Car buyers purchasing used vehicles aged six to 12-years old helped contribute to a 3.7% year-on-year rise in sales in June, according to the latest data from INDICATA.
Sales of cars aged 6-9-years old and 9-12-year old rose by 12.6% and 8.6% respectively, while the 0-3-year old sector fell by 7.1%, mainly down to a shortage of stock in the sub 12-month sector.
SUVs, sports and luxury cars continue to be in high demand while mini and small car sales fell by 4.7% and 3.6% respectively.
Since dealers opened on the 1 June used car sales have reached a seven-day rolling average of 12,000 per day which compares with the 10,000 per day dealer restocking rates. This has led to dealers being short of roughly 125,000 used cars against April levels, which has been hampered by wholesale stock still stuck in compounds or parked on airfields.
This has weakened supply into the wholesale market which has meant demand has continually exceeded supply. With prices rising by just 0.7% in June it suggests many dealers could be brave and increase prices of stock on their forecourts.
“We have definitely seen a strong used car performance since dealers opened on the 1 June. Stock volumes on our online wholesale portal fell by 25% in the month so we know demand is outstripping supply,” explained Jon Mitchell, Autorola UK’s group sales director.
“We anticipate the summer months will be extremely busy with the market only starting to calm down in early autumn. The new 70-plate in September and Covid-induced PCP and contract hire contract extensions will feed additional stock into the market in autumn which should improve stock availability,” he added.
In March, INDICATA published a report on the extent of the impact of coronavirus on the automotive industry, and offered advice on how different sectors can survive.
The report stated that dealers will face significant challenges as their new vehicle volumes come under real pressure. To combat this, INDICATA said the key will be to strengthen and develop used vehicle operations as used volumes have weathered past financial storms better.
“In a hostile market, stock-turn is the most powerful weapon for defending profitability.”