UK used car market sees 8.9% drop, SMMT says

The UK's used car market has seen an 8.9% decline in the first quarter, according to the latest data released by the Society for Motor Manufacturers and Traders (SMMT).

The research shows that around 1,687,755 transactions took place, with much of the fall taking place during January and February where lockdown restrictions lowered demand, seeing drops of -27.1% and -19.4% respectively.

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March saw the market show signs of recovery with a 32.2% year-on-year rise, representing 638,570 raw sales. However, this increase is likely due to the first week of March being the time when Britain entered its first lockdown.

When compared to 2019 numbers, it was still down 8.4% and Q1 as a whole is down 16.5% or 332,389 fewer transactions.

The SMMT reports that demand for battery-electric and hybrid vehicles remains strong during Q1 fuelled by increased desire for low-carbon vehicles at lower prices.

Hybrid transactions rose 16.6% to 27,694 units while plugin hybrids saw a 32.1% uplift to 10,534 units, and battery-electric vehicles surged 48.3% to 6,564 sales.

Despite this, the combined total for plugin vehicles only represents 1% of the overall market, seeing a slight increase year-on-year from the first quarter of 2020, in which they represented a 0;7% market share.

Petrol and diesel combined still represented a 97.1% share for a total of 1,638,536 units, according to the SMMT.

Luxury saloons and specialist sports were the only segments to see growth, up 10.3% and 5.4% respectively. Together these accounted for more than 7 in 10 (71.7%) of all cars finding new owners.

The top ten models included the Ford Fiesta, Ford Focus, Vauxhall Corsa and VW Golf, with the South East, North West and West Midlands representing the largest markets.

“These figures lay bare the turbulent impact of coronavirus lockdowns on the used car market," according to Mike Hawes, the SMMT's chief. " “These figures lay bare the turbulent impact of coronavirus lockdowns on the used car market."

He added: "The second quarter will see significant growth as last year’s April and May markets were severely limited by lockdown measures. It’s vital that the used market is rejuvenated to help sustain jobs and livelihoods, drive fleet renewal and support environmental progress. With car showrooms open again and the UK coming out of Covid restrictions, the sector can look forward with renewed optimism.”

It is also likely the market was affected by the global semiconductor shortage, which is forecast to affect the automotive industry for at least the rest of the year.

Read more: The semiconductor shortage may last into 2022

A number of key automakers continue to report losses attributed to the shortage.

The US and EU are currently overseeing plans to directly address the shortage and a number of East-Asian suppliers are a few months away from being able to meet demand.

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