Enhancing Customer Engagement & Retailer Efficiency
Enhancing Customer Engagement & Retailer Efficiency

Why 2024 is looking like the year of the used car

April marked 21 consecutive months of growth for new car registrations, pushing the year-to-date total up by 8.4%, according to the Society of Motor Manufacturers and Traders (SMMT).

This sustained period of growth has just prompted the trade body to revise upwards its full year forecast to 1.98 million units.

While this is welcome news for the recovering market, demand continues to be driven by fleets, as the cost of living crisis and high interest rates continue to limit the buying power of private buyers.

However, the used car market is also going through a period of recovery, with franchised retailers ideally placed to serve the motoring needs of in-market consumers.

Used car sales up

Last year, despite rising wholesale values and retail prices caused by supply shortages, the used car market grew by 5% to 7.24 million units. Cox Automotive is currently forecasting a further rise this year of up to 7.7 million transactions, which will be a welcome 4% increase of the pre-pandemic average.

Sales of used cars certainly got off to a flying start this year. The market grew by 6.5% Q1 with 1.96 million units finding new owners, the strongest start to a year since pre-pandemic 2019, according to the SMMT.

The market has now been growing for 16 consecutive months, on the back of improved supply into the new car market generating higher volumes of used cars, especially with businesses and leasing companies replenishing their fleets.

These rising sales will undoubtedly be further boosted by the steady fall in average used car prices which peaked at £18,927 in January 2023, according to MOTORS, and have been steadily dipping most months since then until this April when they increased by 1% to £16,964, a possible indication that we could be seeing a market correction and hopefully greater stability for prices.

All these used car market indicators are good news for retailers.

What the data says

We know from our latest Dealerweb Showroom data, collated from over 1,000 retailers, that demand for used cars is positive, accounting for 57% of enquiries in April, compared to 43% for new cars. There were also small but welcome improvements in enquiries both month-on-month and year-on-year.

Additionally, used car orders accounted for the lion’s share of vehicle sales at 60%, compared to 40% for new.

This followed a solid performance for used cars over the course of Q1 with our data tracking a rate of 31% enquiries to orders, compared to 28% for new cars. While the impact of those falling used car prices only resulted in a 1% drop in order values.

Opportunities for retailers 

We believe all these market trends suggest there are opportunities for franchised retailers to increase unit sales and profitability on their digital and physical used car forecourts.

It is no secret that specialist independent retailers and car supermarkets have upped their games in recent years, so for franchised retailers to successfully compete against them they must consistently deliver the high levels of customer service expected by new car buyers to those buying used, even on out of franchise cars. For many it will mean having a clear focus on stocking desirable cars and pricing them competitively.

However, ensuring that you have accurately priced each vehicle can be a time-consuming task, as it involves checking price points nationally and against competitors in your area.

With CitNOW Insights we collect your DMS stocklist and compare it instantly against Auto Trader data, giving you the instant analysis you need to amend your stock to sell.

We automatically provide optimised prices for every vehicle, constantly checking your stock prices every day to ensure your prices are correct from day one; maximising margin opportunities and optimising days to sell time.

The power of enhanced listings

The opportunity to make a strong first impression starts the moment a used car is listed online.

This is where our CitNOW Imaging platform (formerly Auto Imaging) empowers retailers to elevate their inventories with the fast delivery of consistent and high quality digital assets.

In-app AI-powered quality control and real-time guidance on image-taking helps retailers comply with OEM and group standards; while stock feed integrations and APIs allow them to leverage content seamlessly into quick, consistent, online listings.

It can also help reduce the amount of unadvertised stock, days in stock, as well as decrease time to web and provide sales teams with a more efficient overall solution.

The results are enhanced listings that will showcase used stock across dealer websites and marketplaces and help drive buyer engagement.

Making videos more personal

CitNOW was an early advocate in the delivery of video tools to help sales and aftersales teams communicate with customers and our services are being used daily by thousands of retailers across the UK.

CitNOW Sales builds on a customer’s initial online experience and takes the dealership digitally to them. Specifically designed for sales executives to use, it provides an easy way to film, edit and send personalised videos of used vehicles as a response to individual enquiries, creating trust and building lasting relationships.

However, we believe even more can be done with video to help drive used car sales.

By asking customers about their typical usage, the sales executive can provide a highly bespoke video which can focus on anything from size requirements (do they have a family, how old are their children, do they have babies?), internal space needs (will they be using it for the weekly shop, do they have a dog?) to general practicality (how easy is it to park, does it have parking sensors and camera?).

Including this tailored content, along with showcasing the car’s condition, features and previous history, helps build relationships and trust with prospective customers.

Discover more about how Dealerweb Showroom, CitNOW Insights, CitNOW Imaging and CitNOW Sales can maximise the opportunities that exist to grow your used car sales.

Auto Talk at CitNOW Group
Auto Talk at CitNOW Group

Enhancing used car profit: accelerate the remarketing process

Once a retailer has added a used vehicle to its inventory, the number of days it takes to bring it to market is one of the most crucial things it can influence from a profitability perspective.

Within this, three areas of focus stand out.

