cover.
  5. Wax. Get your vehicle waxed twice a year (especially if you live near the seaside) and consider having a body protection treatment added.  
  6. Keep the inside of your car clean too. Don’t just wash the outside of the car, keep the interiors clean as well especially during Winter when there is more salt on the roads.

Cazana Weekly Pricing Insight

The first full week of activity in the automotive sector for April 2021, was not as positive as many would have hoped for and was a step back on the previous weeks trading. There were similar levels of consumer leads coming into the retailers, although it would seem that there was less eagerness for the customers to commit to buying at this point. The general opinion is that this is because car buyers are holding off until April 12th so that they can come and see the car and test drive it in person before making a commitment to buy, which is an interesting and perhaps accurate perspective.

There is another viewpoint that is less palatable for businesses to admit, and that is that there has been a drop-in sales team commitment and workload capacity. This was the last week before showrooms reopening and for many businesses and team members this was the week that staff returned to work for the first time in weeks. This final period before opening may have been used for staff training and a re-acquaintance with once familiar surroundings. Either way, the coming days will show whether this was a customer or operationally driven decline in sales performance.

The charts below qualify the market dynamics over the last 7 days in comparison to the previous week with full-year data shown at the bottom in yellow: –

Data powered by Cazana

The last seven days recorded a drop in sales of -11.5% which is disappointing as discussed. In addition to this, there was a reduction in the number of fresh used car retail advert listings of -32.4% which is a large drop in relation to the volume that were placed in the previous week. However, this is less of a concern given that it reflects the fact that small and mid-size retailers have been bringing their used car stock levels back up to capacity. In some cases, small to mid-size retailers had been running with lower inventory levels during the lockdown as their online sales capability was not facilitating enough revenue to keep stock at normal capacity.

From a retail pricing perspective, the Average Retail Price of a used car improved by +0.4% overall showing a good level of stability. However, the Cazana Used Car Retail Price Index reflects a normalised view of the market and shows a moderate decrease of -1.7%. It is worth noting that during the total data period from April 5th 2020 to April 5th 2021, the Cazana Used Car Retail Price Index increased by 14.1%.

In consideration of the big drop in the number of fresh used car retail advert listings in the last week, it is important to understand why this may have happened and seek to discover whether any specific trends may signal a problem within the market. Looking at new listings by fuel type shows that the decline was pretty consistent, with the delta running between a drop of -29.1% of BEVs to -34% of Petrol cars. Perhaps of more interest is the view of what happened in the last week by Market Sector as shown in the chart below: –

whole-market-data-new-retail-listings-by-market-secto

Data powered by Cazana

It is evident from this chart that the largest decline in new retail advert listings has affected the smaller cars where the volume of new A sector Superminis dropped by -37.5% although this represents just 4.2% of the total market. The largest market share belongs to the J Sector or SUVs with 26.6% and that showed a decline of -32.2% in fresh advert listings closely followed C Sector or Medium Cars that represents 23.1% of the market and new advert listings declined by -32.4%. The fact that the market sectors with the greatest share of total volume moved similarly is both a comfort and a reflection that this drop was a preparation of stock levels before the Showrooms reopening.

With Market Sector in mind, the chart below looks at the volume of sales in the previous week: –

whole-market-data-retail-sales-by-market-sector

Data powered by Cazana

This chart is interesting as it is a different lens on market activity and allows transparency on the balance of vehicles on offer for sale in the market against the sale volumes by market sector. The positive news comes from the fact that for the A and B sector cars, where sales were lower, and the number of new retail advert listings declined more than others suggests that the lower number of new retail adverts in the market should not be too much of a stock constriction issue for the retail buyer. On the flip side, the high volume of J Sector sales combined with the low volume of new retail listings in the first bar chart could mean that there is a potential stock availability issue looming, and that could affect sales volumes and profitability for retailers. At the same time, it could be good news for remarketers with the right type of used cars to put into the wholesale market, although unless the remarketers use retail driven insight, they would struggle to identify what might be a short-term window of opportunity to maximise on the asset return.

