Industry optimistic about used car market revival
Demand for used cars is expected to increase in the coming months, bouncing back from a 30.7% fall in March.
The SMMT reported a fall of eight per cent for the first three months of the year, despite growth in the first two months.
However, industry bodies have predicted a return to growth as lockdown measures are eased.
Louise Wallis, head of the National Association of Motor Auctions, said: “Quarter one 2020 started strongly for auctions, and would likely have continued without the Covid-19 crisis.
“Auctions are now operating, although with reduced volumes to normal, which is giving much needed assistance to the market. We anticipate this volume to continue to rise over the coming months as the market gradually returns to more normal trading conditions as the lockdown starts to be lifted.
“Dealership reopening will be critical to kick start the used car market as they will need to buy stock for their forecourts to fulfil customer purchases and use auctions to dispose of any surplus part-exchange vehicles”.
Meanwhile, Sue Robinson, director of the National Franchised Dealers Association, said: “The used car sector performed well at the beginning of the year and the decline experienced in March is hardly surprising as it coincides with the introduction of lockdown measures and business closure.
“It is positive to see that used plug-in electric vehicles experienced a double-digit growth in the first quarter. Over the next months, demand will likely be driven by the type of cars available in dealerships’ stocks.
“Used car sales have been key for franchised dealers for quite some time and, going forward, businesses are likely to continue to concentrate on this area.
“In the short and medium term, cars will represent the best alternative for many planning to limit their use of public transport and the used car sector may benefit from this,” said Robinson.