1. Ensure stock is not lost in the remarketing/preparation cycle.
2. Realise the opportunity to market fresh incoming stock as soon as possible.
3. Optimise and retain the part-exchange opportunity.

Accelerate the marketing process

Before a car even arrives at the showroom, vehicle description and, dependent on location, imaging processes can often be started. When looking at the online marketing of your vehicle inventory, Auto Trader points to the critical importance of the right imagery:

  • Buyers expect to see 20 images in an advert.
  • Real Images of cars perform 4x more than CGI.

Well-shot, clear images that represent the true condition of a vehicle are vital to ensuring a retailer’s stock stands out. It no longer requires high-end photographic equipment, extensive training, or too much of that all-essential time.

With just a smartphone and the CitNOW Imaging app (formerly Auto Imaging), challenges associated with creating digital vehicle assets, such as time to shoot and upload images, quality, and cost, are addressed. Added to this, with auto-background replacement, CitNOW Imaging automatically applies on-brand backgrounds ensuring consistency and quality across all listings.

The in-app AI-powered quality control and real-time guidance on image-taking ensure the correct images are captured, and image quality is at its highest. Once taken, stock feed integrations and APIs enable the image portfolio to be uploaded seamlessly. The net result is rapid, consistent online listings.

CitNOW Imaging speed to market

Throughout 2023, the time it took for three different retailers to bring vehicles to market significantly decreased, showcasing the impact of CitNOW Imaging. Retailer 1 began the year with a 24-day speed to market average, which decreased to just 10 days by year-end. Retailer 2 implemented the CitNOW Imaging app and then experienced a notable drop from 22 days to 9.9 days within six months. Lastly, Retailer 3, started at 25.7 days and have now reduced their time to market to 15.1 days.

Time is money in used vehicle sales, and CitNOW Imaging is reducing stocking days for retailers successfully.

Optimising the part exchange opportunity

People often begin their car buying journey months before they enter a showroom and the value of a part exchange could be vitally important when customers make a purchasing decision. It is here that CitNOW Appraise, our fully digital vehicle appraisal tool, can be very effective.

Straight from the dealership website, CitNOW Appraise allows retailers to keep part exchange opportunities within their dealership and avoids them losing out to competing online car buying platforms. It also puts the customer in complete control of the part-exchange process with them providing essential vehicle information, photographs, and videos which help retailers offer accurate and authentic valuations.

Not only does the ease of use and more accurate valuations help build trusting relationships with customers, but it also helps to boost the intake of quality stock for retailers and a higher resale value which ultimately delivers a higher used car profit.

Just contact us to discover more about how CitNOW Group can help enhanced your used car profits.

Follow us on LinkedIn to see this article and all our other Auto Talk news.

Auto Talk at CitNOW Group
Auto Talk at CitNOW Group

Zero emission vehicle sales - the role of data and multi-channel communication

Following on from our last Auto Talk article, designed to provide support to retailers focus on the sales process and creating an enquiry management advantage, this final article in the series will consider the role of data and multi-channel communication.

March saw an impressive 10.4% rise in new car registrations overall. However, OEMs and retailers focused on the Zero-Emission Vehicles (ZEV) Mandate (which requires 22% of all new cars registered this year to have zero emissions) may be concerned that Battery Electric Vehicle (BEV) market share fell to 15.2%.

Encouraging more people to buy a BEV will be an immediate issue for many across the industry. 

Tracking lead management

People are moving towards EVs, but for some OEMs to hit their 22% ZEV target, more need to choose BEVs rather than hybrid or petrol cars. Using CitNOW Insights’ Business Intelligence, retailers can track lead management by fuel-type data. Using this information and, for some manufacturers, often armed with impressive deals for BEVs, sales teams can increase their focus on converting more buyers from hybrid and petrol cars to BEVs.

However, it is online that customers’ hearts and minds must first be won.

Research undertaken by ICDP reveals that 60% of buyers made a final decision on the brand and model that they expected to buy via online research, before visiting a retailer, and they stuck with this decision after visiting the retailer.

Re-imagining digital communication to increase BEV sales 

‘When buying an electric vehicle, consumers want an experience that matches their expectations of the car itself. That is, something exciting and innovative but also reliable and predictable. They expect to both transact online and negotiate with a real person, and they still need to take a test drive. However, the overall experience needs to be more seamless, more personalised, and more flexible than it was in the days of forecourt walkarounds.’

McKinsey’s Future of Auto Retail – July 2023

CitNOW Conversations has been developed to meet these needs. It has been designed to make it easier for retailers to communicate with customers seamlessly on the messaging channels they prefer, when they want, from one central platform – whichever fuel type they are looking for.

Retailers can engage with every online visitor in real time by adding a live chat widget and a WhatsApp icon to their website; Facebook Messenger & Google My Business Messages are other options. Integration with OEM apps is also possible.

The platform makes it easier for customers to start conversations and discover more about BEVs.

But the platform is much more than just a communication hub.

Efficient communication on any channel at every step of the customer journey. CitNOW Conversations is an ideal tool to help enhance BEV sales now.

Just contact us to discover more about how CitNOW Group can make exceeding those ZEV targets a bit easier.

Follow us on LinkedIn to see this article and all our other Auto Talk news.