Cookie Notice We use cookies and share information about your site visit to personalise content and ads, provide social media features and analyse traffic using tools such as Google Analytics. We do not sell your personal information. You can view our privacy notice, cookie policy and how to exercise your rights by clicking the following link. Privacy Notice Accept Cookies Cookie Settings English español Deutsch italiano polski русский čeština română slovenščina magyar Nederlands (Nederland) Nederlands (België) français (France) français (Belgique) lietuvių Türkçe български português hrvatski slovenčina Ελληνικά HOME FIND CARS AUCTIONS SELL CARS CONTACT LOGIN Blog Discover our blog SELLERS: Car stocks at an all-time low: the crisis after the crisis Sep 29, 2021 In most European countries, the Covid-19 situation has evolved to a more stable point over the last few months. With the evolution of vaccinations, lockdowns and halts to all economic activities seem far away. Nevertheless, the automotive sector is still widely suffering at the moment. One of the main reasons is the very low level of second-hand cars available in Europe. A “crisis after the crisis”. The situation Let’s first follow the numbers. We have compared the volume of vehicles available online (new and second-hand), using the market observation of Gocar Data. We compared the number of vehicles published in August 2019 with the same period in 2021 for the six base ADESA markets: All countries are going down, sometimes by a very high percentage. In total, the 6 markets have fallen 6,73 % in 2 years. The same trend is observed in most EU countries, and only seems to be accelerating. A decrease of the stock by 6 to 7% therefore seems a small detail. But the main vehicles affected are the "good" used vehicles; the ones with the right age (4/5 years) and the right mileage. The phenomenon we are witnessing now is broadly aimed at young cars. The causes Several factors explain this evolution: First, the stock has been diminished by the massive success of the second-hand market during the first months of the pandemic. And, more recently, the inflow of used cars has slowed down drastically. The used car market has been the choice of many consumers during the lockdown. For many consumers who needed to buy a replacement vehicle, buying a new car was considered a high risk as many feared the effects of the pandemic on the economy, globally and personally. To avoid a large investment, many decided to buy second-hand cars at a lower cost, rather than a new one. This explains the poor results in new car registrations right after the end of the first lockdown. Even in the leasing sector, one of the key drivers for the new car market, many contracts were extended beyond their normal end date. On the other hand, Covid-19 also slowed down the orders and deliveries of new cars. During the lockdown, dealership activities were almost reduced to nothing in many countries. And afterwards, most of the activity was focused on the backlog of deliveries, which were stopped during the lockdown. And finally, we’re now facing a huge chip shortage issue. As more and more vehicles include an increasing volume of electronic components, this affects all brands. Toyota recently announced that it could build only 40% of its planned new vehicles. This shortage comes mainly from the supply chain management. For years, all parts of the chain worked according to the ”Just in time” principle, where everything is produced right before delivery. No stock means no sleeping capital, no maintenance and less costs. When all activities stopped during the beginning of the pandemic, it stopped all the pieces of the chain. When the lockdown started to end, all steps had to wait for the previous activities; you can only transport after the mining, you can only refine after the transport, and so on. Since the automotive factories are at a very late stage in the chain, they have no choice but to wait. Some experts even predict that the situation will not return to normal before mid-to-late 2022. In the first phase, as the consumers were not ready to invest, the new car market issues were opportunities for second-hand sellers. But as the months passed, it’s now obvious that the industry is facing a domino effect. New car deliveries are a powerful driver to bring young second-hand cars onto the market. When this cycle slows down, the volume of available cars goes down, too. The short-term future remains uncertain as the chip shortage seems to last for a long time. The impact on the second-hand market will remain significant for some time to come. We see for some months now a low supply, followed by an impact on the prices. At the same time, this upward price evolution represents a great opportunity for you: now is the time to sell your stock through ADESA! For sure, you will get higher prices for your vehicles. In the next article, we will analyze the evolution of the market prices. Stay tuned! Your advantages: Free registration Exclusively for car traders Register Now! Testimonials At first I had my doubts. I wanted to physically see the car. But now I know I can rely on the published damage reports and car descriptions. 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