Auto Trader’s shares fell by 5% on Thursday despite a turnover increase.
- Used cars are in high demand, selling quicker than in recent history.
- CEO Nathan Coe cites a shortage of new cars as a key factor.
- The company reported a 9% increase in turnover and 15% rise in profits.
- Auto Trader plans to enhance efficiency with new AI technology.
Auto Trader experienced a 5% decline in its share price on Thursday, contrasting its financial performance, which saw a 9% rise in turnover to £284 million and a 15% increase in pre-tax profits to £188 million for the first half of the fiscal year.
The swift sale of used vehicles has been a significant trend, attributed largely to a shortage of new cars—a repercussion of reduced production in the past few years. This shortage has intensified demand in the used car market, as reported by CEO Nathan Coe, “Because of the number of consumers that we’ve got on Auto Trader and a shortage of stock, cars are selling very very quickly and that does directly impact our business model.”
Despite this strong demand, Coe anticipates a slight moderation in growth for Auto Trader’s revenue in the second half of the year compared to the first half. Nevertheless, the stock has shown resilience, maintaining an upward trend of about 33% over the past year.
In response to market dynamics, Auto Trader is advancing its application of artificial intelligence to streamline operations and boost customer interaction. The introduction of a new software, named Co-driver, aims to drastically reduce the time needed for comprehensive car and van listings, enhancing operational efficiency for retailers.
This AI-driven tool, accessible through Auto Trader Portal accounts, is designed to integrate with third-party systems, offering dealers detailed insights into consumer preferences and optimising vehicle descriptions. Nathan Coe elaborates, “What we see that they don’t see is 600 million minutes of consumer behaviour every month… It makes sure the cars are valued right and makes sure they’re appealing to the right consumers.”
Auto Trader remains optimistic about leveraging AI technology to sustain its growth despite current market challenges.
