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Motorpoint response to SMMT report on used car sales figures Q1 2022

The CEO of Motorpoint – Britain’s largest independent retailer of nearly new cars and vans – has reacted with caution to used car sales data published today by SMMT (Society of Motor Manufacturers and Traders), saying used car dealers are not enjoying the purple patch the figures seem to suggest.

SMMT’s data shows a 5.1% increase in used car sales during the first quarter of 2022, with sales of pre-owned electric models more than doubling during the same period.

But Mark Carpenter, Motorpoint’s CEO, worries the figures paint an overly optimistic picture and warns that many used car retailers still face critical business conditions as unprecedented market turbulence and unpredictability continue to take hold.

Carpenter said:

“There’s a perception out there that used car dealers are making money hand over fist at the moment and all we hear in the media is talk of high prices.

“But this price inflation has been caused by a shortfall in supply that’s seen half a million vehicles come out of the supply chain in the first three months of the year.

“Sure, prices are around 30% higher than they were a year ago but prices have plateaued and are beginning to ease off. Additionally, for the first time since COVID, we’re seeing normal levels of depreciation returning, with stock typically losing between 1.5% and 2% of its value per month.

“Additionally, the way these latest figures are presented gives a bit of a false positive. The used car market may be up 5.1% in Q1 of 2022 but it’s still down 12% on 2019 pre-pandemic levels, while the new car market is down 40%. Combined, that’s a fall of more than 529,000 cars changing hands.”

He added:

“Rather than seeing SMMT separate out new car registrations and used car sales, I think it would be better to combine the data as the two are intrinsically linked. That would be a much more useful way of looking at overall market health.

“The important thing is that people are still buying cars and it doesn’t really matter to most consumers if they buy brand new or nearly new.”

Carpenter added that he does not predict new car production normalising back to more than 2 million additional registrations in the near term. That means, the used car market is likely to remain unpredictable for the foreseeable future.

On the subject of increasing sales of used BEV (Battery Electric Vehicle) – up 120.2% in Q1 – Carpenter’s message was clear: “Don’t write off the plug-in hybrid just yet.”

He said:
“We all know electric is the future and it’s wonderful that so many motorists are making the switch from ICE vehicles. But the increases in sales are coming from a very low base and the evidence from our 17 stores nationwide is that the vast majority of customers are not yet ready to make the transition in a single step.

“Our own data shows that most customers are keen to edge closer to the adoption of new battery-powered technology by choosing and living with a PHEV initially.”

Further information about Motorpoint can be found here:

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