European dealer used car stock levels are falling which is causing price inflation reports INDICATA
This means stock levels are now 12.3% below August 2019 which is mainly down to the increased demand for used cars due to the semiconductor shortages impacting new car sales.
With sales demand rising and much lower than normal volumes of young-used-cars available from the ex-rent-a-car fleet the impact on stock levels is likely to worsen.
Stocks fall well below 2019 levels
Stocks of left-hand drive cars at the start of August 2021 were already 2.2% lower than August 2019 and that gap has widened to 8.8% lower at the start of September compared to the beginning of September 2019.
With used car sales up 13.9% for the first eight months of 2021 virtually every European market is reporting consumers are switching to a used car to avoid long lead times for new cars.
Used car inflation set to continue
With no signs of the semiconductor crisis coming to an end used car inflation is likely to impact all countries for another 12 months and possibly into 2023. The UK alone has seen prices rise by 16.6% in the first eight months of the year.
While there was a visible slowdown in used car markets during the August holiday period, EV sales increased by 7% compared with July. However, EVs achieved the slowest stock turn (4.8x) out of all the fuel types compared with 7.6x for petrol and diesel cars. Hybrid stock turn sat at 5.7x which is further proof that they are becoming an integral part of the used car industry.
Price inflation could last until 2023
“Used car stock levels fell in every country except Turkey in August and demand shows no signs of slowing up due to new car supplies still being compromised which may last until 2023. This means we will see price inflation in the used market continuing for many more months to come,” said Andy Shields, INDICATA’s global business director.
“We urge dealers to continue to review their forecourt stock pricing on a daily basis and to be prepared to raise prices to keep pace with consumer demand,” he added.
To download the 30-page INDICATA report go to www.indicata.com/corona
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