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In the used car market of Europe’s top five countries (Germany, United Kingdom, France, Italy and Spain) plus Belgium, you can see from the INDICATA data in the chart above that used diesel car sales have been steadily losing market share to petrol cars since July 2019. When you factor in our other article on new car sales trends, supply will significantly reduce over the coming months and years but using INDICATA data we can see that demand is still there.
Used diesel car sales appeared to close the gap a little in September mainly due to used diesel fleet vehicles in the used car market. Petrol has now reversed the move to diesel and shows no sign of losing the top position in the next 4-5 years.
Gap between used diesel and petrol sales grows
The gap between used diesel and used petrol car sales was 1:1.01 in October 2018 according to INDICATA. Just one year later and it is 1:1.10 a 9% increase in just 12 months. The ratio is set to continue to widen, driven by the reduced supply from the new car market, but also due to demand changes, particularly amongst buyers of younger used vehicles who are making similar decisions on powertrain to new car buyers, particularly where they live near the growing number of clean air zones.
The total online B2C used car market is up 9.4% in October year-on-year. Despite diesel losing market share it still saw a 4.2% increase in volume with used petrol car sales up 13.1% over the same period.
Used hybrid sales grow by an additional 8,742 cars
The growth in new hybrid sales over the last few years is also now impacting the used car market with hybrid sales up from a 1.6% market share in October 2018 to 2.2% one year later. In volume terms that’s an increase of 50.3% or an additional 8,742 used hybrid cars.
With new car sales of Plug-in Hybrid Electric Vehicles (PHEVs) falling we could see used PHEV values starting to rise as increased demand is met with a reduced supply.
Used EVs volumes rise by 55.5%
Over the last 12 months EVs haven’t managed to take more than a 0.4% market share. Whilst there is only a relatively small supply of used EVs available, due to limited sales in the new car market, the reality seems to be that demand is also low. In growth terms the volume of EVs sold in the online B2C used car market has risen by 55.5%, but that still equates to just 5,195 cars sold across the six countries in October 2019.
We have seen the new car market hit by yet more bad diesel media coverage and legislative actions but INDICATA’s data is showing demand for used diesel cars remains strong. You will need to subscribe to INDICATA’s data to get the full lowdown but used diesel car sales are rising.
Used diesel prices are actually outperforming used petrol prices over the last 12 months in Germany, France, Spain and Belgium, and in all six markets reviewed in this article used diesel car stock levels are selling faster than used petrol car stock.
European used diesel supply falls while hybrid and EV demand and supply continues to grow
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Andy Shields appointed as INDICATA’s new business unit director
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Andy Shields has been appointed as business unit director of INDICATA, the global leaders in used vehicle pricing and market analysis.
Andy will have responsibility for INDICATA which is currently in 14 countries.
Andy said, ‘I am very familiar with INDICATA having used it extensively throughout my career both during my time at Avis Europe and whilst consulting for OEMs and major dealer groups.’
Supporting asset managers implement change
‘As a global leader in real time, used car pricing it is not just about data provision but supporting asset managers to implement ongoing pricing management, where the whole organisation embraces and executes it from sales executives to the CEO,’ he added.
Full data integration with Sofico
Andy recently supported VW Bank GmbH leasing company VWFS Ireland’s adoption of Sofico’s Miles lease management system.
Andy said: ‘As I join INDICATA, I am delighted we have announced full data integration into Sofico across all 14 countries. This contributes real time pricing insights at individual vehicle and portfolio levels for Sofico leasing and finance customers.’
Prior to joining INDICATA, Andy held roles such as director of fleet and remarketing at Avis Europe, VP sales and supply for an online car supermarket, and spent 10 years consulting for OEMs, dealer groups and leasing companies.
INDICATA transforms used-car decision making power
Peter Grøftehauge, Autorola Group’s CEO said: “INDICATA has made excellent inroads into providing data that transforms company’s business revenues and used car decision-making power.
