Auto Trader shares dropped by 5% despite a rise in turnover, indicating market volatility.
- The online car marketplace noted a significant increase in the speed of used car sales, surpassing historical records.
- CEO Nathan Coe highlighted the impact of limited new car production on the used car market.
- Auto Trader reported a 9% increase in turnover, with profits rising by 15%.
- The company is advancing AI initiatives to enhance listing processes and consumer engagement.
Shares in Auto Trader fell by as much as 5% on Thursday, notwithstanding a notable increase in turnover. This decline comes at a time when the online car marketplace has observed that vehicles are selling faster than ever before, according to their records. Despite the dip, Auto Trader’s stock remains approximately a third higher over the past year, illustrating underlying market resilience.
The Manchester-headquartered company has commented on the sustained demand for used cars, which remains robust even as new car sales appear to be lagging. CEO Nathan Coe elaborated on the situation, explaining that the shortage of new cars produced several years ago has now contributed to a reduced supply in the used market. Coe detailed the influence of these conditions on the company’s business model, noting the rapid sales pace directly affects operations.
Coe anticipates that while revenue will continue to grow, there will be a gentle slowdown in the rate of growth compared to the earlier half of the year. In its financial report, Auto Trader disclosed a 9% rise in turnover to £284 million for the six months ending in September. Concurrently, pre-tax profits saw a 15% increase, reaching £188 million, setting a strong performance foundation despite share price fluctuations.
Alongside financial metrics, Auto Trader is focusing on technological advancements to bolster efficiency and customer interaction. The firm is progressively deploying new AI-driven software, termed Co-driver, designed to drastically reduce the time required for creating detailed car and van listings. Currently, this task takes about 30 minutes. The software is set to be available through Auto Trader Portal accounts and integrated into third-party systems via Auto Trader Connect.
Nathan Coe articulated the transformative potential of these AI enhancements, pointing out that, “What a dealer currently does is write the descriptions themselves… What we see that they don’t see is 600 million minutes of consumer behaviour every month.” This extensive data insight enables Auto Trader to optimise listings by predicting desirable image selections and specification highlights, ensuring cars are effectively marketed to the right buyers.
Auto Trader’s strategic focus on AI to drive efficiency in a tightly constrained used-car market illustrates a robust approach to maintaining growth amid external challenges.
