Weighing up the AFV opportunity
The number of Alternative Fuel Vehicles (AFVs) coming onto the market is rising month by month, and many early iterations are now reaching the used market in reasonable volumes.
We explore dealer appetite for AFVs and how they’re preparing for the change in consumer demand. There are clear signs in recent months that the Alternatively Fuelled Vehicle (AFV) market is sparking into life.
Evidence from various trusted industry sources shows AFVs enjoying a powered-up market performance, while petrol and diesel models retain a steady market position.
AFVs accelerating in the market
At the end of the summer, in Auto Trader’s August Retail Price Index, AFVs recorded a 5.7 percent year-on-year growth. while like-for-like prices for diesel and petrol vehicles fell by 1.7 percent and 1.4 percent respectively.
From the same research, electric vehicles (EVs) registered unprecedented growth, rising by 30.4 percent to £25,111 – their highest figure ever recorded.
More recently, the Renault Zoe, 2015 and 2016 models, took the top two spots in Auto Trader’s Fastest-Selling Index the first time this has been achieved by an EV.
Dealers becoming switched on to AFVs
As the consumer demand for AFVs increases, dealers are also becoming more and more switched on to the opportunities offered in the used car market.
In our latest sentiment survey, just over two-thirds of the dealers surveyed said AFVs now featured within their stock profile. One in ten dealers reported more than 10% of their used vehicle offer consisted of AFV stock.
Furthermore, over half of those dealers surveyed said they had invested in additional AFV stock this year.
Dealers are also gearing up for any future acceleration in AFV demand by investing in the infrastructure required to support AFVs on their forecourt. Two-thirds reported investing in product and technical training for staff and charging points at their dealerships.
Those using bespoke stocking plans and multiple wholesale funding channels will also be best placed to fund the investment required. Freeing up cash flow to spend on staff training, charging points and handling and storing processes, will enable ‘switched on’ dealers to take advantage of any AFV surge in the used car market.
It’s certainly a good time to be making such preparations as the AFV used car market continues to progress throughout the year.
Positive signs for AFVs in the future
The latest Society of Motor Manufacturers and Traders (SMMT) figures for October, highlighted pure-electric vehicle registrations in the UK achieved their third-best month ever - the highest total outside of a new registration plate month.
Combined sales of pure-EVs and plug-in hybrid are also up 10% up year on year, demonstrating a strong market performance across 2019.
For dealers looking to invest in AFVs, the signs for the future are very positive. While the AFV share of used car sales for October 2019 represents only 1.9% of the market, it’s a steadily increasing market share.
With recent announcements such as Bristol City Council’s proposed ban on all diesel cars, having the scope to supercharge any future market, now is the time for dealers to consider their AFV offer.
As our survey results show, the majority of dealers are doing exactly this. It’s a positive sign and as the market continues to move forward, those who move with it will make the biggest gains.