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: email@example.com
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