8:09 am, June 19, 2008
VALUES in the ‘bread and butter’ sectors of the used car market fell in May, reports BCA, as trading conditions in the sector remain harsh. A misleading rise in average used values was generated by enhanced activity from manufacturers in the nearly-new sector.In contrast, the highly representative fleet and lease actually sector fell by over three per cent, while part-exchange values dropped by nearly five per cent. Indeed, average performance against CAP Clean continued to drop in most sectors, apart from nearly-new.BCA illustrates this by highlighting an average ‘nearly new’ value of £17,096, massively up from £14,858 in April. Compare this with the overall average of £5462, up £56 on April values. You don’t need a calculator to see the disproportionate effect that a record number of manufacturer sales staged by BCA had.Fleet and lease values fell by a sharp £214, to £6428. That’s 3.2 per cent down. CAP, incidentally, valued the stock at £6906, £125 down, equivalent to minus 1.7 per cent. Part exchange values continued their decline too, and are now over £200 – eight per cent – behind those in January. But whereas CAP recorded a 4.9 per cent fall in May here, CAP reckoned on minus 1.7 per cent.‘We are seeing signs of a two-tier market’ said BCA Communications Director Tony Gannon. ‘First-time-entered and realistically-valued stock is converting well, at in excess of 70 per cent. Re-entered vehicles, however, are struggling to get the buyer’s attention, unless there has been a sensible price adjustment.’‘The underlying issue of unsold stock must be addressed – it will not go away. We are working closely with our customers to encourage them to bring vehicles to the remarketing arena that are priced inline with current market values. This is not a seasonal price adjustment, but is a more fundamental re-aligning of prices in the retail and wholesale market.’It could get worse too, he warned. ‘Any downturn in retail activity is reflected in reduced wholesale demand, and this is the key driver of the market.’ Worrying times ahead, it seems…
