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Cox Automotive downgrades used car market forecast
Date: 27 July 2021 | Author: Sean Keywood
Data firm Cox Automotive has reduced its projection of how many used cars will be sold in the UK during 2021.
The company said it had dropped its whole-year sales forecast to 6,766,250 sales, a 0.6% reduction compared with its April forecast, as well as 8.3% below the 2000-2019 average.
Following the obvious effects of the Covid-19 lockdown on the start of this year, new car supply issues are said to have hampered the market's recovery, with the current quarter expected to end 5% down on the 2000-2019 average.
Cox insight and strategy director Philip Nothard said: "After so much time with their showroom doors closed, dealers were raring to hit the ground running, but unfortunately factors out of their control still hold them back to this day.
"Most new car models face shortages or lengthy lead times, placing added pressure on a used car market starved of supply."
With new car supply issues said to be likely to remain for the rest of the year, Cox does not expect an indication of whether the balance between supply and demand is stabilising until Q4.
Nothard explained: "By then, the strength of the economy will be clearer as the furlough scheme comes to an end and consumer and business confidence is understood.
"But that means the industry faces a period of uncertainty over the coming months, and we can't be complacent about the ongoing threat of Covid-19 and the potential for new restrictions as we head into winter."
According to research carried out by Cox with dealers, a lack of ex-fleet cars has led to 81% of dealers holding onto part-exchanges due to high retail demand.
Nothard said: "This is further impacting wholesale supply and driving competition for the stock that's available. Furthermore, 41% of dealers expect this change to continue even when supply improves, suggesting that some dealers' habits have changed permanently."
