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Used car market could hit 7.7m sales this year, says Cox Automotive

  • Cox Automotive publishes forecasts for second-hand car market
  • Used market could see up to 7.7m transactions in 2024
  • But continued volatility leads it to forecast baseline figure of 7.4m
  • Dealers urged to assess stock profile as used EV adoption numbers grow

Time 8:00 am, May 13, 2024

The used car market could enjoy up to 7.7m sales by the end of 2024 if trading carries on at the rate set during the first three months.

That’s according to Cox Automotive’s latest forecast, although insight director Philip Nothard tempered it by saying that while Q1 matched its upside forecast for the three-month period, its baseline forecast of 7.4 million units is still the most likely outcome for the entire year.

‘The SMMT’s official used market figures for Q1 rightly give cause for celebration,’ he said.

‘The market grew 6.5% to almost two million units – the fifth successive quarter of growth and a five-year high. The actual number of transactions [1,967,923 units] was within a whisker of the upside forecast of 1.96m we published last October.

‘This bounce could lead us to conclude that our upside scenario is now the most likely to play out by the end of December.

‘However, while I’d be delighted to see the number of transactions exceed our predictions, I think it’s important we don’t get ahead of ourselves, and I instead remain “cautiously optimistic”.

‘When looking at the used market, we must always have one eye on the new, which is experiencing significant volatility right now, and despite recent positive economic headlines, the cost-of-living crunch remains very real for many people.

‘Interest rates remain high, and with a general election due, consumer appetite for anything perceived as a risk is low.

‘For these reasons, we believe our baseline forecast should remain the guideline for quarters two, three and four, rather than the more optimistic upside.’

Cox Automotive’s adjusted full year used market forecast has been published in its new Insight Quarterly report.

The forecast offers baseline, downside and upside scenarios, with the baseline the most likely scenario, predicting 1,896,630 transactions in Q2 (upside scenario: 1,966,972) and 7,350,205 for the full year versus its upside forecast of 7,669,814.

Its upside forecast for Q1 was 99.5% accurate to the SMMT’s figure, published last week.

Nothard added: ‘Dealers would do well to reflect on issues currently affecting new and keep these, as well as price volatility, front and centre.

‘What’s happening in new will always become a hurdle for used operators further down the line.

‘OEMs are currently having a torrid time grappling with the switch to EV, the ZEV mandate, new market entrants and spiralling costs.

‘Price adjustments have become a key defence strategy, leading to the return of a push market, making the reliable prediction of residual values and, in turn, fleet company defleet strategies very challenging.

‘Couple this with the possibility that several manufacturers may withdraw ICE models from their line-up to overcome the risk of non-compliance with the ZEV mandate and it becomes clear why caution is advised.’

He advised used car dealers to remain alert and agile, and – with the ICE car park ageing year on year – to embrace hybrid and EV models within their stock mix.

‘News via the SMMT that used zero-emission car sales are up 71% only adds urgency to the need for more dealers to assess their stock mix.

‘There is a noticeable lack of EVs and hybrid variants on too many used car forecourts. This sector is becoming increasingly competitive with each passing month, but how many dealers are ready for what’s coming down the pipe?

‘The gradual reduction in the number of petrol and diesel registrations is impacting on availability and choice in vehicles up to four years old.

‘We predict diesel’s share of the new car market will plummet to 3% by 2028. Retailers should, therefore, consider how their forecourt looks now, what percentage of it is ICE and how that will look a year from now and in the years that follow.

‘Can that profile be sustained when the availability of ICE vehicles is shrinking at a rate of 10-16% a year?’

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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