Europe’s weak new-car markets boost used-car transactions and prices

23 February 2022

Europe’s big five new-car markets are forecast to be at least 7% smaller in 2025 than in 2019. Meanwhile, used-car markets look set to exceed pre-pandemic sales levels in 2022, but by how much? Autovista Group’s chief economist Christof Engelskirchen, Autovista24 senior data journalist Neil King, and Autovista24 journalist Tom Geggus, discuss new-car and used-car markets, influences, and outlooks.  

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Show notes

Europe’s big five new-car markets to stay under pre-pandemic level in 2025

Europe’s used-car markets on track to exceed pre-pandemic level in 2022

Sales of new and used-electric vehicles to grow in 2022, but challenges abound

Monthly Market Update: Used-car pricing boom across Europe extends into 2022

New 2022 Report: Trends & Growth Opportunities

Episode synopsis

Used-car transactions in the big five European markets may return to pre-pandemic levels this year. Data for January 2022 is only available for Germany and Italy, but the year-on-year growth rates, of 5.6% and 34.3% respectively, suggest both used-car markets are on track to exceed pre-pandemic levels in 2022.

The same applies to all the major European markets, with Spain and the UK only requiring 5% growth to get ahead this year. Used-car transactions in France would need to contract by 4% to revert to the volume achieved in 2019.

Meanwhile, Autovista24 forecasts that all five new-car markets will end 2022 with at least 18% fewer registrations than in 2019. This depends on the extent of the improvement in the supply situation, but the limited availability of new cars, and mounting financial pressures for consumers, will certainly serve to support used-car demand again in 2022.

Rising residual values

The UK’s used-car dynamics have been disrupted by supply-chain issues even beyond those experienced in continental Europe. The right-hand-drive setup represents another added challenge due to the limited import/export possibilities. This has contributed to the phenomenal rise in residual values (RVs) in the country since the start of the pandemic.

France is the only major market not to show a double-digit RV rise, but still experienced an extraordinary increase of 9% since January 2020. RVs in Germany, Spain, and Italy rose by between 14% and 17% compared to pre-pandemic levels.

Powertrain divergence

The upward trend in RVs of cars with internal-combustion engines (ICE), and hybrid-electric vehicles (HEVs), is forecast to continue across most of Europe in 2022. The exception is the UK, where Glass’s expects values to lose some of the impressive gains made in 2021, albeit only falling by around 3%-4%. Nevertheless, even the outlook for the UK is healthy by historic standards as ongoing supply issues are expected to give vendors the confidence to hold out for strong reserve prices.

The outlook also points to ongoing RV rises for plug-in hybrids (PHEVs), except in France and the UK, as they make up for the lack of ICE cars and HEVs. However, transaction prices of battery-electric vehicles (BEVs), especially those with a limited range, will continue to struggle as there is not enough demand from private used-car buyers to absorb the growing supply.