Just two weeks after our last communication the used car market globally has changed again very dramatically.
The Covid-19 pandemic is affecting the majority of our countries and we are doing all we can to provide help and support to our colleagues, vendors and buyers.
Busy online platforms
Our online platforms have been very busy during the pandemic, but in some countries where the logistics businesses have been forced to close, we have had challenges in delivering vehicles.
We have launched Market Watch to help remarketing professionals make some sense of how used markets are responding to regional challenges.
Free market data and analysis
The data and analysis are free during the next few months so please take advantage and apply to receive either the Market Watch PDF or gain access to the online web portal.
Any insight or trend you can gain in these coming weeks will be highly valuable to your business, as will our Director of Marketplace, Morten Holmsten’s insight into cross border trends for diesels which we also feature in this newsletter.
Don’t hesitate to get in touch with any of my colleagues around the world if you need further help or support and please stay safe.
Peter
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NEWS
Introduction from Peter
Cross border trends show diesel cars are still in demand
There had been no ‘significant change’ in total demand for used diesel cars across the global automotive market before the Covid-19 pandemic, despite local legislation having a regional impact, according to INDICATA data.
With some cities across the world banning the use of older diesel powertrains and, in certain cases, the complete ban of internal combustion engines, local demand has been disrupted. Yet, with supply and demand ultimately driven by vehicle owners – the overall impact on used diesel car sales globally is proving to be slow.
Consumers have become unsure about buying used diesels
“Of course, with all the media attention in recent years in some regions, consumers have become more unsure about buying a diesel vehicle – especially when politicians talk about excluding them from the big cities. However, at the same time right now consumers are just as untrusting of alternative powertrains,” explained Morten Holmsten, global business unit director, Autorola Marketplace.
With demand at a country-by-country level very much controlled by the local legislation, INDICATA data highlights that older diesel cars, especially, are being exported from Germany to countries like Ukraine, Poland and the Baltic countries where demand is greater.
Cross border is influenced by three key areas
According to Morten, such cross-border activity, is influenced by three key areas:
• Price gaps between the markets
• Shortage of used cars in a market
• Neighbouring countries trading arrangements
Also, influential but slightly less significant in terms of volumes, is the ‘the right car at the right time’ requirement of dealers.
“An example of these market dynamics at play is Portugal which has had a shortage of late used cars in the market, caused by reduced new registrations in the years after the financial crisis. This led to an extraordinary movement of vehicles to the country,” explained Morten.
Increased used prices in Spain
“Something similar has been seen in Spain, where increased prices in the Spanish market made it more attractive to import vehicles and less attractive to buy cars from Spain.”
Local legislation, according to Morten, is going to be the key driver of used vehicle market behaviour in the future – and not just in relation to diesel. Already the EV market looks set to be a key one for cross border activity in the future.
Morten said: “We can see that local tax benefits for EVs are already having an impact on registrations, such as in the Netherlands at the end of 2019 on new cars and, in early 2020 on company cars in Denmark.
EVs will be the next export trend in future years
“We will probably see an increased number of exported EVs from the Netherlands three to four years from now, simply due to the extraordinary number of new registered EVs in December 2019,” said Morten.
For more information, please contact Morten Holmsten, Mobile: + 45 40 97 31 00, Email: mh@autorola.com
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INDICATA launches free Market Watch used data in 13 countries
INDICATA has announced the launch of Market Watch, a two-tier free data source for remarketing professionals.
Market Watch features used car market volumes and pricing data in 13 individual countries and provides ongoing analysis and trends at macro and micro level to help manage issues such as the current Covid-19 pandemic.
Market Watch is available as a:
• Regular PDF hosted on individual INDICATA country websites
• Web-based market reporting tool for leasing, rental, OEM and dealer group decision makers
Market Watch has published its most recent data analysis focusing on the impact on used car sales in 13 European countries during March and on used prices during March and April.
Used car sales trends – Europe (6-31 March)
Our graph shows the stark difference between the markets in full lockdown, and those with some residual used car trading. Indexing from week one in March, the resilience of Sweden retaining 80% of its used car volumes and Turkey, Netherlands and Denmark (66% of volumes) contrasts with the lockdown countries where sales have dramatically fallen towards zero.
Used car price changes – Europe (1 Feb–3 April)
Our table shows how prices have changed between 1 February – 3 April using the INDICATA Market Watch benchmark car basket. The Netherlands used car pricing split by segment reinforces the power of Market Watch at a micro level.
The first interesting observation is the lack of overall price movement in some countries and a correlation with the introduction in social distancing.
Looking at UK, Spain, Austria, Italy and France, who went into lockdown with the fastest measures, dealers had minimal time to react before closure and experienced the fewest number of price changes.
Dealers had more time to react to market changes
Denmark, Belgium, Netherlands and Sweden progressed more slowly into social distancing and their volume falls were slower than other countries. As a result, dealers had time to react to market conditions by dropping prices.
Market Watch also looks at individual country data by sector or fuel type. For instance, small cars in the Netherlands sustained values initially better than larger vehicles, both from a € value and a percentage, typical of a market slide.
Turkey’s market price bubble
Turkey’s 7.5% rise appears to show remarkable growth, however, if we overlaid recent market growth rates, we would have expected a 10% rise. A move to used cars as ‘a safe asset’ fuelled by a new car sales fall and relatively cheap consumer finance potentially creates a market price bubble.
“Market Watch gives further support to the used car industry to help make sense of how to manage the impact of Covid-19. Our PDF and web portal provide used car decision makers with the best real time data to help build a short term and long-term strategy to efficiently manage used car supply and demand,” explained Andy Shields, INDICATA’s global business unit director.
Go to www.indicata.com/corona to sign up to your free PDF or web-based data feed.
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