NEWS

Germany and France trading used diesel as market days supply drops sharply

Jun 24, 2019   written by Dean Bowkett

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

Spanish used car prices continue to fall but mainly due to market corrections

Jun 24, 2019   written by Dean Bowkett



The financial situation in Spain is improving and with the Spanish economy in the healthiest position it has been for some time, despite changing governments, it seems strange that the automotive market is faring so badly. New and used car sales have reduced by 5.12% and 11.1% respectively, and average used car prices flat at 0.1% for the first two months of Q2 2019 versus Q2 2018, then falling sharply in May.

To understand it we need to consider that Spain was not only the worst hit economically of the big five automotive markets in Europe during the financial crisis of just over 10 years ago, but it was the second worst performing market in the whole of the European Union behind Greece. The post-recession recovery has been slow but steady economically and is now making good progress, but this has resulted in an overheating and sudden cooling down in the automotive sector. This became obvious with used petrol car prices last year, whilst the past 12 months has also seen used diesel values creeping up.

Used car prices expected to stabilise

What we are seeing now in the INDICATA data is some market realignment. With a strengthening economy, the used car prices are expected to stabilise again but with new and used car demand so weak and with little sign of improvement, it is likely to take some time before car buyers flock back allowing dealers to start increasing prices significantly.

Looking across Europe the good news is that whilst demand for used diesel cars is falling back a little, used online B2C used diesel prices are not collapsing as some feared. The INDICATA data shows petrol prices strengthening against used diesel values over the past 12 months but the demand for used diesels is helping prices to remain robust.

 

France market data shows that used diesel car prices have actually increased

Taking a deep dive into INDICATA’s data in France shows that used diesel car prices have actually increased on average year-on-year, rising 3.4% for April and May 2019 compared to Q2 2018, whilst used petrol prices rose just 0.2%.

However, if you look at the data at a more granular level you can see significantly different trends to the average movements. Even just going down to segment and fuel type per the INDICATA used car price index graph you can see how used petrol car prices have significantly outperformed used diesel car values over the last 12 months for C-segment medium sized vehicles like Focus and Golf.

Moving to the larger vehicles like the M-Segment MPVs and D-segment large cars you can see how the initial clamour to move to petrol which pushed up petrol prices has now been met by reality as buyers realise diesel is still the more sensible option for these bigger vehicles doing higher mileage and diesel values are performing better year-on-year.

This variation even extends down to make, model and bodystyle according to INDICATA’s data.

 


Click here to get back to all News

Diesel B2C used car market sales up but market share still declining

Jun 24, 2019   written by Dean Bowkett

For the first five months of 2019 online B2C used car sales rose 5.7% to 5,358,094. The shifting market dynamic saw used diesel sales up just one per cent to 2,637,026 compared to used petrol car sales which rose 10.7% to 2,721,068 units according to INDICATA.


In volume terms, only Germany and Spain saw total used diesel sales falling for the first five months of this year. Germany saw used diesel sales drop by 2.3% to 824,964 whilst Spain saw a 16.1% decline in used diesel car sales. This means used online B2C diesel cars now account for just 39.3% of the German used car market so far in 2019, compared to 41.6% for the period ended May 2018. In contrast used diesel car sales still accounted for 68.5% of the Spanish used car market although that is down from the 71.8% for the first five months of last year.

France has seen a similar decline to Spain, with used diesel car sales accounting for 64.1% of the total 962,554 online B2C used car sales for the first five months of this year compared to a 66.1% share of the 889,118 online B2C used car sales for the same period last year.

Diesel car sales represent less than half of the UK online B2C used car market

According to INDICATA’s data, used diesel car sales have represented less than half of the UK online B2C used car market for almost two years now. However, they are still losing marketshare, dropping to 45.7% of the market for the first five months of this year’s 1.6 million used cars sold versus 48.7% of the 1.5 million online B2C used cars sold to end of May 2018.

One country which seems to be defying the other major market’s trends is Italy. It saw 478,776 online B2C used cars sold this year (to end of May). That is a 5.3% increase in total used car sales but unlike the other major automotive countries in Europe the marketshare of used diesel cars in Italy rose by 0.3% to 68.2% compared to the same period last year. This apparent ‘love’ of diesel cars in Italy ties in with a report from the German Federal Statistical Office which reported a 20.5% increase in used diesel car exports from Germany in 2017 with Italy being the largest importer of those vehicles.


Click here to get back to all News

Ageing stock profiles creating issues for some countries

Jun 24, 2019   written by Dean Bowkett

The challenges faced by sellers of non-Euro 6 diesels and other market pressures caused by economic uncertainty in countries such as Italy is creating an aged stock issue in some countries.

A sneak preview at INDICATA’s average stock days by age across multiple markets shows the diversity of stock ages and ageing profile across Europe.

