Philip Nothard, retail and consumer specialist at cap hpi, examines the reaction of the used car market to a year of poor headlines and unfavourable legislation for diesel engines, and finds that – at least in terms of demand – the situation is not quite as dire as many might have feared.
The diesel engine has had a tough year in the press, and when coupled with the march of legislation to support low -emission vehicles it would be easy to assume this would translate into a tough time for sales.
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But it seems that consumer and fleet appetite for diesel vehicle has held up. There is no waning in demand for diesel vehicles in the new or used market.
Values have moved broadly in line with petrol-engined equivalents through 2016, with little visible impact from headlines through the year.
According to the SMMT, the split between petrol and diesel engines has remained even through 2016, with 1,113,582 diesel vehicles sold year to date by October, compared to 1,117,305 petrol, representing a split of 48.2% and 49.1% respectively.
Analysis of the used market shows volumes have remained steady over the last three plates. A snapshot of retail advertisements in November for diesel-fuelled vehicles shows a slight reduction from 43,720 in 2015 to 41,649 in 2016. By comparison, petrol vehicles moved from 38,909 in 2015 to 37,167 in 2016.
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By GlobalDataUsed values for petrol and diesel vehicles have tracked in line with seasonal trends, and there’s no evidence of a sudden drop in wholesale appetite or consumer demand.
It was clear from the headlines coming out of the Paris Motorshow that manufacturers have a focus on hybrid and EV. As technology advances, it’s likely that these vehicles will take a share of the petrol and diesel market.
Recent data from the SMMT shows that the market share for electric vehicles has risen from 0.26% in 2014 to 0.29% year-to-date 2016. Petrol/diesel hybrids account for 2.88% year-to-date 2016.
Research by cap hpi shows that petrol hybrid vehicles show the strongest forecourt resilience of any fuel type.
The gap for petrol hybrid vehicles between the price advertised and sale price achieved is only –2.8%, which compares favourably to an average of –5% and –5.25% for electric vehicles. The average gap between advertised value and sale price is £376 for petrol hybrid vehicles. The figure rises to £890 for diesel hybrids. Petrol vehicles outperform diesel, with a drop of £430 against £609 respectively.
In the short term, the current trend looks set to continue. Dealers and consumers will continue to buy a diesel vehicle, often at a premium over the petrol equivalent.
