June 2023 – Dealer Auction has added two new metrics to its Retail Margin Monitor to further support dealers in identifying the most profitable stock for their forecourts. The digital platform has included ‘Average Auto Trader days to sell’ and ‘Average Auto Trader Retail Rating’ alongside its top 10 profit-generating models for May 2023 to add extra context to the results.
The consistent top performer, the Land Rover Discovery Sport, continued to reign supreme – with an average retail margin of £4,150, an Average Auto Trader days to sell of 30 and an Average Auto Trader Retail Rating of 89. Dealer Auction’s Marketplace Director, Kieran TeeBoon, commented: “You could say the Land Rover Discovery is the ultimate ‘triple treat’ for your stock.”
However, TeeBoon points out that ‘value’ isn’t just about profit. The new metrics show that models appearing lower down the top 10 profit chart might prove the most suitable stock for dealers. For example, the Mazda CX-5 at number 9 might have a lower average retail margin (£2,605) than those above it, but it’s the fastest seller in the top 10 (23 days, on average) and also has the highest Average Auto Trader Retail Rating (94).
TeeBoon observed: “The new data metrics reinforce what we’ve always said – it’s essential for dealers to have a healthy stock mix of ‘quick wins’ and opportunities for higher profit. The performance of the Mazda CX-5 and also the Nissan X-Trail shows that dealers shouldn’t shy away from mainstream brands when seeking extra profit. In theory, you could sell two Mazda CX-5 models with a combined profit of £5,210 in a similar amount of time to selling one BMW 5 Series with a £2,750 profit.”
The newly included metrics will now be featured in the Retail Margin Monitor going forward. The ‘Average Auto Trader days to sell’ reflects the estimated number of days it will take a dealer to sell that specific vehicle to a consumer, while the ‘Average Auto Trader Retail Rating’ uses three key metrics1 to determine consumer demand for the vehicle, with a higher score being more desirable.
At brand level, Land Rover topped the chart with an average retail margin of £3,510, followed by BMW (£2,720) and Mercedes-Benz (£2,670).
TeeBoon concluded: “It’s clear that dealers are paying close attention to data and insights to support their instincts when sourcing quality stock. Our evolution of the Retail Margin Monitor reflects this – drawing on the vast real-time data capabilities of Auto Trader to highlight models that can offer not just solid profit, but a quicker turnaround too. We look forward to seeing how this shift in reporting impacts the overall performance of the top 10 going forward.”
Richard Walker, Auto Trader’s Data & Insights Director, said: “A retailer’s forecourt is prime real estate – a car that isn’t selling is not only eating into its own potential margin, but it’s also preventing the sale of stock that could be sat in its place. These new metrics offer a powerful new layer of intelligence, which will help retailers to maximise overall profit potential by not only identifying stock with the best individual return, but also those most likely to fly off forecourts.”
About Dealer Auction
Dealer Auction is the UK’s smartest and busiest automotive digital wholesale marketplace. We give buyers and sellers more choice, better insight and greater margins. Dealer Auction is an independent company, created through a joint venture between Cox Automotive and Auto Trader. For more information, visit www.dealerauction.co.uk.
Launched in January 2022, Dealer Auction’s Retail Margin Monitor tracks the potential retail margin that can be achieved on vehicles bought via Dealer Auction’s open network. We track models meeting two key criteria: more than 20 units sold with a retail price of less than £25,000. We then compare the sold price for each model with the Auto Trader market average to reveal the potential margin. For the brand table, we compare models with more than 50 units sold. We crunch the numbers at the start of every new month. This edition analyses data from 1st May to 31st May 2023.
Notes:
1 The ‘Average Auto Trader Retail Rating’ uses three key metrics1 to determine the consumer demand for the vehicle:
- Average days to sell – Calculated for the whole of the UK and then adjusted for the variations Auto Trader have observed locally in your area.
- Live market supply – Comparing the national supply level for the vehicle over the last seven days with the usual level of supply Auto Trader have seen in the market over the last six months.
- Live buyer demand – Analysing how many people are currently searching for the vehicle on Auto Trader, comparing consumer search behaviour over the last seven days against the level of interest over the last six months.