Whilst countries like Austria, the UK and Sweden carry an ageing level of one- to two-year-old used stock, places like Germany, Spain, Poland and Belgium tend to carry a more aged level of 25-36-month-old vehicles. Some of these stock levels are concerning given the age in stock but it is countries such as Italy and Portugal where very high levels of stock and high levels of aged stock of older vehicles are apparent. This causes difficulties with pricing in a way to recover stocking costs and retain a healthy margin, a cause for real concern.

Looking deeper into the INDICATA data at a manufacturer, model and fuel type level highlights some interesting challenges but you need to subscribe to INDICATA data to find out more.


Click here to get back to all News

New car sales fall across most of Europe’s big five as used car demand strengthens

Jun 24, 2019   written by Dean Bowkett

INDICATA’s latest data shows online B2C used car sales are up 7.5% to 5.5 million units in the first five months of 2019 for the big five European car markets compared to the same period last year.



Only Spain saw used car sales volumes fall, down 11.1% so far this year. France saw the largest rise as sales jumped 13.8%, closely followed by a 10.6% increase in the UK year-on-year. Italy (+5.4%) and Germany (+4.6%) also saw a healthy increase in used car sales.

Germany is the only country to see new car sales increase over the same period as sales rose 1.74% for the five months to May 2019, compared to the same period in 2018. New car sales in France remain flat, down 0.05%, whilst sales in the UK dropped 3.1%; Italy fell 4.1%; and Spain saw a 5.1% decline as yet another change in government has knocked some of the car buyer’s confidence out of the economy.

Continued trend for used car sales

Except for Spain, this data highlights a continuing trend to move from new car sales to used car sales which happened for most of last year and shows little sign of abating.

Online B2C used car sales were 140% higher than new car sales in Germany for the period January to May 2019 compared to 137% for the first five months of 2018. In the UK that ratio went from 140% in 2018 to 160% in 2019 over like for like periods.

 

Click here to get back to all News

Market Days Supply falling sharply in Germany and Italy

Apr 15, 2019   written by Dean Bowkett


Germany has seen stock of used cars fall sharply, according to the latest data from INDICATA. Market days supply (MDS) of used cars saw the usual uplift in the run up to the end of the year followed by the traditional downward trend in the first quarter (Q1) of 2019 as dealers took advantage of the pent-up demand from car buyers to change their vehicles.

Across the big 5 markets of Germany, UK, France, Italy and Spain combined, the average MDS in Q1 2019 is inline with the same quarter in 2018 but at a country and fuel type level there are marked differences as a result of varying strategies in dealer stocking plans and used car buying demand.

In Q1 2018 MDS in Germany stood at 78 days’ supply, a fall of three days against Q4 2017. Move forward one year and MDS stands at just 72 days for Q1 2019, a drop of 11.3% against Q4 2018 and down 8.0% against Q1 2018. This quickening of stock turn should add a boost to dealers’ profitability.

Drilling down deeper into the INDICATA data shows that market demand for used diesel is weakening but it remains reasonably strong with diesel taking 49.2% of the B2C online used car sales volume in Germany in Q1 2019, compared to 52.0% for the same period last year. But a review of stock levels shows that online B2C stock levels of used diesel cars in Germany has dropped by 15.9% in Q1 2019 against the same quarter last year whilst stock of used petrol cars has risen by 13.9%. Given this imbalance it would appear that dealers are fearful of the used car market following the new car market due to the demonisation of diesel and are choosing to buy used petrol cars rather than used diesel cars.

Whilst the gap between average used diesel prices and petrol prices has moved against diesel by 3.0% between Q1 2018 and Q1 2019 the clear demand and increasing shortage of diesel stock could create some market opportunities with used petrol MDS standing slightly higher at 71.9 days compared to 70.5 days for used diesel.

Italy has also seen MDS falling, down 6.7% to 72 days for Q1 2019 compared to Q1 2018. However, the underlying INDICATA data shows a different trend to Germany. Online B2C used car sales volumes for both fuel types have risen by a little under 9.5% in Q1 2019 versus the same period last year but prices are rising much faster for petrol used cars than for diesel. Whilst dealer stock has seen a 9.4% increase in online B2C used diesel cars on average for Q1 2019 compared to Q1 2018 used petrol stock levels have dropped by 6.0% over the same period, indicating that dealer stock mix is out of line with market trends. This explains why MDS for used diesel stock now stands at 77.1 days on average for the latest quarter compared to just 64.1 for used petrol cars.

Whilst the new car market in Spain has fallen by 6.9% for the first quarter of 2019 compared to the start of 2018 the sale of online B2C used cars has dropped by 18.8% over the same period. The INDICATA data previously showed that Spain was suffering with an excess of used stock as buyers were switching from buying used cars to new cars but it is not in large enough numbers to absorb the stock levels seen and this trend is still visible.

