Q2 used car downturn highlighted in SMMT figures
Used car transactions fell by 2.8% in the second quarter of the year, according to new figures from the Society of Motor Manufacturers and Traders (SMMT) that provide further evidence of the slowdown in the sector.
The SMMT data shows 2,034,236 transactions took place over the quarter, equating to some 60,000 units fewer compared to the same period last year. The data also shows that the number of used car sales has fallen in every month this year apart from March, when they rose just 1.9%.
Demand for petrol and diesel models fell by 3.7% and 2.5% respectively, but they still accounted for 98.3% of the market. Uptake of alternatively fuelled vehicles continued to rise in Q2, increasing 24.8% to 33,492 used car transactions, of which pure electric vehicles saw the largest growth with a 32.8% rise while hybrids were up 25% to 29,321 units. However, the upsurge in ULEV take-up did not fully counter the downturn in petrol and diesel demand.
The figures come a month after Autorola said an ‘unusual’ Q2 had brought an across-the-board fall in used car prices – including hybrids and electric cars – as a result of both general apathy from Brexit and an increase in part exchanges due to the plate change.
The Autorola figures were published after warnings from Cap HPI in May that used values had dropped up to 4% month-on-month as the used car market goes through a ‘market correction’.
Commenting on the SMMT data, the organisation’s chief executive Mike Hawes said: “With the country still gripped by economic and political uncertainty it’s perhaps unsurprising to see the used car market slowing down. This means owners are often holding on to their cars for longer, delaying the widespread introduction of the latest, cleanest models which is not good for air quality. We need a boost to consumer confidence, something that a Brexit deal would deliver, to improve the fortunes of the industry and the wider economy.”
Ian Plummer, commercial director, at Auto Trader, also commented on the SMMT figures as the firm published the latest findings from the Auto Trader Retail Price Index, which analyses over half a million industry data points and has found the price growth for used cars is in decline for the first time since August 2016, slowing to just -0.7% in July.
Speaking about the challenges faced by the used car sector, Plummer said: “Whether it’s the Conservative leadership race, the new prime minister, or the increased likelihood of a no-deal Brexit, consumers have faced significant turbulence over the last few months. It should come as no surprise therefore, that despite its resilience, the same consumer uncertainty that is so profoundly affecting new car sales should impact the used car market too.”
“If further evidence was needed of the opportunity AFVs represent for the industry, the 2015 Renault Zoe is currently the UK’s fastest selling used car, taking an average of just 23 days, closely followed by the 2018 Kia Niro hybrid at 24 days. It clearly highlights the desperate need for a clearer and more compelling narrative from the government to encourage consumers to make a switch from fossil to electric.”