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Mixed fortunes in EU used car study

THE European new and used car markets have gone under scrutiny in a major report showing important trends in each of the main countries.

A total of 12 countries accounting for almost 30 million used car sales are included in the Used Car Market Report 2005, produced by remarketing giant BCA and Fleet News Europe sister company Sewells Information and Research.

Here, we feature extracts on the five main European countries, France, Germany, Italy, Spain and the UK, as detailed in the report.

France PROBLEMS with the French economy continued to have an impact on many major sectors in 2004, the motor industry being no exception. Even so, the French market did show signs of recovery in 2004 after a somewhat troubled previous year. New car sales rose marginally by 0.2% to 2.013 million units while used car sales recovered much of the ground lost in 2003, increasing 2.2% to peak at 5.44 million units last year.

Germany DESPITE a relatively stable year for car sales, the German market remains fragile, reflecting the general economic mood in the country. Economic reforms and high oil prices did not create the best scenario for the motor trade to operate in, yet despite this, volumes were quite robust. New car sales stemmed four years of decline, creeping up marginally to 3.27 million units – the highest in Europe. Meanwhile, used car sales fell by 2.4% to 6.6 million units – second only to the UK in this regard. Germany’s car parc figure also increased, by nearly 1% to 45 million units, also the highest figure in Europe. While Germany may have the largest car market in Europe, taken in context of the biggest population (82.5 million), there is clearly plenty of potential to be unleashed in the German market yet. The German used car market continues to experience difficulty matching stock availability to demand. Motorists are generally looking for older and cheaper cars – up to five years old, priced between E5,000 and V10,000 – yet much of country’s retail stock remains younger and relatively higher priced.

United Kingdom DESPITE falling used car volumes (down 400,000 units to 6.8 million year on year), the UK retains its position as Europe’s largest used car market, keeping Germany off the top spot. The UK has enjoyed a number of years of low interest rates and generally benign economic conditions which have done much to help stimulate its car markets. However, a series of quarter per cent bank rate increases – designed to slow the UK credit boom – has affected retail sales in every sector, and the motor industry is no exception. That said, any slowdown in UK used car volumes must be viewed in the context of the strong figures recorded in 2003, when the used car market broke the seven million barrier for only the sixth time on record.

Italy THE new car market grew marginally. Overall, the Italian scenario was familiar to other European marketplaces, with concerns about economic conditions and rising fuel prices stalling any chance for real growth. The Italian used vehicle market remains bound into a narrow wholesale structure and convoluted and administratively heavy procedures for changing car ownership. With a similar population to the UK, and a car parc of 34 million units, Italy has the potential for a much larger used car market. In fact, Italy’s used sales of just 50 per thousand population are the lowest in Europe.

Spain SPAIN continues to have one of the least dynamic European markets, due largely to the bureaucratic change of ownership process, which hampers development of used car sales volumes. With the high penetration of rental and leasing business in Spain creating large volumes of used cars, export has traditionally provided the safety valve for the Spanish market. However, with demand falling in the key markets of Germany and France, daily rental exports fell dramatically last year, with only about a quarter of available stock crossing the border. This has left the manufacturers and rental companies with large volumes of young product to sell in the home market. The leasing companies have fared little better, with volumes of high mileage, basic specification cars to trade within the home market. It is clear 2005 is going to be a crunch year for the Spanish used car industry.

 Austria, Belgium, Denmark, Netherlands, Norway, Portugal and Sweden are also featured in the report. BCA executives say the European-wide volume of used car sales taking into account the active markets of Czech Republic, Hungary, Poland and Slovenia could total 50 million units.

To order a copy of the report, contact Sewells Information and Research on +44 (0)1733 468254.

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