‘Andy’s vast experience in used cars, e-commerce and finance means he has a perfect combination of skills for his new role as head of INDICATA.”
For more information, please contact Andrew Shields, Business , Mobile: +44 0 77 75 844 311, Email: firstname.lastname@example.org
Tracking the new car winners and losers across Europe by fuel type
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In the first 9 months of 2019 Battery Electric Vehicle (BEV) sales grew in Europe by 93.1% but this still equates to just 2.1% of the total new car market. Hybrid vehicles have also grown by a healthy 42.7% in the first half of 2019 and now account for just over 5.5% of new car sales.
Other powertrains such as Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) have seen their market share hold at around 1.6%, mainly due to its popularity in Italy. However, Plug-in Hybrid EVs (PHEVs) have seen sales drop by 12.7%, accounting for just 1% of the new car market across Europe for the first 9 months of 2019. The decline in demand from fleet operators is part of the reason.
Fleets see increased costs of fuelling PHEVs
Several countries have or had a beneficial taxation system for company drivers choosing a PHEV over a diesel vehicle, making them a popular choice from a personal perspective. However, fleet operators noticed a significant increase in fuel costs as drivers were commonly not charging them, just using them as a petrol vehicle. This meant cars were performing worse than a straight petrol version of the car as the PHEV also boasted added battery weight.
Feedback from auction houses like Autorola confirmed that many PHEVs were coming off fleet having never been charged and with the charging cable still in its original sealed bag.
Bristol city centre moves sets a worrying precedent
On 5th November the UK port town of Bristol became Europe’s first city to approve a ban on all privately-owned diesel cars from 2021 between the hours of 7am and 3pm every day.
Whilst Clean Air Zones (CAZs) are appearing across Europe, the difference here is that the local council has not distinguished the considerable difference between old, high emission diesels of the past and new, clean, Euro 6 engines with little to no NOx and low CO2 emissions. The full details of the fines and charges have yet to be published but the ban includes parts of the city centre as well as the nearby M32 motorway.
We will need to wait until February 2020 to see if the national government approves the business plan, which is predicted to cost £113.5 million, but it does set a worrying precedent.
INDICATA sees impact on new and used diesel market
Some cities already have bans or restrictions on older diesel cars, pre-Euro 6, whilst Oslo has legislation in place to ban all diesel cars from certain roads on days with acute levels of air pollution. This progression to a blanket ban on all diesels will impact the new and used diesel car market as INDICATA data is seeing.
Despite reports and data about how clean the latest Euro 6 diesel engines are, the press continues to use the phrase “Dirty Diesel” with gusto, whilst politicians and lobbyists continue to talk about introducing more clean air zones. The message received by many drivers and consumers is a clear one to “not buy diesel.”
The high-level view is that drivers would choose electric or hybrid vehicles, the reality is most lost diesel sales have gone to petrol engine cars.
European used EV/hybrid stock levels rise while diesel stocks fall
The increased number of new hybrid and EV cars registered over the past few years is now flowing through into the used car market according to the latest market insights data from Indicata for the five largest European countries plus Belgium.
Stock levels of hybrids have jumped 72% in the last twelve months whilst EV stock levels have more than doubled, jumping 220% although both are seeing longer stocking days as demand fails to keep up with supply.
Used diesels/petrol demand outweighs EVs/hybrids
When combining Indicata sales and stock data there is good EV and hybrid availability, but demand remains strongest for the traditional internal combustion engine.
Data from October 2018 to September 2019 shows online B2C used car stock levels are up 4.9% across all powertrains in September 2019 compared to the same period last year.
Dealers de-stock used diesels at a fast rate
Dealers appear to be de-stocking used diesel cars at a faster rate than demand is changing, but diesel remains the fastest selling powertrain. Used petrol car stock has also risen by 14% as dealers move away from used diesels.
Used car prices and demand for used diesels is still relatively strong according to Indicata, however, dealer stock levels are down 7.5% in September 2019 compared with 2018.
