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.
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