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.

Instantly download the white paper by filling in the form below.


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 Client Case Study: Harwoods Group

Harwoods Group partnered with Cazana as they wanted to determine how well their vehicles were priced, to review their market positioning and improve their overall efficiency.

Since using Cazana’s valuation tools, the franchised dealership group has gained a deeper insight into the entire market, enabling them to optimise vehicle prices and to reduce their days in stock.

Download our case study today to find out what they have to say about Cazana.


If you’re keen to maximise your stock turn and profit through retail driven retailing, please get in contact via retailpricing@cazana.com.

Cazana Weekly Pricing Insight

One might be forgiven for not realising that England returned to Lockdown on November 3rd as it would seem that the number of cars on the roads and the volume of people in public places and in “essential” shops appears little different than it was in previous weeks. Certain businesses have not been allowed to open which in some cases has been noted as reasonable in the bid to battle the spread of COVID 19 and in other cases highly illogical. The closure of Retail Car Showrooms has been illogical in many eyes and there are some very strong supporting reasons for this when compared to other retail outlets. As an example, Garden Centres remain open and attract large numbers of visitors to what is at this time of year a confined space. A Retail Car Showroom also attracts people, but it is argued that social distancing measures are both easier to apply and more effective when compared to those often more relaxed measures in place in a Garden Centre.

Given the circumstances there is little surprise that retail car sales have dipped in the last couple of weeks and there has been much comment in the press around the renewed importance of the online journey that is still missing in a number of car sales businesses nationwide. Cazana are acutely aware of the efforts being made to remedy this position and, as happened during the first lockdown, the requests for data to support digital transactions has significantly increased as realisation dawns that realtime whole market insight that has not been edited or affected by human decisioning is of immense value to “Mouse to House” solutions.

The question on everyone’s mind is what has happened to retail pricing in the last week, and as a result what was the impact on the wholesale market that is ultimately driven by the retail consumer demand. The chart below looks at high level retail pricing performance in the last week and qualifies what impact Lockdown 2.0 has had.

Data powered by Cazana

The chart reviews retail pricing by market sector profile in the week commencing November 9th in comparison to the previous week. The blue bars show the retail pricing move week on week and the grey bars show the change in retail advert market share based on whole market data. The orange line highlights the current market share as a whole.

Retail pricing in the last week has been slightly more varied than in the first week of lockdown 2.0. The overall market movement was a decline of -0.48% which is higher than it has been for some time although it is imperative to understand that this is not a big move generally speaking when compared to more normal market conditions in previous years. It is also an acknowledgement that retail pricing does not need to drop to generate consumer demand. A number of retailers both large and small experimented with price realignment during October 2020 and the results almost unanimously demonstrated that price drops did not generate extra sales. The retail consumer is more concerned about safety and customer service at this point in time.

The chart above does highlight that it is the older car profiles that experienced a drop in retail pricing. The decline of -1.45% for Older Part Exchange cars is followed closely by slightly lower declines for all cars over 6 years old and this is a mild acceleration of what has been happening in recent weeks. Of equal interest is the increase of 0.78% in retail prices of older ex fleet cars which comes as a bit of a surprise given the volume of this profile of vehicles in the market. This perhaps suggests a change in the profile of cars coming to the market and greater analysis would highlight with which brands this has happened and the potential opportunity this has created for both vendors and retailers.

Taking a different view on the market the chart below looks at retail price changes as a percentage by looking at pricing profile, and also compares the same period in 2020 with 2019 as an indicator of market similarity and potential stability.

Data powered by Cazana

It is important to note that the data included in this analysis covers retail pricing performance of vehicles up to £90k in value, as above this price point the individual vehicle volumes can be low and volatility can be high.

The data shows that by price range the biggest drop in values was for cars priced under £10k and this reinforces the view that retail consumer demand for older, cheaper cars really has changed for the worse. The reason cited is that consumers seeking cheaper and safer travel options have now bought their cars and demand levels are therefore returning to normal. At the same time, it is worth noting that cars in the £70k to £90k price range have also seen retail price increases.

The final chart looks at the retail price change by fuel type week on week. The inclusion of this chart is important amidst press speculation that there may be an increase in pricing for Hybrid and Electric vehicles as retail consumers remember the benefits experienced earlier in the year in the reduced pollution levels coupled with news that the ban on ICE sales will be coming forward to 2030.

