ABM Q4 - Flipbook - Page 13
The used market’s
response to ageing
Chinese cars will
be a key test as the
market matures
buying quite locally. We saw the distance
travelled to buy extend in the Covid and
post-Covid period, just because there
was less immediate supply to buy. Now
there’s plentiful supply in the market.
“Online buying has not really sustained
itself, as we thought it might have done in
2021 and 2022. The consumer is saying ‘I
trust the dealer down the road, and I can
get it serviced down the road’.”
At the same time, dealers have
made improvements to the customer
experience, Pontin adds: “If the industry
had done it properly in 2021, 2022,
2023, we could have been looking at a
completely different shape of market. It
can be quite nice to go along, touch and
feel, and chat to the sales team. The way
in which dealers have structured their
sales environment has changed hugely in
the past few years.
“Gone are the sharp sales practices,
the tactics to make you buy the car
right now. They've rightly acknowledged
that today's consumer is doing a lot of
research online.”
New faces, familiar challenges
As the market progresses, one of the
primary questions is this: how will the
used market respond to new Chinese
cars as they age? Early signs have been
positive, with respectable value retention
and fast sales, but volumes have been
small so far.
BYD and OMODA&JAECOO have already
set up approved used operations, but
it is not yet clear if efforts will be made
by all Chinese OEMS to support these
cars in the longer-term. Fleets would
welcome efforts to protect long-term
residuals by keeping as many used cars
in the franchise network as possible, but
the manufacturers may instead focus
on new car sales. Making well-informed
stocking decisions will be crucial to take
full advantage of the Chinese opportunity.
This is arguably truer for EVs, with
performance varying widely by model,
and the cars themselves being markedly
different from ICE cars.
Smyth sees opportunity here, with the
dealer taking on an important role: “It
requires an open mind and a willingness
to embrace change. The used EV market
is still developing, so dealers need to
understand the differences and be
prepared to adapt their approach."
Supply shortages caused during
Covid-19 are now making their way well
beyond the franchise network. So far,
dealers and fleets that sell or operate
vehicles over five years old have been
insulated, but this will begin to change. At
the same time, those in the younger end
of the market will enjoy some relief.
But, as Palmer concludes, there is
reason to be somewhat optimistic: “I
don't see the demand picture changing.
Consumer confidence is pretty stable.
The used market is always really well
insulated anyway, even through financial
crises. I think the market will remain on a
really stable footing.”
Q4 2026
AUTOMOTIVE BUSINESS
13
71
