2024 Automotive Market Trends: Impact of Sales Decline on New and Used Cars

2024-04-13 15:31:49

The automotive market started 2024 with a sharp drop in sales, both 0Km and used cars, and the impact is beginning to be felt in prices.

The first to begin to modify the percentage increases were the automotive companies, with the official lists with more moderate increases, where in April, some models were left with the same values ​​as in March or were raised by just 1 percent.

As a consequence, the used car segment quickly began to echo this reality, and prices, which were excessively expensive, began to drop and recover the historical difference that existed between a new car and one with a few years of use.

In this way, with a price disclosureit is expected that the drop in sales will find its bottom and that, towards the second half of the year, recovery begins.

Who lowered the prices of used cars

Although the drop in the price of used vehicles manifested itself quickly, Alejandro Lamas, secretary of the Automotive Chamber of Commerce (CAC), explained that the market must be divided in two to find real values.

“The used market must be divided into two, which are the cars sold in dealerships and those of private direct. The first ones quickly adapted to what was happening with the 0km, and in the face of offers and smaller increases, they lowered their prices or remained stable. It can be said that the surcharges quickly disappeared, because it is a logical sequence where the ceiling is marked at 0Km and prices go down,” commented Lamas.

The sale of used cars in dealerships falls less because prices have become more honest.

He then described the second scenario: “The other reality has to do with individuals, who make their sales on the web, where the majority does not adapt to the change in prices and are left with the December or January values, high prices, and They don’t realize what happened with the 0km,” commented the manager.

As a result of these two realities, in the agencies, although sales fell, the decline is not so strong because there was a rapid adaptation to reality, while among individuals they do paralyze operations because buyer is not willing to validate those prices.

What will happen to used sales

In this context, Lamas admitted that it takes a long time for individuals to accept that prices must go down, but if 7 months pass and they do not sell the vehicle, they will have to do so.

On the other hand, with the quick reaction of the dealers, and accommodated to the new reality, demand is expected to recover.

“I understand that people today are more concerned regarding prepaid, regarding increases in food and fixed expenses, but there are consultations every day at dealerships,” he explained.

As for prices, the cars resumed the logic of the devaluation of a used car, which follows the following rhythm: “a 0Km, as soon as it is taken out of the dealership and patented, loses 15% of the value. Then, per year, it suffers a drop of approximately 10 to 15%. This is what happens every year, and that is what happens today,” said Lamas.

Despite that statistic, There is no exact rule because no two used are the same.

The best-selling used car is the Volkswagen Gol.

“There are always different things to evaluate. If there is a car with new tires, that will have more value; or if one made a timing belt plus the 4 new covers, it already costs $1.5 million more; the same as if it has official services and at the end, it is quoted more than one without guaranteed services,” commented the manager.

This way, Pricing the car will depend on several factors.

0Km car financing: does it threaten used cars?

Another aspect that resurfaced in the new car market has to do with financing. Several brands launched the possibility of finance the purchase of a 0Km in 12 or 18 months at a 0% rate, giving the possibility of reducing the delivery amount and beating inflation with the rest of the payment in parts.

These benefits often play once morest the used ones, who have few credit options.

However, lamas said that at this time, helps adjust prices and the used ones have to be honest to close the sale.

On the other hand, he predicts that “bank rates are falling significantly and this means that little by little the entities begin to offer loans according to the needs of the people,” Lamas mentioned.

Used car sales in numbers

In March, according to the Automotive Chamber of Commerce, 105,969 used vehicles were sold in Argentina, a collapse of almost 28% compared to the same month in 2023 (146,826 units). If we compare it with February (106,228 vehicles), the decrease was 0.24 percent.

The Toyota Hilux truck is the best-selling used truck.

In the first 3 months of the year 328,332 units were sold, one 16.13% drop compared to the same period in 2023 (391,483 units).

In this period, the province that suffered the greatest decrease was Formosa: 34.13%. The one that fell the least was Entre Ríos: 11.02%.

He best-selling used car was the Volkswagen Gol Trend, and the best-selling truck, the Toyota Hilux.

For dealers, starting this month the decline in used sales will stop, and with more realistic prices, sales will be able to resume their pace in the coming months.

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