21 February 2020
Robert Madas, valuations and insights manager for Austria and Switzerland at Autovista Group’s Eurotax, looks at the trends in the Swiss new and used-car markets.
The new-car market in Switzerland and the Principality of Liechtenstein closed 2019 up 3.9% on 2018 figures, with 11,750 more registrations. Growth was not necessarily expected given the challenging conditions but was secured thanks to a healthy final spurt in December.
With 311,466 new-car registrations, last year was very positive. There were significant catch-up effects following a weak 2018, which was mainly disrupted by the introduction of WLTP and ongoing diesel concerns. December was particularly strong, albeit supported by a large number of tactical registrations as models with high fuel consumption and emissions were registered before the CO2 fines come into effect, based on the emissions of new cars registered in 2020.
2020 new-car outlook
In 2020, we expect a slight decrease in new-car registrations, to between 295,000 and 305,000 units. It can be assumed that the large number of tactical registrations in December 2019 will have a direct impact on new-car demand as these vehicles will come onto the market as young used-cars.
Manufacturers will certainly push electric and hybrid vehicles this year, but the actual demand is difficult to assess. In 2019, registrations of alternative-fuel vehicles (AFVs) increased significantly by 88.6%, to 40,714 units (up 19,123 units on 2018). In volume terms, they were the real growth drivers of the passenger-car market. We expect a further increase in demand for AFVs, but the reservations many buyers have about them will not simply disappear in 2020. Long delivery times for some newly-introduced models will not help matters either.
Changes of ownership in 2019 and 2020
With 848,200 changes of ownership, equating to a year-on-year decline of 0.9%, 2019 was a comparatively weak year. This continues the decline recorded since 2017. Trends in the new-car market are also becoming apparent in the used-car sector, albeit with a certain lag, and we expect the volume of used-car transactions to increase slightly in 2020. An above-average increase in changes of ownership of AFVs can be expected too - as with new-car registrations, the growth trend will continue.
We are expecting around 850,000 to 860,000 used-car transactions this year. On the one hand, this is due to the increased number of new-car registrations in 2019 and in particular, the increased number of tactical registrations. At 30,954, this was 31.6% higher than in the previous year. This will have a positive effect on the supply of young used cars. In addition, after the strong new-car years of 2015 to 2017, more three to five-year-old cars will come onto the market, which should make the used-car sector even more dynamic.
The analysis of the stock days in the used-car market also suggests an increasing dynamic. In 2019, especially in the high-volume medium segment, we saw a reduction in the average selling time from 69 days to 66 days.
In our view, the assumed reluctance of consumers to buy a new car in 2020 will have an uncertain impact on the used-car market: This will have a positive effect on used-car demand in those cases where a vehicle replacement is necessary or desired, but it can also mean that some consumers postpone buying a new car and hold on to their vehicle in 2020.
The original article can be found in German on the Eurotax Switzerland website here.