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September 8, 2022

Semiconductor shortage could change wholesale used car landscape: Aston Barclay study

UK-based vehicle remarketing and auction group Aston Barclay has found that semiconductor shortage could permanently alter the wholesale used car market.

In its new research, Aston Barclay tracked the impact of the Covid-19 pandemic and global semiconductor shortage on the structure of the wholesale used car industry between Q2 2020 to Q2 2022.

For the period under review, the firm looked into aspects such as the average age, mileage and price of ex-fleet, daily rental and dealer part exchange used cars sold at auction.

Aston Barclay found that annual fleet mileages fell by 21.1% or 9,100 miles, from 43,000 in 2020 to 33,900 in 2022 and the average age of ex-fleet vehicles has been at 41 months over the past two years.

In contrast, prices have surged by 39.6% or £4,340 from £10,938 in Q2 2020 to £15,278 in Q2 2022.

The data suggests that since the start of the pandemic, rental companies have been buying rather than selling used cars and this trend is expected to continue as they face difficulty in sourcing new cars.

The late and low sub-24-month sector has also witnessed dramatic change from an average of 21 months and 17,600 miles in Q2 2020 to 16.8 months and 11,100 miles in Q2 2022.

The supply shortages have pushed prices by 56.8% or £8,680 to £23,941 during the period.

For the parts exchange market, Aston Barclay’s data shows that due to supply shortages of new cars, dealers have held onto most of their part exchanges, with the prices in the segment increasing by 34.9% (£2,692) to £10,400 in Q2 2022.

Aston Barclay chief revenue officer Mark Hankey said: “The data shows that in a relatively short space of time that many of the used car sectors have changed dramatically, particularly at the late and low and budget ends of the market. “Ex-rental used cars are now competing with ex-fleet cars at auction while the younger part exchanges have also increased closer to pre-pandemic fleet sector prices. It is a lot to take in but basically competition has increased in the mid-sector of the used market. All those cars are now chasing the same buyers.”

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