Therefore, the last week has been a little disappointing from a performance perspective and the hope is that this was a short-term impact of the return to work of furloughed staff. There is also the possibility that this was the beginning of the automotive retail sector returning to a customer-facing sales environment. The lockdown period has proven the industry can operate online and that the customer has the confidence to buy cars online. The question is whether old school habits will return or whether the industry has learnt a valuable lesson. Either way, realtime market insight and dynamic retail driven pricing will be key to successful auto retailing.

 

 

Cazana Weekly Pricing Insight

The last week of March saw an uplift in sales for both new and used cars as consumer confidence took another step forward whilst business confidence dipped. Over the month, new car registrations recorded an uplift of 11.5% over March 2020 with Fleet and Business registrations the benefactors, despite a drop-in business confidence. Private buyer registrations were down -4.1%. Some interesting dynamics at play clearly, although the positive take is that registrations are now down just -12% year to date which is excellent.

Sales in the used car market have been particularly positive too and this has been off the back of high levels of leads and the return of sales staff from Furlough in readiness for the showrooms reopening on April 12th. The question is whether the positive used car sales levels will continue in the final week before lockdown restrictions are lifted. The coming weeks will be remarkably interesting and are likely to give a better indication of what the future used car market will look like by showing the potential durability of online sales and delivery models where showrooms are fully open for business.

The charts below qualify the market performance over the last 7 days in comparison to the previous week with full year data shown at the bottom in yellow: –

cazana price index

Data powered by Cazana

The charts show that the volume of used car sales increased by +24.9% over the previous week which is a significant achievement. At the same time, the volume of newly listed vehicles dropped by -6.3% which may be a sign of restricted used car stock availability which was a concern highlighted by Cazana some weeks ago. As the retail market gets busier in the coming weeks and the remarketing and logistics operations ramp up activity once again, this could become quite an issue and understanding the level of retail consumer demand daily will be key to ensuring retail pricing is correct in the marketplace.

From a retail pricing perspective, the Average Retail Price dropped by -14.9% overall which is cause for further investigation. The more stable Cazana Used Car Price Index reflects a normalised view of the market which shows a decrease in the retail price of -3.4%.

It is also important to highlight the changes in the period trend data that is shown on each chart. The market is now a full year on from the onset of the first lockdown in March 2020 and the devastating drops in both sales and new listing volumes are reflected in the full-year data.  Sales Levels have increased by +70% over the last year and new Retail Listings by an astonishing 632%. The context is that this time last year there was extremely limited sales activity at all, with only key workers allowed to purchase online and have their car delivered to their door or collect in a very socially distanced manner.

Given the significant rise in the number of used car Retail Sales in the previous week, the chart below looks at this in more detail: –

whole-market-data-retail-sales-volume-by-fuel-type

Data powered by Cazana

This chart is interesting as it highlights the change in used car sales volumes by fuel type week on week, and it is clear that there has been a marked increase in sales of ICE cars. At the same time, there has been a dip in sales of BEVs and Hybrids. Combine this view of the market with the previous market headline charts and this would suggest that there has been a demand for higher-priced ICE cars as this combination would account for the drop in average retail price and slight tail off on the Cazana Used Car Price Index.

The chart below looks at the market in more detail and puts a lens on used car sales by age profile: –

whole-market-data-retail-sales-volumes-by-age-profile

Data powered by Cazana

As a general trend, there has been an upturn in sales of used cars over the age of 3 years but it is clear that there has been a significant increase in sales of the Old car age profile with an upturn of +128.1% over the previous week. The Older Part Exchange profile is not far behind recording an increase of +90.9% and overall this is a very interesting market trend. This could signify that as the country approaches a return to a new normal where social distancing will still be in place, there remains a consumer demand for old cars as a substitute for travelling on public transport. Alternatively, given that the data indicates it is more expensive ICE cars that have been sold, this could be demand for cars to be used to travel more widely in the UK as the foreign travel industry looks set to remain closed for some months.

In conclusion, the last week has seen some remarkably interesting and positive sales activity in both the new and used car markets. With sales enquiries increasing in volume and the right staff now back from furlough to service them, it was not a surprise that sales increased especially when the end of the 3rd and hopefully final lockdown period is so near at hand. The question is whether as the showrooms open there will be a significant boost in sales as a result of pent-up demand with the “accidental saver” looking to spend their money. Whatever the outcome, the need for realtime whole market data remains imperative to drive good commercial decisions within businesses nationwide.

