We welcome back Chris Wiseman (Managing Director – Wessex Garages), he first joined us on the podcast 219 episodes ago, and a lot has happened since then.
Today we discuss the OEM/Dealer relationship, how that has changed and the key to its success going forward. How the new brands differ in their strategies and culture to the legacy brands and the benefits to that.
We then dive into the new and used car markets, the current climate and the challenges ahead.
Here are the highlights:
{02:25} Growth
{05:25} Relationship with your OEM
{10:10} Broken Model
{11:30} Hybrid Agency
{17:33} New Brands
{26:06} Market Share
{30:31} New Cars
{38:55} Used Cars
About Symco Training:
Symco Training was founded in 2000 by Simon Bowkett and it was his belief that the business had to offer its clients something different. That difference was clear to Simon from his days in the dealership when he experienced many sales trainers who had all the answers, but were unable, unwilling or both to actually show the delegate how they could be implemented. It remains the ethos of the business today. You see, Symco only employ trainers that are committed to delivering not only in spiring and insightful training, but are equally as happy to demonstrate these skills and techniques with real customers in your own showroom. We believe in order for sales training to be effective and in Simon’s words ‘real world’, it needs to be tried and tested in the only place it matters the showroom floor. There is no room for theory when your goals are for your team to sell more cars, hours or parts and retain more profit. In dealerships around the world the focus applied by many of the sales executives is to try and sell a deal. Symco specialise in getting your teams to focus on selling themselves, the product and then supporting this with the deal.
To find out more visitwww.symcotraining.co.uk
Time, welcome to the Selling and the Motor Trade podcast in Association of Car Without. The online car-changing destination. Together we share tips and ideas on how to sell more cars, improve your service department, and generally put more profit into your department, dealership or dealer group. I'm your host, Simon Bowkett, or some of you might already know me as Skippy. First thing, I just want to say thank you for taking the time to listen to this podcast. Hi and welcome to another episode of Selling and the Motor Trade. It's my pleasure this time to welcome back a good friend of the show and Chris Wiseman, who's been on the show right at the beginning. I think Chris was actually episode number four or number five about three years ago.
So welcome back Chris. Hi, welcome. Yeah, great to be here again. Just a bit of correction on that. 2020 was episode six. I just looked at his research, his everything, skip research, his everything. Wow, that is actually five years ago now. 2020, episode number six, absolutely brilliant. Well, listen, lots have changed. Okay, that time. Can I ask you, what's changed for you and Wessex Motor Group in that time? What's been some of the biggest developments you've overseen? Yeah, we've had a good five years. We've had some highs and lows. We've had some of our best ever performing years in that period. Coming out of COVID was an incredibly transitional period for us, a lot of consolidation that went on.
And really, we spent five years planning what's next. Some key movements with some of our franchises, some key developments, which I'm sure we'll talk about later. But yeah, period of consolidation and dealing with what's next around the corner, and this is an industry, as we all know, that's in an incredible state of flux at the minute with things coming out from every angle, aren't they? So it never has stayed still for any period of time, but it just seems we came straight out of COVID into another phase of change completely. Yeah, exactly. Now, listen, Wessex, you've recently expanded with a major new site in Cardiff. Can I ask you, what does that acquisition mean for the business, your customers, and how does it fit into your overall growth strategy for Wessex Motor Group?
It was part of a five year plan that we had really going back post COVID, of what we were going to do and which manufacturers we were going to really invest in. It's the second part of a big development. We've gone through a process of refurbishment up for all our key businesses, the new Kea Corporate CI. And we're pretty much completed with that. We've got one left to do, which is another big announcement that we've got coming up in probably the next three or four weeks where we'll be able to let people know what we're doing to one of our big sites. And that's probably the biggest investment we've ever made as a group in the 25 years that I've worked there.
But laterly, last week, we took possession of the old Kazoo site in Cardiff. In fact, I'm sat here, I'm writing with the Kazoo pen because we found the box of them when we did the ship. But that's a fantastic site. It's an ex-Kazoo, but it's also ex-imperial cars. And prior to that, it was a Land Rover site. So the facility is superb. The space on the site is great. The location is probably one of the best in Cardiff, I think. It's immediately opposite our current businesses. And the plan there is to relocate Hyundai into a facility that's fit for purpose, really, without grown-at current Hyundai showroom. Hyundai goes for a phase of reallocating markets, working with some key partners.
