The UK vehicle market is going through a troublesome period with a combination of new and used car deals down for a third progressive year in 2020. There is no expectation of an improved condition presently owing to the COVID-19 situation. Dealers will have to rethink the best way forward for handling both the new and used car markets.
After a three-month stable record, UK Vehicle Market dropped greatly throughout November 2020. November recorded a sale of 113.790 vehicles, a decline of 27.3 percent.
What’s influencing vehicle sales in the UK at this moment?
Under extraordinary conditions like the corona pandemic, in any case, numbers can become overly exaggerated. Most car sellers had shut their showrooms and although they opened again in June, the showrooms had remained shut since the lockdown begun in march.
It additionally took an additional fourteen days before the public authorities truly encouraged shoppers to start movements in public places. Despite the relaxed environment on COVID, the social distancing rules remain.
Dealers could be feeling the pressure brought by the need to provide for their families, giving a loophole to prospecting buyers to negotiate for lower prices. Furthermore, dealers may experience challenges of moving vehicles from one point to the other while observing social distancing. The effect of social distancing can further drive down sales, although the trend is beginning to rise again.
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UK motor vehicle sale trends for medium-term
The 2016 BREXIT referendum brought the UK’s vehicle industry to top levels of profitability. Within the next four years, motor vehicle sales continued to soar, placing the UK at number four of the total global sales. The UK motor industry sold slightly above 3 million units within that period.
In the post-referendum period, British economic growth began to decline and the effect was felt within the motor vehicle industry. The sale of light motor vehicles declined all through 2017-2018, even as the other European nations continued to record growth filled with uncertainty.
2018 recorded reduced sales of 2.7 million and from that figure, 2.3 million units were small passenger cars. 2019 recorded the lowest vehicle registrations from five years, with only 2.6 million units.
The conclusion of the BREXIT preparations raised panic in the UK’s economic sector. The panic greatly impacted negatively into the UK motor vehicle industry, with players reducing their rate of production and some seeking to set up base elsewhere. Two main players, Honda and JLR, have already concluded into that decision.
Demand for used cars hits an all-time high
June opened another season in the motor vehicle industry as dealers opened doors again. The post lockdown season attracted online buyers who compared vehicles from different sites. Surprisingly, the orders began flowing for used cars instead of flashy new cars.
Showrooms received increased demand for the older models, with the ratio of new to used cars standing at 1:7. Between June 2020 and November 2020, the trend is gaining pace and there are no signs this will change anytime soon.
Records are showing an increase in used car prices, which rose above 7.5% in early October compared to the same time in 2019. This increase was the highest recorded within five months since June 2020.
In most cases, car buyers obtain a used car through trade-ins with their older car but the situation is currently different. Consumers are buying the old models to add to their older models and it’s not surprising to find someone with two or three cars in their compound.
One notable thing is the rise in young drivers who have now joined the queue for buying a used car and avoiding public transport and cabs.
A forecast into the future of used vehicle value seems not to change and financiers are taking it as positive news. Those who would like to trade in their older models have the opportunity of a thriving used car market.
UK’s motor vehicle market has gone through its highs and lows since the onset of COVID. Even though the market was hard hit during the first half of 2020, the situation began gaining profitability in the second half. Used car dealers are now enjoying a boom, although they should tread carefully with the trade-ins. New car dealers are likely to become greater beneficiaries once the used car market becomes saturated.
Vendy Adams works for a digital agency that owns several popular websites as a senior writer and editor. She also has a major interest in her other freelance job as a thesis and dissertation writer, where she helps university students do their job successfully. In her free time, she listens to pop music, relaxes on the beach and cooks Mexican food for her family.