Cox Automotive forecasts 7.8 million used car transactions in 2019 after strong H1 used car performance

Cox Automotive forecasts 7.8 million used car transactions in 2019 after strong H1 used car performance

Cox Automotive has reaffirmed its full year forecast of 7.8 million used car transactions in 2019 following the release of Q2 figures from the SMMT.

The latest SMMT results show that used car transactions in H1 passed the four million mark for the fourth consecutive year, and represent a slight decline of -1.7% on 2018, in line with the forecast published in the Cox Automotive Insight Report in June.

Our H1 overview

Philip Nothard, Customer Insight and Strategy Director - Cars at Cox Automotive, said: “The final Q2 figure of 2.03 million transactions is within 0.36% of our Q2 forecast, and represents a strong result for the used car market.”

“The first half of the year brought mixed fortunes for the automotive sector in general, and while we’ve seen a relatively large drop in new car registrations, the used market has remained comparatively stable.”

“That said, used car retailers had their fair share of challenges in the first half of the year. We saw low stock availability push up wholesale prices in Q1, this was due to a number of factors, but lower fleet volumes following the introduction of WLTP arguably had the biggest impact.”

“Wholesale volumes increased in the second quarter, but this led to a rapid fall in used values that caught some retailers unawares. This initial phase of steep price-drops has now levelled out, but it’s likely we will see a slight downward trend on values through the remainder of 2019.”

The results of our monthly dealer sentiment survey showed that retailers experienced some challenges around consumer demand from March onwards, with almost 60% reporting that demand was down YoY in March.

The downward pressure on prices also had an impact on margins as retailers struggled to realise the full value of part-exchange vehicles, and 52% of dealers reported that margins were down year-on-year in April and May.

Nothard commented: “We believe that the steep fall in values in Q2 was partly a reaction to the buoyancy in the used market over the past two years. Consistently high levels of demand have off-set normal seasonal patterns, holding prices at an unusually high level.”

“As supply began to exceed demand, we saw a fairly abrupt fall in values, but we do believe that the market will now return to a more traditional seasonal ebb and flow.”

“On a positive note, we’ve seen a stabilisation of both values and volume in the first part of Q3, and we expect the wholesale market to hold steady over the rest of the year.”

“While these used car transactions do reflect a slow market decline, the used market has shown its strength once again, and we expect the majority of retailers to continue their focus on used car sales throughout the rest of 2019.”

Latest from Cox Automotive

29th August, 2019

One in three dealers has little or no understanding of RDE

The latest dealer survey from Manheim has highlighted a surprising lack of awareness about the new Real Driving Emissions (RDE) tests that come into force at the weekend.

Read more
13th August, 2019

Market tracker - July 2019

July trading started reasonably well and stock availability in the wholesale market did improve in July, according to results released today by Cox Automotive.

Read more
13th August, 2019

CV market tracker - July 2019

The used LCV market put in a strong performance in July with good levels of buyer demand and stock availability, according to the latest results from Manheim.

Read more
6th August, 2019

Dealers react as dip in diesel demand hits used car market

Declining demand for diesel stock is starting to impact the used car market according to the latest NextGear Capital sentiment survey.

Read more
More articles