The latest European used car data, published in the 2013 BCA Used Car Market Report, prepared by Professor Peter Cooke at the University of Buckingham Business School, shows that any recovery in car sales remains patchy in the major European markets.

The report highlights that new car sales remain depressed, with volumes across Europe dropping to 12.5 million last year (EU27 + EFTA), compared to the peak of 16 million reached in 2008. Apart from the UK, Denmark and Luxembourg (where new car markets were flat last year), new car sales in all other Western European countries dropped in 2012. Countries recording the biggest falls included Greece (-40.1%), Portugal (-37.9%), Belgium (-14.9%) and Ireland (-11.5%).   In the UK, new car volume growth outpaced the European market by some distance in 2012, rising 103,000 to 2.04 million units, returning the UK to second place in Europe's new car sales table.

By contrast, used car volumes increased by an average of 2.1% across Europe in 2012, although not across all markets. Both the UK and Germany – Europe’s two biggest used car markets – experienced substantial used car sales growth in 2012. At the same time, volumes declined in France by around 2%. Used car sales remained flat in Spain while volumes continued to fall in Italy.

Taking the five major markets as a benchmark, used car sales rose from 23 million in 2011, to 23.5 million in 2012.

In the UK 7.1 million used cars were sold in 2012, with Germany close behind at 6.9m, an increase of 0.4 and 0.5m units respectively. Both markets have recovered strongly from the onset of recession when used car volumes fell across Europe, with 2009 being the lowest volume point recorded in the last decade.

Used car volumes in France have remained remarkably stable over the past 10 years. Despite falling to 5.4 million as France entered recession in the second half of 2012, a decrease of 100,000 units/-2.1%, volumes kept ahead of the 2009 low point of 5.2 million.

Italy’s car market suffered a ‘double whammy’ in 2012. Both new car and used car sales tumbled – new cars by 350,000 to a lowly 1.75 million and used cars by 300,000 to 2.5 million units. Used car volumes have fallen consistently since 2008.  

Spain’s new car market remains under pressure and new car volumes fell by 108,000 to a low of 700,000 in 2012. Used car sales remained stable at 1.57 million units.

Report author Professor Peter Cooke of Buckingham University commented: ‘While the used car markets experienced some moderate ­– if patchy – growth across Europe last year, it is vital that the European new vehicle markets start to show some consistent signs of recovery as economic conditions improve. The new vehicle market is integral to the economic health of Europe, with two million people directly involved in automotive manufacturing and a further 4.6 million jobs in related parts manufacturing and services sectors.’ 

According to the report, the six largest Western European car markets covered by the report accounted for over 25 million used car sales in 2012. The UK is identified as the largest market for used cars in Western Europe, accounting for 7.1m sales in 2012. BCA’s research shows that used car volumes in the UK dropped from 7.4m to 6.3m in 2009 – a consequence of the economic downturn, but the market recovered over the following three years.

Germany’s used car sales also continued to recover, rising 500,000 units to 6.9m in 2012. For France and Spain, used car sales volumes have neither increased nor decreased significantly for several years, the report suggests. Used car sales in Italy declined by 300,000 units in 2012 to 2.5m, even though these sales had held up well during the worst of the recession.

There are some 239m cars on the roads of Europe, having grown steadily from just under 222m in 2005. Overall were around 279m motor vehicles on European roads in 2010. The BCA report shows that 70% of the cars are to be found in five countries: France, Germany, Italy, Spain and the UK. Of these, Germany has the highest concentration of cars at 517 per 1,000 inhabitants, followed by France with 502 and the UK with 470 per 1,000. On average, Europe has 477 cars per 1,000 inhabitants, compared with 461/1,000 in the USA, 456/1,000 in Japan and a comparatively low 32/1,000 in China.

Perhaps it is not much of a surprise that the average age of cars in Europe has increased through the recession years. The average currently stands at 8.3 years. Cars in the UK are the youngest on average in the EU’s major markets at 7.6 years, compared with 8.3 years in Germany and 8.2 years in France. According to EU data, the ageing effect actually pre-dates the recession. In the EU15 countries, the average age of cars rose from 6.9 years in 1995 to 7.5 years in 2004. In general, where a nation’s economy is thriving, the average age of its cars tends to be lower. Data from ACEA for 2010 showed that in the EU 35.6% of cars were over 10 years old, 32.1% were between five and 10 years old and 32.2% were five years old or less.

