Used car boom drives up Carsales share price
A surge in demand for used cars is helping Carsales navigate the recession as budget-minded commuters seek to avoid public transport in a post-COVID world.
Carsales’ latest trading update was well received by the market, with booming used car sales helping offset plunging new vehicle listings.
Carsales’ stock climbed 6.2% and finished the session at $18.00, only about 5% down on its pre-COVID trading price, despite Carsales forecasting a decline in net profit of between 6 to 9 per cent for FY 2020.
Speaking with Money News host Brooke Corte, Carsales CEO Cameron McIntyre says trading conditions for car yards were dire in mid-March as the lockdown came into effect before picking back up in April.
“There does seem to definitely be an element of car purchasing that is related to nervousness around public transport as a result of COVID-19,
“We’ve seen people entering the market and buying their first car, or maybe their first car in a while, or families might be adding a second car and as a result, it’s putting pressure on the inventory levels on our site because more cars are being bought than being sold at the moment,”
Click play to hear the full conversation between Brooke Corte and Cameron McIntyre: