Auto Trader’s shares fell by 5% despite increased turnover.
- Vehicles reportedly sold faster than ever, impacting business dynamics.
- Demand in the used car market remains high amidst new car sales slump.
- AI integration aims to enhance listing speed and customer engagement.
- Future revenue growth expected to moderate in the latter half of the year.
Shares in Auto Trader fell by as much as 5% on Thursday, even though the company experienced a significant turnover increase. According to Auto Trader, cars were ‘sold faster than at any point in our recent history.’ This statement highlights a shift in market dynamics while impacting the company’s core operations.
CEO Nathan Coe highlighted that the demand for used cars remains strong despite a decline in new car sales. The imbalance is partly due to reduced new car production three to four years ago, resulting in limited stock available now in the used market. As a result, Auto Trader has faced quick vehicle sales, affecting its traditional business model.
Coe also mentioned that future revenue from Auto Trader is anticipated to grow but at a reduced pace compared to the first half of the year. The company reported a 9% rise in turnover to £284 million over the six months ending in September, with pre-tax profits climbing by 15% to £188 million. Despite the dip in share price, the firm’s stock remains about a third higher over the past year.
Auto Trader has increased its reliance on artificial intelligence to boost operational efficiency and enhance customer engagement. The rollout of new software, Co-driver, is designed to cut down the time needed for completing detailed car and van listings, which currently takes around 30 minutes. This software will be made accessible through Auto Trader Portal accounts and be compatible with third-party technology systems via Auto Trader Connect.
Nathan Coe highlighted the extensive consumer data available to Auto Trader, stating, ‘What we see that they don’t see is 600 million minutes of consumer behavior every month.’ This information helps ascertain what makes a car listing appealing and ensures accurate car valuation, ultimately improving the retailer’s role and consumer satisfaction.
Auto Trader faces rapid market changes with strategic AI enhancements to sustain growth.