Petrol accounts for 51.6% of used stock
Used diesel cars now comprise just 43.8% of online B2C used car stock, versus 49.7% 12 months ago while used petrol car stock now accounts for 51.6% of Europe’s total used stock.
While it may seem a logical move for dealers to de-stock used diesel cars the reality is there are only enough used diesel cars to cover 58.9 days of demand at current run rates compared to 63.1 days of used petrol cars.
INDICATA tracking used car markets across Europe
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Whilst the five largest car markets are key countries to track across the industry for the major international automotive companies, it is also worth monitoring trends across the rest of Europe. A sneak preview at INDICATA’s average stock days by age across multiple markets shows the diversity of stock across Europe.
The next three largest car markets in Europe after the big five and in order of forecast new car sales for 2019 are Poland, Belgium and the Netherlands where a combined 1.46 million new cars are likely to be sold this year, which is more than Spain. These three countries account for significant amounts of used car exports and, in the case of Poland, also imports across the whole of Europe.
Considerable disparity across smaller markets
There is considerable disparity across these smaller markets. Austria, the Netherlands and Sweden have significant levels of younger aged stock of one to two-year-old used vehicles compared to Belgium and Poland where it is the 25 to 36-month-old vehicles which are currently proving the hardest to sell.
Before considering cross-border trading between any market it is a key requirement to understand if you are moving stock into or out of a country at the right time. Whilst you may consider this is possible to do at a very high level, the INDICATA data shows that once you start dissecting different markets by vehicle age, segment type, fuel, body style and make or model mistakes can be made, and opportunities missed.
The daily rental market in Spain and the fleet markets in countries like Belgium, the Netherlands and the UK export tens and even hundreds of thousands of used cars each year and identifying where the biggest demand could be for a particular vehicle could transform a company’s bottom line profitability.
Used car sales outperforming new car sales across Europe’s big five car markets
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Car buyers are switching to buying newer used cars instead of new according to the INDICATA database.
To June 2019 new car sales had fallen in nine of the previous 10 months, with just a miserly 0.1% positive movement in May 2019 being the only glimmer of hope across the 28 European member states and the European Free Trade Agreement countries of Iceland, Norway and Switzerland.
However, used car sales across all five major European car markets grew by 8.2% for the period January to July 2019 compared to the same period in 2018. France has seen the biggest rate if increase, up 14.6%, followed the UK (+9.2%), Spain (+7.0%), Germany (+5.8%) and Italy (+3.6%).
Used car sales outstripping new
Over the first seven months of 2018 online B2C used car sales were achieving parity with sales of new cars across Europe’s five largest car markets, with 7.14 million new cars registered compared to 7.15 million used car sales. One year later and used car sales are now 10% higher than new car sales with 7.74 million online B2C used cars sold in the first seven months of 2019 versus 7.01 million new cars over the same period.
The widening gap between new car sales and used car sales started in September 2018 when the introduction of the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) saw new car sales collapse. Used car sales also started to rise from January 2019, increasing in volume terms by an average 8.4% per month between January and July. Despite new car sales rising by 0.9% across the five biggest car markets in Europe in July, used car sales leapt by 20.9% according to the latest INDICATA data.
Spanish market on road to recovery
Focusing on specific markets, a weak quarter one (Q1) of online B2C used car sales in Spain was compensated for by a strong second quarter (Q2) which saw sales rise 32.1% over Q1 2019 and up 19.3% over Q2 2018. The recovery was not quite enough to put the Spanish used car market back into growth though and for the first half of 2019 it was still down 2.6%, but an even stronger July meant total online B2C used car sales in Spain were up seven per cent.
July also saw strong used car sales growth in the remaining four markets with sales for the big five countries up 20.9% in total over July 2018. Germany saw online B2C used car sales rise by 26.2% in July 2019 compared to the same month last year, whilst France (+23.3%), the UK (+11.6%) and Italy (+10.8%) also saw strong increases for the month.