We're one of those key partners. Cardiff offered us a great opportunity. We've been working like for two years, trying to first buy it and now ended up leasing it. But we think in, I don't know, four, six weeks maybe, we'll have that site operational. It will literally double our capabilities for Hyundai in Cardiff and free up congestion on the other site over the road for Kia. So I'm really looking forward to that. It's a great, great location. And I think it will really represent the brand in the right way. Bigger facilities, better parking, more modern, bigger showrooms, yeah, everything about it going into a solar's location for the brand is right at this time. Some brands, it's the right time, the right place to expand for us.
Hyundai is exactly that time. Yeah, you're definitely bursting at the seams. Whenever I come into the Cardiff site, it is absolutely bursting at the seams. So that's going to be great news there, great news. Can I just ask you, Chris, a little bit about how do you see the relationship between the OEMs, the car manufacturers and dealerships evolving in this market? What do you do for Wessex to build that strong partnership with your brand? Because it's changing all the time. Is that still as important today as it was those years ago? I think the brand relations is more important today than it's ever been. When you've got a market that's in the amount of flux that we're in at the minute, which is a challenge for everything, I think having that, let's say, true partnership is really important.
I think as an industry, the OEM relationship to the dealer network has always been, and this is a bit of a wide statement, but it's always been a little bit stretched. It's always been a little bit of a tenuous link there. There always seems to be a couple of different agendas running, whether you're the dealer or whether you're the OEM. But I think today, that dynamic is changing completely, well, it has to change completely. The days of the OEM dictating to the network need to finish, they need to change. It needs to be a true partnership, in the spirit of partnership. I was talking to an OEM and somebody else from a dealer group, and I think when we chatting around the table, it became quite clear that really, OEMs aren't particularly good at knowing dealer groups and how they operate and the issues that affect us, some of the cost-based issues that we've got, they're very quick to impose additional costs without realising it.
But secondly, the dealer network don't really understand the pressures that OEMs are under, and understand how complex that relationship is. I couldn't sit here and talk with any level of authority on what an OEM has to do, or a national sales company has to do in the UK to make sure that a car gets built on time, shipped here, arriving here, and it's the quality and everything. That supply chain has got so many moving parts to it. We can't even possibly understand what that is. And likewise, I don't think sometimes the manufacturers, because they don't have necessarily the experience level of working within dealer network, they're appointing maybe people from a graduate scheme historically, they don't really understand what it means to work in a dealership, they don't really understand the cost-based that we're managing on a day-to-day basis, that wholesaling cars to us, or interest-bearing cars, or the amount of demos that we run, the amount of courtesy cars we run, those costs just mount up, mount up.
When interest rates are virtually nothing, then no one has really a problem with it, but when interest rates are 6%, 7%, that's a huge amount of cost-based that we're adding every single day. But I think that partnership really, and it is a sweeping statement, it does vary from brand to brand. There are particular brands out there that we work with, and that I know of, that have incredibly good relationships with the dealer network, and I'm really trying to make that work with all the best intentions. And there are others, I think, that are more dictatorial in the way that they operate, or are under more constraints from their parent companies in Europe or overseas, where they have all the right intentions.
They have the right intentions that it's discussed with the dealer groups, so the plan moving forward, but as that flows through the chain of command back to the homeland, or back to Europe, whatever it is, then that gets diluted or it gets blocked by people that maybe don't understand the market that we're in at the moment. But I think to answer your question, I don't think it's being more important in today's world to have that true spirit of partnership. We're all dealing with the same problem. We're all dealing with exactly the same problems. We want the same thing ultimately. We want the same outcome. We all want to sell more cars, we all want to give a customer experience, we always want to make money.
The part is certainly getting a bit smaller of how much we can make. Therefore, OEMs want their share, dealer network, one their share. And if we're not careful, I think we could end up with a bit of a broken model. And I think it's on the cusp. I think the traditional franchise dealer model is close to breaking point at the minute. You're dangerously talking about the A word here, the agency model. And listen, there's lots of talk about agency. For our viewers in American and Canada, because we talk about agency on this podcast in the past, and I know Chris has, and I do get comments people say, well, sorry, what's that all about? I know in UK, we will definitely know this, but agencies wear the brand cells directly to the dealership, sorry, directly to the customer.
