Rising used car stocks at 2021’s year-end a ‘short term’ trend

Car dealers temporary rise in stock levels at 2021’s year-end is set to be a temporary trend, according to data published by Indicata.

The vehicle stock management and marketing software provider said that used car sales grew by 15.3% year-on-year and 0.8% over 2019 last year despite the market being under increased pressure from falling stock levels.

However, as used car sales declined 19.3% month-on-month in December stocks increased by 2.5% in a trend supported by dealer groups de-fleeting ageing cars to boost their December year-end performance, Indicata said.

There are also signs that some vendors have held used cars back to sell in January, which is also boosting stock levels.

Indicata’s monthly market report added: “This will be a short-term measure as the semiconductor crisis looks set to restrict new car production for many more months to come.”

Group sales director, Jon Mitchell, said: “Stock levels have certainly improved very slightly moving into January, but we expect demand to continue to exceed supply and for prices to remain very high.

“Used diesel cars continue to sell quickly despite the continued focus on EVs and hybrids. There is a strong market in place for used diesels especially in areas not affected by the Low Emission Zone regulations.”

Last summer Indicata told used car retailers they were failing to keep pace with rapidly increasing used car values and selling one-in-four cars too cheaply.

Although 2022 is likely to be a more fluctuating market - with uncertainty expressed in the results of AM's recent Outlook 2022 Survey - maximising margins through ambitious pricing will continue to be a trend as dealers endeavour not to lose out in a market starved of supply.

Diesel-powered used cars remain the fastest-selling vehicles with a stock turn of 5.9, Indicata’s data said, with fully electric vehicles (EVs) tied for second place at 5.3 with petrol.

Ford’s Fiesta hatchback was the biggest selling car under four years of age, coming top with a Market Day’s Supply (MDS) of 67.5 days, followed by the VW Golf at 69.2 days and the Mercedes A-Class at 75.4 days.

The Porsche Taycan and the MG3 were December’s fastest-selling used cars.

Auto Trader last week revealed that the Nissan Leaf EV was its fastest-selling car throughout 2021.