Currently a used vehicle sells for 24% above its value early 2020 in Spain. This scenario is due to several factors: Shortage of supply due to production cuts, semiconductor crisis, extension of leasing contracts, impossibility of renewing the RAC and inflation.
In absolute terms, we are talking about an average increase of €4,000-5,000; from €19,000 average offer price to €23,800. The VO market resists the crisis better and there is room for growth at the national level. The average renewal of the VN is over 9 years, well above the European average.
The low availability of units as a result of the component crisis, which has weighed on the current stock, has led to a 17% reduction in the commercial effort made by manufacturers and dealers, according to data from PromoCAR from Kantar provided to Unoautothe new vehicle portal of Sumauto, relative to the accumulated of the year (until October).
Specifically, if a year ago the promotions had an average discount of 4,576 euros, now they have been reduced up to just over 3,800 euros, although it was in August when they hit the ground, 3,500 euros. A market reality in which the profitability of operations prevails compared to volume, that is, selling less but with more margin. The profitability of distribution networks stood at 3.8% in the third quarter of the year (latest data available) compared to 3% in the same period of the previous year in the case of new vehicles, according to Snap On.
And it is that the average price of a new vehicle ready to roll, with VAT, registration tax and expenses included, has increased from 30,618 euros to 32,200 euros (+5.2%), although with the discount, if it was previously at 26,042 euros, now stands at around 28,400 euros (+9%), according to PromoCAR. In short, buying a new vehicle today is 2,400 euros more expensive than a year ago.
All this coincides with a moment of gradual recovery of the stock and drop in demand due to high inflation and to the rise in interest rates (in Spain 8 out of 10 VN purchases are financed), which will have a full impact on registrations this year, which will foreseeably fall by 3.4% to 830,000 units, according to MSI.
New vehicle discount evolution
Sumauto recalls that dealers still have room to maneuver to lower prices by 15%, sell more and remain profitable. That is, it would suffice to recover andl average discount of 2021 so that the purchase of a new vehicle is more accessible for the pocket of the Spanish without ceasing to be a good operation for the dealers.
According to Ignacio Garcia Roji, spokesman for Sumauto, “the current situation of rising prices and reduction of commercial actions by brands and dealers has contributed to further freeze demand and is leading the market to either review the discount policy, or maintain them, and release the stock via tactical registrations, rent a car or renting. A promotional policy more in line with the current momentum, with a gradual recovery of the stock, would help to reactivate private demand, which is waiting for prices to drop, without giving up brands and distributors to a profitability that would continue to remain above levels pre-pandemic”.
Valor residual
The residual value is the economic value that a vehicle retains, after a certain time and mileage. Said value is the opposite of depreciation and can be expressed in absolute terms or as a percentage.
The Dacia brand leads the residual value ranking with the best position, with 13 points above the market average. This leadership of Dacia is confirmed by EUROTAX, a leading provider of data, solutions and business intelligence services for the European automotive industryits objective being to offer independent, transparent, precise and updated information on the automotive sector.