And the dealer becomes a delivery agent, hence the agency sales model. Hey, Chris, based on that, can I get your take now on agency and what impact it would have for a deal like Wes, especially when it comes to accessing the customer's data, delivering a seamless only channel experience to the buyer. What you've used on, because it's a changing feast. Again, people not in this country, we've had some big manufacturers, JLR saying they're not doing it. Volkswagen, the Audi group have put it on ice. I want to get your views now, Chris, where you're up to with agency and has it changed over the five years ago when we first sat down and chatted? Absolutely, it's changed.
I think we don't deal with any brands currently that are a true agency model. We have some import arrangements, but we don't, their main brands aren't agency models. When it was first talked about, when we first looked to it, I couldn't see how it was going to work. I couldn't see how it would help the dealer network. And I was probably on the, not sitting on the fence, but clearly on one side of the fence, that agency was completely wrong for our business. I'm not so sure now, if I'm honest, I think the reason they, a true agency, I'm talking here, a lot of people have pulled away from that is purely the cost base.
They recognize the cost base. And we all know, when it's a pool market, agency works, when interest rates are low and it's a pool market, the model probably is close to working as good as it can do. But when OEMs need volume, when it's a push market, especially now when we're in this transition of EVs, Edmandy, then I think it really highlights the problems that exist within that sort of model, i.e. the amount of funding it takes, the logistics, the storage issues, the risk attached to it. So I think it seems to be, I mean, I think there are brands making it work and have made it work. They've gone through a bit of pain, but then they're making it work okay at the moment and the network seems to be okay with it.
Whether that works for the real volume brands, I question at the moment. But I think there is a hybrid model out there that needs to be looked at because that's what you need for the best customer experience. I'm not sure that I've seen the real data that says the agency model is the best possible customer experience you can get. I'm not sure that that is the panacea for all things that that's what we should be looking at because it might be a good outcome for the customer, but it might not be the best outcome and it certainly might not be the best outcome for the network. But I think there is a hybrid model to be had.
I don't know what that looks like or when we start to look at it, but I think when I go back to saying that the franchise model at the moment is on the cusp of possibly breaking, I think if we don't get heads around the table and figure it out as a true partnership, then I think you could see a lot of casualties coming up. The manufacturers' arrows are leaning on well-funded smaller, larger dealer groups because there's security in that, there's capacity in that. We've got the funding to get compounds and storage facilities and stock vehicles, but there'll be a lot of smaller owner drivers out there that are looking at the current cost-based thinking.
I'm not sure how much this can last really and an agency model in that case would work for them. It's interesting what you said about the customer service on a pure agency model. I suppose if we take Tesla, which of course is not agency because they don't have dealers or agents, but anecdotally, you speak to some people who have gone through that Tesla experience and the customer service is woeful. I'm not talking about currently what's happening with Elon Musk and people burning Teslas or anything like that. That's a whole new subject, but I do believe the dealer, the entrepreneurial side of it, really does help with giving the customer that on-the-ground service they need as well.
I think the OEMs realize that we are needed part of that process. The touch then on the data thing is an interesting one. If you think historically, you know, I've been in this industry for way too long, as you have probably, the manufacturers have been traditionally quite poor at handling data. They've had the data, look at how many new cars we've been sold and how much data they've accumulated from all the forms. Yeah, Apple registration data. They've had that data. It's been available to them, but they've been really poor at how they work it. I've sat over the years in many, many meetings of people showing me a timeline of the customer experience and when they're going to get, when we're going to reapproach them and re-solicit them.
It all falls down, I think a lot with technology really, in different agendas. Every little department along the way has got a slightly different agenda and the after sales is disconnected. I'm talking from a manufacturer point of view. The after sales becomes disconnected. The finance historically has been disconnected to it. So there's too many disconnects. It never really works because they're never holding all of the data because as soon as a customer leaves and comes into our world, we're using different systems and we're using different processes to handle that customer experience. So I still think we're the best suited to handle the customer journey and without shadow of a doubt. But I think there's a lot that a manufacturer can do to assist it and to work with the network and let us work with them to try and understand what that process looks like from a customer perspective that maybe gives a best customer outcome and the best dealer outcome, which will undoubtedly give the OEMs the best outcome as well.
