Long gone, thankfully, are the days of Arthur Daley and his dubious bunting-clad used car lot in mid-80s ducking and diving, wheeler dealing suburban London. Initially it was specialist magazines that led the charge against the donkey-jacketed purveyors of 'dodgy motors' who befuddled their potential customers with a torrent of rhyming slang-infused backstreet jargon, leading potential car buyers to search private and dealer advertisements from the comfort of their home without the whiff of cheap aftershave and presence of an ill-fitting suit along with a pressure sale.
Of course, the analog days of the magazines still meant that a trip to a car dealership was necessary to view a potential purchase, however the internet has put paid to all of that, and British used car publishing giant Auto Trader Group seized that opportunity early on.
Nowadays, Auto Trader Group is a FTSE-100 listed high roller, its stock having become the best-performing stock on the FTSE 100 today. In fact, Auto Trader stock had struck record highs of 624p earlier in the session. The online used car marketplace is becoming absolutely hot property, and Auto Trader no longer has the entire niche to itself, with new contenders such as Cazoo, itself having suddenly risen to prominence with its outlandish $7 billion SPAC deal which takes it from a value of zero to literally billions within months.
In Britain, though, Auto Trader is the establishment. It is old school turned new. It is tinged with memories of teenage years, when it was a treat once a week to spend 40p of the newspaper round money on a copy of the magazine to take home and dream about owning one of the thousands of cars for sale in the advent of that rite of passage - passing a driving test.
Auto Trader’s stock surged following the release of its full-year financials. Revenues had fallen by 29% in the 12 months to March 2021, to £262.8 million, which could be largely attributed to the publisher's decision to run free advertising for its retailer customers in April, May and December during the height of government-enforced lockdowns, and to offer discounted rates in June. Still, in its online form, no used car dealership visits are necessary, and private sales plus direct ex-lease purchases are widespread, as are classified advertisements from main dealers of major car manufacturers.
Auto Trader may be the original, but its business model is being attacked by newcomers and as a result revenues have plunged by over £100 million to £262.8million in the year to March 31 as the average revenue brought in by each client declined by around a third from £1,949 to £1,324 and dealers are now being offered free advertising. The showroom, even for used cars, is nowadays online.
Auto Trader Group CEO Nathan Coe said "There has been a dramatic shift towards buying online which means we now have more buyers than ever turning to Auto Trader to help with their next car purchase, making us even more relevant to retailers and manufacturers."
Listed on the London Stock Exchange, the firm's share price has absolutely rocketed despite the poor annual results. That is the second example of exactly this having happened this week. Perhaps confidence is high because Auto Trader has such a longstanding history as the household name in used car advertising in the United Kingdom, and there is hope that its revenues may rise, however new car sales are outstripping used car sales as the number of new car registrations in May this year was an astonishing 673% higher than in May 2020.
With Auto Trader's revenues down, and the wet blankets representing governments of the G7 countries currently prattling about the climate at their summit in Cornwall and therefore the switch to electric cars being imminent as traditional internal combustion powered cars may become subject to sanctions, the world on wheels today is a very different place to those halcyon days of reading the magazines and dreaming of the freedom of the open road.