Selling Cars

Car market update: May 09

It has been something of a good news/bad news sort of month for the car industry.

Scrappage is due to start on the 18th May, which many hope will see an upturn in demand for new vehicles similar to that seen in Germany (though the German scheme is not without its critics). In fact, research from Parker's suggests that people are somewhat wary of Scrappage here in the UK too.

However, it's likely that the soon-to-start scheme has contributed to April sales being down by 24% compared to this time last year. The combination of a sluggish market and people holding off buying until scrappage kicks in is a double whammy.

There are also signs that the mini-boom experienced in the used car market recently is slowing down. Compared to the massive average price growth seen from January through March, the 1% increase during April is a pretty big drop-off.

However, Glass's reports that there is unlikely to be a big decrease in average used prices as a result of scrappage, as the scheme will help keep second hand stock levels low. Instead, they predict that over the course of 2009 average residual values will have increased by 16% compared to 2008.

So that's potentially good news for the used car market.

Scrappage has also helped inject a little good news into the beleaguered new vehicle industry. For example, the Nissan factory in Sunderland is employing 150 staff on a short term basis to cope with increased demand.

However, for many businesses and employees scrappage can't come soon enough – and may be too late to have enough impact. Toyota have reported their biggest ever annual loss. LDV still has an uncertain future. Even the news of vacancies at Nissan is tempered by the fact that the plant shed 1,500 jobs earlier this year.

Overall, there are still some very trying times ahead for manufacturers. However, there are at least some reasons for optimism (as the very cautious mentions of “green shoots” here and there in the media suggests!)

As always – if you're looking to sell used car quickly and easily, check out Sell Car UK!