A report issued by British Car Auctions (BCA) has warned dealers they must continue to focus on attracting previous new car buyers into the used car market, using European car retail data to back up its projections for the used car market in the years to come.
The report, entitled "The Broad View" and authored by Professor Peter Cooke of Buckingham University’s Centre for Automotive Management, used sources including the Office of National Statistics, SMMT statistics, Eurostat figures and BCA’s ‘Used Car report 2012’ to analyse recent economic data alongside used and new car figures.
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The report showed European sales declining from a peak of 16m new car registrations in 2007 to a new low of 12.5m in 2012, as the EU continued to struggle with the ongoing recession.
From this, Cooke argued that "given the gloomy forecasts for European economy, such a steep drop in new car volumes arguably renders the current EU manufacturing base unsustainable."
Furthermore, the five year decline is predicted to result in a "significant and lasting shortage of first-time used cars coming to market."
In contrast, UK new car sales rose in 2012, up to 2.04m from the 17 year low of 1.94m in 2011.
This was still below pre recession levels of 2.4m in 2007, however, and Cooke also reflected other recent warnings over the use of self-registration to boost sales figures.
As supply has tightened, prices of used cars have risen, and 2011 saw the used car market value reach a new high of £35.7bn, compared to the new car market’s value of £29bn.
The report also looked at SMMT company car parc data showing that fleet business car disposals in the 3-5 year age group have fallen every year since 2008, to a new low of 415, 300, however volumes were predicted to make a slow recovery from 2014.
Although the average age of cars fell from 7.44 years in 2011 to 7.41 years in 2012, this was still the second highest age on record, and it is predicted to rise further, as new car sales continue to struggle.
Consumer research carried out by the BCA showed the number of car owners who were "certain/quite likely" to buy a new car in the next year fell from 14% in 2011 to 11% in 2012, having fallen every year since 2008.
In comparison, the number of motorists who answered "certainly not/won’t" reached 50% in 2012, up from 48% in 2011, marking the fifth consecutive year that figure has risen.
Unsurprisingly, at 27%, lower fuel consumption was the most popular consideration when choosing a new car, followed by lower road tax at 20%.
