Impact of COVID-19 on Used Car Market

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MyCar

• Impact of COVID-19 on Used Car Market

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• COVID-19 is leaving detrimental effects on
  numerous industries at the global level. However,
  some sectors like pharmacy and grocery have
  remained unaffected in fact, the sales have
  grown. A similar impact or less negative impact
  was gauged in the used car global market, some
  countries witnessed staggering growth in sales of
  the used cars while others witnessed stable sales
  or less severe loss.
• The COVID-19 pandemic has led to several changes
  in the car-buying behaviour of customers. There
  are two significant reasons for that- one of the
  critical reasons is hygiene and safety amidst
  coronavirus owning to which customers are
  preferring to buy a used car for once instead of
  travelling through public transport. The other
  reason is budget strains due to the economic
  downturn, due to which customers are reluctant to
  invest a considerable amount in cars.

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• The USED CAR DEALERSHIPS worldwide have started
  to report an increase in demand for used cars,
  especially online sales, indicating much faster
  recovery for global used car sales as compared to
  new cars.

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Lets look at the pre-owned car market country
wise
US
In March as the US went under lockdown to combat
the spread of COVID -19, the sales of new-cars
plummeted. Sales were down by 47 in April and
then 30 in May but the sales of the pre-owned
car grew faster. As per the recorded statements
by media of Geog Arison, Co-CEO of online used
car seller Shift, said We actually have an
issue now, which is that we dont have enough
inventory. This is because the car remains the
essential commodity to travel in the US where
getting to work is difficult without a personal
vehicle. Furthermore, as per the Cox automotive
report, the sales of new-vehicles dropped by 28
in May, but during the same period the sales of
the used car went up by 6. A leading online
used car platform Carvana reported a 43 increase
in sales during Quarter 2020, and now the company
plans to expand its business. The reports are
evident to understand that pandemic is leaving a
positive impact on used car sales in the US
market.
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India
The sales of used cars in India also grew amidst
COVID-19. It is because the broad audience of
India is price sensitive. The customers look for
more affordable means to transport with lower
cash outflow, and the employment uncertainties
have triggered the idea of investing in the
pre-owned car, which would cost cheaper than a
new car. If we look at the statistics, the sales
of used cars reached 40-lakh units in FY20,
which is approximately 40 higher than the new
car sales. And if the opinions of experts are to
be believed, the craze of the used car is going
to swell as people are looking for more
personalized mobility options to ensure safety
from virus contraction. According to media
reports, the online USED CAR DEALERSHIP in India,
Droom announced the traffic on its platform is up
by 175 and leads up by 250 during the
April-June period. In the same period, Maruti
Suzuki True Value reported that the used car
sales grew by 15 as compared to the previous
year.
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Europe
The impact of the pandemic has affected all the
sectors, including the USED CAR market in Europe
badly. As per the data, the European markets
revealed that the sale of used-car declined in
2020 compared to 2019. The market of new-car
suffered more severe consequences owing to
lockdown. However, Italy witnessed deep burns as
it suffered a double-digit decline in the entire
automobile industry. A similar market situation
was witnessed by the used-car market in Spain,
where the coronavirus crises caused the market to
shut for the first time after 2013. In March the
market of the pre-owned car was dropped by 35
due to the stoppage of commercial activity in the
country.
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Canada
The demand for used-car is strong amid pandemic
in Canada. According to the Canadian Black Book,
the sale of the used car grew by 0.35 within the
ending week of August. The sale of SUVs, vans saw
a rise of 0.49. According to the estimated
release by DesRosiers Automotive Consultants in
the initial days of the pandemic, the sale of new
cars and trucks fell to around 95,000 which sums
up to 48 collapse compared to the same month in
the previous year.
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China
According to Chinas Automobile Dealers
Association, the dip in used car sales was
experienced after the average percentage of used
car sales plummeted by 70 in February as
compared to the previous year data. However, the
market condition was improved in May and the
sales went up by 4. The sale of new cars was
impacted heavily as compared to a used car. As
per media reports, in the first six months of
2020, an average of 1.3 million new passengers
cars were sold every month, which is 23 lower
than the first half of the year 2019. However,
the market in China has started to recover.
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Conclusion
Despite all the troubles and uncertainty hovering
around the auto industry, it is quite likely that
the market of a used car will recover faster as
compared to the new car. Few diverse factors that
would trigger used car sales are low price, less
production of new cars and growing need among
people to have personalized vehicles for safe
travel.
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