Motorpoint warns car sales likely to dip as households tighten budgets this year
Online car retailer Motorpoint has warned that inflationary pressures will mean a drop in consumers buying used cars this year while supply chain disruption will continue to bite.
The London-listed company said consumers were under “increasing pressure” to cut back on discretionary spending, with inflation at a 40-year high.
“This position has worsened since the start of our new financial year. This is very likely to reduce overall sales and transactions in our markets,” the used-car seller warned.
It also warned that rising inflation and worldwide vehicle supply chain challenges were “likely to continue to affect our markets and all industry participants.”
It comes as the firm posted a booming profit increase, with profit before tax up 122 per cent to £21.5m, versus £9.7m in 2021.
Supply chain shortages would also continue to “limit new car production in the near term, which in turn constrains the supply of used cars that fit our nearly new criteria.”
In final results on Wednesday, Motorpoint added: “The precise extent to which these factors will impact consumer behaviour and our markets is increasingly difficult to predict.”
The firm had a “strong track record of gaining market share in difficult times”, owing to competitive prices.