Supply slows down used car sales
As day follows night, falling used car sales were inevitable after a prolonged squeeze on new vehicle supply. SMMT’s new figures this week show Britain’s used car market shrank by -18.8% during the second quarter. More than 1.75 million transactions took place between April and June – but that’s nearly 408,000 fewer than last year’s bumper Q2, and -13.5% below pre-pandemic 2019.
As supply for new vehicles is stalled by supply chain issues, more motorists have been holding on to their older, less efficient vehicles – a trend already apparent by late 2021 after pandemic disruptions and dealership closures saw the average age of car on UK roads reach a record 8.7 years old. Given Britain’s highly ambitious targets for new zero emission vehicle uptake, the direction of travel needs to be reversed – and quickly.
Despite supply chain constraints, manufacturers are doing all they can to get vehicles, particularly electric vehicles, to customers. There’s plenty of choice following heavy investment, with a significant increase in EV models on the market, now up to more than 150 models, with longer battery ranges and faster charging times.
Consequently, there is growing appetite among second-hand buyers: used BEV sales rose by 57.1% to almost 17,000 units in Q2, doubling their market share to 1.0%. This is welcome progress, but new car market growth must return so that rising used BEV demand can be met.
In other news this week, as government confirmed its ambitious timeline for UK-India FTA negotiations after a fifth round of talks, SMMT joined forces with 10 other trade associations representing industries, including chemical, pharmaceutical, legal and tech, urging negotiators to hold out for a commercially meaningful deal, even if doing so means the current deadline of Diwali – now just over two months away – is not met.
The deal has the potential to open up a major growth market for UK Automotive, but it must be balanced and fair. Content must be prioritised over speed, to ensure a truly comprehensive deal that delivers progressive tariff reductions and favourable origin requirements – a deal that matches government’s ambition for our sector and maintains our global competitiveness.