Fleet & Government In our last quarter’s report (Apr 18 – Jun 18) our closing statement was... Dealer demand for used vehicle stock fell as they were under “Fortunately, it’s not all doom and gloom as we believe the worst pressure to write new car business and as a result traded is now over. Already we are beginning to see signs of improvement significantly more vehicles. in July as demand and vehicle enquiries are increasing. Looking The economy as a whole has continued to contract due to the into our crystal ball, our expectation is the recovery will be slow banks tightening of financial lending as seen with the property however we have marked September as being the month the market. market improves”. The Royal Commission’s investigation into the banking industry Overall the (July – Sept) quarter was very similar to the previous, and lending practices have also tightened lending. Fortunately, however, as expected the demand for used vehicles slightly this has increased the demand for used vehicles as buyers are improved, particularly in September. Evidence of this was the now opting to buy cheaper vehicles as a result of smaller loan improvement in the overall clearance rates. approvals. We still had a carryover in the number of vehicles being returned Families’ budgets are also under pressure due to the increasing prior to the EOFY (Increased Supply). costs of living. It has been well documented that the increased Aggressive EOFY New Vehicle Dealer offerings and incentives have cost of electricity, health and tolls, fear of interest rate rises and continued well past June and into July and August, including: high debt levels have all impacted on the confidence of people to spend. Upgrading or purchasing a new vehicle is low on the • Low-interest finance offers priority list for most, particularly with home equity contracting. • Extended warranties and servicing From an auction perspective, the used vehicle market continued Cashback offers to be very tough, although during the back end of September we • saw improvement. Fleet Vehicles Apr 18 to Jun 18 July 18 to Sept 18 (Sept 18) Av Age (Yrs) 4.2 4.0 (3.9) Av Odometer 101,695kms 101,558kms (101,182kms) Clearance Rate 47% 47% (52%) Av Sale Price to Glasses 107% 106% (105%) Av Days to Sold 32 28 (28) Auction Vs Glasses 106% 104% (105%) Fixed Price Vs Glasses 117% 117% (117%) When comparing the data for both quarters, the results are very We are currently experiencing better results through October similar, however, we have separated September’s data which however buyers are still being cautious and selective. shows a significant improvement of 5% in the overall clearance Better quality vehicles are selling for good money, however, poorer rates. quality vehicles with greater UFWT spend are struggling. Although Compared to Fleet, demand and returns for Government vehicles the market has improved, we don’t expect it to lift as quickly as have remained steady due to a shortage of late-model, low previous years. kilometre vehicles in the market. This is outlined in the key metrics such as sale price vs Glasses and overall clearance rates of 75%. Government Vehicles Apr 18 to Jun 18 July 18 to Sept 18 (Sept 18) Av Age (Yrs) 3.4 3.4 (3.4) Av Odometer 62,850kms 65,419kms (65,860kms) Clearance Rate 76% 75% (76%) Av Sale Price to Glasses 117% 117% (118%) Av Days to Sold 24 19 (18) Auction Vs Glasses 116.3% 116% (118%) Fixed Price Vs Glasses 122.4% 121.8% (122%)