Overall Spanish dealers seem to have now got the mix of used petrol and diesel cars closer to market demand with MDS in Q1 2019 for used petrol at 83.4 days and used diesel 86.0 days, a gap of just 2.6 days compared to 5.6 days for Q1 last year and well below the double digit gap that existed for Q3 on average. However, stock levels are still the highest in terms of MDS adding an extra funding burden to dealers’ bottom line profitability.

New and used car markets in Spain are struggling and companies defleeting used cars in volume may want to consider taking some stock out of the market to achieve better returns.


Click here to get back to all News

Used car sales rise as new car sales stagnate across most of Europe’s big 5

Apr 15, 2019   written by Dean Bowkett


According to INDICATA’s latest data 3.35 million online business-to-consumer (B2C) used cars were sold in the first quarter (Q1) of 2019 compared to 2.99 million new cars. It means that whilst new car sales have fallen by 2.6% for Q1 2019 compared to Q1 2018, across the big 5 European car markets online B2C used car sales have risen by 8.5% over the same period.

Both new and used car sales saw the usual quarterly seasonal increases in Q1 2019 with new car sales rising 23.2% compared to Q4 2018 and used car sales rising 16.3% over the same period. This is stronger growth than the previous year where new car sales rose 18.4% in Q1 2018 versus Q4 2017 and used car sales rose 9.8%.

Except for Spain, which has seen online B2C used car sales falling by 18.8% in Q1 2019 over the same period last year, the remaining four largest European car markets have all seen used car sales volumes increase as buyers switch from new to used according to Indicata.

Europe’s largest new car market, Germany, has seen new car sales stagnate for the first quarter of this year with just a 0.5% year-on-year increase whilst online B2C used car sales have jumped up 5.0% over the same period. With tense global trade conditions and uncertainty over Brexit pushing Germany into its deepest manufacturing slump for six years, new car sales are likely to continue to struggle with conservative consumers in Germany opting to buy cheaper nearly new cars instead.

It is a similar story in the UK where new car sales are down 2.4% in Q1 2019 compared to a rise of 14.7% of online B2C used car sales. Once again, we see Brexit weighing heavily on consumer confidence with neither Brexiteers nor Remainers happy with any of the proposals. From an employment prospective, the recent announcement from Honda about shutting down its UK plant along with further insolvencies and closures of High Street stores is creating concerns about employment prospects. Whilst there are many other factors at play the upshot is that consumers continue to be wary about spending on big ticket items and this is likely to continue to support the sale of used cars over new ones.

Used car sales in France have now been outstripping new car sales for the last three quarters, a reversal of fortunes compared to 2018 in total. This leaves just Italy and Spain where new car sales continue to outperform the used car market.

The French economy is currently struggling to grow as fast as it needs to, according to the OECD with its Secretary-General, Angel Gurría recently stating: “There is a real need to address the social challenges of long-term unemployment, difficulty in joining the labour market and weak social mobility.”

With this, it is difficult to imagine new cars outselling online B2C used cars at least during the remainder of 2019 and into 2020 when we have the added burden of Real Driving Emissions (RDE) tests to contend with and the risk that new car sales will be hit in the same way that the Worldwide Harmonised Light Vehicle Test Procedure (‘WLTP’) did.


Click here to get back to all News

Diesel marketshare in the B2C used car market down 2.8%

Apr 15, 2019   written by Dean Bowkett


The war on diesel has seen the marketshare of online B2C used diesel cars fall by 2.8% in the quarter one (Q1) 2019 compared to the first quarter of 2018 with buyers switching to petrol alternatives according to INDICATA.

In volume terms, total online B2C used diesel car sales were almost flat for the quarter with Q1 2019 seeing 1.590 million used diesel cars sold compared to 1.593 million sold across the big 5 European car markets the previous year.

But this only tells half of the story as online B2C used petrol car sales shot up by 11.4% over the same timeframe, with 1.64 million cars sold in the first three months of this year compared to just 1.47 million sold last year over the same period.

Germany (-7.2%) and the UK (-6.7%) saw the biggest fall in used diesel car marketshare with Spain a close third as diesel lost 4.4% of its market for Q1 2019 compared to a year earlier.

Spain has historically been the strongest used diesel car market with diesel sales representing 72.2% of online B2C used car sales in the country but this has fallen to 69.0% in Q1 2019. With used diesel car sales losing just 1.2% marketshare year-on-year in France and currently standing at 65.1% for Q1 and Italy seeing diesel losing just a 0.1% marketshare and used diesel cars now representing 68.1% of the market it would seem the inconsistency in the war on diesel may change the way and location international used car sellers choose to trade out of their used stocks.

