Used car volumes to fall due to longer fleet cycles, predicts Cox
Cox Automotive has published its used car forecast for 2019, predicting that transactions will drop 2% compared to 2018, reaching a total of 7.795 million used cars.
The firm, whose first forecast in August 2018 was within 1% of the final SMMT figure while its Q1 2019 prediction was correct to within 1,000 cars, said that issues within the new car market due to extended fleet cycles are causing reduced supply in the used market.
Cox, Manheim’s parent firm, added that the drop-off in new diesel sales is also now affecting used supply, with three-quarters of a million fewer diesel cars registered in 2017/2018 than in 2015/2016.
Philip Nothard, customer insight and strategy director at Cox Automotive, said: “As retailers shift their attention to used vehicles, stock is key, and an appreciation of supply and demand in the wholesale market is vital to help maintain strong margins.”
“This is particularly true as we enter a period of fuel transition. Low-age diesel stock is still in demand however data from Manheim shows that petrol vehicles are beginning to make up a larger share of wholesale volumes.”
“As fewer new diesel vehicles enter the market we may see a short-term increase in used values, although interest in these vehicles will wane in the longer term.”
According to data from Manheim, overall average vehicle values held relatively steady month on month (down 0.8%), while the value of ex-fleet vehicles increased by 6.8%.
Philip Nothard added: “2019 has been a market of two halves, with ready-to-retail vehicles in hot demand while lower-grade cars struggled to attract bids.
“Increased wholesale volume in May has emphasised this divide even further, with fleet vehicles in good condition attracting significantly higher levels of interest in the hall.”