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Vertu sees carmakers cutting EV prices in effort to shift volumes

Carmakers are discounting prices of electric cars and promoting finance packages to boost sales.

That’s the view of Vertu Motors issued with a trading statement ahead of its results for the six-month period ended 31 August 2023.

It delivered a trading profit above prior year levels, aided by the Helston acquisition which was completed in December 2022.

Vertu anticipates that full year results for FY24 will be in line with current market expectations.

As the new car market returns to normality following the chip shortage and pandemic, OEMs are returning to traditional lower profitable sales channels like Motability where sales have increased.

“Supply is improving overall which aids sales volumes. Recent increased supply of new electric vehicles appears to be exceeding retail demand, creating an imbalance in pipeline inventory coming into the key plate change month of September.

“Manufacturers are reacting to this through the offer of discounted prices and supported finance rates to stimulate retail demand.  Fleet sector demand for electric vehicles remains robust and is currently critical to the electrification of the vehicle parc,” it said.

In line with the market Vertu delivered strong fleet sales with good latent demand and good supply.

Used vehicle like-for-like volumes declined 6.3% in the five months ended 31 July 2023.  Vertu said that rising interest rates meant it was unable to run its 0% finance offers on used vehicles during event periods as it did in the prior year.

Vertu commented on the widely reported shortage of sub – five-year-old cars in the market with the exception of used EVs “impacted by substantial increases in supply” into the used market.

Robert Forrester, chief executive Officer of Vertu Motors, said:  “I am pleased to report that trading remains positive.  The entire Vertu team has put in hard work and dedication once again, and I would like to thank them all.  Used car pricing has remained firm and we have gained market share in the new car market.  The performance of our high margin aftersales business has remained strong.

“The integration of Helston Garages remains on track to deliver the planned synergies.  The Board remains optimistic for the future, we anticipate that full year results will be in line with current market expectations, and we are excited about the opportunities our enlarged portfolio will create for Vertu Motors.”

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