Data powered by Cazana

The chart above clearly shows that retail pricing by fuel type in 2019 was more extreme than in 2020 across the board. It also shows that in the same period this year both Petrol and Electric powered cars have shown a minimal increase in pricing. The largest shift in pricing at a drop of -1.01% has been for Hybrid powered cars.

To summarise, whilst retail showrooms have had to close their doors to customers for what one hopes is a short period, retail pricing has not as yet been adversely affected. Right now, there is little reason to adjust pricing with examples of those who have tried a price driven strategy reporting no discernible sales advantage merely a drop in profit. Factual, retail driven whole market insight from the last lockdown showed there was no need to take this approach. The only difference this time round is that the wholesale market is still functioning and there is likely to be an increase in available stock, but this does not mean that pricing should drop. Retail consumers drive the market and a stable approach based on realtime insight is the key to successful commercial strategy. Recent press suggestions that pricing needs to fall to clear stock levels are not fact based and are an irresponsible recommendation at this point in time.

Understanding market trends and nuances will be the key to ensuring that the appropriate commercial strategy is developed on a day by day basis to suit the evolving market conditions in the coming weeks. The need to be flexible and responsive, specifically in pricing terms, has rarely been stronger and the resulting stocking policies will be critical in the coming weeks. Using retail driven realtime insight is a marvellous, accurate and cost effective way of ensuring funders, retailers and remarketers are fully aware of fact-based retail pricing trends in order to facilitate continued enhanced financial return.

Cazana Weekly Pricing Insight

The last 7 days have seen England return to Lockdown and Wales come out of a 17-day firebreak period aimed at halting the spread of the COVID 19 virus. The somewhat irritated retail consumer has been through an adjustment period in the last week, during which time many buyers spent significant sums of money on a variety of items before realising that the second lockdown appears to be less restrictive than expected. Or could it be that fewer people are taking this second lockdown seriously, which would appear to be the case in certain areas? Commitment to obeying government guidelines and rules is crucial at this point to minimise the lockdown period whilst at the same time trying to balance the needs of the economy.

However, there has also been some positive news and it has been confirmed that there has been some significant success with a COVID vaccine. The rate at which the vaccine can be shared is yet to be verified and besides the efficacy may be lower than ideal. Unfortunately, the news in itself may bring an air of arrogant confidence to the general public that the “end is in sight” and people may try and surge back to normality. It is vital that this mistake is not made, or it is likely that Christmas may also become a lockdown period which is not what either the population or the economy need.

From a used car perspective there has been much speculation on the impact that the latest round of restrictions will have on demand, retail pricing, sales levels and therefore wholesale pricing. It is still early to say what impact it will have but the chart below looks at high level retail pricing performance in the last week showing some interesting nuances.

Whole-Market-Retail-Price-Change-as-a-by-Market-Sector-Profile-Wc-211-against-Wc-2610

Data powered by Cazana

The chart reviews retail pricing by market sector profile in the week commencing November 2nd in comparison to the previous week. The blue bars show the retail pricing move week on week and the grey bar shows the change in retail advert market share based on whole market data. The orange line highlights the current market share as a whole.

This week’s data is interesting as it is more difficult to identify clear trends in the way in which it has been for some months. This is perhaps indicative of the current market and economic dynamics. The largest move in pricing terms is claimed once again by the Old Car profile with a drop of -0.84%. Retail price moves in this profile have been volatile for the last 3 weeks switching between increase and decrease week on week. Surprisingly, the overall market representation for this profile has also dropped by 2.48% and under normal circumstances where market representation drops one might expect to see prices increase. This instability is likely due to reduced consumer demand and some unpredictability around individual vehicle supply.

Looking at positive market movements, it is surprising to see that the Ex Fleet Old profile has shown a 0.8% increase in retail pricing following the decline in pricing the previous week of 1.89%. Although this profile covers just 0.66% of total retail adverts, there had been an expectation that pricing would be dropping once more given the increase in the volumes in the market of late and more specifically reduced consumer interest in this age of car.

The chart below looks at the market from a slightly different perspective and shows retail price changes as a percentage by looking at the pricing profile and compares the same period in 2020 with 2019.