5 Things for drivers to be aware of as the roads get busy

With restrictions beginning to lift the number of drivers on the road is about to significantly increase. The question is whether the road network, regular road users and pedestrians are ready for the increase in traffic and potential for danger. Here is a list of 5 things that drivers need to be aware of before they get behind the wheel of their cars:

1. Is the Car Insured – there are a number of drivers that have taken the opportunity to reduce the insurance [risk on their car or in many cases leave it off the road and perhaps uninsured. As the lockdown lifts the car must be fully insured for the correct road usage and at the correct mileage level to safeguard both the driver and other road users.

2. Get the Car MOT’d – During the lockdown periods in the last year MOT rules have been changed and the MOT period extended in a bid to keep personal contact to a minimum where it may not be necessary. As a result, there will be a number of cars potentially on or about to hit the road that do not have a valid MOT. No MOT means the insurance is invalid and that poses risk to other road users and pedestrians in addition to the fact that the car itself may be dangerous to the driver.

3. Get the Car Taxed – Many people took the opportunity to save a bit of money by not taxing their cars and declaring them as SORN. If the car is going on the road it needs to be taxed and if it is not, just like having an invalid MOT the car will not be insured.

4. Take it Easy – Many drivers have drastically reduced the number of miles they drive each month and whilst this has been great for the environment and less stressful for the motorist it has meant that the level of road experience has dropped. Before driving the motorist should get behind the wheel and reacquaint themselves with the controls properly and maybe take some time to drive in a space where other road users are less prevalent to get used to the car again.

5. Don’t Speed – Today’s cars are swift and easy to get up to and beyond the legal speed limit. Where road experience has been eroded due to the lack of travel there is danger in believing that it will be easy to remember to drive within the speed limits. Take the time to build awareness and think of the safety of other road users and pedestrians by keeping the speeds down. It will also help the environment.

These simple reminders will help to ensure that every road user is more aware of what they are doing and keep others on the road safe and secure. Equally, an uninsured vehicle means that costly repairs would need to be met by the owner of the car and that brings in itself great cost and risk.

5 Things every car retailer must do for April 12th

With non-essential retail outlets opening on April 12th Car Retailers will also be throwing open the showroom doors and welcoming buyers to meet their sales teams and look at both new and used cars in person once again. But what do the retailers need to remember before welcoming the general public back on site: –

1. COVID Safety First – make sure that appropriate procedures are in place to protect staff and visitors alike to the site. COVID is still with us and ensuring the correct distancing measures are in place, coupled with the right sanitisation of people, surfaces and most importantly the cars remains essential if the country is to have a successful emergence from Lockdown 3.

2. Used Stock Safety and Appearance – The current average days to sale overall in today’s used car market is 43 and therefore under the current Lockdown rules where test drives have been banned, the chances are that many cars have not been started, used or cleaned at all for that period. If staff have been on furlough and the workshops operating on a skeleton staff or to capacity, that means that there is the potential for cars to need a little TLC and perhaps maintenance before visitors come and see them on the pitch. That goes for appearance to. Make sure a maintenance safety check and valet has been done before the showroom doors open.

3. Get the Sales Staff Back in the Business – If there is pent up demand from the last lockdown period, and this is very likely given that at best used car sales levels have been at 80% of normal, then it is essential to make sure that staffing levels are at the appropriate levels to meet the expected demand. Get the teams back in place at least a week before opening to make sure they are aware of the new routines and processes and also know what stock is on site and ready for sale.

4. Get the Retail Price Right – Retail sales have been running at varying levels throughout the lockdown periods over the last 12 months and the importance or realtime retail-driven insight has never been more obvious. Where trade based data providers went for weeks without any form of fact-based information corroborate pricing, retail-based pricing solutions such as those provided by Cazana kept retail used car pricing relevant. With pent up demand and a suspected boost in sales in the coming weeks, keeping the retail prices absolutely in line with the market and tuned for the best commercial performance is key.

