Results from auction house Manheim’s monthly Market Analysis
report show that the UK wholesale used car market started to
decline halfway through the second quarter of 2008, after
relatively strong results in the first three months of the
year.
Average used car wholesale values in May 2008 were £6,768, 4 per
cent below the weighted average values in the period Jan-Apr
2008.
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As the used car market has struggled, conversion rates have
fallen by between 4 per cent and 9 per cent, depending on the
sector, Manheim found, with May’s auction sales volumes down by 12
per cent month on month. However, the fall in volumes has not been
large enough to cause stocks to grow to unmanageable levels,
Manheim said.
Commenting on May’s report, Mike Pilkington, managing director,
Manheim Auctions & Remarketing said: “There is no doubt that
trade buyers have become much more selective in their purchasing,
aware that there is clearly no shortage of choice. In some cases
buyers are only replacing retail forecourt stock to avoid any
over-stocking, with others still prepared to invest speculatively
in the right vehicles.”
The general public has taken the opportunity to review motoring
needs, Pilkington added, with diesel models suffering as a result:
“With diesel prices at the pumps now at least 10 per cent higher
than petrol, we are seeing a rising demand from trade buyers for
small petrol-engine family vehicles.” Demand for diesel derivatives
is “still reasonably strong”, he pointed out, although executive
cars with larger engines, whether diesel or petrol, “are starting
to suffer” with luxury 4x4s “under the most severe pressure”.
Dramatic fall in second-hand market
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By GlobalDataOver the past six months, an estimated £2bn has been wiped from
the value of the second-hand car market, as a result of the credit
crunch, the rising cost of fuel, and the government’s troubled VED
plans (see Motor Finance May 08).
Mark Norman, of CAP Motor Research, said: “We will see the true
impact when people become aware that their next tax disc is going
to cost them an awful lot more. Our research has shown that the tax
disc will become as important as insurance and service costs when
deciding what car to buy.”
Owners of older cars will be worst-hit, with many older vehicles
soon to be worth “little more than their scrap value”, according to
EurotaxGlass’s.
Motor Finance Issue: 44 – June 08
by Jo Tacon ,
Published for the web: June 27 08 11:6
Last Updated: June 27 08 11:7
