Vertu ZEV warns of “potential volatility” in market due to ZEV targets

Vertu Motors reported a strong trading performance with car retail sales business up 6.8% for the three months to May for like-for-like. Commercial vehicle and fleet like-for-like had a volume growth of 6.4% while used sales rose 6.7% on a like-for-like basis.

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

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

Vertu warned that the ZEV Mandate could distort the new car market as OEMs endeavour to reach BEV sales targets, reflecting an NFDA report published yesterday.

“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.”

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.”

Forrester suggested possible acquisition opportunities are likely to happen, and described the market as “very fragmented” alluding to its 5% share of the market.