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- Will Used Car Sales Change in Europe in 2023? A Complete Analysis
Will Used Car Sales Change in Europe in 2023? A Complete Analysis
How has the European used car market been evolving in 2023? Let’s deep dive together into used car sales in Europe and what’s in store for the rest of the year.
Looking for the most recent data? Take a look at our analysis and forecasts for the 2024 used car market!
Last year, we published an article with our breakdown of the used car market and our forecast for used car sales in Europe for 2023. It's time to revisit our predictions and find out whether we can count on them for the time being.
Turns out, we were mostly right.
Last we left off, we predicted a period of recovery for both the new- and used-car markets compared to the uncertainty that 2022 brought.
For 2023, our predictions weren't too far off for the used car market. As with any predictions, there are always unexpected developments and unknown factors at play. Even though the year isn't even halfway, there have already been quite a few challenges and opportunities in the market.
Inflation influences used car sales in Europe
One of the challenges is inflation. Prices continue to increase for goods and services, which means consumers may be less willing or even able to pay the increased prices for used cars. As the prices are a result of the increased demand due to the ongoing chip shortage, this could put downward pressure on resale values.
Another short-term challenge for the used car market is that several manufacturers (Volkswagen, BMW and Ford, to name a few) have resumed production for their assembly lines, making them able to meet the demands of customers seeking to drive new vehicles. Of course, a large amount of these vehicles will at some point end up on the used-car market, but in the short term, this alleviates a portion of the demand.
Lastly, the shift towards electric vehicles is both a blessing and a curse, as most European companies are looking at electrifying their fleet to meet European regulations. This means most companies will put their used cars running on fossil fuels up for sale, and seek out greener vehicles in the form of hybrid and fully-electric vehicles. The consequence is an increase in combustion-powered vehicles, whereas demand for these vehicles will hit a turning point in the coming years.
However, these challenges can be valuable sources of opportunities.
Even though there are challenges to overcome in the used-car market, it has proven to be a resilient market in face of the economic and social disruptions. The demand for used cars is still strong in many countries. Sustainability plays a large part in that - even though one might think that mostly applies to hybrid and electric vehicles, it's important to note that used cars are an essential part of the reduce/reuse/recycle chain.
While Fleet Europe notes that supply and demand imbalances could cause Residual Values (RVs) to fluctuate, digital remarketing and the growing importance of sustainability and eco-friendliness may positively impact RVs in the long run.
The used car market in Europe is facing a range of complex and interconnected factors, including supply chain disruptions, inflationary pressure, and shifting consumer preferences, but there are also positive trends and developments that could potentially support RVs and used car prices over the long term.
How are used car sales evolving in Europe in 2023?
While most markets are expected to remain stable for the near future, there are several factors at play in each country. Let's have a look at how the market evolved in each country over the past six months.
For Germany, the largest and most dynamic market in Europe sales of used cars exceeded 5 million in 2022. And 2023 has been off to a strong start. Despite the challenges, demand outpaced supply in many regions, even though absolute prices may be just beyond consumer purchasing power.
Because of the reduction and discontinuation of incentives for new (PH)EVs earlier this year, the combined market share for these types of vehicles fell by 55% year-over-year to a staggering 15% of total market share - even though more EVs have become available on the used-car market over the past half year.
In France, there was a modest increase in sales in 2022. The market did face some challenges earlier this year. While there is high demand for EVs, supply chain disruptions have heavily affected the availability of new EVs. Additionally, the market is expected to benefit from a rise in consumer confidence and a recovery in the economy, but consumers are holding off their purchases as they expect prices to drop soon.
Belgium has been ramping up its low-emission zones, leading to increased demand for vehicles that are allowed to enter these ever-growing areas. Other than that, interest in new combustion-powered vehicles has dropped due to changes in regulations and tax breaks, causing hybrid and electric vehicles to become more interesting alternatives for companies.
Though Luxembourg is only a small fraction of the European market, and limited information is available, it is highly likely that the country's proximity to the neighboring markets will influence its market trends along the same lines.
The Spanish market shows relatively low demand and limited supply of hybrid and electric vehicles. The need for affordable transportation, fueled by a recovering economy, puts these cars just outside of reach for the average consumer. It comes as no surprise that the market in Spain offers a steady supply of quality used cars.
Meanwhile, the market in Portugal is subject to change. As it ended 2022 with an increase in used car sales (+6.6% compared to 2021) and an ongoing preference for gasoline-powered vehicles, supply is limited causing strong competition among buyers. Other than that, the government is steering the market towards alternative fuels with incentives and initiatives, which will most likely shake up the market in the coming years.
Italy saw a decline in RVs for used cars due to lower demand, even though Fleet Europe offers a more positive outlook for the Italian used car market, where remarketing experts expressed "cautious optimism" for the year ahead. Italian car brands are still struggling to produce enough new cars, which is affecting Italian car dealers as well as transport of vehicles. Since transport companies give priority to brands, Italian car dealers are scrambling to find viable transport options.
Lastly, The Netherlands saw increased competition due to the rise of online marketplaces for used cars, which emphasized customer service and competitive pricing for dealers. The shift towards sustainability, promoting fuel-efficient and low-emission vehicles, is further driven by both consumer demand and government policies introduced to reduce carbon emissions. Due to a shortage of new cars, the prices for popular used cars have increased.
How does the future of used car sales in Europe look like?
We at eCarsTrade are here to help you keep an eye on market trends, and make informed decisions so that you can price your inventory more accurately and turn a (better) profit. We'd like to conclude our findings with some helpful pointers, so that you can negotiate better deals.
Invest in quality
Here at eCarsTrade, we sell only ex-leased cars which come from trusted leasing companies that accurately and extensively document the vehicles’ mileage, service history, and current condition. Another benefit of buying an ex-leased car is that each vehicle is thoroughly inspected by professional and independent experts. Their detailed reports, which include photos, provide our customers with confidence in the state of the cars and an accurate description of any damages.
Whether you’re selling to private customers or other automotive professionals, it’s worth investing in a well-maintained car. Or you might just be able to scoop up a car with some minor damages, make the necessary repairs and sell it for a higher price. Make sure you check out our guide to buying damaged cars as well as how to fix minor car damages.
Focus on your customer’s experience
The customer journey is becoming more important than ever - providing excellent customer service will help you build a loyal customer base. Provide them with accurate information, and be responsive to their questions and concerns.
Embrace technology
Streamline your operations and don't be afraid to explore digital advertising platforms to help you reach new and wider audiences. Try browsing our website to make informed decisions on pricing your inventory, and you might even strike a great deal.
Stay informed
While it's good to follow up on industry news and trends, it might be worth the additional effort to attend industry conferences or seminars, network with other car traders, or keep up to speed on the latest insights and findings on the used car market. By staying informed and adapting to change, you can position yourself for success. And we're more than happy to help.
Here at eCarsTrade, we love delving deep into market analysis and predictions of what will happen on the used car market in Europe. While we can't predict with 100% accuracy, of course, our experience and thorough research allow us to make accurate estimates of market trends that we love to share with you.
From global and local market trends to valuable marketing insights and how-to-guides on turning better profits for your business, you can find the right content for your professional needs over on our blog.
