EBay Motors Group has said U.K. car dealers will need to make their marketing efforts work harder to reach car buyers earlier to maintain leads until potential customers are ready to buy in the current market.
It’s new research found that during February, despite higher-than-normal levels of online buyer activity, there was a reduction in lead conversion rates.
EBay Motors Group owns Motors.co.uk, a website that reached a four-year high in web browsing sessions during January and February, but EBay is concerned by consumer uncertainty, illustrated by the high levels of online visits that did not immediately translate into leads.
Average stock volumes fell for the second consecutive month from 55 to 51 cars, their lowest level since October, according to EBay Motors. It found car supermarket inventories dropped 16% to 336 units a month-on-month shortfall of 62 units. Franchised dealers experienced an 11% fall in stock volumes from 85 to 76 units. Independent sites were unchanged at 33 units.
The shortage of stock meant that prices, still tracking at historically high levels, were stable, falling just 0.6% month-on-month from £19,262 to 19,152 ($22,660), up 4% year-on-year. Demand for used vehicles remains strong, caused in part by ongoing supply constraints for new vehicles, which helped drive growth in retail prices across the board in February.
Stock turn ratios improved slightly, with the average car selling from forecourts in 40 days, compared to 42 days in January. The rise in EVs being stocked by dealers continued and was at 5% in February, up from 1% 12 months ago. Hybrids accounted for 7%, up from 3% 12 months ago. Petrol vehicles remained top at 49%, with diesel cars at 40%.
“Matching supply to consumer demand remains a challenge for dealers, although the continued strength of pricing is helping many to conserve their margins,” said Lucy Tugby, marketing director at EBay Motors Group.
“Buyers are in the market but with increased pressure on their household budgets they are understandably driven by price and affordability. We can see this in the high volumes of searches for older cars in the 6–14-year-old bracket. Many will also be hedging their bets to see if prices come down.
“As we head into spring, dealers may have to work their marketing harder to reach consumers earlier and maintain the conversation for when they are ready to buy.”
Previous research by EBay Motors Group found most car buyers in U.K. prefer to buy a vehicle after visiting a dealership and speaking to an advisor,