Editor's choice
9 Jun 20

Used-car market almost back to 2019 levels

By the last week of May, used-car sales volumes across Europe had recovered almost to 2019 levels. “Remarkable enough – but our biggest surprise was the dramatic switch away from diesel,” says Andy Shields, global business unit director at INDICATA.

For its fifth Market Watch report since the beginning of the pandemic, INDICATA, the business intelligence provider for online vehicle remarketing, focused on May – noticing a remarkable recovery towards the end of that month across the 13 markets surveyed. 

Swift recovery

  • In Portugal (+20.9%), Poland (+19.6%) and Denmark (+14.3%), sales were up considerably over previous May. 
  • Sales were static to slightly down in Turkey (+0.9%), the Netherlands (-1.2%), Sweden (-2.4%), Austria (-3.3%), Germany (-4%) and Italy (-4.5%).
  • Still way down: Belgium (-14.1%), France (-40%) and the UK (-56.9%). 

All added up, that means that retail used-car sales for the entire month of May were down 17% compared to the same month last year. However, figures for the last week of May were down only 9% year-on-year. Considering the many market obstacles still in place in the ‘New Normal’, that’s a remarkably swift recovery. 

Fuel types
The recovery is not a tide that lifts all boats. Sales of used diesels are down dramatically (-25.9%), used petrol cars are down less (-11.3%), but used electric and hybrid cars are up (+32.5% and +32.7%, respectively).

  • Even in diesel-driven markets like Germany and Belgium, used diesel sales in May were down 17% and 19% year-on-year, respectively. 
  • The only exception is the UK, where there is no marked movement from diesel to more environmental fuels. 

Categories
Confirming a trend noticed in earlier Market Watches, INDICATA notices that many consumers are treating themselves to nicer used cars than they would perhaps otherwise have bought. 

  • The demand for sports and luxury cars is increasing.
  • On the other hand, the demand for older and larger executive cars is falling.

Dealers
So, used-car sales are relatively strong. Nevertheless, dealers have not splashed out on replacing sold stock. Whilst this is understandable as a move to protect cashflow, it is not a sustainable strategy, INDICATA warns. 

  • Belgium is bucking the trend, with dealers buying used cars in large volumes (thus fuelling the wholesale market). 

Prices
In markets that have reopened, used-car prices have remained firm. 

  • Across most markets, dealers are keeping their nerve and are not panic-selling stock.
  • In markets that have been less locked down, prices have been falling – nowhere more so than in Sweden (-4.2%).

Biggest surprise
“The volume recovery across Europe is remarkable, even more so given that key markets like the UK have had their dealerships close for 10 weeks,” says Andy Shields. 

“That relatively high volumes being achieved in these markets shows how much change to their buying journey consumers are prepared to face, by doing more research online before visiting a dealer, and by completing the transaction online too.”

The biggest surprise in May was the strong move away from diesel, Mr Shields adds, but: “Whether this is a short-term shift in behaviour or a long-term trend, we’ll have to see. This is one to keep a careful eye on.”

To read INDICATA’s latest Market Watch report in full, go to indicata.com/corona.

Authored by: Frank Jacobs