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INDUSTRY VIEWS NEWS AND THOUGHTS FROM SOME OF OUR CAR DEALER LIVE GUESTS CAP HPI
We’ve come into January off the back of a few difficult months compared to the rest of the year, and the first few days were disappointing for dealers – the activity wasn’t necessarily there. Derren Martin Cap HPI
It’s felt as if we’ve been catching our breath
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irector of valuations Derren Martin said: ‘We’ll quickly forget about what happened last year because this year is going to be just as interesting. ‘The price rises that happened last year have been well documented – up by nearly 30 per cent on average and some cars were up by 50 to 60 per cent. ‘We’ve come into January off the back of a few difficult months compared to the rest of the year, and the first few days were disappointing for dealers – the activity wasn’t necessarily there. ‘There was a little concern that this would be a continued trend, but we’ve definitely seen it improve as the month has gone on.’ Overall, said Martin, January was a ‘reasonable’ month for dealers. ‘It hasn’t been on fire, but thankfully Omicron wasn’t as bad as people had expected, and dealers have been able to
replenish stocks to a degree.’ He continued: ‘We put up some values and put some down. ‘Cars like the Audi Q5, BMW X1, Vauxhall Grandland X and Nissan Qashqai have been under pressure and have come down, while the Vauxhall Mokka, Volkswagen T-Cross and Touareg have gone up – it is very mixed.’ Martin also revealed that older cars were performing better than their newer counterparts. Ten-year-old cars were up by nearly three per cent, or £100, while cars at the lower end of the price scale – £6,000 to £12,000 – were also in higher demand than cars costing more than £20,000. ‘January is probably more interesting than when everything was going up last year, because it feels like we’re catching our breath and seeing where the market is going to go this year.’
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Used car prices are going to come under pressure
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ead of research Mike Allen discussed what we’re seeing in 2022 already and what the year ahead could hold. He said: ‘2021 was a great year for all dealers I speak to. Whether they’re a plc or private groups, they’ve all had a great time. ‘Will 2022 be a little bit harder? The consumers have more pressure on them with energy costs, and used car prices will come under a bit of pressure. ‘However, all of these guys bounced out of Covid, and by making these profits a lot of them converted it into cash, so they’ve got great balance sheets and they’re generating a lot of cash at the moment.’ Talking about the news that Constellation had
bought a 20 per cent stake in Lookers, Allen commented that this ‘shrewd’ deal had got it the shares at a good price from shareholder Tony Bramall. ‘I think it’s a very shrewd investment. The price paid for the stake looks very cheap at nine times P/E (price-earnings) by our calculations,’ he said. ‘It’s quite clever in terms of making that kind of stake.’ He added: ‘Those shareholders wanted the business to go into good hands, and Constellation knows the market very, very well. ‘I think these guys wouldn’t just sell out to anybody.’
