Europe’s big five used-car markets all grew in the third quarter

28 November 2023

Used-car transactions in five of Europe’s biggest markets improved in the third quarter of 2023, although two were let down by poor performances in September.

France, Spain, Italy, Germany, and the UK all saw gains between July and September, as their used-car markets benefitted from improved new-car deliveries. For France, this is the first time in 2023 that the used-car market has seen an increase, while all markets have built on a slower start to the year.

New-car deliveries slowed in 2021 and 2022 due to the supply-chain crisis, with a shortage of semiconductors at the heart of the issue. This led to a slowdown in the used-car sector, as private owners and large fleet operators held on to their vehicles for longer while waiting for new models.

Used-car supply dwindled and the market had to pause before building back up to gains. The new-car market is now in forward drive, as markets across the continent report monthly improvements. So, those looking for a used model have more choices, not only of vehicle type but also drivetrain, with larger numbers of battery-electric vehicles (BEVs) available.

However, the cost-of-living crisis has also caused an impact. While a used car is cheaper than a new vehicle, some buyers are holding on to their existing vehicles to save funds. This is leading to an ageing European car parc, struggling in some markets to build on the opportunities of better used-car supply.

Weaker results for Spain

Spain posted the weakest performance of Europe’s big five markets in the third quarter. It recorded growth of just 0.6% compared to 2022, according to figures from industry association GANVAM.

Despite a promising start to the year, with first-quarter numbers in-line with other markets, the country has seen its used-car transactions slow across the rest of the year. Its low growth in the third quarter is due to mixed results, with a modest 0.8% increase in July followed by a larger 2.9% improvement in August. This, however, was counteracted by a 1.6% decline in September.

In September, GAVNAM reported that while diesel models made up the majority of the used-car market with a 56% market share, these transactions dropped by 6.3% in the month alone. Across the year to date, diesel transactions have fluctuated, standing 1.8% ahead of the first nine months of 2022.

Sales of used petrol-powered vehicles also declined in September, by 6.5%. The powertrain’s growth so far this year has reached 3.8%, holding 36.9% of the market.

Sales of second-hand BEVs grew 40.6% in September hitting 1,012 units. However, these all-electric models have accumulated a decrease of 6.4% so far this year. Plug-in hybrids (PHEVs) continue to gain prominence, with growth of 13% in the year to date.

First positive quarter for France

The French used-car market, which has struggled in the year to date, saw its first positive quarter, with transactions up by 1.8%. The country only saw sales start to improve on 2022 in June. This trend continued into the start of the quarter, with July’s transactions up by 6.1%, and August up by 2.4%.

In total, 1,234,258 passenger cars changed hands in the country from July to September, according to AAA Data. However, in September, numbers dropped again, with a decline of 3%.

With the supply-chain crisis holding back the movement of models into the used-car market, transactions of those less than five-years old have struggled across the quarter. While they still hold 30.4% of the market in France, this segment dropped by 2% in July, then by 3% in August and by 5.3% in September.

Instead, the market has been buoyed by older-vehicle transactions, especially those between five and 10-years old, which improved each month, by 11%, 7% and 2.8% respectively, generating a market share of 21.4%.

In August, AAA Data highlighted the fuel-type split, showing that diesel still led the way in the used-car market with a 51% hold. However, this has fallen from 57% three years ago, with buyers now turning their attention to petrol (40%) and hybrid (6%) models. The latter powertrain gained four percentage points in three years. BEVs, however, made up just 2% of the market in August.

UK continues slow growth

Used-car transactions in the UK improved by 5.5% in the third quarter, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

As supply into the sector improved, a total of 1,884,160 units changed hands, with volumes across July, August and September improving on figures from 2022. This made the UK the biggest market in terms of volume among the big five European markets.

Reflecting an increase in supply, demand for BEVs doubled in the quarter, reaching a record market share of 1.8% as volumes rose by 99.9% to 34,021 units. This share is up from the 1% recorded in the same period last year. PHEVs and hybrids also improved their transaction tally, up by 34.6%, and 46.4% respectively. This meant plug-in vehicles saw an increase of 70.9% to represent 2.8% of the market.

‘The used-car market continues to grow strongly, with re-energised supply unlocking demand for pre-owned electric vehicles, the result being twice as many motorists switching to zero-emission motoring in the quarter,’ commented SMMT chief executive Mike Hawes.

‘Maintaining this momentum requires growth in the new-car market, to boost supply to the used sector and cement this success. Equally important is the urgent need for charging infrastructure rollout, so that all drivers can have confidence in being able to charge whenever and wherever they need,’ he added.

Strong stats in Italy and Germany

Italy had a strong quarter, with used-car transactions up by 8.7%, according to figures released by ANFIA. The country saw strong growth in each month, with figures up by 9.5% in July, dropping to a 7.2% increase in August before recovering to 9.1% in September.

With poor results in 2022, Italy’s market is expected to end the year on a positive note. It has continued a run of improvements since March, the only month of the year so far that has recorded a drop against 2022.

Germany was the leading market among Europe’s big five in terms of growth, but not volume. Its 1,544,724 transactions represented an increase of 9.6% in the third quarter, according to figures from the KBA.

The country saw double-digit growth in July and August, reaching 11.9% and 12.2% respectively. This was hampered slightly by a smaller 4.8% improvement in September.

Year-to-date struggles

France’s strong third quarter saw its used-car market recover from some of its first-half losses, however, transactions remained 2.5% below the same period last year. With uncertainty around low-emission zones and their implementation, buyers will be wary of purchasing older vehicles, according to AAA Data.

Yet, the transition of newer models to the used market is slower due to the supply-chain crisis. This means there is a smaller selection of compliant models, leading many buyers to delay their purchase decisions.

In Spain, the market was up by 2.4% between January and September, with 1,393,716 transactions. GANVAM projects that the market will not exceed two million vehicle transactions in 2023, which will represent a drop of 3% by the end of the year.

With an average tally of 145,565 units across the three months of the third quarter, this would represent a slowdown and a poor result for the country’s used-car market, which ended 2022 down by 5.6%.

The overall UK used-car market was up by 4.6% to 5,563,576 units in the year to date, an increase of 244,094 units on 2022. However, the SMMT noted that uptake remains 9.3% off pre-COVID-19 levels, highlighting the task ahead of the market as it looks to return to full strength.

Meanwhile, Italy’s used-car market was up by 5.8% in the first nine months of the year, with a total of 3,685,257 transactions. Germany has again seen the biggest improvement across the three quarters, with transactions up by 6.2% to a total of 4,550,244 units, according to figures released by the KBA.