One Auto API CEO Mark Fretwell explores how a flexible approach and data-driven strategies will be essential for thriving in the UK’s dynamic used car market.

In recent weeks, I’ve been reflecting on the remarkable resilience and adaptability required in today’s rapidly changing business environment. 

Nowhere is this more evident than in the UK automotive sector where flexibility will, without doubt, become a defining factor for success.

Take the used car market, for example, which is experiencing significant shifts – driven by changes in supply, advances in technology and evolving legislation. 

The Shifting Landscape: ICE vs EVs

Some of you may have seen the recent Auto Trader Insights report, which highlighted that the supply of one-to-five-year-old ICE cars in the used car market is at its peak right now. 

Quite simply, there will never be more 1 to 5 year old ICE vehicles available in the used car market than there are today.

And as regulatory pressures force manufacturers to produce an ever-increasing proportion of EVs, the constrained supply of ICE vehicles is only set to intensify, effectively forcing used retailers to adapt by integrating more used EVs into their inventories.

For franchised retailers in particular, this shift is not just a matter of choice – it is becoming a necessity. 

With the controlling influence manufacturers have over supply of nearly new vehicles and  approved used programmes, they can effectively nudge franchised dealers toward stocking more used EVs. 

And all of this will happen, regardless of whether the end consumer is fully ready to make the transition to electric vehicles.

The Role of Pricing and Demand

One of the key challenges for retailers in this evolving market is going to be pricing. 

While we have seen a hot spot of interest for three-to-five-year-old electric vehicles, as reported recently by Auto Trader, the overall appetite and demand for EVs remains fragile. 

So in the absence of any external measures to incentivise used EV purchases (either financially and/or via a much improved and affordable charging infrastructure), used car retailers will need to adjust prices to stimulate demand and make EVs more attractive to consumers.

Data-Driven Strategies for Success

So what can used car retailers do to ensure they make the right pricing decisions?

Historically, it was instincts – honed through years of experience – that helped to guide decision-making in the motor trade.

In recent years, the pendulum has been slowly shifting towards a more data-driven approach but still with at least 50 percent of the process based on those expertly refined instincts.

And the future?

As the market continues to evolve at pace, instincts based on past experiences that are so different to the dynamics at play, may not hold the relevance they once did. So relying on them to the same degree could hinder a dealer’s ability to adapt to new challenges.

In the months and years to come, we predict data-driven insights will play an even greater role in helping retailers navigate this dynamic landscape. By leveraging real-time data, retailers can gain a comprehensive understanding of market trends, consumer preferences, and inventory optimisation.

This capability enables them to make informed decisions quickly, allowing for timely adjustments to vehicle pricing – as well as driving stock acquisition strategies and marketing efforts.

Preparing for the Future: Embracing EVs

To ultimately succeed in this evolving market, dealers must embrace the inevitability of electrification.

Whether they personally favour EVs or not, the reality is that they will need to become proficient in selling them to remain in business over the longer term.

This involves investing in product expertise, positioning EVs at the heart of their business and doing whatever they can to educate customers and help them find a suitable EV for their needs. 

For example, every interaction with a customer that involves a renewal offer or a new purchase, should include discussions about EV options and their suitability for the customer’s particular needs.  

Even customers who aren’t ready to make the change will appreciate this approach and in doing so dealers can sow the seeds of future sales, build a clearer profile of their customer base and target future communications appropriately.

A Collaborative Approach to Navigating Change

As always, automotive market evolution presents both challenges and opportunities. 

Retailers who flex, adapt and embrace data-driven strategies will be best positioned to thrive in this new landscape. 

At One Auto API, we are committed to supporting our partners through this transition, providing them with the tools and insights they need to succeed.

That’s been in our DNA from day one.

Our aim has always been to empower ambitious businesses with access to a breadth of automotive data resources and proven industry expertise at a level that suits the stage they are at in their business journey.

It’s not about tying people down to long-term commitments or unrealistic investment levels that can stifle progress or innovation.

It’s about being a trusted partner as they scale their business with increasing volumes of data and refine their product, service or strategies for success.

By enabling flexibility we empower gold-standard solutions.

Everyone’s a winner.

Here to help – let’s talk.
If you have any questions about how you can use data to position your business for future success, we are here for you. Click here to schedule a free 30-minute consultation – we will use the time to understand your business, project and goals to see how we can add value.