Used-car sales grow in four of Europe’s big five markets in second quarter

23 August 2023

Used-car transactions in four of Europe’s biggest markets continued to grow during the second quarter of 2023, benefitting from increased supply as new-car registrations picked up the pace.

Germany, Italy, Spain, and the UK all saw year-on-year growth from April to June. However, the French market continued to struggle in the first two months of the quarter, before an improved performance in June helped to lessen the impact, although figures are still down on the same period last year.

New-car markets struggled in 2022 as various challenges impacted registrations. This likely led to private buyers keeping their cars for longer, while fleets also delayed switching their vehicles due to longer delivery times.

Used-car markets therefore suffered from slow supply, impacting transactions. The two markets worked hand in hand in this regard, with a number of used-car buyers looking for vehicles around 36 months old.

However, as this age range fits into the period when new-car sales were affected by COVID-19 lockdowns, it is equally impressive that the used-car market continues to see recoveries in many countries.

France continues to struggle

In the second quarter of 2023, France recorded 1,301,840 used-car transactions, equating to a 2.6% drop compared to 2022. The country saw its market fall by 3.2% year on year in April and then drop again by 8.1% in May. However, a slight recovery of 3.4% was recorded in the last month of the quarter.

This increase in June was thanks to sales of vehicles over five and 10 years old according to the AAA. Some 93% of the French used-car market is made up of private individuals, which is confirmed by the enduring appeal of older vehicles. This also highlights the importance of price when it comes to purchasing decisions.

The AAA believes many buyers are adopting a ‘wait and see’ attitude, as the country looks at the future of its low-emission zones (ZFEs), which restrict the most polluting cars from entering certain areas. Current plans mean any town or city with a population of more than 150,000 people will adopt a ZFE by 2025, which would bring the total number in the country to 43.

Yet a proposal from the French Senate has called the ZFE plan into question and proposes a more flexible timeline with an alternative final implementation target of 2030. It also suggests an increase in government subsidies to help with the purchase of ‘clean vehicles’. 

Growth for Italy and Germany

With an 8.8% increase in transactions, Italy’s used-car market posted the largest second-quarter growth out of the five countries under review. Data from ANFIA reveals the country recovered after a troubled first quarter, with a 3.2% increase in April, then respective year-on-year gains of 10.7% and 12.1% in May and June.

As 2022 was a particularly difficult year with only two months of growth (March and October), it is likely the Italian used-car market will end up seeing increased transactions by the end of 2023. This is especially likely as the new-car market continues its own recovery.

Germany posted a 6.8% increase in used-car transactions in the second quarter, helped by a bumper month in June with a 13.1% rise. More modest improvements were recorded in April (3.3%) and May (3.8%), according to figures from the country’s automotive authority, the KBA.

Mixed fortunes for UK and Spain

The Society of Motor Manufacturers and Traders (SMMT) reported a 4.1% increase in used-car sales in the second quarter of 2023. The organisation explained that this reflects ‘sustained growth in the new-car market and improving availability.’

Used battery-electric vehicle (BEVs) sales continued to soar, growing by 81.8% to 30,645 units between April and June. These all-electric models represented 1.7% of the market, a record for the country.

Double-digit growth also continued for plug-in hybrids (PHEVs) and hybrids (HEVs), up 11.4% and 29.5% respectively. The rising proportion of electrified vehicles meant the market share for internal-combustion engine cars fell to 94.3% from 95.7% last year. However, volumes of petrol and diesel cars did see growth of 2.5% and 2.8% respectively. 

In Spain, used-car transactions grew by just 1.4% in the second quarter, according to industry association GAVNAM.

‘The progressive regularisation of the new-car market is also allowing the second-hand vehicle market to look more like that which we saw before the COVID-19 pandemic: a leading role for vehicles up to five years old, a segment which is growing at double digit rates, and, on the other hand, a worrying increase of models more than ten years old,’ said Raúl Morales, director of communication at Spanish dealers’ association, Falconauto.

However, sales of BEVs dropped 12.3% in the first half of the year, according to data from GAVNAM’s ElectrocarVO report. This comes as supplies of these vehicles in the used-car market increased by 64% compared to the first six months of 2022.

Just 5,431 BEVs changed hands in this period, with most of these sales occurring in the first quarter. The report suggests that price differences are a big factor in buyer decisions, with a used BEV costing almost twice as much as a used diesel vehicle.

Market stabilisation in first half

In the first half of 2023, France was the only one of the big-five markets to record a drop in transactions. The country saw used-car sales fall by 4.4%, with 2,611,360 vehicles changing hands.

Germany, Italy and the UK all posted similar results in the first half, with respective growth of 4.5%, 4.5% and 4.1%, as each country’s new-car market improvements meant greater supply into dealerships.

Finally, Spain saw an improvement of 2.8% in the first six months of 2023, meaning that for every new vehicle sold in the country, 1.9 used vehicles were sold. Using data from consultancy firm MSI, GAVNAM believes that used-vehicle sales will improve by 4.1% by the end of 2023, with transactions from fleets driving this growth.