At a country level, in absolute terms, Spain has seen the sharpest fall in used cars, down 18.8% for Q1 2019 over the same period last year but diesel has taken the brunt of that drop. Sales of online B2C used diesel cars have fallen by 22.9% in Spain Q1 2019 versus Q1 2018 whilst used petrol car sales fell by just 10.1%.

Germany and France both saw quarterly used diesel cars falling by 3.5% and 2.1% respectively compared to the previous year whilst used petrol car sales rose by 9.4% in Germany and 1.5% in France.

The UK and Italy saw strong demand for used car sales resulting in both fuel types increasing total sales. Used diesel car sales in the UK rose by 5.6% to 465,949 units in Q1 2019 compared to a year earlier, whilst Italian used diesel car sales rose by 9.2% to 207,282 units.


Click here to get back to all News

Spanish used petrol car prices falling sharply

Apr 15, 2019   written by Dean Bowkett


According to the latest data from INDICATA even though new and used car sales are falling sharply in Spain, with used diesel car sales particularly suffering, it is the price of used petrol cars which have been dropping the sharpest since the third quarter of last year. It appears that dealers pushed up prices as demand for used petrol cars increased but then the market overheated.

Since then, dealers have been correcting stock levels and prices to meet demand in the face of a declining market. However, used petrol car prices in Spain remain 11.8% higher on average in Q1 2019 compared to the same quarter last year whilst used diesel prices are 7.4% up year-on-year.

Used petrol car prices in Italy have jumped by 9.2% to €18,861 for Q1 2019 compared to the previous year whilst used diesel prices fell by 1.7%. This means the premium used diesel cars historically enjoyed in Italy has now been seriously eroded even though used diesel cars remain more popular amongst used car buyers. With total used diesel car sales volumes in Italy rising at a similar rate to used petrol car sales and marketshare of petrol versus diesel remaining almost static we could be seeing used petrol car prices being artificially pushed up which may explain why the Italian used car market is not following the move away from diesel being seen in other countries.

Apart from Italy, the UK is the only other one of the big 5 European car markets to see average online B2C used diesel car prices falling, down 12.4% in Q1 2019 compared to Q1 2018. Over the same period the UK saw petrol prices rise 4.3% although a drill-down into Indicata’s data shows that significant variances at a segment level exist in all countries and this should be considered before taking any pricing action.

Germany and France saw used cars of both fuel types rising. Germany continues to be the market which has fallen out of love with diesel more than most and with used petrol prices rising 4.0%, compared to used diesel prices rising 1.6%, the diesel premium is continuing to be eroded.

Despite some of the economic challenges in France both used petrol and used diesel cars saw above inflation average price increases with used petrol prices rising by 5.8% and used diesel car prices increasing by 5.6%.

Being able to look at the Indicata data in more detail you can understand how the overall averages start to diverge as you get into the different segments and also down to brand and model specific issues.

A quick review of just three segments in Germany shows how the large sized cars are showing strong pricing for used petrol cars and a sharp decline in used diesel car prices compared to last year and yet looking at the smaller, medium-sized cars and also SUVs the overall pricing dynamics for petrol and diesel vehicles have been relatively consistent at a segment level.

Whilst we won’t get into the detail at brand level it is also worth reviewing the segments at a brand and even model level in order to adjust pricing and to help understand the best markets to optimise your revenue.

Click here to get back to all News

Young used diesel car stock massively outstripping sales in the UK

Feb 8, 2019   written by Dean Bowkett

The stock of used diesel cars in the UK during November was reasonably well balanced across all ages from 13 months old through to 72 months old but there is a significant stock issue for cars under 12 months old which varies by brand.

Used diesel cars aged between two to four years are responsible for the bulk of online business to consumer (B2C) used car sales, with much of that stock coming from ex-fleet vehicles. However, by November dealers were sitting on 74 days of market days supply (MDS) of used diesel cars aged six-12 months old.

Latest clean Euro-6 diesel engines and CAZ
These younger used diesel cars will all be fitted with the latest clean Euro-6 diesel engines and therefore should not be a problem for any car buyers wishing to use them in the emerging clean air zone (CAZs) regions springing up across the UK. They also meet the requirements for use in London’s Ultra Low Emission ZONE (ULEZ) but INDICATA data has already shown how the political and media spin in the UK is putting car buyers off both new and used diesel cars.

Sales and prices continue to rise
Despite the rhetoric against diesel both sales and prices of online B2C used diesel cars are rising. Sales increased by 3.5% to 392,676 in Q4 2018 whilst prices were around 1.3% higher than a year earlier. But putting that into context, online B2C used petrol car sales grew by 19.3% to 461,996 in Q4 2018 whilst used petrol car prices shot up 6.0%.

This means dealers may well have to consider how quickly and at what price they clear out these young used diesel cars before the market starts to take a downward turn. This issue is also not unique to the UK with other European countries having varying degrees of the same issue and with a variety of different brands.

Click here to get back to all News