5. Find the Right Used Stock – With stock turn about to increase the question is what will sell fast and will the business be able to replace it. Buying teams have come back to the retailer groups in the last few weeks and are getting acquainted with stock sources once again. The question is, does the business have the capability to analyse the sale data and build a realtime stock sourcing plan. Remember, the stock will probably be short for 6 weeks or so as the remarketing and logistics industry gets back up to full speed.

The next few weeks will be a fascinating period during which the automotive sector will learn to what extent the market will bounce back. Whilst there are many accidental savers out there, Car retailers would do well to remember that as the country comes out of lockdown there are now other treats the consumer may choose to spend their savings on.

Cazana Weekly Pricing Insight

March is usually dominated by new car sales activity and whilst new car registrations are reported to be tracking at a better level than some expected, the final registration volume will undoubtedly have been affected by the lack of semiconductors affecting production. There also remains mild concern that the incident in the Suez Canal may also impact new car supply for some OEMs, although Mazda and Suzuki believe that will not be the case.

Activity in the used car market in the last week has been pretty good, with retailers reporting a further uplift in the volume of enquiries as consumers show more interest in used cars. Staff are now beginning to come back from furlough as preparations gather pace for the reopening of the showrooms on April 12th. Used Car Buyers are now back in the business working with the senior management teams to understand what the retail consumers are looking to buy right now. Online sales activity has been a little slower, but this is due in some cases to the lack of sales professionals being available to service the leads quickly.

The charts below qualify the market performance over the last 7 days in comparison to the previous week with full year data shown at the bottom in yellow: –

cazana-price-index-march-30

Data powered by Cazana

The charts show that used car sales improved by + 5.9% over the previous week’s figures. With a better complement of sales staff in the business nationwide, it would have been interesting to see where that total would have led to. With buying teams coming off furlough, there has been an increase of + 22.8% in New Retail Advert Listings as the retailers increase stock levels for the anticipated surge in demand when the showroom doors reopen, which is good news.

At the same time, retail pricing edges ever higher with the Average Retail Price improving by +2.5%. and the Cazana Used Car Price Index showed an uplift of +2.8% week on week, but the really good news is that the full-year figure is up +12.6%, thus qualifying the marvellous strength in used car demand over the last 12 months. This is quite an increase and whilst there are several potentially influencing factors the simple truth is that the retailer online “mouse to house” operation capability is in a large part responsible for keeping the automotive sector going. It will be interesting to see what will happen once the showrooms are allowed to have customers on-site once again. There has been much press coverage saying that the market will revert to buying face to face once again which if true would be quite a disappointing step backwards and a significant threat to online only retailers.

Given the significant rise in the number of used car retail listings, the chart below looks at this in more detail: –

whole-market-data-new-retail-used-car-listings-by-age-profile

Data powered by Cazana

The chart above qualifies the spread of the +22.8% increase in listings that was recorded last week. The ever-volatile Old Car profile sees a significant jump in the number of new adverts. This could be because Lockdown 3 is ending and the smaller dealers that did not have online operational capability are now getting themselves ready to receive customers once again. This can be seen across all age profiles from 5 years old and above. The other point of concern is the increase of +53.8% in the Pre Reg-profile, suggesting there has been some tactical registration once again.

The chart below looks at this in more detail to see where the increase in retail adverts has been most noticeable from a market sector perspective: –

whole-market-data-new-retail-used-car-listings-by-market-sector

Data powered by Cazana

This chart is reassuring in that the increase in the number of new retail advert listings seems to be largely consistent across the different market sectors. This suggests that the rise is indeed due to an awakening of the market from a smaller independent retailer angle. Perhaps of note is the A Sector increase of +36.9% in retail adverts, and maybe this uplift in the volume of older small cars will be the market for those who want to stay away from public transport when Lockdown 3 ends properly with the reopening of non-essential shops on April 12th. The J Sector or SUV category has shown the smallest volume of increase in retail adverts at +7.4% which is interesting as there has been anecdotal comment that this sector of the market is under duress at the moment.

