Used vehicle market revs up with strong start for 2018
As a gauge of the current used vehicle automotive landscape, the Market Overview report paints a positive picture for the wholesale sector as dealers turn to nearly-new and older vehicles to attract customers.
Figures from the report show that Manheim’s online and physical auction channels, saw a 9.4% year-on-year increase in prices for cars selling through the lanes (both physically and online) in the first quarter of 2018 - a clear sign of the increased demand placed on ready to retail, prime stock.
The data shows, in particular, a demand for smaller, low mileage (sub-60k) three year old vehicles with models such as the Ford Focus and Ford Fiesta selling at a faster rate than larger, prestige vehicles - with economic uncertainty and increased fuel prices key factors in driving this trend.
Nissan’s Qashqai and Juke models have replaced the Mini hatchback and Mercedes C-class in the top 10 best sellers (when compared with Q1 ’17).
By contrast, high mileage and sub-standard vehicles requiring remedial work are proving increasingly difficult to find buyers.
The report also showcases positive growth for part exchange volumes, with month by month double digit growth of 17.5% in March 2018, compared to February 2018, and conversion ratios also remaining strong in the same period.
Further positive signs for the used vehicle market emanate from the unlikely source of diesel vehicles, with the report highlighting a less marked move away from diesel in the used vehicle sector than other parts of the market.
January ’18 saw the highest percentage share of volume in three years (38%) for diesels, albeit with a slight easing in February and March. Petrol share remained stable throughout Q1 and ahead of the same period last year in terms of share, but with lower volumes.
The data also shows that when it comes to purchasing a vehicle, buyers are becoming more focused on price and condition as fuel type loses its overall importance in the buyer decision making process.
One area where the diesel debate is having an impact is the increasing abundance of scrappage schemes, resulting in the wholesale market being starved of cheaper, high mileage vehicles.
Overall there is a quiet confidence emerging within the sector. This is demonstrated by Cox Automotive’s dealer sentiment survey which reports that 56% of dealers were 'optimistic about economic conditions' as Q1 of 2018 closed.
As we push on through Q2, the majority of dealers report themselves in a fairly strong position with a belief that the momentum will continue through to the middle of the year.
The data shows, in particular, a demand for smaller, low mileage (sub-60k) three year old vehicles with models such as the Ford Focus and Ford Fiesta selling at a faster rate than larger, prestige vehicles - with economic uncertainty and increased fuel prices key factors in driving this trend.
Nissan’s Qashqai and Juke models have replaced the Mini hatchback and Mercedes C-class in the top 10 best sellers (when compared with Q1 ’17).
By contrast, high mileage and sub-standard vehicles requiring remedial work are proving increasingly difficult to find buyers.
The report also showcases positive growth for part exchange volumes, with month by month double digit growth of 17.5% in March 2018, compared to February 2018, and conversion ratios also remaining strong in the same period.
Further positive signs for the used vehicle market emanate from the unlikely source of diesel vehicles, with the report highlighting a less marked move away from diesel in the used vehicle sector than other parts of the market.
January ’18 saw the highest percentage share of volume in three years (38%) for diesels, albeit with a slight easing in February and March. Petrol share remained stable throughout Q1 and ahead of the same period last year in terms of share, but with lower volumes.
The data also shows that when it comes to purchasing a vehicle, buyers are becoming more focused on price and condition as fuel type loses its overall importance in the buyer decision making process.
One area where the diesel debate is having an impact is the increasing abundance of scrappage schemes, resulting in the wholesale market being starved of cheaper, high mileage vehicles.
Overall there is a quiet confidence emerging within the sector. This is demonstrated by Cox Automotive’s dealer sentiment survey which reports that 56% of dealers were 'optimistic about economic conditions' as Q1 of 2018 closed.
As we push on through Q2, the majority of dealers report themselves in a fairly strong position with a belief that the momentum will continue through to the middle of the year.