Whole-Market-Retail-Price-Change-as-a-by-Price-Range-Wc-0211-against-Wc-2610

Data powered by Cazana

It is important to note that the data included in this analysis covers retail pricing performance of vehicles up to £90k in value, as above this price point the individual vehicle volumes can be low and volatility can be high. This chart also highlights that whilst the overall market retail price movement in 2019 was an increase of 0.03% compared to the 2020 figure of 0.01%, the shifts by price profile were not consistent.

This comparison is also interesting because it suggests that year on year retail pricing performance was actually very similar. A small high-level movement but with individual characteristics that suggest minimal realignment across all different pricing profiles. The largest movement in 2019 was an increase of 0.41% in the sub £10k price profile and for 2020 an increase of 0.25% on the £20k to £30k profile. The latter movement has been a consistent increase present for a number of weeks, but is also tied with the activity in the Old Car Profile. Looking in more detail there is without doubt evidence that older executive and sports cars have shown uplift in average retail price. Greater analysis will highlight the risk and opportunities associated with this age and price profile combination.

In conclusion, retail pricing over the last week has shown minimal movement as the market appears to hold its breath whilst waiting to see the impact of retail consumer demand on the sales volumes. This temporary pause was to be expected, and a second lockdown was inevitable, although the challenges experienced first time round in relation to online selling have been resolved by a number of switched on retailers who if they did not have online “mouse to house” capability in March this year, certainly have it now. It is prudent to acknowledge that a small number of wholesale vendors have gone into the market to vent stock in the last week. The Cazana wholesale pricing accommodated this change as it has happened using the factual data and machine learning to make the appropriate pricing changes. What is also evident from the whole market data is that there has not been any immediate drop in retail price for the affected product.

Cazana customers indicate that there is no need to make an adjustment based on the data and those few that have dropped individual retail price points against the greater advice have not benefited from the expected increase in retail sales.

Understanding market trends and nuances will be the key to ensuring that the appropriate commercial strategy is developed to suit the evolving market conditions in the coming weeks. The need to be flexible and responsive specifically in pricing terms has rarely been stronger and the resulting stocking policies will be critical in the coming weeks. Using retail driven realtime insight is a marvellous, accurate and cost-effective way of ensuring funders, retailers and remarketers are fully aware of fact-based retail pricing trends in order to facilitate continued enhanced financial return.

Cazana Weekly Pricing Insight

The last week has seen some big news items for the economy and the automotive industry. The most significant has been the re-introduction of the national lockdown, although this time there is more flexibility around education and the type of retail outlets that can still trade. Although the lockdown period has been cited to end on December 2nd 2020, there is a general feeling that this may well extend to the New Year in a bid to contain the COVID virus and many businesses are planning for this eventuality.

There are of course two sides to this news and whilst the benefit to health and lives is crucial the potential damage to the economy and employment is also a key consideration. The extension of the CJRS scheme and furlough is welcome support, and the news that controlled handover of vehicles bought online is also essential to keep the automotive sector moving. However, the news that retail dealer premises have to close is perhaps inconsistent with some other retail outlets permission to continue trading in a socially distanced manner and as such disappointing and slightly worrying. Click and Collect online transactional capability in the automotive sector has vastly improved during the year but there are still companies that are not where they need to be from a digital viewpoint to be able to operate competitively.

The new car registration figures for October have also been released and there is no surprise that the figure is down on the same period in 2019, although at just 1.6% lower many consider this to be a good result. Of note is the volume of AFVs that have been registered with a 35.7% market share for the month. In market share terms the largest growth has come for mild hybrid petrol cars sitting 9.7% higher than they were October 2019. The next largest growth in market share year on year benefits the BEV sector with a 4.4% increase to a 6.6% for the month or 5.5% for the year to date.

From a used car perspective and looking at high level retail pricing performance in the last week, the chart below highlights some interesting shifts.

Whole Market Retail Price Change as a % by Market Sector Profile W/c - 26/10 against W/c - 19/10

Data powered by Cazana

The previous chart reviews retail pricing by market sector profile in the week commencing October 26th. The blue bars show the retail pricing move in comparison to the previous week and the grey bar shows the change in retail advert market share based on whole market data. The orange line highlights the current market share as a whole.

