Home » Business » Bazaars lack cars and customers. Finding a solid second hand is and will be difficult, experts agree Companies and markets

Bazaars lack cars and customers. Finding a solid second hand is and will be difficult, experts agree Companies and markets

PRAGUE The coronavirus crisis is having a devastating effect on the used car market. Even bigger than the new car market. There is a shortage of used cars, and although the market is gradually recovering, the decline compared to last year is dramatic. For customers, this means that they cannot expect attractive discounts.

The Czech used car market probably has the worst behind it, but even so, its decline is dramatic. According to data from the Carvago car market, the used car market in the Czech Republic fell by 46.53 percent in the first half of the year, and in the week from March 16 to 22, for example, the market fell by 99 percent. For the whole two months, the year-on-year decline was at the level of 90 percent or more. Since then, the market has been recovering, but the situation is still far from ideal.

Carvago data mapping the market up to and including the first week of September, which the company provided to the Lidovky.cz editorial office, show that the year-on-year decline until then was 39.15 percent. However, there has been no greater recovery so far: since the beginning of July, the market has been about 15 to 20 percent lower year-on-year compared to the comparable period in the previous year, and this trend has not changed in any way, stagnating. This suggests that a full market recovery will be over for a very long time.

“The coronary crisis continues to hit the Czech used car market. Although the year-on-year decline rate slowed slightly in the third quarter and the market began to gradually recover, we still see a decline in sales of at least 20 percent in individual weeks. The result is a year-on-year drop in turnover of more than 30 billion crowns, while used cars were sold by almost 40 percent less, “comments Jan Kranát, Operations Director of the Carvago car market, for Lidovky.cz.

The crisis continues

Other data also prove the market crisis. For example, data from the Czech Leasing and Factoring Association show that in the first half of this year, customers concluded 9120 loan agreements for used cars in the first half of the year, while last year it was 12,501 in the first half of the year. For new cars, the decline was not so dramatic (7689 compared to 8753), so the used market seems to be hit harder.

The decline in the market is also confirmed by data from Cebia, which mainly deals with the inspection of used cars. It notes in particular the decline in imports of used cars from abroad, in the first half of the year they were imported by almost 23 percent less than last year. Smaller imports, but also the decline in sales of new cars in the country means that there is a shortage of used cars on the market.

“The shortage of used cars is also caused by the cautious behavior of companies that, after the first wave of the coronary crisis, reduced the necessary investments and did not buy new cars. Corporate clients have a radical influence on the Czech market, accounting for more than 70 percent, which practically shapes it. The second aspect is the insufficient supply of cars on foreign markets. Compared to last year, the market lacks more than 20 percent of cars, which deepens the lower sales results, “describes Kranát.

According to him, the price of used cars is rising due to these factors, but the rising exchange rate of the euro against the koruna is also having an impact: imported cars are more expensive for a Czech customer. Carvago states that despite the effects of the coronavirus situation, the average price of a used car sold increased by 3.5 percent year on year to 261,878 crowns. At the end of the first week of September, this average was as high as 264,476 crowns.

However, Cebia’s statistics for the first half of the year show a decrease in prices, for the first half of the year they report a decrease from 228 thousand to 212 thousand crowns. However, these are offer prices, not the prices of vehicles actually sold. At the same time, car bazaars still commonly use the practice of attracting customers in advertising to cars that they do not actually have. The crisis could have deepened this situation in an effort to attract at least a customer.

There are fewer and fewer solid used cars

The representatives of both companies basically agree that it is and will be difficult to get a solid used car. Finding a quality used car may prove to be a more difficult task than in the previous year. “Due to the koruna’s exchange rate, cheaper and lower-quality cars will be imported into the Czech Republic, on which it will be possible to earn more. Those who plan to buy a used car in the foreseeable months should look for it as soon as possible, “said Martin Pajer, CEO of Cebia, in July.

The worse situation regarding imports of used cars from abroad means that the share of cars of Czech origin is increasing in the offer. According to Carvaga, it is 52 percent. Almost 32 percent of used cars come from Germany, Italy holds the third position with a share of just over six percent, Austria is the fourth with four percent. Other countries have only very low shares.

According to Carvaga, interest in newer used cars is rising. “Cars up to three years of age with a range of up to 30,000 kilometers currently account for more than 30 percent of sales,” says Kranát. Used cars are on average younger, the average age is 9.4 years. However, Cebia warns that the share of used cars older than ten years is growing again for imported cars, which rose by two percentage points to 53.21 percent in the first half of the year. The company specifies that while the average age of used cars of Czech origin is seven years, for example, for cars individually imported from abroad, it is eleven years.

The most popular brand of used cars in the Czech Republic is, of course, Škoda, which has a share slightly exceeding one third. Followed by Volkswagen (11.6 percent) and Ford (6.8 percent), the share of brands Hyundai, Peugeot, Audi, BMW, Mercedes and Opel is between three and four percent. As for the best-selling models, the Škoda again leads the Octavia, Fabia, Superb, Rapid, followed by the VW Passat and Golf, Ford Focus, Hyundai i30 and VW Touran. Relatively new models Karoq, Kodiaq and Scala have already made it into the twenty most popular used cars, while the youngest and smallest classic SUV of the Mladá Boleslav brand, Kamiq, has not yet made it.

Diesel cars continue to dominate used cars with a share of almost 52 percent. All-wheel drive has only 13 percent of used cars sold.

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