January strong but market fragile

BCA reports that January trading conditions have exceeded many expectations with generally buoyant and competitive bidding in the auction halls, but warns against complacency going forward. In January 2008, BCA’s overall sales volumes increased and average selling prices improved against last year.

BCA’s conversion rate averaged 69% across the board during January, on a par with last year’s record performance despite volumes entered rising. Week four of 2008 saw BCA sell nearly £78 million of vehicles, the corresponding figure in 2007 was £55 million.

The demand has been nationwide - BCA’s long-established Belle Vue auction centre sold a record 702 cars in one day mid-January for a £3 million plus turnover, while at BCA Blackbushe a Ferrari F430 F1 Spider sold for £133,500 in a leasing sale. Corporate vendors have enjoyed good results around BCA’s network, with both cars and commercials in demand.

However, BCA continues to warn against an underlying softness in the market and expects volumes to rise again significantly in the immediate period post the plate-change on March 1st.

BCA’s Communications Director Tony Gannon commented “The start to the year has been strong and we have recorded some exceptional results over the past few weeks, but there is no room for complacency.”

“January is traditionally an active month in the trade and coming off a period at the end of 2007 when the market was particularly slow, the leap into the New Year has been welcome. However, Easter comes early this year and that often proves to be a watershed in demand.”

“And with the new plate on March 1st likely to stimulate additional volumes of business from fleet, lease and dealer sources, buyers will have even more choice later in the spring. Even with all this current activity there is an underlying softness in demand and dealers are reflecting this by showing less interest in poorly presented cars and vans.”

Gannon added “We fully support the recent statement issued by the SMA (Society of Motor Auctions) which highlighted the even greater importance for vendors to present and price vehicles correctly as volumes rise. Attention to detail will be critical if sellers are to maximise the value in the vehicles they sell. It is crucial to set reserve values that accurately reflect the condition, history, mileage, specification and current market conditions.”

Gannon concluded “If market conditions tighten, condition gets even more important.”