The biggest shift on this chart has been an increase of 3.62% in the average price of cars in the Old Car profile which relates to cars over 10 year of age. This is a significant upturn for the week and comes off the back of a drop of -2.42% during the previous week. Of equal note is that the price increase comes in partnership with an inflated number of cars advertised in what is the second largest sector of product in the market at just over 22%. This highlights volatility in this profile which is interesting given the consistent stability of this type of car over the past few months and perhaps reflects the retail consumers now varied appetite for this type of car.

The biggest weakness in pricing comes for the Ex Fleet Old profile which relates to cars that are 4 to 5 years old. A decline of 1.89% in pricing is to be noted especially where there has been stability in market share. This suggests there may be either a marked change in the profile of cars available or indeed a dip in consumer demand for this type of car.

The chart below looks at the market from a different perspective and shows retail price changes as a percentage by looking at pricing profile and compares the same period in 2020 with 2019.

Whole Market Retail Price Change as a % by Price Range W/c - 26/10 against W/c 19/10

Data powered by Cazana

It is important to note that the data included in this analysis covers retail pricing performance of vehicles up to £90k in value, as above this price point the volumes are low and volatility can be high. It is also evident that retail pricing performance in 2019 was more volatile than it has been in the last 7 days with a greater drop in pricing for more expensive cars. Whole market movement for cars up to £90k in price was an increase of 0.19% although taken in isolation cars over £90k in price dropped by -2.1%.

This chart also suggests that the increase in pricing of Old cars in the previous chart relates to cars with prices up to £50k with a peak of a 0.27% increase in vehicle pricing in the £20k to £30k price bracket. This is a fascinating dynamic and Cazana can help customers identify why this has happened and what types of vehicles are affected with more granular detailed analysis. What is clear is that 2020 continues to throw new and interesting challenges and market nuances on a day to day basis.

To summarise, the retail market currently looks in good health although the industry and economy are entering not only another lockdown period of uncertainty but also a traditionally quieter time of the year as it tails towards the festive season. Online “Mouse to House” solutions will be critical over the coming weeks, as will be the need to retain contact with potential customers via digital marketing and informed pricing. Retail pricing does not need to drop, and indeed there is no indication that there will be significant reductions or great consumer deals to follow in the coming weeks. Where certain wholesale vendors are experiencing poorer conversions and more instability with wholesale pricing, the retail viewpoint remains firm for now. As such there are opportunities to continue to recover losses incurred during the first lockdown.

Understanding market trends and nuances will be the key to ensuring that commercial strategy is developed to suit the changing market. The need to be flexible and responsive specifically in pricing terms and the resulting stocking policies will be critical in the coming weeks and using retail driven realtime insight is a marvellous accurate and cost-effective way of ensuring funders, retailers and remarketers are fully aware of fact-based retail pricing trends to facilitate continued enhanced financial return.

The Importance of Data Enrichment For Accurately Pricing Motor Risk

In a technology-led world, it is increasingly important for insurers to have access to new data in order to accurately price motor risk. By understanding the complexities of new technologies installed on a vehicle, along with the value, history and specification of the vehicle, insurers are able to make better informed decisions.

This free eBook explores how the growth of car connectivity and ADAS is impacting motor insurance, and how insurers can overcome various challenges by using Cazana’s dynamic data.


Cazana Weekly Pricing Insight

Week Commencing October 19th.

The last week has seen a further change in retail consumer demand as the number of online enquiries and retail buyers on the pitches has continued to fall. There is by no means cause for panic at this stage, but it is a fact that market demand has fallen further in the last 7 days. Cazana predicted this scenario some weeks ago, and perhaps this is not a surprise given that the changes to the furlough scheme come into effect very soon and this drift in demand may be in part a reflection of these changes. However, it is key to remember that in addition to this the weather of late has deteriorated and the retail consumer has been harder to find as a result of further COVID lockdowns. In addition, it is also the school half-term period and as such demand may return in the coming weeks although traditionally speaking we are approaching a quieter time of year. 2020 has been such a unique period it is hard to tell what will come in the short-term future.

The other key dynamic to consider is the availability of used car stock and the last week has seen a further improvement in the volume of cars available in the wholesale market. This has resulted in a decline in conversion at the auction houses as there is more choice for the trade buyers and it is also clear that the pricing has also started to drop. This directly reflects the slow-down in retail demand and the drop-in sales levels and needs to be monitored closely in the coming weeks, specifically as there are indications that PCP returns are set to increase further. There is a chance that the drop-in part exchange numbers will offset this, but it is unlikely to be a perfect balance.