However, it should be remembered that July and August 2018 saw significant new car discounts being offered to clear out new cars which had not or could not be homologated in time for the introduction of WLTP in September, so the rate of growth should stabilise once we are past this period.
Market days’ supply sees double-digit decline as demand for used cars increases
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Car buyers switching from buying new cars to used cars across Europe are pushing down market days’ supply (MDS) for online business to consumer (B2C) used cars of all types, according to the latest data from INDICATA.
MDS measures the amount of used stock available across retailers in a country and compares that to the volume of sales. Therefore, if demand increases but stock levels stay the same the MDS falls because traders will sell out of their stock over a shorter timeframe.
Since the start of 2019 MDS in Spain has fallen 25.6% as supply for used vehicles is failing to keep up with demand. Despite online B2C used stock levels rising by 41.9% between January to July 2019, it is still not enough to meet the increasing demand from used car buyers looking for a more cost-effective way to change their cars.
Stock levels static whilst used demand increases
The increase in used car sales is having a similar effect across the major European used car markets with the remaining four markets all seeing total stock levels remain relatively static whilst used car demand increased. The highest and lowest stock movements for the big five markets, excluding Spain, were in Italy where online B2C used car stock levels rose by just 4.2% from January to July this year whilst the UK saw levels drop by 0.7% over the same period.
MDS fell 19% in Germany for all fuel types with the decline much sharper for used diesels. This indicates that dealers could be destocking diesel and switching their focus to selling used petrol cars a bit faster than used car buyers are changing their buying habits.
Germany and France impacted by transition from diesel to petrol
Online B2C used diesel car MDS in Germany stood at just 62.78 days in July this year which is the lowest level in the market since INDICATA started tracking MDS in this way and well below the average 78.61 days seen for 2018. In contrast MDS for online B2C used petrol cars stood at 77.31 days in July 2019 compared to a similar 76.81 days 2018 average.
France has seen MDS fall by 17.7% between January and June this year with MDS dropping from 61.77 days in January for the whole market to just 50.84 days by July 2019. Drilling down further into INDICATA’s data shows the French used dealer market seems to be handling the move to petrol from diesel in a more controlled fashion than Germany. Used petrol car MDS in France has increased by 4.2% since January 2019 and 12.4% since July 2018. In July 2019 it stood at 54.78 days whilst used diesel car MDS has dropped 28.7% since January and 22.8% down over the previous year and now stands at 47.09 days – a gap of just over seven days between both fuel types compared to over 14 days’ worth of stock in Germany.
UK limited by scale of right-hand drive markets
With the UK being the largest right-hand drive market in Europe it doesn’t have the flexibility to import and export used cars as freely as most of mainland Europe. Germany has increased its used diesel exports which is resulting in much lower MDS for used diesel cars, but the UK is limited due its scale over other right-hand drive markets. This limitation means it is only able to export around three per cent of all online B2C used car sales to countries like Ireland and Malta. Despite this MDS for both used petrol and used diesel vehicles have been on a par with each other since the end of 2017, standing at 42.47 days for used diesel cars and 42.0 days for used petrol cars.
Much of the 24 months to 48-month-old used stock comes from fleet and retail finance defleets many of which are diesel. Only recently INDICATA confirmed that petrol powertrains are proving to be “the UK’s top selling used cars during 2019” which might indicate concerns of a possible major disparity in supply and demand.
The fact is that whilst used car market demand is changing and becoming more petrol focused, the change is happening at a slower rate compared to the new car market, lagging behind by two to three years at the moment according to INDICATA’s database.
Used diesel car sales fall as supply from new car market drops
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How a vehicle performs in the used car market is a real determining factor in a new car sales success. If demand in the used marketplace dries up, then residual values collapse making the car unattractive in terms of financing and cost of ownership. This means it is the used car market which is the key driver for the new car market.
However, when legislators and the media distort the market, as it has done with the war on diesel, we can see the used car market being dictated by the new car market.
