Used car market has ‘defied economics’, says Lookers boss

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Mark Raban says listed dealerships are getting “very cautious” in 2022, despite expectations of record pre-tax profits

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Took

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ookers’ boss said today that the used car market boom has “disregarded the economics” and is likely to subside in the second half of 2022.

Mark Raban said listed dealerships are getting “very cautious” in the year and “not going away”, despite expectations of record pre-tax gains for 2021.

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He told the Standard: “The test question is: How long will this continue? We’re definitely going to continue it in the first half of the year, and I think as we get into the second half, it’s going to be less in general. will start happening.

“What’s going on in the market has disregarded economics. Used cars prices don’t go up, they depreciate. It’s been exceptional, so we’re very cautious about getting our transition back to normalcy.” Huh.”

The pandemic has slowed global chip production, stalling production and supply of new cars amid supply chain and logistics issues. Consumers face long waits for new models and this has helped lift the market for used cars along with pandemic savings and public transport vigilance.

The comments come as Lookers said it expects pre-tax benefits for the year ending December 2021 to exceed the consensus figure of £82 million. Raban said he is expecting a figure in the “late 80s.”

The firm now plans to restore its dividend as well as bring cash back into the business and launch a new strategy.

The company is facing a market constrained by the likes of cashew and irrigated. Viewers will invest in technology to fuel its hybrid physical and online offering and launch more stand-alone used car operations.

“What we’re trying to do here is business of the future,” Raban said.

The CEO said he still sees a “huge opportunity” for his firm in the used car market in the UK, as it sees over 8 million annual transactions and Lookers currently sells around 100,000 used cars each year. Is.

John Stevenson and Jonathan Pritchard in Peel Hunt cautioned that “ongoing positive trends are offset by supply shortages and the prospect of used-car prices normalizing”, but added that Looker’s share price is “to other car dealers”. The exemption remains unreasonable”.

Viewer share rose 1.8%, or 1.25p, to 71.3p this morning.

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