Retail sales surge past pre-pandemic levels
Retail sales in May were up 14% on the same month in 2019, with that momentum continuing and even growing into June.
According to Auto Trader, the 14% rise in May increased to 15% in the first week of June.
It attributes these strong figures to myriad factors, not least of which is the 1.7 million ‘lost’ transactions in 2020.
In addition to a potential backlog of sales, the growing personal disposable income and savings amongst consumers will be another important influence on the levels of demand this year.
The research also revealed the growing importance of car ownership as a result of Covid-19, with nearly one in three (29%) of the circa 1,000 consumers surveyed believing that owning a car is more important to them now than it was before the pandemic.
As such, Auto Trader predicts the exceptionally strong levels of consumer demand to continue for much, if not all, of 2021, which should sustain good used car transaction levels.
Chief operating officer Catherine Faiers, said: “From early this year, we have seen huge levels of consumer demand on our marketplace, which has accelerated dramatically since the reopening of physical forecourts in April. As well as fuelling incredibly strong used car sales performance, it’s also contributed to the very sharp uptick in prices, currently at a record 9.7% year-on-year and increased the speed of sale to just 22 days. This trend has led to robust margins and helped to compensate for the lower volume of transactions last year.”
She concluded: “With the level of disposable income and savings many consumers now have, it seems reasonable that a significant proportion of the 1.7 million new and used car transactions that didn’t occur in 2020, will happen in 2021. We believe that we’ve barely scratched the surface of this year’s potential. Whilst this is of course subject to the continued easing of lockdown restrictions and available vehicle supply, it does highlight the huge opportunities available over the months ahead.”
