The Future of the Used Car Market in Great Britain 20012-2017, the latest report from automotive research firm Trend Tracker, confirms that after the recession the UK’s used car market was only slightly bigger at 6.77 million units in 2011 than the 6.75 million of a decade earlier.

The value of the used car market increased by 11% between 2001 and 2011, but taking out the effect of inflation it actually fell by 18%. This was caused by a real-terms (i.e. inflation adjusted) fall in average used car retail prices over the period.

Disregarding any effects of inflation, Trend Tracker forecasts that the value of the used car market in 2017 will be 3% down on 2011 due to a real-terms drop in used car prices as the parc age profile becomes older after the recent decline in new car sales – and despite an increase in used car sales volume of 7% over the period.

Model segmentation
An increase in the used car market share of superminis from 26% to 31% since 2003 reflects increased demand for smaller, more economical cars, as well as increased supply of superminis filtering through from new car sales as fleet companies and ‘user-choosers’ specify more fuel-efficient models with less exposure to benefit-in-kind tax.

The popularity of superminis has increased at the expense of the lower medium and upper medium segments, whose used market shares dropped from 30% to 27% and from 21% to 17% respectively between 2003 and 2011. The executive segment’s share has fallen from 7% to 5% over the same period.

Age segmentation
Cars aged over nine years old account for the largest proportion of used car transactions. Between 2001 and 2006, their share of market volume declined from 40% to 33%, recovering back to 39% by 2011.

Cars aged 6 to 9 years have been the fastest-growing age band in used cars, with sales rising by 31% in the period 2001 to 2007 and falling only slightly since. Sales of used cars up to three and three to six years old grew 24% and 22% respectively in the period 2001 to 2006, but have weakened noticeably since, particularly those of cars aged up to three years old. Falling new car sales have reduced the availability of the latter, and the recession has affected their appeal to used buyers.

Robert Macnab, Trend Tracker’s lead analyst for the study, noted, “Sales of new cars appear unlikely to achieve pre-recession levels for several more years. Only then will sales of used cars up to six years old start to pick up as more stock becomes available. The age segment between six and nine years old exhibited strong growth between 2001 and 2011, but will fall away as the dearth of new car sales during and after the recession has an impact on availability. Cars over nine years’ old will continue to be the largest segment and relatively stable at around 40% of total used car sales.”

ENDS

Further information

Trend Tracker’s latest used car study forecasts used car market trends, including sales volumes, used car values, and franchised and independent used car retailer numbers, for the coming five years. For further information, please call Chris Oakham on +44(0)870 421 4350 or email coakham@trendtracker.co.uk.

Aimed at a professional industry readership, The Future of the Used Car Market in Great Britain 2012 - 2017 is available from Trend Tracker priced at £1,250 plus VAT inclusive of electronic and bound copies and a Powerpoint executive summary. The table of contents and a list of tables and charts can be downloaded at www.trendtracker.co.uk.