Five years of strong used demand ahead, report says
According to research by Professor Peter Cooke at The University of Buckingham Business School published in the latest BCA Used car Market Report 2010 there will be a used vehicle supply gap until 2015 at the earliest, leading to increased demand for defleeted vehicles.
The reports says: ‘Forecast new car and LCV sales for the next five years, as the country passes through a period of austerity, may well create a surprisingly buoyant used vehicle market – driven, on the one hand, by some private buyers moving from buying a new car to a less expensive used one and, on the other, a relative lack of supply of younger used cars.’
The Buckingham Automotive Team is perhaps less optimistic about the rate of recovery in the new car market given the massive public sector cuts on the horizon, shortage of available credit and the overall industry and personal austerity that is emerging.
However, the report adds: ‘The speed of recovery of the new car market is disconnected from the demand for used cars as, by definition, used cars were those units sold 2-3-4 years or more ago and now being recycled.
‘In the case of both younger used cars and younger used LCVs, the exact shortfall is somewhat difficult to predict at this stage, as it will be driven by economic recovery, market sentiment and, in the case of used LCVs, the ability of small business enterprises (SMEs) to adapt their business models to using older units, operating fewer LCVs, or finding the wherewithal to buy a new vehicle.’