Looking at high-level retail pricing performance in the last week, the chart below highlights some interesting shifts.

Whole-Market-Retail-Price-Change-as-a-by-Market-Sector-Profile-Wc-1910-against-Wc-1210

Data powered by Cazana

This chart looks at the retail pricing performance by market profile and shows a number of changes to previous weeks. The blue bars highlight the pricing change in the last seven days compared to the previous week whilst the grey bars show the percentage change on the total market share over the previous week by profile. The orange line clarifies the volume of retail adverts as a percentage of the total market.

It is immediately apparent that average retail pricing at the older end of the market has seen a marked drop for the Old Car profile which is cars over 10 years old. The fall in pricing has been 2.42% which is higher than it has been for some weeks. Interestingly this is combined with a drop in total market share of 2.25% and this profile now accounts for 21.93% of the whole retail advert market.

Conversely, the chart also highlights that for the younger market profiles there has been an increase in both average retail pricing and also market share. This is specifically noticeable for the Late and Low sector which covers cars between 6 months and 2 years old. This may be due to early churn on Ex PCP cars or the return of the rental product, but deeper analysis will highlight what vehicles are coming to the market and Cazana customers often delve deeper into this data to highlight possible areas of concern.

It is worth noting that the patterns here are reasonably rare and to experience both an increase in retail price and market share at the same time is a market performance flag for many. Similarly, with the Old Car data, a drop-in market share often comes with an increase in retail pricing. Therefore, it is logical to deduce that there are some market influences in play that need to be further analysed.

The chart below looks at the market from a different perspective and shows retail price changes as a percentage by looking at pricing profile and compares the same period in 2020 with 2019.

Whole Market Retail Price Change as a % by Price Range W/c - 19/10 against W/c 12/10

Data powered by Cazana

It is important to note that the data included in this analysis covers retail pricing performance of vehicles up to £90k in value, as above this price point the volumes are low and volatility can be high. It is also evident that retail pricing performance in 2019 was more stable than it has been in the last 7 days.

This chart supports the conclusions that can be drawn from the previous chart and it is clear that the cheaper older cars in the £0 to £10k price range are having a more difficult time than of late. There are a number of potential reasons for this, although the previous chart has already ruled out the possibility that the volume of stock in the market could have been increasing and pushing pricing down. The profile of cars in the market can impact pricing performance, although it is prudent to consider that this area of the market saw a boost in demand and as such retail pricing earlier in the year post lockdown with retail buyers looking for cheap cars to avoid using public transport. It is possible that this demand has been satisfied and therefore demand and pricing have begun to drop.

In conclusion, it would appear that the used car market is experiencing some changes both from a pricing and supply perspective. The logistics supply chain is now reported to be back at a more normal level and collecting a car from an auction is now apparently at pre-COVID levels as a direct result of new socially distanced appointment collection procedures that have been put in place. With several economic concerns on the table and consumer confidence lower than had been anticipated at this point of the year, the coming few weeks will be exceedingly interesting to monitor. Understanding market trends and nuances will be the key to ensuring that commercial strategy is developed to suit the changing market. The need to be flexible and responsive specifically in pricing terms and the resulting stocking policies will be critical in the coming weeks and using retail-driven realtime insight is an excellent way of ensuring funders, retailers and remarketers are fully aware of fact-based retail pricing trends to facilitate an enhanced financial return.

 

Cazana Monthly Pricing Insight for September 2020


 

Under normal circumstances, September would be a month of celebration and investigation for the industry as a whole with new car registrations taking priority over the used car business within retailers nationwide. However, 2020 has been a unique year so far and this time September has been a month fighting to sustain the recovery that started in June when the retailer doors opened for business once again. After several months of hard-fought new car business and impressive used car sales the new car market posted a dip of 4.4% over the previous year which for many came as something of a surprise given the positive start at the beginning of the month and this performance has left the year to date registration total 33.2% behind activity in 2019.

