The lack of new cars increased interest in used cars and caused an unprecedented increase in prices. He now touches on inflation and worries about the future. People are spending less, overcrowding in bazaars is easing and price growth has slowed down. But another change is on the horizon. Western countries are stepping into electromobility and expect a rapid increase in sales next year. The market will generate fewer used cars for gasoline, the import of which we in the Czech Republic depend on.
Inflation, the energy crisis and the prospect of the consequences of war, including the possible increase in food prices, lead people to be more careful with money. The purchase of a newer car is one of the largest items in family budgets, so a change in mood can already be seen even in bazaars.
According to the data of the digital marketplace Carvago, the price of three-year-old cars increased by 31.3 percent year-on-year in the first quarter, while in the second it only increased by 14.1 percent. A similar slowdown can also be seen in five-year-old cars. In some segments of the German market, according to Carvago, discounting can also be seen.
On the other hand, car repair shop owners in villages and smaller towns see the same trend. People are preparing for the fact that their old cars have to last longer, and they are investing much more in repairs than in the past.
Further developments are difficult to predict, but one specific factor is looming on the horizon that will significantly affect the used car market. It is the boom in electromobility in the countries from which we have imported the most used cars so far. The condition of which was that motorists in Germany or Austria got rid of older cars at prices affordable for a Czech family.
To get an idea, let’s recall three simple numbers. Last year, less than 207,000 new cars were sold in the Czech Republic, while 185,000 used cars were imported. Three quarters of them came from Germany.
The local government generously supports electromobility and the market responds favorably. Sales of electric vehicles rose from 1.7 percent in 2019 to 13 percent in 2021, and we see similar figures in Austria. After overcoming the initial difficulties, the trend accelerates and the curve bends upwards.
It’s now common to wait a whole year for new cars, so dealers can say today what they’ll be delivering next spring and summer. And leasing companies, which “see the cards” for sister organizations abroad, talk, for example, in Austria about a third of the orders. The share of cars with an internal combustion engine will decrease proportionally, which will be reflected in the composition of exported used cars in the next three years.
The question is whether the demand for used electric cars will grow just as fast in our country. It will depend on the residual prices, which can be significantly affected by several factors.
First of all, the high prices of new cars. Discounting related to mass production of batteries has been slowing down in recent years, and the war situation stopped it. According to estimates of the International Energy Agency an upward movement can now be expected, although the same will apply to fossil fuels.
The second unknown will be the duration of generous state subsidies in Western countries. For example, the former German chancellor Merkel did the math with support ending in 2025a later proposal to expand it encountered resistance in the new government.
Therefore, it is also not clear whether electric car owners will replace their vehicles with the same three- to five-year frequency as before. Who should buy another electric car more expensively and without support, prefers to keep the older one for longer.
There is only one precisely defined factor: within four years, the supply of imported used cars with internal combustion engines will shrink by a third, which will be balanced only by new cars sold in the Czech Republic.
If all other factors come together unfavorably, it can have similar consequences as in the pandemic year 2020, when new car sales fell by 24 percent across Europe.
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