Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), said the used vehicle retail sector could look forward to “renewed optimism” after falling 8.9% in sales in the first quarter.
Despite the impact of COVID-19 ‘Lockdown 3’ across the UK, car dealers managed to sell 1,687,755 vehicles through a combination of click-and-collect and home delivery services in the first three months of the year.
However, the 27.1% and 19.4% declines in January and February were mitigated by a 32.2% year-over-year increase in March 2020, when the sector’s operations were disrupted by the coronavirus pandemic outbreak.
Compared to 2019, March was still 8.4% down and the first quarter down 16.5%, with 332,389 fewer transactions.
Hawes said the data was used to “expose the tumultuous impact of coronavirus lockdowns on the used car market,” but fueled optimism as the sector looked to a rebound in the second quarter.
With dealerships reopened and the UK exempt from COVID restrictions, the industry can look forward to renewed optimism, ”he said.
“The second quarter will see significant growth as the markets were severely restricted by lockdown measures in April and May of last year.
“It is important that the used market is rejuvenated in order to preserve jobs and livelihoods, to promote the renewal of the fleet and to support ecological progress.”
The medium-term prospects for the used car trade have been influenced by problems with the global supply of semiconductor microchips.
It is expected that the stalled new vehicle production will hamper sales and lead to a reduction in the market introduction of partial exchange vehicles.
The problem is expected to keep used car values high. Cox Automotive is calling on retailers this week to change ratings to maximize profits.
The SMMT said its data suggests that consumers are interested in buying used plug-in hybrid (PHEV) and electric (EV) vehicles, but P-lug-in vehicles still only made 1% of the market, up from 0.7% in the first quarter of 2020.
An increase in auto fuel vehicle vehicle (AFV) inventory at car dealerships increased hybrid sales by 16.6% to 27,694 units, while PHEV increased 32.1% to 10,534 units and EVs increased 48.3 % to 6,564 sales.
Luxury sedans and specialty sports were the only segments that saw growth, according to SMMT.
Sales in these segments rose by 10.3% and 5.4%, respectively.
Superminis (31.4% share) were by far the most popular used purchase, followed by a lower middle (27.2%) and dual purpose (13.1%).
Ian Traummer, Auto Trader’s commercial director, commented on the sector’s used vehicle performance, saying that most retailers saw volume above 2019 in the second quarter.
Commenting on the first quarter, he said, “Given the closed showrooms, the used car market’s performance in the first quarter has been very positive, underscoring the success that retailers have achieved with their online purchase channels.
“Even with the impact of COVID felt only last year, March was incredibly strong, and I doubt that many in the industry would ever have believed that around 90% of ‘normal’ sales could be achieved on its own on-line.
“There’s no doubt it’s a tremendous accomplishment and testament to both the continued high demand for car purchases and the resilience and agility of retailers who have adapted their stores so well.”
Karen Hilton, Heycar’s chief commercial officer, suggested that the dealership reopening in April did not result in the “car-buying explosion some had hoped for,” but she said there were good signs that many customers were still there plan a purchase.
“In addition to today’s numbers, which show an 8.9% decrease in registrations from Q1 2020, our own analysis suggests that owners with vehicles between the ages of six and eight are most likely to buy,” she said.
“They are the people who used our free assessment tool the most in the first quarter – more than a quarter of the inquiries.
“They are closely followed by owners of vehicles between the ages of three and five and nine and eleven, who make up around a fifth of the visits.
At the same time, more than half of the estimated cars added to heycar later in the first quarter belonged to the three- to five-year-old category, suggesting that those who have extended funding agreements on COVID are now reasonably confident about one To make a new purchase.
“With the summer months promising the end of all coronavirus-related restrictions, there are plenty of reasons to be positive as merchants rebuild their businesses.”