Amidst the plethora of incentives for new cars lay the aftermath of the suspension of new car production earlier in the year. Availability issues for certain products, specifically in the VAG and Ford ranges, meant that certain key models were hard to find whilst at the same time preparations for the finalisation of RDE2 legislation and CAFE targets resulted in some models being offered at very appealing prices. However, as the month progressed, so did the level of registrations with the Fleet sector finishing on a notable 5.8% down on 2019 and the private car sector a more respectable 1.1% lower.

Meanwhile in the used car market, performance was a lot better and the strong demand from the used car buyer continued to bring positive news to the retailers who were able to focus on used car sales better than in the same period in previous years. Despite the challenges, still evident in the logistics supply chain, used cars were still finding their way to the forecourts to satisfy demand and pricing remained firm on the face of it.

Looking in more detail and the chart below compares retail pricing as a percentage of cost new by age and mileage profile against two previous years.

Full Retail Market Pricing Performance as a % of Original Cost New Compared Against 2 Previous Years

Data powered by Cazana

This chart gives a high-level view of retail pricing performance during the month of September in comparison to the previous two years split by age and mileage profile. It is immediately clear that across all profiles retail pricing was higher than it has been for some time. The grey bars highlight an increase as an overall percentage of original cost new with a 3-percentage point increase for 1 and 2 year old cars being exceeded by 3 year old cars that experienced a 4-percentage point increase over performance in 2019. This is a direct reflection of consumer demand and post lockdown stock shortages.

A high-level view is interesting but detail brings a clearer picture of pricing performance and the chart below highlights pricing movements across the month by Price Range.

Whole Market Retail Price Movement During September 2020 Compared Against 2019

Data powered by Cazana

This chart highlights the retail pricing performance of the whole market split by price range and reveals the context behind the overall monthly drop in pricing of -0.26% this year. As a comparison, the 2019 data is also shown and despite the fact that this year recorded a mild drop it is important to note that in the same period last year retail pricing declined by 0.93%.

Of note are the price ranges that recorded the largest decline in average retail pricing and this is led by the sub £10k bracket where there has been so much consumer demand in recent months. This can mean one of two things with the first being that the profile of the vehicle in this part of the market has changed and there are cheaper cars available. However, the background detail reveals this is not the case. The other alternative is that consumer demand for cars in this price bracket has resulted in the need to reduce pricing which would seem to be the case. This perhaps reflects a shift in the market and the fact that those people that had been looking for cost effective transport solutions to keep them away from public transport have now been satisfied.

In addition, there has been a marked decline of 1.83% in retail pricing in the £30k to £40k price range and the reasons for this are less clear although more granular analysis would give a clear insight into the reasons behind this shift. Conversely, the positive performance in pricing in the £10k to £20k price range that represents just over 44% of the overall market share, has helped keep the total market average decline lower than it could have been.

In summary, September 2020 has been an interesting month that has seen more challenges than originally anticipated. The new car registration performance was surprisingly poor, but the used car market continued to please the accountants and bring more much-needed relief to the finances. However, as predicted by Cazana some months ago it is important to highlight that as the month drew to a close there was a definite shift in the volume of retail customers. Digital media campaigns began to return fewer enquiries and footfall on the used car pitches slightly declined. In addition, as also predicted by Cazana some months ago, the volume of cars in the wholesale market began to increase and the recovery of the logistics sector meant easier vehicle movement and thus the supply of used cars increased. The result has been more choice for the consumer, an increase in the volatility in retail pricing and the settling of the often wild wholesale pricing swings subjectively reported by some traditional data providers

October will be an interesting period and the need for reliable fact-based unedited insight will be of paramount importance. With furlough coming to an end and a further national lockdown a possibility, what is certain is that understanding market trends and nuances will be the key to ensuring that commercial strategy is developed to suit the changing market. The need to be flexible and responsive in operational structure, pricing and stocking will be critical in the coming weeks and using retail driven realtime insight is an excellent way of ensuring funders, retailers and remarketers are fully aware of fact-based retail pricing trends in order to facilitate enhanced financial return.

 

 

Cazana Weekly Retail Price Watch

The last week has proven to be a steady one with retail buyer interest remaining constant across the market as whole. Although enquiry levels are slightly lower than of late, they appear to have stabilised in the previous week which is good news following a period of decline probably induced by the typically quieter holiday season. It is also becoming clearer that whilst the Mouse to House option is important and keeps some buyers in market, the consumers actually prefer coming to the used car pitches. Procedures set up to stem the spread of the coronavirus at the beginning of June have now been accepted as the “normal” way to buy a car and the retail buyer seems to like the often shorter sales process that is driven by the need to make an appointment to be able to see the sales team. This is partially due to the fact there is less time to actually argue the price as much as anything, but the continued shortage of used cars has helped perpetuate the position.