Well, we're seeing new brands coming from China all the time. And Chris, I'll get the strong. I'm sure you'll tell me the exact numbers. You told me something two or three months ago that shocked me. The number of OEMs represented in the UK in 2019 was 40 odd, was it Chris? Now 2025, that number is over 60 depending on who you listen to, but about 64, 65 different manufacturers in the UK currently competing for that space. Well, okay. Now, listen, we know that Wessex represents a TWR or a brand. What excites you about these new Chinese entrants and how you're customers reacting to unfamiliar brands, how you're integrating them into the Wessex business? The first thing I think you have to understand when you're looking at these brands is the speed and the scale that they're entering the UK.
They've seen a gap in the market once in a lifetime opportunity for them to come in. You've got a government pushing a Z mandate, the predominance for their product is EV. They're in control of the supply chain and they've seen a gap in the market where some of the legacy OEMs have been caught napping a little bit and that gap's opened up and China have come in with speed and scale. They're globally the biggest manufacturer of cars in the world. They have vertically integrated supply chains where they're manufacturing everything for the cars. But I think the biggest difference that I'm understanding or I'm learning is the difference between a traditional car manufacturer and a technology company.
Generally speaking, the Chinese brands tend to be around technology rather than the connected services and all the bits that can add on to it rather than the driving experience of an ice vehicle. We're shifting into a great presentation the other day from a guy that said, and I'm plagiarizing because these aren't my words. Yesterday we were dealing with a product. Today we're dealing with it, which was an ice product. It didn't really change. It was a petrol car. It might have been slightly changed in terms of a facelift or whatever, but it was a driving experience based on an ice car. That's what we needed to know about. Today we're dealing with products and services, connected services and a bit of technology.
Then tomorrow we're going to be dealing more with those services and then talking more about experience, the customer experience. How the customer gets into a car, how the customer connects to it, what it offers in, what it does to him. Does it connect with his phone? Does it connect with all that? Then tomorrow in the future, are we just going to be talking about an experience? Because this kind of getting used to dealing with a technology company and not a car manufacturer is a different perspective. If I saw a product, I won't say what it was, but we were looking at a new entrant into the UK car that is coming here very, very shortly.
Then there was another car in the showroom that I was looking at. It looked superb. It looked absolutely beautiful. My question was, if we take a brand, that car, and that on your brand, when do we get this amazing looking car that you're seeing in front of me? The answer came back, which you probably won't because it's two years old. I'm like, I'd have that. Two years old for a product. Sorry. Sorry. Two years old, they think it's out of date. It's out of date. Wow. If you think of a legacy OEM and a traditional route to market, it's five years, seven years. It's a couple of facelifts. It's all of that. But these companies are now just building cars around technology.
Like a nice one. Yeah. Almost reskinning. That's a real idea when you look at that because the discussion is not around with them necessarily that maybe not the look of the car or the driving experience, per se, and don't get me wrong, an EV is superb driving. I drive one and have done for years. What they're talking about now is the first thing is what's your autonomous driving like. I didn't think I'd ever see autonomous driving in my time in the industry. But in China, the first thing they say, what is the autonomous driving like? What can it do for me in that respect? Then what can it do with connectivity and to the mobile iPhone and everything I need to do?
Then what can it do further down the line? Because they know it drives well. They know how it's going to drive. It's going to drive superbly. Take away the emotive side of driving a petrol car, an EV drives better. There's no question about it. They've latched onto it. Of course, they get the early adopters, a technology curve. The early adopters love all that. We're almost getting out of that phase now into where we need to get into the mass market. That's the struggle that everybody's got at the moment. I think that's why I call a reference. We don't have them, but BYD. BYD with their commitment, their spending marketing. The speed. The speed and scale.
I think there are 100 dealer points now or something. It could even be more JCO emodors. The same sort of thing. They are advertising Chinese brands for everybody. So hence, once they've conquered that and they become a brand name, the gateway for other Chinese brands is huge. Not just some will stick in some way. It's picking the right winner, I suppose. The other thing, Donald Trump this week has just said there's going to be 25% tariffs on all cars going into America. Surely, if you're a Chinese OEM, you'd have to be looking at Europe the rest of the world then, won't you? So are we just going to get more and more of a Chinese looking at this?
