Headline first quarter car sales figures look disappointing, but they mask a more nuanced story and lots of interesting insights for dealers
As many dealers will be aware, first quarter used car sales figures issued by the Society of Motor Manufacturers (SMMT) showed a decline of nearly 5% compared to the same period in 2017.
The headline figure looks like a blow, but the wider picture is far less negative. For a start, it’s worth pointing out that although 5% is a significant fall, there were still over two million used cars sold in the first three months of 2018.
On top of that, the decline was not across the board. The detail behind the headlines—and in supporting evidence from other sources—provides some telling insight that proactive dealers can use to their advantage.
Diesel sales remain strong
One obvious theme to come out of the figures is the continuing rude health of diesel, at least in the used car market. Volvo’s recent decision to ditch the fuel from all future plans was seen as another nail in diesel’s coffin, but used models remain attractive to buyers. Sales actually rose by 2% in the quarter.
That situation looks unlikely to change anytime soon. Figures for 2017 show used fleet diesel prices rising 11.4% in the year. A recent report by Glass’s, the used car price guide, revealed that demand for diesel at auctions remains high.
Clearly, this is no fire sale and there is no indication of an imminent crash.
More predictably, alternatively fuelled vehicles—hybrid and electric—also bucked the downward trend, with a significant 15.9% leap in sales, albeit from a low base.
The sweet spot for age
The findings also reveal an apparent sweet spot for used car age. Much of the headline decline is down to buyers avoiding the extremes—sales of both older secondhand cars and “almost new” models fell. But models in the three- to eight-year-old age bracket bucked the trend, registering a modest rise.
It may be that the nearly new market is being affected by the sluggish new car market, while a growing consumer preference for greener vehicles is showing up in falling sales for older stock.
Other findings are more expected. Black has overtaken silver as the favourite used car colour, and superminis remain the most popular body type. Taken together, the results may prompt proactive dealers to tweak their inventories and marketing accordingly for the potential to reap significant benefits.