Car stocks at the bottom: the pricing effect
Article written and data provided by Gocar Data – The analysis and opinions expressed in this article are those of the author only and not those of OPENLANE Europe.
In Gocar Data’s last article in September, they discussed the causes of the low car stocks across all European markets. Unfortunately, the situation has not improved since then. Gocar Data has analyzed the evolution over the past three months.
As they look at the car stocks from August to November, some of the key markets remain stable: France, the Netherlands and Spain see no large changes. Unfortunately, Belgium (- 4,48%), Italy (- 7,23%) and Germany (-18,97% available vehicles!) are still in a descending trend. Overall, those six markets lost 8,57% in three months.
And there is no short-term improvement. More importantly, all the signals tend to demonstrate that the situation is here to last. Some even predict that we can’t hope to reach a “normal” market situation before the end of the summer of 2023.
Yet the market is still turning, as best it can. With new behaviors. For example, 22% of the advertisements that Gocar Data compiles disappear in less than 24 hours. Buyers are more than ever eager to jump on all the new offers and close deals as quickly as possible, ahead of the competition. In fact, we’re dealing with a market with two faces: on the one hand, sought-after cars are fiercely hunted. On the other hand, less sought-after vehicles can remain in inventory for a long time. Sometimes, the reason for the lack of success of some models are very country specific (fiscal impact, for example). Finding buyers across borders, as OPENLANE Europe can offer, will turn in many cases a “problem vehicle” into a real commercial opportunity.
As expected, when the supply is low and the demand is either stable or higher, there is a direct impact on the prices. Obviously, there are differences between markets, makes, fuel types etc. but the GocarData team also witnesses a general trend.
Average published price delta per country
Gocar Data has analyzed a few models that are most often available in the auctions on OPENLANE Europe. As we mentioned earlier, there are big differences between markets and models.
Top 3 price increase per country (Jan.-Oct.)
In parallel, there is also an evolution of the time-to-sell.
Top 3 “time to sell” decrease per country (Jan.-Oct.)
Even as retail prices rise, vehicles with very low selling times offer buyers real opportunities for positive financial performance. Again, this is usually true for the right vehicles. Based on proper market observation, it is possible to select vehicles with limited inventory and high demand in the buyers’ local market.
These are certainly challenging times for the automotive industry. However, as in most complex times, finding better ways to manage inventory, pricing and model mix will allow it to outperform the market. More than ever, understanding the facts, measuring daily changes and acting quickly and smartly are the key success factors.