Supply slows used car sales

As day turns to night, the slump in used car sales was inevitable after a prolonged squeeze in the supply of new vehicles. New figures from SMMT this week show the UK used car market fell -18.8% in the second quarter. More than 1.75 million transactions took place between April and June – but that’s nearly 408,000 less than last year’s exceptional Q2 and -13.5% less than before the 2019 pandemic.

As the supply of new vehicles is blocked by supply chain issues, more motorists are holding on to their older, less efficient vehicles – a trend already apparent in late 2021 following pandemic disruptions and the Dealer closures have seen the average age of cars on UK roads hit a record 8.7 years. Given Britain’s very ambitious targets for the adoption of new zero-emission vehicles, the direction of travel must be reversed – and quickly.

Despite supply chain constraints, manufacturers are doing everything they can to get vehicles, especially electric ones, to customers. There are plenty of choices after heavy investment, with a significant increase in electric vehicle models on the market, now up to over 150 models, with longer battery ranges and faster charging times.

Consequently, the appetite of second-hand buyers is increasing: used BEV sales increased by 57.1% to almost 17,000 units in Q2, doubling their market share to 1.0%. This is welcome progress, but growth in the new car market needs to return so that the growing demand for used BEVs can be met.

In other news this week, as the government confirmed its ambitious timetable for UK-India FTA negotiations after a fifth round of talks, SMMT has joined forces with 10 other trade associations representing industries including chemicals, pharmaceuticals, law and technology, urging negotiators to hold their ground for a commercially meaningful deal, even if it means the current Diwali deadline – now just over two months away – n is not respected.

The deal has the potential to open up a major growth market for UK Automotive, but it must be balanced and fair. Content must take priority over speed, to ensure a truly comprehensive agreement that offers progressive tariff reductions and favorable origin requirements – an agreement that matches the government’s ambition for our sector and maintains our global competitiveness.