The ongoing everything shortage continues to disrupt the auto industry – in particular, new vehicle production – although we’re beginning to see some recovery for used inventory. Once again, inventory levels rose in October with the Vehicle Availability Index coming in at 90, an increase of 9.4% from September. What caused this increase? It looks like consumers, while showing a high demand for private mobility, are still price-conscious.
With a resolution to the ongoing global chip shortage unlikely in 2021, average listing prices have continued to increase as supply remains limited. Despite the steeper price tags, consumer demand for vehicles remains high. We decided to dig into our search data from last quarter to understand what impact high prices and limited vehicle availability have had on buyers’ searches.
We speak with Mark Hollingworth, Sales Manager at Redrose Cars, about the dealership’s growth and how their CarGurus partnership remains a major part of their future plans.
Seasonal changes as well as some exogenous shocks led to shifts in the narrative as we put a bow on the third quarter. However, the underlying uncertainty caused by high demand and limited supply remains.
In somewhat of a surprise move, we saw inventory levels increase in September with the Vehicle Availability Index reading 82.3, an increase of 4.7% from August. However, this was likely caused by both a cyclical decline in used sales in September as well as the petrol shortage at the end of the month, which could have caused consumers to delay purchases.
Throughout the pandemic, CarGurus has kept a pulse on consumer sentiment around car buying through its Covid Sentiment Study. The Q3 edition, which surveyed 989 UK consumers in July, found good news for dealers: consumer confidence is up 20 percentage points among respondents. Eight in ten (77%) say the pandemic did not negatively impact their ability to afford a vehicle today, vs. just six in ten (57%) in June 2020.
However, the pandemic continues to have a lasting impact on the industry, shaping attitudes around car buying. Below, we explore which trends are temporary and which are here to stay.
For Darren Ardron, Group Managing Director at Perrys, taking a digital-first approach to car sales has been critical to their success, particularly in recent months. Watch this video to hear Darren explain how CarGurus’s dynamic platform and strong customer service has helped take Perrys to the next level.
There had been a hope that August could be a turning point in the ongoing chip shortage currently battering the global automotive industry; however, that hope came and went with the reality that a resolution in 2021 is not likely. In fact, the UK now looks to be experiencing a direct hit from the chip maelstrom that we’ve seen in other markets in recent months.
Although the rollercoaster of 2021 continues, dealerships have adapted, selling cars to the plethora of car buyers still searching for and researching vehicles online. But as global inventory shortages persist, we decided to dig into our search data from the second quarter of 2021 to see how buyers’ searches have changed since the beginning of the year. In particular, we looked at which used makes and models were the most searched on CarGurus in 12 UK regions.
Earlier this year, CarGurus released its inaugural Buyer Insight Report in the UK, which analysed the digital purchase paths of more than 1,500 buyers. To provide more insights into the mindset of the next generation of car buyers, we dug into the data to explore the differences among younger car buyers (Gen Z and Millennials) and more seasoned car buyers (Gen X and Boomers).1 The key takeaway? Younger car buyers are more brand-open and less certain about major decisions, which results in a higher likelihood that they take their time and compare their options to find the best deal possible.
As vehicle availability continues to challenge both dealers and car-buyers, CarGurus is happy to introduce a new monthly report from our Director of Industry Insights & Analytics, Kevin Roberts. The UK Vehicle Availability Index & Insights report will deliver his in-depth research and outlook for the coming months.
While a recovery from COVID’s direct impact on the economy & industry is challenging, the addition of the global semiconductor shortage has created a further headwind. Though this lack of chips is directly affecting new vehicle availability, there is a trickle-down impact on used, which is increasing in size as the stock shortage lingers.