NEWS

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

Written by Dean Bowkett in category 
June 24, 2019



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.

 


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