8:51 am, August 7, 2023
Cox Automotive has backed the used car market to improve throughout the rest of the year, although progress is likely to be slow.
The automotive services provider has forecast a steady improvement between now and the end of December with minimal shifts in market dynamics.
As part of its latest AutoFocus insight report, the firm’s team of experts say that both consumer and business confidence are likely to improve.
This, Cox says, will help feed consolidation and acquisition activities which will help build a more ‘streamlined and efficient’ marketplace.
Overall, the firm predicts used car transactions for the year will total around 7.15m units, representing a four per cent rise on last year.
However, the figure is still likely to be below the average yearly figure seen prior to the pandemic.
Experts have also forecasted a total of 1.86m transactions in the third quarter, which it expects to soften to around 1.6m in Q4.
Bosses say they are confident in their estimates, having been 96.8 per cent accurate in Q1.
When it came to issues that could halt growth, Cox pointed to the issues that could halt growth global economic conditions and energy-related issue, as customers and dealers continue to face sky-high bills.
Reacting to the findings of the report, Philip Nothard, insight and strategy director at Cox Automotive, said: ‘The global loss of 42 million new vehicles in production has permanently impacted the future composition of the used market.
‘However, our analysis points to a steady improvement in the UK sector for this year, which can be partly attributed to production cycles moving back to near normality.
‘It nevertheless remains a changing landscape and the impact of supply and demand on valuations in the used sector has become increasingly evident in recent months.’
He added: ‘The current state of the electric vehicle market poses a potential risk for the used car sector.
‘While 64 per cent of franchised dealers stocked BEVs as part of their used vehicle inventory in 2022, just 11 per cent of independent dealers did.
‘This creates uncertainty around the pricing and availability of pre-owned electric vehicles, which could lead to cautionary buying behaviour from both retailers and consumers.
‘By the end of 2023, more than a fifth of 0-1-year-old vehicles in the UK is expected to be a BEV, and this figure is projected to increase to 41 per cent for 1-3-year-old cars by 2027.
‘To keep pace with this rapid market shift, the sector must prioritise education, knowledge-sharing, and legislative measures to support the ownership and stocking of pre-owned electric vehicles.’
The latest AutoFocus report can be viewed in full here.
