INDICATA Market Watch COVID-19

INDICATA Market Watch COVID-19

Are Battery Electric Vehicles the `new normal'?

Edition 20 October 2021

Executive Summary

? September 2021 online B2C used car sales increase by 2.6% month-on-month (MoM) and down 8.9% year-on-year (YOY) due to the impact of pent-up demand from Covid-19 restrictions in 2020.

? September year-to-date used car sales up 11.3% over 2020 and 10.7% above 2019.

? Tactical registrations in September 2021 are 15% higher than the previous year.

? BEV sales up 137% year-on-year as hybrids rise 88% over the same period.

? BEVs become the fastest selling powertrain in Denmark.

? Stock turn for the internal combustion engine remains the highest with used diesel (8.1x) and petrol (7.7x)

? A 28% MoM increase in stock turn for BEVs and a 20% increase for hybrids, equivalent to a 40% and 25% YoY increase respectively, dramatically shortens days in stock.

? Status quo regarding best-selling vehicles by volume under 4-years-old in September with Volkswagen Golf remaining both the overall best-selling used car and the best-selling internal combustion engine car. Toyota C-HR remains the best-selling hybrid and Renault Zoe retains the top selling BEV slot.

? The fastest selling used cars under 4-years-old in September by Market Days Supply was the Opel/Vauxhall Zafira (22.8 days). The Zafira also grabbed the top spot for petrol and diesel with the Prius + for hybrids (25.2 days) and the Mini Electric for BEVs (44.8 days).

? October opening stock levels 7.9% lower YoY and 2.2% lower than the previous month.

? Stock levels now 13.3% lower at the start of October 2021 than October 2019.

? Our price index is based on the latest vehicles to provide a consistent pool of 3-year-old vehicles indexed against January 2021 which should result in a steady downward movement in average prices MoM due to lifecycle, but strong sales demand and supply constraints mean prices are rising and sharply in some places like the U.K. and Poland.

INDICATA Market Watch October 2021 - Edition 20

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European Markets Q3 YTD used car sales 10.7% above pre-pandemic levels

The semiconductor shortages continue to impact the entire car market. By the end of August 2021 new car sales across the European Union, Iceland, Norway, Switzerland, and the U.K. were 12.7% above the Covid-19 pandemic ravaged first eight months of 2020, but they were 24.4% below the same period in 2019 and 26.8% below August 2018 YTD. September has shown no respite with Europe's three largest markets all seeing further year-on-year falls, Germany (-25.7%), the U.K. (-34.4%) and France (-20.5%). Even a scrappage scheme introduced in Italy in August failed to stop the decline, with many customers reporting new car lead times stretching well into 2022.

This has resulted in buyers looking in the used car market for their next replacement vehicle. In our analysis of online trading of used cars from trade to retail customers (online B2C used car sales) the used car markets in the countries covered by this report are now 11.3% above the first nine months of 2020 and 10.7% above the pre-pandemic same period in 2019 as new car buyers switch to the used car market.

September online B2C used car sales generally performed well across the region (+2.6% MoM), particularly in countries like Spain and Denmark, but the unprecedented level of demand is driving used car prices up in most countries as dealers struggle to get hold of the right quality of used stock. This is clearly having a negative impact on the sales volumes of some online B2C used car sales with sales of used petrol cars in September down 10% YoY and used diesel car sales falling 18% over the same period. In contrast online used hybrid car sales were 88% up compared to September 2020 and BEVs rose 137% YoY.

The increased demand is also visible in the top sellers of online B2C used cars up to 4-years-old by volume in September. VW Golf and Renault Clio retained first and second place from August, but the speed of sale has seen the Market Days' Supply for Golf fall from 60.9 days in August to 60.2 days whilst Clio has tumbled to 45.5 days a drop of 6.8 days. That means Clio used cars were selling 13% faster in September than in the previous month.

