June - Latest whitepaper update: How will COVID-19 shape used car markets?

09 June 2020

9 June 2020

The June update of Autovista Group’s whitepaper: How will COVID-19 shape used car markets? sees a total of 18 European markets provide their view on used car sales and residual value (RV) formation for 2020, 2021 and 2022.

In an unrivalled pan-European overview, editors from Austria, Belgium, the Czech Republic, Finland, France, Germany, Hungary, Italy, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the UK give their views on how the coronavirus pandemic and resulting market shutdowns will affect the automotive industry going forward.

Autovista Group reported on the grinding halt of the automotive industry and the impact of the lockdown in several stories and podcasts over the past weeks. The industry is now slowly emerging from the pandemic lockdown in many markets. After Austria, Germany entered the ramp-up phase and others are following.

These steps, even if they feel small, are crucial, as industry needs to progress to a new normal. The main reason is that economic losses, which have been building up, are tremendous. For dealers in Europe, the losses have almost doubled since our last analysis 30 days ago from €1.7 billion to €2.6 billion for their used-car operations alone during the lockdown, not taking into account possible losses in the ramp-up phase. 

Market impact

Of the 18 markets featured in the latest update, 11 consider themselves in a ‘medium-risk’ scenario when it comes to the impact of COVID-19 on the economy and used car markets, which predicts a slow, U-shaped recovery.

Portugal and Slovenia, which have been added in this update, put forward the medium-risk scenario. According to João Areal, editorial manager at Autovista Eurotax Portugal: ‘Almost 1 million employees are in furlough or have been laid off, resulting in a severe reduction in salaries. The recession will be longer, and recovery will not be V-shaped but U-shaped.’

Economic forecasts, which form an important foundation for Autovista Group’s RV forecasts, are still gloomy, with a 7% GDP decline predicted this year in the Eurozone. However, these appear to be bottoming out after five months of drops.

The countries that expect to come out of the crisis faster than others are Germany (with plans for a €130 billion economy incentive scheme that has just been announced), Poland, Czech Republic, the Netherlands and Slovakia. These countries could help to absorb some of the supply of used cars from other markets, which would lessen the impact on other European markets as a result.

With many European countries now waking up to the idea that support for their automotive markets is needed in order to help underpin the economy, incentive schemes are being announced in a number of markets. These are being reviewed and will be incorporated with subsequent updates to our scenarios.

Register for the webinar: How will COVID-19 shape used car markets?

To coincide with the next update on the Autovista Group whitepaper: How will COVID-19 shape used car markets?, Autovista Group will be hosting a webinar to discuss the various scenarios and provide business-critical information on how to fine-tune your plans and explore the counter-measures needed for the coming 12-18 months.

Attendees will find out how used-car markets reacted during the COVID-19 outbreak and subsequent ramp-up phases across Europe. Our Autovista group experts, representing some of the key markets impacted by the outbreak, will highlight the impact on residual values during the coming years, and discuss what opportunities lie ahead for market participants.

The 45-minute free webinar will take place on 7 July at 11:00 CEST. Click here to register.

More detail on the impact of the coronavirus and the outlook for market recovery is available in Autovista Group’s updated whitepaper: How will COVID-19 shape used car markets? Scenarios for residual value development in Europe for 2020, 2021 and 2022. Download your copy here.