To summarise, the last week has been a positive period from a new business perspective with a high volume of leads for used cars. Buying staff are coming back to the business having been on furlough and are helping to ensure that stock levels will be maximised ready for April 12th. With a positive outlook for the weeks ahead, the important part will be understanding where the best opportunity lies and being able to react quickly to consumer demand as it happens. For that, realtime retail-driven insight is essential, and only this type of data will ensure remarketers make the most of the retail consumer demand, and the retailers make sure they can stock and sell exactly the right cars to maximise profit and

 

Somerset Bridge choose Cazana to improve understanding and profitability of their motor book

In 2020 Cazana expanded its capabilities to provide new automotive insights to Underwriters, Brokers and Price comparison websites (PCWs).  As an established Cazana client, Somerset Bridge were offered privileged early access to this substantial new dataset.  Following a rapid deployment of data science teams from both companies, it quickly became clear that the data was able to identify significant new risk/pricing insights.

The value Cazana brings to innovative insurers is comparable with other more conventional data sources, namely credit risk scores and other personal information.  The key difference is that Cazana data only comprises vehicle insights; it provides detailed information on ‘the metal’ without using personal data. By combining DVLA feeds, Dealership feeds and a wide variety of other website data, Cazana is able to build an individual passport for every vehicle including a timeline of key events, previous adverts, MOT history, modifications and of course any ADAS features fitted. The data can be consumed in real-time at point of quote, renewal or claim.

Lisa Allan, Director of Operations explains further “as part of our ongoing quest to further modernise motor insurance, we took the decision very early on to deep-dive the new datasets created by Cazana.  We were impressed with what we found, and we’ve now committed to building a long-term partnership with Cazana, as we continue to evolve and assess how we better assess risk”.

Tom Lawrie-Fussey, Commercial Director at Cazana adds “We’ve learned a great deal from the close collaboration we’ve enjoyed with the Somerset Bridge team throughout this process. We see this as just the start of a much broader collaboration between our respective organisations, and I’ve no doubt this partnership will grow further as Cazana develop yet more datasets that help us to translate and deliver further vehicle insights to insurers” 

Surprise Government Shift in the Plug-In Car Grant

March 18th 2021 saw the government announce that with immediate effect there were to be some significant changes to the Plug-In grants available for BEVs in the consumer and commercial markets. This move was entirely unexpected and controversial in that it is not supportive of the Road to 2030 initiative and the ban of the sale of pure ICE cars that the government has been talking about and promoting so heavily in recent months and weeks. To be clear, the financial support has now dropped from £3,000 per car to £2,500 and whilst any drop-in support is unwelcome the uncomfortable part of this change in policy is that the Cost New cap for the support has been reduced from £50,000 per car to £35,000 per car. It is believed that there was no industry consultation or warning of these changes coming into place.

At a time when the cost of BEVs is much higher than ICE cars this removal of support has a significant impact on the availability of the grant for some mainstream BEV models. The following vehicle model ranges will be affected: –

BMW I3 Mini Electric
Citroen E-Space Nissan Leaf
DS3 Crossback Peugeot E-2008
Ford Mustang Mach-E Peugeot E-Traveller
Hyundai Ioniq Polestar 2
Hyundai Kona Skoda Enyaq
Kia E-Niro Tesla Model 3
Kia Soul Vauxhall Mokka – E
Lexus UX Electric VW ID3
Mazda MX-30 VW ID4

Whilst not all models in these ranges will necessarily be impacted, this is quite an extensive list and this action has not rewarded those manufacturers that have been preparing new products for the market in predetermined price ranges. It is also worth highlighting the impact of the change in the level of the grant in relation to the cost of ownership of the car. Most private cars these days are financed with in excess of 92% of new cars registered being the subject of some form of finance agreement according to the FLA. Broadly speaking the removal of this grant will increase the total cost financed by £2,500 and that would equate to around £70 a month higher payment for a £35,000 car on a 4-year HP agreement with no deposit.

However, there are some counter arguments and considerations to what has happened and probably the most important point to address is the immediacy of the announcement. The government has been in an invidious position over the last year as a direct result of the COVID pandemic. Without specific detail, expenditure and borrowing has had to sky-rocket to give the country and population as much support as possible. As we begin to come to the end of the pandemic the government has no choice but to try and find ways to begin to pay back the debt. This is one of those ways. As a country and individuals, did we not realise that we would have to pay this borrowed money back?

