Seasonal trends drive dealers’ stock sourcing strategies

Dealers are continuing to adapt their stock sourcing strategies in line with seasonal trends according to NextGear Capital’s latest survey results.

Nine out ten dealers surveyed said they changed or adapted their strategy based on seasonal factors.

Around two-thirds reported the major reasons for changing their stock strategy was to either cash in on seasonally appropriate vehicle models or to avoid holding onto over aged stock.

However, one in ten dealers admitted to having no over aged stock policy in place or to buying stock based on seasonal trends.

For the latest survey, dealers were spoken to during the run-up to Christmas and for many, the final month of the year plays an important part in their buying strategy.

Around a third of dealers reported replenishing stock levels in December in order to meet demand in the new year. With, according to data from CAP HPI, the used car market delivering its strongest December performance since 2012, it’s a good time for dealers to be active in the market.

It echoes the positive sentiment expressed by dealers this time last year when over half of those surveyed revealed similar plans to invest in new stock to take advantage of opportunities offered in the new year.

Pam Halliday, NextGear Sales and Marketing Director, said: "Our latest results show how important seasonality remains in guiding dealers’ stock sourcing strategies.

"Just as dealers’ need to be aware of and adapt to market trends throughout the year to secure the best sales opportunities, applying the same principles to seasonal trends is also equally important.

"The vast majority of dealers clearly understand this and are adapting well to utilise seasonal specific models, as well as to avoid holding over aged stock.

"It’s encouraging to see that most dealers do have a stock ageing policy in place. It enables them to manage their stock turn more effectively, avoid holding over aged stock and creates the opportunity for greater business investment and growth.

"Those without a stock ageing policy run the risk of losing track of their numbers and in turn an effective measurement of the true cost of stock left for too long on their forecourt.

"Dealers using a seasonality based strategy aligned to a stocking plan that delivers well-managed stock turn, are best placed to develop financially robust businesses that deliver greater margin and profitability."