As you said, a golden opportunity for them. I think so. I think the way they're kind of talking about the understanding how the markets work, Europe, 35% tariff on Chinese brands. I think the reaction was, but that's okay, we'll build a factory in Europe then. That's not a problem. That's kind of their mentality. Of course, we are not putting tariffs on at the moment. We are clearly a target for them. I think it's bad for the UK motor industry. I think it's worth about $7 billion annually to us, the US market. I think that signifies another problem that we the OEMs have got to deal with because the cost of that level of business now will be huge.
It's going to be very interesting. Some of these Chinese brands I was in Ireland yesterday and X-Pang. They're talking about this flying car. I'm thinking this is like Jetsons or something like that. This is back to the future. This is now, Chris. It actually properly exists. I think it will pick you up from the airport in Dubai and fly you autonomously to the roof of your hotel. It's there and it exists. I'm not sure whether I'm getting it, but you're a flyer skipper. You might know. Not for me yet. I'd still like a bit of control over something flying to start with. Definitely interesting times with the Chinese coming. Well, sorry. We can't say that.
They're here now, aren't they? They really are here. I suppose it's picking the right winner as well because I'm sure some of you will fall to the wayside. Actually, having said that, people fall to wayside might be the French, the legacy manufacturers. I think there are a few brands. I don't think you can just say those with a small market share. I think those with a bigger market share may also be reconsidering their position in the UK and whether they want to operate in that market. I mean, we've got a static market for the next 12 months plus with, as you said, significantly more in France, but I haven't seen any of the targets for my current manufacturers have reduced.
There's got to be winners. There's got to be losers. It's navigating that to see who can make it stick. But that means you've got to have a strong portfolio of product coming through with a good dealer network with some profitability in there as well. To make it work, to make it stick, you've got to have all that. It's no good having a brand with huge market aspirations, but not the product to back it up because that's been eroded almost on a daily basis. There's something I'm not really sure about. Most of our legacy manufacturers will have NSEs, national sales companies there, but I'm sure some of these semi brands coming in, more of them will look at importers to distribute their product.
Do you see any difference yourself dealing with an importer as opposed to the manufacturer owned subsidiary when it comes to support, strategy, flexibility? I'm just not sure of the difference. Is there a difference? There's a considerable difference depending on the brand. You tend to have less reliance on somebody talking about market share. The traditional OEMs and national sales companies are very wrapped up in market share all the time. The import model tends to be more about how many cars can we sell in a showroom that has let's just say a cost basis far more aligned to selling less cars. The traditional legacy model big showrooms, big overheads, lots of product around you stocking wholesaling costs, demos, curtsy cars, all of the above.
That's great if you've got volume and it's great if you've got margin. The difference is when you talk to an import model, it's less margin, it's a less opportunity to make money, but significantly less overheads currently. That's the trade off. They're very, very in tune to their network in as much as they like the feedback of what works and what doesn't work and they take that on board. The product, as you say, is picking the right product for the right location. It's in one size fits all. If I've got an empty showroom somewhere, putting a brand in there, whether it be a traditional model or an import model is a bit of a no-brainer. If I'm building a new showroom and the cost of land and the overheads and building it and all the associated cost base, then I've got to make sure I've got a return on that and in order to do that, I need volume.
But it isn't a one size fits all you. It's about what have I got, what footprint have I got, what space have I got and what does that look like in the future? Because there's no point in building something now or putting something into a showroom now. If the commitment five years down the line plus is, I know you've got other sodas facility and it's going to be you've got to think about, does this work in the future? But also, what's my return on the investment? How many cars do I have to sell in order to pay for what I've just done? And that's always been my first port of course, right? In order to make this work, when do I get a return on this?
And then I, an import model, albeit lower margins, lower volumes, it's a lower cost base, you tend to get probably a return a lot quicker out of that model than you would a traditional one. Okay. Can we talk about the new and maybe used car market going forward in 2025? I suppose let's look at new cars first. It's been turbulent, supply and change, issues we've gone through. We all know that semiconductors and all that, shift towards EV 28% for people again, not in the UK market. 28% of vehicles have to be bad battery electric vehicles. There's more demand for that. What's the landscape look like for new car sales? And what are the opportunities I suppose for Wessex between now and the end of the year?
