Used-car retailers rallied against three months of COVID-enforced dealership closures and vehicle supply shortages to drive annual sales up 11.5% year-over-year in 2021 .
The Society of Motor Manufacturers and Traders (SMMT) reported that the used car market last year was only 5.5% down from the pre-pandemic five-year average despite the problems .
An annual total of 7,530,956 transactions over the year means 777,997 more cars changed hands than in 2020, with retailers making high margins thanks to an imbalance of supply and demand.
Commenting on the performance of the car retail sector, SMMT Managing Director Mike Hawes said: “It’s good to see the used car market returning to growth, although activity is still lower than it was before the pandemic.
“With the global semiconductor shortage expected to ease later this year, releasing pressure on the supply of new cars, we expect more of the latest, cleanest and zero issue are available to second owners.
“The demand for personal mobility has undoubtedly increased during the pandemic, so it is essential that we have good new car sales to stimulate fleet renewal and the used car market if we are to improve the quality of the air and fight against climate change.
After a huge year for the used car retail industry, the 2022 AM Awards invites nominations for its 2022 Used Car Dealer of the Year and Independent Dealer of the Year categories. Click Here for more info.
Yesterday AM reported on Cox Automotive’s prediction that the upward trend in used car prices in 2021 – caused by limited supply – would continue into 2023.
Auto Trader, meanwhile, said last week that long delivery times for new cars have continued to drive up the price of near-new vehicles, with more than one in five now more expensive than their brand-new counterparts.
How the year went
In its analysis of the used car market in 2021, the SMMT noted that used car retailers had a record second quarter, with 2.1 million transactions delivered as the UK emerged from lockdown. COVID-19.
May was the high point, with 769,782 cars finding new owners.
However, stock-outs had an impact as the year progressed, and the fourth quarter saw activity drop 3.1% year-over-year to just over 1.6 million transactions.
The growth of the Omicron variant of COVID-19 in December was partly responsible for a 10.2% decline.
Electric vehicle (EV) and plug-in hybrid (PHEV) sales hit record highs in 2021, SMMT reported, rising 119.2% and 75.6% to 40,228 and 56,861.
Hybrids also rose 50.3% to a record 137,639.
Alternative fuel vehicles (AFVs) now account for 3.1% of the market, SMMT said.
Gasoline and diesel car transactions increased by 10.7% and 9.8% last year, with a total of 7,277,291 units exchanged between hands. This represents 96.6% of all used car sales.
City cars remained the most popular segment in 2021, taking a third of the market (32.7%), closely followed by lower-middle (26.4%) and dual-purpose (13.2%).
Commenting on a turbulent year in the used car market, Auto Trader Commercial Director Ian Plummer said: “It’s easy to forget that physical forecourts were closed for more than three months last year. and just as the market was returning to some semblance of normality, the global shortage of semiconductor supply hit the supply of new cars very hard and had a rapid and profound impact on the car market. occasion. Even with increased demand, such performance is remarkable.
“I am confident that 2021 will be remembered as a defining year for the used car market as we have seen the steps it has been forced to take to embrace digital solutions have paid off. In the final weeks of the lockdown, retailers often reached around 90% of normal sales volumes.
“The hit to new car sales and chip shortages have caused prices to soar, with five years of growth squeezed into just seven months. With new car supply challenges set to last until at least the middle of the year, the effects will be felt over the next few years as younger vehicles become increasingly scarce.
Chris Evans, Head of Sales at heycar, said: “Used car prices remain at an all-time high at the moment, with little indication of this change in the short to medium term.
“At heycar, we have seen the average parts trade-in value increase by 55% over the last twelve months, while the value of leads we send to our dealer network is now 17% higher.”
National Franchised Dealers Association (NFDA) Executive Director Sue Robinson said: “Over the past few months, franchise dealers have adapted their stock profile to include older vehicles and a variety of brands in order to offer a wider choice of used cars for the benefit of their customers.
“Although electrified vehicles currently represent a small proportion of the used car market, this transition will accelerate further as more electric vehicles reach the used market. This rapidly growing segment is enabled by knowledgeable franchise dealers who help customers choose the right vehicle for their needs.
“In 2022, we expect the used car market to remain strong as franchise dealers continue to see sustained consumer demand. Inventory undersupply due to global semiconductor shortages has led to a decline in vehicle production over the past two years and we expect this to gradually ease in the future.”