AutoTrader warns of multimillion pound lockdown losses

Online car trading marketplace AutoTrader today warned it is to make up to £7 million in operating losses next month.

The latest lockdown has shuttered car showrooms and the FTSE 100 firm said it will offer free listings in February - as it did in December - at a cost of £5-7 million per month to the business. 

AutoTrader said that momentum had remained strong through the third quarter - with site visits up 20% on the prior year between October and December. But it now expects lockdowns to impact sales volumes in January and February.

In a trading update, the firm said its balance sheet remains strong, despite the anticipated losses in this quarter.

It came as the UK car industry reported that 2020 saw the sector’s worst annual sales drop since 1943. 

Figures released by industry trade body, The Society of Motor Manufacturers and Traders, showed that new car sales in the UK fell by nearly 30% to £1.63 million last year. In 1943, they plunged by 90% as efforts were directed to the Second World War fight.

Last year was also the first time the number of new cars sold fell to below 2 million since the height of the financial crash in 2009, and the worst car sales year since 1992.