Motorpoint issues profit warning as car prices slump

Motorpoint, the Derby car retailer, has issued a profit warning after it reported that a sharp downward turn into used car prices – coupled with the costs of clearing up the recent flooding of its premises in the city – has hit its bottom line.

The company said this morning (January 26) in a third quarter trading update that profits are likely to be £5-6m lower than expected.

Motorpoint added a reduction in average selling price from £19,750 at start of financial year to £14,500 currently.

Mark Carpenter, chief executive officer of Motorpoint Group, said: “I have previously commented on Motorpoint’s agility and resilience in difficult times, and that I am confident the Group will emerge from this depressed consumer environment a much more efficient business. Now, at last, there are signs that the macroeconomic headwinds are easing, leading to renewed consumer confidence. As a result, the market size is expected to increase as demand grows, and supply is bolstered by new car registrations feeding into the used car market.

“The actions already taken to right size the business, protect cash and improve unit economics, mean that Motorpoint is well placed to seize the significant growth opportunity despite this correction in used car values. I therefore look forward with renewed optimism and am excited as to what the business can achieve in FY25 and beyond.”