In brief

Used car stock levels rose by 2.5% in January, driven by the market slowdown that was seen towards the end of 2021, data from INDICATA has revealed.

Sales of used cars fell by 19.3% in December, which is in line with typical market slowdowns at the end of the year. The increase in stock was further supported by some dealer groups de-fleeting ageing cars to boost their December year-end performance.

INDICATA said there are signs that some vendors have held used cars back to sell in January, which is also boosting stock levels, but this will be a short-term measure as the semiconductor crisis looks set to restrict new car production for many more months to come.

Whilst used diesel sales remain the fastest-selling powertrain on average with a stock turn of 5.9 it is worth noting that BEVs tied for second place at 5.3 with petrol. EV volumes reached their highest level in late 2021 but still comprise a small fraction of total used car sales.

“Stock levels have certainly improved very slightly moving into January, but we expect demand to continue to exceed supply and for prices to remain very high,” explained Jon Mitchell, INDICATA UK group sales director.

Volkswagen Financial Services has established a joint venture with French-based Icare SA, a subsidiary of BNP Paribas Cardif, which specialises in warranties and maintenance.

As part of the agreement, Icare will provide maintenance solutions across Europe, with the main focus being on vehicle brands outside of the Volkswagen Group.

“As part of our growth strategy, we have set ourselves the goal of becoming the world’s leading fleet provider. This can only be achieved by expanding our multi-brand capability since many fleet customers use different makes of vehicles within their fleets,” said Anthony Bandmann, member of the management board of Volkswagen Financial Services with responsibility for sales and marketing.

Volkswagen Financial Services hold 51% of the shares in the joint venture company and the BNP Paribas Cardif subsidiary Icare SA holds 49%. The establishment of the joint venture is still subject to approval by the antitrust authorities. Both parties have agreed not to disclose the amount of the investment.

Jean Bertrand Laroche, BNP Paribas Cardif deputy chief executive officer, international markets, said: “As a partner of Volkswagen Financial Services around the world for more than 20 years, we are proud to further pursue our cooperation. We will continue to make insurance more accessible for customers thanks to products that are easier to purchase, coupled with an optimized digital experience.”

Startline Motor Finance has appointed Andy Smithson as its head of internal control, compliance and legal.

Smithson will be responsible for ensuring an effective control environment with strong ongoing legal, regulatory and operational compliance, as well as managing the interlock with the company’s legal panel and leading the environmental, social and governance agenda.

He joins from Lloyds Bank Commercial Finance where he was a director, having also spent 12 years at Lloyds Banking Group, eventually becoming head of business risk within commercial banking.

Smithson has also spent a considerable portion of his career in the United States, working in motor finance before becoming vice president of risk management at HBOS in the US and holding the same position at Drive Financial Services.

He said: “It’s exciting to be working in motor finance once more and great to become part of the team here at Startline. I have been genuinely impressed by how invested everyone is in the success of the business and how the company supports both customers and colleagues.

“I’m looking forward to developing the risk framework and oversight model to support our ambitious future plans, ensuring that effective controls and regulatory compliance not only protects the business but delivers positive customer outcomes.”

The average age of used cars in the UK reached record levels in Q4 2021, according to data from Autorola’s online portal.

Ex-fleet cars and dealer part exchanges reached their highest average age this decade, ranging from an average of 17 months for used EVs and 35 months for petrol cars, to 36 months for diesel and 38 months for hybrids. Autorola said the main cause is fleets having to extend replacement cycles while consumers are holding onto their cars for longer due to the shortage of new cars available across dealer networks.

At the same time hybrids and EVs reached 8.4% of Autorola’s total quarterly sales mix, marking the highest recorded figure on the platform and a further sign they are becoming an integral part of the UK used car market. This coincides with launching a new dedicated weekly alternative fuels auction for vendor Arval.

“For the first time we saw three fuel types of used car rise above an average age of 35 months,” said Jon Mitchell, Autorola UK’s group sales director.

“Despite that increase in average age prices continued to rise during Q4 even though December was the quietest sales month for a while. On average used cars sold online for 5.5% more (£948) than Q3 at an average price of £17,937 which is a new record for us,” he added.

AutoProtect Group has appointed Mike Edwards as chief sales and marketing officer, bringing significant automotive experience to the role.

Edwards joins AutoProtect from Pendragon where he worked as head of finance & insurance since August 2017. Prior to that, Edwards worked for 13 years at Mercedes-Benz, most latterly as group finance & insurance manager.

At AutoProtect, Edwards will lead the corporate sales, strategic account development and marketing functions. He will also head up the group’s partnerships, OEM and integration strategies, as well as DealTrak’s finance lender and broker activities.

Matthew Briggs, group chief executive at AutoProtect Group, said: “The evolution of motor retailing and F&I continues to accelerate, led by digitisation, regulatory change and increasing customer-centricity. We see Mike’s appointment, given his experience, retailing insight and passion for F&I, as a clear statement of our commitment to taking the lead in collaborating and supporting all of our clients across the sector.”

Edwards added: “I am delighted to be joining AutoProtect Group at such an exciting time for the group. I have joined a fantastic team with a fantastic proposition that gives AutoProtect Group a real edge in what is a transformative time for our industry.

Eight in 10 motor dealers have seen a surge in demand for used car stock in the last six months, according to a survey conducted by Close Brothers Motor Finance.

The firm’s Dealer Satisfaction Survey found that more than half of dealers (53%) have seen a significant increase in demand for used car stock, whilst 26% have seen a slight increase.

The ongoing semiconductor shortage has trickled down to car dealers and retailers across the UK, whose pricing models have been thrown into disarray thanks to a lack of available stock. The release in pent-up demand from consumers should have boosted sales and facilitated recovery across the sector, but instead it put immense pressure on the new car market, pushing many buyers to the used car market instead.

A vast majority (83%) of dealers say the semiconductor shortage has meant there simply is not enough stock to meet the consumer demand, whilst 88% admit that getting stock for their forecourts is challenging.

Chris Aitken, account manager at Close Brothers Motor Finance, said: “Utilising data and insights has added real value to conversations that I’m regularly having with dealers. It can be eye-opening for dealers to understand how their pricing models compare to the marketplace, and get a much deeper understanding of why certain vehicles might not be selling.”

The remarketing outlook for 2022 will be the focus of conversation at the first Vehicle Remarketing Association’s (VRA) of the year.

The webinar will be led by Jim Saker, professor emeritus at Loughborough University, who will examine the issues likely to impact on the retail motor industry during the next 12 months in his keynote presentation.

A panel discussion will then follow looking at the prospects of different aspects of remarketing featuring Derren Martin head of valuations at cap hpi; Gerry Moxham, chief visionary officer at Click Dealer; and Rob Severs, vice president of product at iVendi.

Philip Nothard, chair at the VRA, said: “We have lived through two very turbulent years thanks to factors such as the pandemic, the semiconductor shortage and Brexit. Increasingly, it is looking as though 2022 will very much continue in this vein.

“Despite all of this disruption, the remarketing sector has shown a remarkable degree of professionalism and adaptability, and has very much continued to thrive.

“In this session, we’ll be examining some of the key issues and likely developments that will affect our members, and looking how to maximise opportunities that arise.”