The BCA report suggests that the dynamism of any car market can be measured by how many vehicles are bought and sold there each year, relative to the car parc – the term used for the total number of cars on the road in that country. This measure of vehicle turnover compared with the car parc is also known as the ‘parc turn’. The report notes that countries with a well-developed wholesale infrastructure for used cars and tax-friendly treatment of used car sales generally have a higher parc turn.

The UK has the highest car parc turn with combined new and used car sales of 9.1m units in 2012. This represents a parc turn of 30.1%. As the report highlights, this also underlines the UK’s developed used car infrastructure. Although Denmark has a higher parc turn percentage figure, the market is far smaller with a total car parc in 2011 of 2.1m units. As the report points out, the UK’s parc turn stood at 34% in 2003 and settled at around 28-29% during the country’s longest economic crisis from 2008. The revival of the new and used car markets contributed to the rise in 2012.

Italy experienced a fall in its parc turn from 12.5% in 2011 to 10.7% in 2012 – resulting from a fall of almost 500,000 in new and used car sales volumes. Spain experienced a further fall in its parc turn, down 0.6% in 2012 to 10.3%, driven by a 174,000 drop in new car sales.

Data shows that Germany’s parc turn has remained relatively flat over the past 10 years at around 22%, dipping to 20% in 2007 and peaking at 24% in 2009, as a result of scrappage scheme incentives. Parc turn stood at 23.2% in 2012. The rate of turn was also steady in France, at around 25-26% until 2008. Having slipped to 24% in 2008, the rate recovered slightly but has declined again since 2010 from 25% to 23% in 2012, as the French new car market has declined.

The report shows that the parc turns in both Italy and Spain have followed a fairly similar 10-year cycle. Italy remained steady with a turn of around 15% until 2007 when it rose to 16% and has been in steady decline since, reaching 11% in 2012. For Spain there has been more variation with turn climbing from 14% in 2003 to 16% in 2005. It then fell to 11% in 2009, rose briefly again before declining further to 10% in 2012.

Almost inevitably, used car sales will exceed new car sales in any market since a car can only be sold once new, but several times as a used car. Given the strength of the car market in the UK it is not particularly surprising that the country’s used/new volume ratio is the greatest among the major European car markets. It rose a further decimal point to 3.5:1 in 2012. In France the ratio rose from 2.4:1 to 2.8:1 year on year, which the BCA Report says reflects the marked drop in new car sales, rather than an increase in used car volumes. A similar explanation is given for the rising ratios for Italy and Spain, up to 1.8:1 and 2.2:1 respectively as new car volumes fell sharply. Portugal’s 4.6:1 ratio is attributed to the large falls in the country’s new car market.

A strong new car market inevitably gives rise to a strong used car market, so the UK’s position at the top of the European used car sales/1,000 population is not unexpected. The ratio for the UK rose four points in 2012 to 113, some way ahead of the other large European markets. The ratio for Germany rose from 79 to 84 while France’s ratio dropped from 85 to 82. The state of the Spanish economy ensured that the country’s ratio remained low at 34, while the ratio for Italy declined from 47 to 41.

It is equally unsurprising that the UK is the largest used car market among the European car markets. It remains one of the few markets in Europe where new car sales have been rising recently and the same is true of the used car market. Sales dropped from 6.7m in 2008 to 6.3m in 2009, before rising steadily to 7.1m in 2012. Germany, the second largest European used car market followed a similar pattern, although the fall in used sales was less pronounced in the economic crisis, dropping from 6.1m in 2008 to 6.0m in 2009. The market has risen in stages since, to 6.9m in 2012.

For Italy, France and Spain, the state of the recent used car market reflects the difficult economic position in all three countries. In Italy, used car sales have declined from 3.0m in 2006 to 2.5m in 2012. The position in France has been more stable, with used car sales falling from 5.4m in 2008 to 5.2m in 2009, reaching 5.4m in 2012, after peaking at 5.5m in 2010 and 2011.

The Spanish used car market is much smaller than in either Italy or France, declining from 1.5m in 2008 to 1.4m in 2009 rising to 1.6m in 2012.