- Advertising packages will be free for December for all UK retailer customers and payment terms for November services extended by one month
- Buy online destination now live on Auto Trader promoting Click & Collect and Home Delivery services to car buyers
- Auto Trader strengthened its market leading audience position April - September 2020 (H1), reporting audience growth of over 20% from June onwards
- Auto Trader Revenue for the period April – September 2020 (H1) was down by 37% as a result of support provided to retailers during the first lockdown
Auto Trader, the UK’s largest marketplace for new and used cars, has today announced its support for all UK retailer partners following the latest wave of lockdown restrictions in England and Wales. Auto Trader is providing its advertising packages for free for the month of December and an extension to its payment terms by one month for its November services.
Following the government’s confirmation on Wednesday 4 November that retailers in England would be forced to close their forecourts for at least four weeks from 5 November, joining Welsh retailers who are currently closed until 9 November, Auto Trader has again responded with support measures to help the industry through this challenging time. This support will enable retailers to make the most from a difficult November and December, so that the industry can come back quickly in January and start the new year in the strongest possible position.
It is understood that retailers in England will be allowed to operate both home delivery and some Click & Collect services. This, coupled with the consumer activity seen through October and into November, will help to sustain some sales. However, this announcement has increased uncertainty for retailers as there’s understandably more caution beyond the month of November, particularly as December typically sees a seasonally lower volume of sales. With this in mind, Auto Trader felt the most effective way to support its customers would be to make its advertising packages free for the month of December for all its UK retailer customers and to extend its payment terms for November services by one month. Both of these measures will help to free up cash flow to allow retailers to finish the year in the strongest position possible.
These support measures follow previous support that Auto Trader offered its retailer customers. In the most challenging times of this pandemic, Auto Trader offered a level of support unprecedented in Auto Trader’s 43 year history. This resulted in a record-breaking number of buyers from June onwards which helped the industry rebound strongly out of lockdown. The business provided free advertising during April and May when dealerships were forced to close their showrooms, followed by a 25% discount in June. It also extended payment terms for all retailers, ran its biggest and longest ever stock offer, accelerated product launches and held regular insight webinars which were attended by over 6,000 retailers.
Nathan Coe, Chief Executive Officer of Auto Trader, said: “We remain committed to supporting our customers when it matters the most. What our customers really need at the moment is simplicity and clarity about the future. By going free in December and extending payment terms in November, we feel we have delivered this. We are also doing everything we can to sustain demand by driving consumer awareness that retailers are open and highlighting Click & Collect and Home Delivery stock available on Auto Trader. Our new marketing campaign focussed on this launches today.”
“Today we have also announced our half year results. The unprecedented level of support we provided to retailers has had a material impact on our financial performance. However, as an organisation we feel both proud of the decisions we have made and the performance we have achieved. What has made me most proud has been the determination and passion I have seen from our people to support our retailer partners and to continue to improve the products on which they depend. We have and will continue to work tirelessly to support our partners and to deliver the things they and the wider industry need to continue to emerge even stronger.”
The support that Auto Trader was able to offer its customers between April - June (Q1 of its financial year) has heavily impacted its financial results for the half. Its decision to allow its retailer customers to advertise on its marketplace for free during the lockdown months of April and May, and for a 25% discounted rate for the month of June, saw revenue decline by 37% on the prior year to £118.2 million (H1 2020: £186.7 million) which resulted in a decline in Operating profit by 48% to £68.5 million (H1 2020: £131.4 million). Operating profit margin also reduced to 58% (H1 2020: 70%).
However, its audience performance has significantly strengthened in the first half of the year despite an initial decline in visits and engagement through April and May. Auto Trader strengthened its position as the UK’s largest and most engaged automotive marketplace for new and used cars, with over 75% of all minutes spent on automotive marketplaces spent on the platform (H1 2020: over 75%). Average monthly cross platform visits across the six-month period increased by 12% to 57.3 million per month (H1 2020: 51.2 million).
In a survey of c.1,000 car buyers conducted on its marketplace this week, of those looking to buy in the next three months, 58% said they were looking to buy a car within the next two weeks. When asked if the government’s announcement had affected their decision to buy a car, 55% said it had made no impact, and 7% said it made them want to purchase a car even quicker. Just 14% said it had made them delay their purchase. Further highlighting the opportunity for retailers, over 50% said they were willing to buy via Click & Collect or a Home Delivery service, with a further 22% unsure, and therefore open to influence. Auto Trader is therefore urging its customers to ensure their stock remains visible online and that they highlight options to allow a car buyer to complete a transaction with a home delivery or a contactless Click & Collect service.
About Auto Trader
Auto Trader Group plc is the UK and Ireland's largest digital automotive marketplace. Auto Trader sits at the heart of the UK's vehicle buying process and its primary activity is to help vehicle retailers compete effectively on the marketplace in order to sell more vehicles, faster. Auto Trader listed on the London Stock Exchange in March 2015 and is now a member of the FTSE 100 Index.
For more information, please visit: http://plc.autotrader.co.uk
For all media enquires: Andy Nankervis firstname.lastname@example.org, or call 07720 896760