Introduction of the Plug-In grant changes overnight will have stopped the immediate registration of BEV’s in a bid to grab financial support from the government where there is no actual demand for the cars. This was last seen when the grant was adjusted in 2018 and there was a significant increase in the volume of pre-registered BEV’s that hit the used car market during the final weeks of the grant availability. Therefore, in making this change overnight, the government has saved money and inadvertently supported used BEV residual values by averting an unnecessary increase in unwanted cars in the used market.

In addition, the change in the focus of the Plug-In grant support may well be more strategic than it seems at first sight. One of the key industry issues is the speed of the uptake of BEVs with consumers, who are often put off by the high cost of the car itself and the lack of transparency and understanding of the benefits of switching to a BEV. The low levels of new car sales directly impact the volumes of cars in the used car market too as demonstrated in the chart below: –

whole-market-data-live-retail-listings-by-fuel-type

Data Powered by Cazana

New car data from the SMMT has BEV registrations for the year running at 6.9% of the whole market for 2021 year to date, up 4 percentage points on the previous year, the used car market shows a total volume of live BEV retail advert listings at just 0.9% of the total market in February 2021 up from 0.5% 12 months ago. This rate of growth is not fast enough at this point and there is an argument that incentivisation of lower cost new BEVs, will help move the needle in the right direction and at the same time help focus OEM attention on producing cost effective cars at the cheaper end of the market where there is greater volume and scale overall.

In summary, whilst the changes to the Plug-In Grant are certainly unwelcome as a headline, there are alternative angles to take into consideration. Furthermore, as an industry we should expect the government to be looking much more closely at the type of support and incentivisation that it gives to aid and support the transition from the ICE to BEVs and onwards to complete ZEV coverage. There are always different ways to achieve a goal and the question is which route will be most beneficial to the consumer, supportive of the OEMs and fair to the automotive industry as a whole.

Cazana Weekly Pricing Insight

Sales enquiries for both new and used cars have seen an increase during the last week as retail buyers appear to have gained a little more confidence and seem more willing to start to spend the money they have inadvertently saved during the current third lockdown period. However, new car sales for the month are still looking to be at around 60% of normal levels with a considerable constraint on the supply of certain new car models making things harder still for the dealers to meet taxing OEM sales targets.

The used car market has also improved and despite reports of a lower volume of sales professionals available to handle enquiries due to a final round of furlough savings before the showrooms reopen, sales for the week were strong. Conversely, the volume of replacement stock to refill the forecourts were strained as conversion rates at the auctions rallied and on online sales figures from third party remarketing companies took a positive swing too.

The charts below qualify the market performance over the last 7 days in comparison to the previous week with a full year trendline shown at the bottom in yellow: –

cazana price index

Data powered by Cazana

The charts firstly show that used car sales in the last week improved by 40% over the previous period which is very good news, and sales also reportedly ran between 80% and 90% of usual levels for the used car teams. From a retail pricing perspective, the market reflected a drop of 1.4% in the Average Retail Price down from £195 to £13478. At the same time, the Cazana Used Car Retail Price Index dipped marginally by -0.2%. On a more positive note, the index is sitting 9.9 percentage points higher than it was in March 2020.

Given the boost in retail used car sales, the chart below looks at sales by fuel type in comparison with the previous week: –

whole-market-data-sales-comparison-wow-fuel-type

Data powered by Cazana

This chart shows that BEVs achieved the largest percentage increase in sales, followed by diesel-powered cars, which should not come as a surprise to many. However, it is important to remember that the overall volume of BEV used car sales is much lower in comparison to the other propulsion types, and last week they represented 0.8% of the total used car sales. This number is higher than it has been for some time which is another positive, but still some way behind Hybrid cars at 4.4% of the used car market and the traditional fuel types of diesel at 40% market share and petrol at 54.8%.

Looking at the market with a different lens and the chart below shows the percentage move in retail pricing by fuel type: –

whole-market-data-retail-price-movement-by-fuel-type-as-a-

Data powered by Cazana

This chart shows that not only did the volume of BEV sales increase, but the Average Retail Price of those sold cars also improved by a significant 11.3% and now rests at £31,519 per car. Given that volumes of BEVs in the used market are low, this means it is essential to look at the data in more detail to understand what threats and opportunities can be identified and acted upon in relation to the type and brand of BEV in today’s market. It is also conceivable that the volume of national press coverage in the last week in relation to the governments 2030 ban on the sale of new ICE cars may have contributed to an upturn in demand.

