Discounting by car dealers in the U.K. is deepening amid weak retail demand, according to Auto Trader commercial director Ian Plummer.

Plummer told Car Dealer Live that although March data from the Society of Motor Manufacturers and Traders (SMMT) showed that new car registrations in the U.K. increased by 10.4% year on year (y-o-y) — the 20th consecutive month of growth — private demand continued to slump.

Plummer said that fleet sales were driving growth, rather than retail. Fleet sales increased by 29.6%. He said private car sales were down 7.7% y-o-y and 37% down from the same month in 2019 — the year before the pandemic. The SMMT attributed this to a “challenging economic backdrop of low growth, weak consumer confidence and high interest rates.”

According to Plummer, the industry needs to stimulate private demand to try and push potential used car buyers into purchasing new vehicles.

He told Car Dealer Live: “We’re now in a market where demand is probably below the level of supply, and when that happens, you try to stimulate demand and that’s what we are seeing.

“Some three in four new cars advertised on Auto Trader have a discount on them, and that’s grown quite a lot — around 15% on the prior year. The actual amount that is being discounted has grown from around 5-6% a year ago to nearly 9%.”

Plummer added that this level of “push” was most evident in the EV market, where discounts had reached 11%

“New electric cars are still too expensive for the majority of people, as there often is a 30% price gap between ICE and EV,” he noted.

“We are now well beyond the ‘early adopter’ phase of people who could maybe afford to pay the ‘green premium’ of doing the right thing. We are going to need the price equation squared off by manufacturers.”

In January, Auto Trader announced that it would provide all used car dealers with access to its Trended Valuations product and Retail Check functionality in April to help them make sourcing, advertising and pricing decisions.

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