The landscape looks turbulent. And I said it, I think at the beginning of last year, and I'll say it probably again this time, I think when you get into the last quarter of this year, it looks like a bloodbath of everybody fighting for that. I think the manufacturers are reacting quicker. They're trying to control it. We are seeing targets revolving and margin and revolving around EV share, which is, I guess in some way, disappointment, but it disappointed, but it isn't a necessity from a manufacturer point of view. But it almost seems that we don't make the cars. The manufacturers make the cars. The government has made a statement of where it wants to be. And now achieving that seems to be down to us to deal a network.
But we don't make the cars and we don't, we didn't create the Z mandate. And mandates don't create markets. It's an old phrase that's been used over and over again. But it is never true in this circumstances. We're in an immature market with EV, and we're pushing product in there, down channels that may not necessarily be the right thing to do at the right time. The the motorbility market is a good example of, well, EVs are being pushed into that and it's not always the right thing to do. On top of that, we're still in this flux of having ice vehicles and EVs and every bit of product in between. So our training historically has been about, let's train everybody on product about EVs, sorry about ice cars, then we've trained them on hybrids and then we bought in more training on plug-in hybrids and then we bought in mild hybrids and now we bring in EVs.
And what we're doing is stacking training on training on training, which you will have seen in your industry. The requirements for you to train at different areas is completely different. So we're expecting different things from our sales teams today than we, that we expected before. We have to change our pay plans to reflect EV sales. But in the old days, that may have worked because we have a legacy of historically good, hungry sales people that have been in the industry for a long time. And COVID changed all that. It was a turning point for the business. So we've ended up recruiting from the next, I'm not sure what Jen we're on now, but is, I can't keep up with it.
Jen Z. Yeah. So these people have a different work ethic, they differ different expectations. And they're not motivated by the same things that motivated me when I was selling cars or you when you were selling cars. It's a different world out there. So our training has to change completely as to how we do this, how are we going to achieve our volumes to satisfy a manufacturer target in order for us to earn money with the resource that we've got around us. And I think it's one of the biggest challenges that we've got is trying to figure out today how we motivate the people on the ground to deliver a result that we and the manufacturer we want.
And it cannot just be traditional training because they don't necessarily react or respond in the same way to traditional training that we might have done. So it's an interesting market, that's for sure. Jamie Tworkowski Our training has evolved completely out-hatching because we have the YouTube generation we train nowadays. And there's to be short chunks like ourselves fitness program. But the other thing as well, I see with the young generation and I listen, I've got a 21-year-old and an 18-year-old. So I see firsthand the difference. But if you just take EVs, you're an advocate of EV. I am because we have home charging, we charge at home, you can charge at the dealership. But you get these 21-year-old kids there that don't have access to home charging.
Some of our salespeople are still thinking, ah, EV is a load of crap. And it's not until they get in there and experience it and see how good it can actually be to come down in the morning. And the cars are full all the time when they jump in and how easy it is. It's that's quite a challenge with the new generation of salespeople, I suppose. Jamie Tworkowski Yeah, not only is it full, it's also warm because it warmed it up and defrosted, isn't it? And that's one thing. If there's one bad thing for an EV, that's it. But yeah, I think experiencing the product is one thing. Understanding this huge ratio of EV customers being, they're not brand loyal, they're brand agnostic now.
So I think it's, I think at the latest auto trader stats, they're talking about it's a 20% brand loyalty thing with EVs as opposed to a 50, 60% with a traditional ice vehicle. So we're seeing different customers from different brands all the time that that different experiences. And even our brands have changed. We're 20 years with Kia as a brand. Our first cars were Kia Pride, they were $4,995, I think we were selling them for. We're selling 75,000 pound EV9s now. And we're in the range of territory. Jamie Tworkowski But not just that, there's EV3, EV6, 4, 5, 7, I can't keep up with it. The range that Kia has there is immense. Jamie Tworkowski And that's not just Kia, that's across many, many brands.
And of course, we will inevitably get people comparing our brands to every other brand that's in the marketplace. I think what you've got with a brand like Kia and I think I have to agree as well, you've got you've got good EV products when they do come in. If we are the first point of contact, we've got a better chance of retaining that customer than anybody else. But we've probably only got one chance of doing it. Because once they leave or once they, we lose contact with them, they then compare them with every other brand. And getting them into that sort of state of mind is still being brand loyal and they should be brand loyal because we've got, as you say, we'll have EV2 soon, EV2, EV3, EV4 or 5 comes out soon.