The war on diesel having an impact
New diesel car sales started to decline in 2011 when the introduction of Euro-5 emissions tests back in 2008 saw three-year-old used cars starting to suffer with clogging issues with the diesel particulate filter (DPF). The war on diesel and the announcement and introduction of various clean air zone (CAZ) charges and other tax changes in 2016 and 2017 have accelerated the rate of decline in new diesel car sales. The result is we are now seeing the supply of three-year-old used diesel cars coming back to the market reducing.
Used car buyers are generally more pragmatic when it comes to choosing their next car being less concerned about the latest trends and more focussed on finding a car to meet their daily needs. This has resulted in demand for used diesel cars remaining relatively strong with total online B2C used diesel car sales up three per cent for the first seven months of 2019 – hitting 3.74 million compared to 3.64 million for the same period last year.
Diesel outlook on downward trajectory
The outlook for used diesel cars is still following a downward trend though. According to INDICATA’s data, used diesel car sales lost their crown as the powertrain of choice in August 2018 and since then they have continued to lose market share to used petrol cars and, to a far lesser degree, to hybrids and electric vehicles.
Four of the five largest car markets saw a shift in market share from diesel to petrol of between 2.3% (Germany) and 3.4% (Spain) with the UK seeing a 2.5% switch and France a 2.8% movement between the two fuels. Italy continues to be the exception with 469,502 online B2C used diesel car sales recorded by INDICATA for the first seven months of 2019, a 4.7% increase over the same period in 2018 and increasing the diesel used car market share from 68% over that period last year to 68.3% this year. This is clearly why so many German used car dealers are seeing Italy as a good place to export their unwanted older diesel cars.
Petrol continues to be powertrain of choice
Online B2C used petrol cars continue to strengthen their place as the powertrain of choice across the other four markets though. Sales grew by 12.5% across the five largest markets combined, hitting 3.86 million units for the first seven months of this year, or up 13% excluding Italy. This situation is expected to continue for the next three to four years as the collapse of new diesel car sales continues to wash through to the used car market. This will leave used car buyers with little option but to buy used petrol or start to pay a premium for the limited supply of used diesel cars which will then be available by 2021-2022 and beyond.
Of course, this will cause a dilemma for politicians and lobbyists as this means we will see increased levels of CO2 being produced by the increasing volume of used petrol cars on the roads, which could cause more chaos for the automotive industry and car owners with yet more legislation.
Supply and demand provide ‘stability’ to diesel market
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The limited supply of diesel cars coming into the market is good news for sellers of used diesel cars. Whilst demand for new and used diesel cars are in decline, the fall is far less noticeable in the used car market.
When used diesel car demand is combined with the reduction in supply the net result is the price of online B2C used diesel cars generally remains stable across all markets, according to INDICATA. But this high-level view needs to be considered carefully and explored to truly understand what is going on.
Diesel used values not collapsing
What is clear from a high level is that diesel used car values are not collapsing. Even in Germany, where a review of INDICATA’s MDS showed German dealers as having cleared out more stock than they may have needed to, used diesel car prices are rising, up 2.8% on average in Q2 2019 versus Q2 2018. In fact, online B2C used diesel car prices have risen two per cent over the first seven months of 2019 compared to a 3.5% fall in average used petrol car prices.
Average online B2C used diesel car prices are also up in France (+3.1%) for Q2 2019 compared to the same period last year. Whilst used diesel car values have remained almost flat in 2019 with just a 0.2% increase from January to July the situation for average online B2C used petrol car prices follows a similar but more severe pattern to what is happening in Germany, dropping 6.4% in seven months.
UK diesel prices fall whilst petrol jumps
The UK has seen average used diesel car prices fall by 1.1% in Q2 2019 to an average of £14,848 per car compared to £15,026 per car last year, whilst used petrol car prices have jumped up 3.6% in the same quarter hitting an average of £13,114 per unit in Q2 2019.
In general France and Spain both continue to show online B2C used car prices for petrol cars outperforming diesel whilst the other three markets show average online B2C used diesel cars doing better.