Retail pricing activity has remained reasonably steady across the market as a whole as the supply of used vehicles has continued to improve. This has been as much about the logistics chain becoming more accustomed to new operational routines as it has about the number of vehicles being de-fleeted by the major vendors. In addition, the supply of part exchanges has also improved as used car sales continue to improve and the result has been that dealer forecourts are becoming better stocked offering retail buyers more choice of cars. As such the overall weekly retail price movement has seen a decline of -0.19% which has been adversely affected by activity in one key age profile.

The chart below looks at what has happened to retail pricing by market profile comparing last week against the previous week.

Data powered by Cazana

The chart shows that retail pricing has moved upwards in 6 of the key profiles and down in 3 with the largest move coming in the Pre Reg profile. This is interesting as at almost 2% this is quite a large move in comparison with recent weeks, although the dip in pricing for this profile appears to be consistent over time. There are two possible reasons for this, the first being that the average price is dropping because of the type of cars entering the profile. If focus has been on the pre-registration of cheaper cars, then this would account for the drop in average retail price. Given that Renault showed a significant increase in registrations during the month of July this could be the explanation. Secondly, it could mean that demand is dropping perhaps due to the level of supply of both new and pre-registered cars in the market and hence pricing has become more competitive. This is due to the increase in market share for the Pre Reg profile which has increased by 0.48% over the previous week and it must be noted that this is the largest change in market profile share across all profiles.

On a more positive note, it would seem that all cars over the age of 4 years old, and those 3-year old cars from the fleet market, have increased in price. This means that demand for second or commuter cars appears to still be strong. The chart also shows that market share for Older Part Exchange cars and Old cars has dropped and this signifies a good level of sales activity, depleting stock levels and the resulting retail adverts in market.

It is notable that if the drop in Pre Reg pricing is excluded then the whole market retail price movement saw an uplift of 0.26%. However, it is also important to note that Electric and Hybrid powered cars is still volatile, particularly for older variants.

The chart below looks at how retail pricing has changed from a price range perspective and adds some context to the moves seen in the first chart.

Data powered by Cazana

This chart brings some added insight to the overall retail market pricing position and from an immediate glance it is clear that retail prices increased in 5 of the 7 price ranges. The largest uplift in pricing shown by the blue bars indicates that sub £10k cars increased by 0.59% which equates to an increase of £41 per car. This supports the data from the first chart showing that cars over 7 years in age increased in price. It is also interesting to see that the volume of market share declined by 0.67% over the previous week, highlighting demand and suggesting that there may be less wholesale stock available to replace the sold units.

There are 2 price ranges that showed a drop in price, the first being cars between £20k and £30k and the second, between £70k and £90k. The latter price range accounts for just 0.31% of the total retail advertising market, as highlighted by the orange line and by the nature of the cars in this profile, the pricing can be volatile. Of more significance is the drop in price for cars priced between £20k and £30k as this profile represents 14.18% of the total market. Combined with the data in the first chart this suggests it is probable that Pre Reg cars in this price range have been the driver behind the Pre Reg retail price drop.

The largest market share is held by cars in the £10k to £20k price range at 43.95% of the total market. This price range profile recorded an increase of 0.19% on average where the average price is £15,190 and this is positive news.

To summarise, retail pricing has increased overall during the last week with the uplift suppressed by the activity recorded in the Pre Reg profile. The importance of looking at the data in more detail cannot be emphasized highly enough as this is the only way to understand exactly what is happening in the market on a day by day basis. This is the most effective way to identify the best opportunities to maximise on profit and ROI whether a retailer or a vendor. Fact based, unedited data is the key to modern auto retailing and remarketing and only Cazana provides the data to give this critical insight.

