- Diesel Retail pricing suggests good consumer demand
- Ex-PCP stock holding steady despite volume uplift
- Retail Prices for petrol powered cars up noticeably
- Retail Prices for AFVs continues to strengthen year on year suggesting used car demand is growing
THE latest new car registration figures released by the SMMT show the beginning of a balance to the new car market as predicted by Cazana earlier in the year. With the unique month of March 2017 now no longer distorting market comparison, the rest of the year will show the true shape of the new car market for 2018. April figures show an increase in registrations of 10.4% over the same month last year highlighting the distortion of last year’s government VED changes and the year to date market fall of 8.8% is beginning to fall closer to full-year market expectations.
Perhaps the highlight of April’s market is a 26.3% increase in private registrations taking market share for the month to 45%, although from a year to date perspective this only equates to a 0.2% increase.
It is of note that diesel registrations continue to fall at a significant rate with a further 24.9% drop in volume. There had been some hope that this figure would begin to balance as the year progressed but it seems the national press speculation and continued lack of government clarity is still having a notable impact on this fuel type. With market share at just 30.6% for the month and 32.9% for the year it would seem caution remains the key with diesel powered. It is fair to say that a greater understanding of the true cleanliness of the latest engines would be of great assistance to the retail buyer.
The positive news is around registrations of AFVs with a 49% increase in volume on the same period last year taking the year to date uplift to 16.1%. Market share is up 1.1% year on year at 5.2% of the whole market and this looks set to continue over the coming months.
The used car market data from Cazana highlights some interesting trends across a number of sectors. The chart below shows full market performance of Retail values based on retail pricing for key stock profiles year on year demonstrating continued positivity in the used car market.
Data powered by cazana.com
April data shows that there has been an increase in retail pricing for ex-fleet stock which is in line with some of the anecdotal comment coming from the used car market. Ex PCP stock shows stability against the same period last year. These are both impressive performances given that April can be a challenging month with Retail buyers often patchy in the market. It also shows that the continued increase in used car stock is not enough to dent demand as this would translate into lower used Retail pricing.
The chart below gives a snapshot of the diesel to petrol market during April from a retail pricing perspective. With new diesel car sales down significantly there has been much discussion as to when this will be reflected in the used car market. From the data collated and analysed during April, the answer is that in the 3-year-old market there has not been a significant dip as yet.
Data powered by cazana.com
In comparison with the March 2018 data, it is important to acknowledge that retail values for 3-year-old diesels have fallen at a greater rate, showing a drop of 1% for cars having covered 60k and 2% for cars at 36k. However, with a backdrop of greater volume of diesels in the used car market this is by no means unexpected. For many, this comparative stability may come as a surprise but demonstrates that the used retail buyer is still not overly concerned about diesel propulsion.
However, this must be compared to the increase in retail values for petrol cars which have seen an enhancement in retail values for a further month in comparison to the same period last year. This demonstrates improved demand for petrol cars at 3 years of age. At 5% upwards for a 60k ex fleet petrol car this is not a trend to be overlooked. Volumes of this mileage petrol car are lower than the market would like at the moment as they are not typical ex fleet models and this pattern may well continue as the year progresses. It is likely that this improved demand is part driven by value for money as retail customers always look for the best deal. There are also more finance deals in place to help buyers find what they would like.
The next chart finishes the Cazana summary of the April market by taking a view of the performance of AFVs against diesel and petrol cars. Benchmarked at 2 years old and 24k this gives a representative example of demand for what will predominantly be ex - PCP vehicles.
Data powered by cazana.com
This reveals that AFV retail pricing has improved by 8% over April 2017 which is a considerable amount and is the third consecutive month to show such a positive uplift. In comparison with last month, Retail values have increased by 1% but this clearly demonstrates that the used Retail buyer is now taking these cars very seriously indeed. Petrol propelled vehicle vales have also improved in value showing a cursory 1 % uplift although diesel powered cars match the trend in other areas of the market with the largest drop in values of 5% when compared against April 2017. This is 3% lower than the March 2018 figure.
