Shares in Auto Trader slipped as much as 5% on Thursday despite a jump in turnover as the online car marketplace said vehicles had “sold faster than at any point in our recent history.”
The Manchester-based business said the used car market was continuing to see hot demand despite an apparent slump in sales of new cars.
“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,” Auto Trader CEO Nathan Coe told UKTN.
“Because there were less new cars produced three and four years ago you’ve now ended up with less supply in the used market today.”
“We expect the revenue that comes from Auto Trader to be a little bit lower (in the second half of the year) — revenue will still grow but it will be a slight moderation in growth relative to the first half.”
Auto Trader reported a 9% jump in turnover to £284m for the six months to end September as pre-tax profits climbed 15% to £188m. Despite the share price knock on Thursday, the firm’s stock remains up by around a third over the past year.
Auto Trader this week said it was ramping up its use of artificial intelligence to improve efficiency and drive customer engagement.
The firm will release new software, called Co-driver, in a multi-part rollout, aimed at slashing the time it takes to make detailed car and van listings, which currently takes around 30 minutes.
The full range of the software’s features will be accessible to retailers through Auto Trader Portal accounts and can be integrated into third-party technology systems for the retailers using Auto Trader Connect.
“What a dealer currently does is write the descriptions themselves and they’ll pull some data from us and other places and use their years of experience,” Coe said.
“What we see that they don’t see is 600 million minutes of consumer behaviour every month so we know what images people want to see, what order they want to look at them, we know what they’re looking for in a description and we know when we look at a car digitally with our AI models, why specs make that car unique relative to another car.”
“It makes sure the cars are valued right and makes sure they’re appealing to the right consumers…and it makes the job of our retailers much better.”
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