Cox Automotive has reaffirmed its full-year forecast of 7.8 million used car transactions in 2019 following the release of Q2 figures from the SMMT.
Cox’s forecast for 2019 was originally published two months ago and sets out the firm’s prediction that transactions will drop 2% compared to 2018, reaching a total of 7.795 million used cars.
The firm, whose first forecast in August 2018 was within 1% of the final SMMT figure while its Q1 2019 prediction was correct to within 1,000 cars, said that used volumes are falling due to extended fleet cycles from WLTP and the drop-off in new diesel sales.
Now, the SMMT has published its own used car data, showing transactions in Q2 fell 2.8%, leading the H1 figure to decline by 1.7% on 2018 in line with the forecast published in the Cox Automotive Insight Report in June.
Philip Nothard, customer insight and strategy director – cars at Manheim parent Cox Automotive, said: “The first half of the year brought mixed fortunes for the automotive sector in general, and while we’ve seen a relatively large drop in new car registrations, the used market has remained comparatively stable.
“That said, used car retailers had their fair share of challenges in the first half of the year. We saw low stock availability push up wholesale prices in Q1, this was due to a number of factors, but lower fleet volumes following the introduction of WLTP arguably had the biggest impact.
“Wholesale volumes increased in the second quarter, but this led to a rapid fall in used values that caught some retailers unawares. This initial phase of steep price-drops has now levelled out, but it’s likely we will see a slight downward trend on values through the remainder of 2019.”
Nothard also observed the steep fall in values seen in Q2 and said it was partly a reaction to the buoyancy in the used market over the past two years, but added that the firm believes the market will now return to a “more traditional seasonal ebb and flow”.
He added: “On a positive note, we’ve seen a stabilisation of both values and volume in the first part of Q3, and we expect the wholesale market to hold steady over the rest of the year.
“While these used car transactions do reflect a slow market decline, the used market has shown its strength once again, and we expect the majority of retailers to continue their focus on used car sales throughout the rest of 2019.”