The Gavel - 2nd August
Andy Conde - Cars
The latest monthly CAP book reductions of over 2% have once again highlighted the fragility of the market we’re operating in now. As I’ve mentioned in previous blogs, the reduction in CAP values was much needed to align the market with the realities of the current political and economic situation we find ourselves in. However, I don’t agree with how it has been done.
Year to date we have seen an accumulative reduction in excess of 13% - one of the largest changes the industry has seen in over a decade, with most of the reductions coming in June and July alone. This is far too quick, and more gradual reduction throughout the first half of the year would have been better to allow dealers to adjust.
At a time when we have seen so much uncertainty in the wider business and political world, this has done very little for the confidence of buyers, vendors and market makers.
However, I caveat this by saying that we are still seeing a very strong auction market for the right product, and once again retail demand remains extraordinarily strong, with many retailers reporting record sales if not record profits.
Certain manufacturers who are skilled in drip feeding buyers stock are certainly reaping the rewards of clever marketing, with high conversions and prices to match. But those companies with duplicate stock and still seeking that holy grail of CAP Clean, irrespective of condition, are seeing sales hitting the buffers.
As always, I’d recommend our customers to listen to the advice from experienced remarketing companies such as ours about reacting to the markets, reserving vehicles in accordance with grading, and selective rather than bulk selling.
The success of auctions is very regionalised currently with the North being tougher than the rest of the UK, but as I always say, quality stock sells for quality money.
We can only hope that now the issue of the next Prime Minister has been resolved, economic stability will reach status quo and stay there, but whilst we still have the issue of Brexit looming over us, it may be 2020 before normal business is resumed.