September 2021

Austria Germany Denmark

Spain

France United Kingdom Italy

Country

Netherlands Poland

Portugal Sweden

Turkey

Make

Top selling cars up to 4-years-old by volume

Model MDS

ICE

Hybrid

Volkswagen Golf

Renault

Clio

Volkswagen Polo

60.2 Volkswagen Golf Toyota C-HR

45.5 Volkswagen Polo Toyota Yaris

43.1 Renault Clio

Audi A6

BEV Renault Zoe

BMW i3 Nissan Leaf

INDICATA Market Watch October 2021 - Edition 20

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Strong demand for alternative powertrains

BEVs increase sales as other powertrains take a holiday

With the holiday season behind us September saw clear evidence of manufacturers supporting tactical registrations with online B2C sales of very young used cars (up to 1-year-old) 14% higher in September than August. The tactical volumes in September 2021 were also 15% above the same month last year. In fact a year-on-year comparison shows this to be the only age group which saw sales increase YoY as well as seeing the strongest increase in stock turn, rising 19% MoM and 30% YoY.

Whilst a stock turn of 5.9x for BEVs and 6.4x for hybrids are below the levels of the traditional petrol and diesel vehicles, the 25% increase YoY in hybrid stock turn and a 40% increase in BEV turn rates shows demand is rising sharply for these alternative powertrains. This increased demand is fuelling the 19% increase in used BEV sales in September compared to August and a 14% increase in hybrid sales.

Earlier in this report we highlighted how even the top selling volume vehicles were now selling up to 13% faster in September compared to the previous month but the increase in speed of sale is even more noticeable when looking at the fastest selling used cars under 4-years-old, excluding niche volumes and sports cars. In September the Opel/Vauxhall Zafira was the fastest selling with a 22.8 Market Days Supply "MDS" which was 24.8% faster than the previous month's fastest selling Mokka X.

Drilling down into powertrain and the gap between MDS for the fastest selling hybrids versus the traditional ICE petrol and diesel cars has narrowed sharply. Even though BEVs are still in stock longer they are also showing an improving picture and it's worth noting how close the top three fastest selling BEVs are with just 0.1 days MDS between them.

INDICATA Market Watch October 2021 - Edition 20

Month-on-Month Changes (This Month vs. Last Year, Same month):

Fastest selling cars up to 4-years-old by Market Days Supply

Make

Model

Stock turn

MDS

ICE

Hybrid

BEV

Opel/Vauxhall Zafira

16x 22.8 Opel/Vauxhall Zafira 22.8

Toyota Prius +

25.2

Mini Electric

44.8

Toyota

Prius + 14x 25.2

MG ZS

27.3

Toyota Auris

33.9

VW Golf

44.9

VW

Jetta

12x 29.6

VW Jetta

29.6

Kia Optima

34.1 Skoda Enyaq iV 44.9

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Used car sales demand pushes stock levels 13.3% below pre-pandemic levels

The long lead times on new cars, combined with the high demand on the used car market is continuing to push down online B2C used stock levels with stock down 2.2% heading into October compared to the previous month. Three quarters of the way through the year and stock levels are now 7.9% lower than in October 2020 with all countries seeing lower levels of online B2C stock except for France.

It is worth noting that online B2C sales and stock levels is not the entire used car market. It focuses on B2C sales, i.e. those between traders and consumers, and identifies cars transferred from one trader to another to avoid double counting, it also only captures vehicles advertised for sale online and not sold without advertising, a rare transaction in this digital age. But it has become the best way to understand the commercial reality of the automotive industry without some of the complex and distracting issues surrounding used car sales between private individuals.

Concentrating on B2C sales the collapse in new car sales and the movement of demand to used cars is impacting used car stock levels and causing some supply constraint issues which in some countries like the U.K. are becoming particularly severe and causing unprecedented levels of used car inflation.

INDICATA Market Watch October 2021 - Edition 20

Even in the European Union countries, where the movement of left-hand-drive cars across borders is a little easier, total stock levels fell 2.8% MoM and 8.2% YoY meaning the opportunities to maximise returns for cross border trading comes from moving the right cars between countries rather than just a wholesale shift of vehicles which could create even more shortages of the cars wanted in the supplying market.

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