The American used vehicle market has never been so flamboyant. In April, prices soared 10%, the largest increase recorded since data began to be compiled … in 1953. The rise is such that it contributed to a third of inflation last month, at National level. And, according to a report by auction company Manheim, the value of used vehicles has climbed 48% in one year in the United States.
This outbreak is unusual: the second-hand market is traditionally more stable than that of new vehicles. “Historically, used car sales have had less volatile reactions to market shocks, such as the 2009 recession,” said a McKinsey report on the subject two years ago.
A fondness for the car unchallenged
Two phenomena explain the increase in recent weeks: the production of new vehicles has slackened sharply, while demand has remained strong. Most major manufacturers have indeed had to slow down or even temporarily stop their production because of the shortage of electronic components.
In addition, optimism has returned among American consumers, whose purchasing power has been maintained overall, thanks to the economic recovery and support plans. And the appetite for cars did not falter during the crisis, with Americans favoring their personal vehicles over public transport.
Race for innovation
But the market has also been driven in recent years by the arrival of new players. This is the case, for example, with Carvana, Fair or Vroom. These platforms offered new services, such as the possibility of completing an online transaction, more flexible delivery, or even greater choice for consumers, who have access to hundreds of thousands of offers and can thus refine their choices. . For the seller, prices have been pulled up, with a market that has expanded geographically.
Another phenomenon that explains this inflation: with the long period of economic expansion that the United States has known, Americans have tended to change cars more often. Second-hand vehicles that have arrived on the market therefore have fewer and fewer kilometers on the clock.
Finally, the market has moved towards SUVs and pickups, larger and more expensive models. However, the surge in recent weeks should gradually return to normal, especially if the situation improves on the electronic components front. The new vehicle market could also benefit, in the United States, from Joe Biden’s recovery plan, which provides for subsidies for the purchase of electric cars. To the detriment of the second-hand market.
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