We've got EV6, we've got EV9. Now, that's just in the Kia brand. We've got Nero EV as well. Where do you want to stop with it? We'll have a reason to keep them. But when they come in and you've only got one EV to show them or two EVs in the range, then they may not have the car they want an SUV and you haven't got an SUV that's an EV, you've lost that customer, that customer's gone. So the speed of getting new products to market is essential for the new car market. If manufacturers want to keep market share, then they've got to give us a product that we need around us to keep that market share and retain next customers because that's what makes the franchise is viable for one of the better worth is our business is about customer retention.
That's one of the tools that we need for customer retention. So let's talk about use cars now. So we know that the amount of new cars sold a few years ago was significantly less because of semiconductors, we couldn't get the cars, supply chains and so forth. The knock on effect has to be use cars. How many millions of cars less have we got to sell now in 2025 there? Can I get your views on the state of the use car market then? And what's going to happen with supply pricing then? It's still going to be high if we haven't got them, customer demand. Can I get your views on what's going to happen in the use car market?
Yeah, it's as interesting as a new car market to be honest and to a point from Aids a bit of an enigma to me sometimes. I think that in answer to your question, the number of three or the number of less cars on the road, three to five years old currently today is about three million. Three million. So in my view, first of all, that's three million less customers that we're seeing in our service departments. Well, of course, I didn't think about that. Of course, you know, across the UK, I'm talking. That's three million less three to five year old cars that we can resolice it to get back in to buy their next car because they're out of that cycle or they were never in that cycle.
But that's three million less three to five year old cars that we can buy and sell. And as main dealers, that tends to be bread and butter stuff. That's what we're dealing. So there's been, I guess, a trend towards expanding the range and age of cars that you're selling in order to make up that deficit of cars. We've seen that and inevitably, that's pushing up the price that we're having to pay to buy that stock because everybody wants three to five year old cars in the marketplace at the moment. Interestingly, I think, digressing slightly, I think the last quarter three year old EVs were the fastest selling new car on all-to-trader. So that's the kind of that tells you where that shifted and the reason is because they're cheap.
Yeah, when it gets to that price point, customers like the EVs when the price points right, when the price points right, absolutely. So price parity is huge, but we're digressing. But the bit I constantly question, I constantly can't see this, is the disparity between what we have to pay for a price for a used car today, if we're buying it through auctions or through manufacturers, it doesn't matter. We are paying cap plus. But we are not seeing retail prices increase by the same amount. So you're not seeing the cap retail price or the market retail price. And you can argue that we set the retail price because we put the price on auto-trader and therefore that's how they get the data.
We're not seeing that price significantly increase at the same level that we are paying for cars. So we are having a margin squeezed turnover is great. We're selling, we measure our cars. I think we're currently set about 67, 68% of our stock is sold in the first 45 days. And that's a critical measurement for us because we want to know that's where the sweet spot is. That's where we make the most money. So we're turning cars faster. Our stock turn is higher. The cars we do get we sell, but the market is still suppressed in terms of the retail price of that product. And I struggle to understand that. It's always lags behind it. And the only thing I can put it down to is that the market is real lining.
Retail pricing is real lining to where we were pre-COVID. When pre-COVID every used car we sold at an absolute premium. And retail prices were through the roof because you couldn't get cars. Everybody wanted cars because they weren't using public transport. They weren't necessarily looking at a new car because we couldn't get them. So everybody wanted used cars and the prices went through the roof. And simply everybody had it away. It was a boom time. I think we're seeing, or we are seeing an absolute realignment of the market to post-COVID times. But combined with a shortage of used cars currently in the sweet spot of three to five years. So it's great. The use car market is buoyant at the moment.
I don't speak to anybody that doesn't say it's a really strong used car market at the minute. But the challenge will remain getting the right stop. So you've got to try and figure out where you're going to get the stop from, which means that you've got to start converting people into workshops and bring their cars in for service and buying those cars. That just leads me to say that all details of this episode and other episodes on the selling in the Motor Trade can be found on our website simcotraining.co.uk. Go there to get a copy of our book Words That Sell Cars. Go there to sign up to a free trial of our sales fitness online sales training program.
Easiest way to get hold of me is Simon Bowkett through LinkedIn. Thank you.
