Vertu warns of ‘potential volatility’ in market due to ZEV targets

Vertu Motors reported a strong trading performance for the three months to May with like-for-like new car retail sales business up 6.8%.

The increased volumes included low margin Motability business which saw margins reduced to 7.4% compared to 8.1% last year.

Fleet and commercial vehicle like-for-like volume growth of 6.4% while used sales rose 6.7% on a like-for-like basis.

Services revenues grew 10.1% like-for-like compared to prior year, in part benefiting from investment in technician resource.

Vertu warned that the ZEV Mandate could distort the new car market as OEMs strive to hit BEV sales targets, echoing the results of a survey published yesterday by the NFDA.

“The Zero Emission Mandate to force the uptake of zero emission vehicles sold in the UK has the potential to create volatility in the new car market. This may include reduced supply of new petrol and diesel cars in the coming periods and would lead to a strengthening of petrol and diesel used car values.

Vertu hinted at possible acquisition opportunities in the offing, describing the market as “very fragmented” and alluding to its 5% share of the market.

Robert Forrester, chief executive officer of Vertu Motors, said: “I am pleased to report that trading remains positive. Used car pricing has remained stable and we have gained market share in the new retail and Motability car market and delivered strong like-for-like volume growth.”