Used cars were in high demand in July

Used cars were in high demand in July: it increased by 7–10% at dealers compared to June, and by 15% at marketplaces. In annual terms, the market is also growing. Analysts call the situation atypical, since activity usually subsides in the middle of summer. They attribute the jump in demand to the weakening of the ruble and plans to increase salvage fees in the face of low supply. Prices have not risen sharply yet, dealers say, but price increases are inevitable.

Demand for used cars continued to grow in July, while supply continued to decline, according to a survey conducted by Kommersant among dealers and marketplaces. The level of demand in July was approximately 10% higher than in June, says Vladimir Zhelobov, sales director for used cars at Avtodom and Avtospetstsentr. “In general, demand is growing along with the exchange rate, as people who bought euros / dollars at a time of low rates tend to exchange them back for rubles and spend their savings on durable goods,” the dealer explains. The offer on the used car market is about the same as in June, he specified.

Demand grew by 10%, especially for those used cars that are imported from abroad, Denis Migal, founder of the Fresh car marketplace, said.

The main prerequisite was the news about the increase in the recycling fee – “the Russians sought to purchase a used car before the price increase,” he said. Demand in July increased significantly against the backdrop of the dynamics of the exchange rate, Nikolai Baskakov, director of Avilon Used Cars, agrees.

Director of “Rolf North-West” and “Rolf Dmitrovka” Alexander Istomin notes that the growth was about 7% compared to June. Dealer stocks dropped noticeably in July, with a total drop of around 10%, he adds. So far, demand is higher than supply, says Mr. Istomin.

At Avito Auto, demand grew by 15% compared to June and by 42% compared to last year, while supply decreased by 4% and 19%, respectively. Vladislav Ivanov, head of the Avito Auto key account group, notes that the shortage of new cars affects the supply of used cars on the market.

The supply of used cars at Avto.ru in July decreased by 19% year-on-year, while user demand, on the contrary, grew by 15%, says Alexei Mukhanov, head of research and client analytics at Avto.ru.

The effect of the July 2022 low base is not so great, since demand had already begun to recover by that time. Compared to June, the supply of used cars at Avto.ru remains stable, and demand has increased by 7%: auto industry (18%)”.

According to “AUTOSTAT”, the market of passenger cars with mileage in July grew by 17.3% year-on-year, up to 505 thousand units, and by 0.6% against June. The executive director of the agency, Sergey Udalov, notes that this is not final data, but it can be said that demand remains stable, although sales in July are usually lower than in June. In general, the segment reached the mark of 0.5 million cars back in May, which was the best result since pre-crisis December 2021 (see “Kommersant” dated June 15).

Mr. Udalov notes that there is a shortage of supply on the used car market, and the influx of new cars through imports is insignificant. In addition, in the last week of the month, sellers began to actively remove ads: “Perhaps they want to understand what will happen to prices. At the same time, the exchange rate influences the market to a greater extent than the growth of salvage fees.”

Prices for used cars have already increased by about 5-7% due to the increase in the exchange rate, as well as increased demand, says Nikolai Baskakov.

“Further on, the cost will grow even more – against the backdrop of the disposal fee. It can be expected that growth will be gradual until the end of the year, it is better not to postpone the purchase,” he said.

The shortage of cars – both new and used – can negatively affect pricing in the secondary market, as well as the exchange rate, confirms Denis Migal. “If you need a car now, don’t put off buying, especially since the supply has dropped by about 3-5%,” he said.

Prices for used cars have been growing continuously since September-October last year, and in July there was another serious jump, Alexander Istomin adds. The used car market, he explains, is very sensitive to pricing in the new market, because customers often choose between new and used because of shortages, and demand is now high for everything.

Olga Nikitina