Spanish market provides greater insight in changing dynamics
Taking a deep dive into INDICATA’s data in Spain gives a little more insight into the changing market dynamics and why you should consider looking deeper to specific models before drawing too many conclusions.
Whilst both the B and C segments in Spain have shown healthy increases in the average used petrol prices for cars, the situation for J segment petrol SUVs is far less dramatic.
By July 2019 used B segment petrol cars were at 104% of the index point from a year earlier, whilst used C segment petrol cars fared even better, hitting 107%. But used petrol SUVs only saw a one per cent increase in their index value over the same period.
INDICATA’s used diesel car index values show an even more diverse pattern, with the J segment SUV’s index falling to 98%; B segment used diesel index falling to 99%; whilst the C segment used diesel index actually showed prices rising, albeit to just 101%.
Germany and France trading used diesel as market days supply drops sharply
Market days supply (MDS) for online B2C used cars fell in Germany (-7.9%), France (-0.5%) and Italy (-2.3%) for the first two months of Q2 2019 compared to the whole of Q2 2018 according to the latest data from INDICATA.
However, a fall of 11.1% in used car sales in Spain for the first five months of the year saw average used car prices start to fall and MDS increase by seven per cent to 87.4 days for the first two months of Q2 2019 year-on-year.
Used car sales volumes increased by 10.6% in the UK for the year-to-May 2019, compared to the first five months of last year. Used diesel car prices remained almost flat, with a marginal decrease of 0.6%, whilst used petrol car prices rose 3.7%. This resulted in MDS continuing to be relatively stable at 46.2 days for April and May 2019 versus an average of 47.6 days for the whole of 2018.
War on diesel continues to have a significant influence
Drilling down into the data, the war on diesel continues to have a significant influence resulting in dealers trading out of their used diesel stock rather than retailing them to consumers. In some cases, they are even resorting to increasing the levels of export to clear out stock, particularly in Germany and France.
German dealers are currently struggling with stocks of pre-Euro 6 diesel cars which are facing increasing numbers of bans or charges for driving into some of Germany’s major cities and a €2,000-€3,000 cost to convert them to Euro 6 emissions standard.
This issue is starting to appear elsewhere in Europe as dealers are finding it increasingly difficult to sell their older vehicles resulting in ageing stock levels. The aim seems increasingly to avoid being left with unwanted diesel cars, inline with media reports of growing demand for petrol and alternatively powered vehicles. This issue has already seen an increasing number of small independent dealers falling into bankruptcy according to the ‘German Federation for Motor Trades and Repairs’ (Zentralverband Deutsches Kraftfahrzeuggewerbe, ZDK).
Total used diesel car sales show gradual move away from diesel
Total used diesel car sales across the big five European markets captured 49.2% of the online B2C used car market sales for the first five months of 2019 compared to 51.5% for the same period in 2018. This shows there is a move away from diesel but not to the same degree being seen with new car buyers.
However, marketshare only shows part of the story and looking at total sales, both petrol and diesel car sales increased in total year-on-year for the big five countries. Online B2C used petrol car sales rose 10.7%, whilst used diesel car sales saw a one per cent increase according to INDICATA. This proves that whilst the market dynamics are changing there remains a healthy demand for used diesel cars.
Average used car prices rising
This demand for used cars has meant most countries have seen average used car prices rising by as much as 3.5% on average in France or, at the other end of the scale, staying flat with just a 0.1% movement in Spain which is facing other market challenges.
Germany and France both saw average online B2C used diesel car prices rise by 2.7% and 3.4% respectively for the first two months of Q2 2019 versus the whole of Q2 2018.
With used diesel car sales still rising in volume terms and prices still on average increasing, the widening of the gap in MDS in Germany with diesel stock now down to 65.28 days in May 2019 compared to a 2018 average of 78.7 days and a 2018 average for petrol of 76.9 days and a May 2019 average of 77.2 days could be a sign that some dealers have been trading or exporting their diesel stock at a faster rate than needed based on sales volumes, demand and market prices.Click here to get back to all News