In conclusion, the new car market has not performed as well as had been hoped in the last week, although the used car market has shown more strength with a marked increase in used car sales. The drop in new retail used car adverts may result in a downturn in sales next week as a result, although that is by no means a given. As the country moves ever nearer to the April 12th showroom re-opening date it will be interesting to see how sales levels perform. The use of realtime, retail driven fact-based insight will be essential to keep used car commercial strategy in line with market demand.

 

February’s whole car market statistics

The month of February 2021 was one of many challenges and swinging consumer demand and commitment. The used car retailers were operating at around 70% to 80% of expected used car transactional volume which is impressive given the country remained in full lockdown. Both the Average Retail Price and the Cazana Retail Price Index showed improvement which would normally be a surprise in February, but given the unique market conditions was perhaps less strange than expected.

Download Cazana’s latest infographic to view the data on:

  • February’s sales and price index
  • February’s emission summary
  • Economy confidence levels
  • Slowest depreciating cars in February
  • Fastest selling cars in February
  • Sales by fuel type




 

Cazana Weekly Pricing Insight

The last seven days have seen a shift in retail consumer demand as the volume of sales enquiries for many dealers remained consistent but the appetite to commit to buying dropped leaving sales teams working harder to get the deals. This change in the market has been described by some as perplexing although there is an anecdotal comment that consumers are perhaps waiting for the reopening of the car showrooms on April 12th rather than use online sales options. This is a possibility although unlikely, and clearly, a poor decision by the consumer if true. The historical data points to pent up demand and stock shortages in the weeks following the reopening of showrooms which is likely to increase retail pricing. The drop-in sales conversions could be a result of the fact that there is evidence that dealers have put more staff on furlough for the final few weeks of lockdown in a bid to save costs, which means there are fewer professionals in place to close the deals.

The charts below qualify the market performance over the last 7 days in comparison to the previous week with a full year trendline shown at the bottom in yellow: –

cazana price index

Data powered by Cazana

Unlike retail sales for the 2 weeks prior, it is clear that the used car market had a poor period last week, and it will be very interesting to watch sales performance in the run up to April 12th. Used car listings increased significantly in the last 7 days and as such it may be that with an improvement in listings there will be a resulting upturn in sales. With growing listing volumes has come a 7.7% uplift in the average retail price of a used car and in terms of the Cazana Used Car Price Index this translates to an upturn of 2.8% over the previous week and a considerable 10.1% since the beginning of February 2020.

The chart below looks at retail price movements week on week by market sector: –

week-on-week-retail-sales-volume-by-market-sector

Data powered by Cazana

The chart above looks at how sales have changed on a market sector basis in a bid to identify any specific areas of weakness. However, this data confirms that the drop in sales has been pretty similar across the market as a whole and this perhaps supports the suggestion that there are fewer sales staff to service the incoming sales leads. The largest drops have affected the Large Car and Executive car sectors which may also give an indication of the type of customer in the market, although reviewing the data in more detail will give a transparent view of where the sales opportunities are on a day by day basis.

Looking at the market with a different lens puts a slightly alternative perspective on what may have happened in the previous 7 days: –

whole-market-data-week-on-week-retail-sales-volume-by-fuel-type

 Data powered by Cazana

This chart also shows a reasonably good level of consistency to what has happened with used retail sales. However, in line with new car registration data sales of used diesel cars have declined by -41% some 4.6 percentage points greater than used petrol cars. In addition, it is interesting to note that the volume of used Electric cars sold dropped by the lowest amount at -29.5%. When looking at market share of total sales this meant that the shift resulted in Electric Powered cars improving market share by 13.8% which is a good step in the right direction albeit for just this one week.

To summarise, the used car market has not performed as well as many would have liked it to and there is concern over the retail consumer desire to commit to buy. The reality is that this may have been engineered by retailers furloughing sales staff in a last bid to save money before the reopening of showrooms. It is also important to note that this was the first week of March and just might highlight an increase in focus and demand for new cars. More granular examination of the data would give greater transparency and at the same time highlight commercial opportunities and threats.