 

Cazana Weekly Retail Price Watch

The month of August is always a little variable and this year shows August is once again proving to be no exception as the volume of retail consumers appears to have dipped slightly in the last two weeks. Although there is no need for major concern, there are fewer buyers around on the pitches although the online engagement appears to roughly similar to recent levels of activity and sales levels appear to be consistent with genuine buyers still keen to find a new car. Despite a negative shift in the weather in the last week and further restrictions on international travel, it is clear that a number of people are taking their summer holidays whilst they can, perhaps in fear of further lockdown restrictions in the coming weeks and months as COVID infections show signs of further increases both home and abroad. The propensity of the public to forget social distancing rules and guidelines will determine whether the virus will make a comeback in the coming weeks.

Retail pricing activity in the last week has taken a further step towards becoming more volatile and the number of outlier moves has increased once again. This is likely due to the fact that there is a greater choice of used cars coming to the retail market and as such new and sometimes very different price points appear that can if taken out of context suggest significant market swings. Taking an overall view, retail prices moved downwards by -0.14% but as Cazana customers know, analysis of the detail is essential to identify where the market opportunities and threats can be found and the realtime element of the data gives an edge in todays competitive market.

The chart below looks at what has happened to retail pricing by market profile comparing last week against the previous week.

Whole Market Price Change as a % by Market Sector Profile W/c - 03/08 against W/c - 10/08

Data powered by Cazana

Looking at the high-level movements in this chart shows some important trends that highlight activity in the market. It is key to note that there are vehicle profiles that performing better than others and in the last week from a retail pricing perspective the trend for older car pricing to increase has continued. The increase of 1.08% and 1.56% for vehicles over 7 years old represents an upward shift of around £100 per car. This sector is still enjoying good retail consumer demand as people look for commuter vehicles or 2nd and 3rd cars to keep them mobile and off public transport.

Where 5 vehicle profiles showed an uplift in pricing there were also 4 profiles that recorded a drop in pricing. At -1.02% the Ex Fleet Old profile showed the largest decline. This drop is perhaps indicative of two key factors. Firstly, businesses have held cars on fleets for a little longer due to the lockdown period. As such the age profile has shifted and secondly some of these cars have still been in use and as such mileages are higher than would have normally been anticipated. It is also worth considering that from a condition perspective these vehicles may not be quite as good as the market would have ordinarily expected and in some cases due to stock shortages forecourt condition and appearance has been sacrificed in a bid to turn stock quickly hence pricing may have dropped.

Looking at the grey bars in the above chart shows how the profile of retail adverts on sale has changed in relation to the previous week. During this period this has been more stable with the largest movement reflected as a drop for the Late and Low profile. This is interesting as with a lower representation in the market it would suggest that there might be a greater level of demand and therefore pricing may have increased, although the blue bar confirms a price drop of -0.57% for this profile.

The chart below looks at how retail pricing has changed from a price range perspective and adds some context to the moves seen in the first chart.

Whole Market Data - Retail Price Movements and Market Share by Price Range as a % - W/c - 03/08 against W/c 10/08

Data powered by Cazana

Looking at the results in this chart and it is clear where the high-level hot spots are and firstly it is encouraging to note that pricing for the sub £10k car has moved upwards corroborating the movement seen in the first chart. However, it is also interesting to note that the pricing moves are lower than identified when looking at data split by vehicle profile and this can often be the case when slicing insight differently. Deeper more granular analysis shows why this has happened and spotlights key insight that can be lost at a higher level. There are just 3 price ranges that show up uplift in retail pricing and 4 showing downward retail price moves.

It is important to understand that retail pricing interrogated in this manner shows a far smaller delta between the high and low movers. With that in mind it is worth noting that this chart looks at cars up to £90k in price and as already established the high end of the market can be extremely volatile particularly when taking fuel type into account. The variation in pricing for Hybrid and Electric vehicles across the market is one element that has had a marked impact on some of the results over the past 2 weeks and it will be interesting to see whether this position settles at all.

In conclusion retail pricing in the last week has continued to keep retailers and remarketers on their toes to ensure that they are making the very best margin and ROI respectively. The latter relies on understanding what is happening with the retail pricing on any given day and using the largest market insight available can be the only logical way to appreciate what is happening in the market. The last week period has seen a minimal impact on pricing from a reduced number of retail buyers and in all probability,  it is a position that will continue for a couple of weeks during the traditionally quieter holiday season. What is important is to ensure that stability remains constant and there is no dash to adjust pricing, although given the relative shortage of replacement stock this is an unlikely outcome.