Insight: Pandemic Motors: Europeans snap up old cars to avoid public transport
30/11/2020 06:00
* Sales of cheap used cars surge across Europe - IHS Markit
* Online searches for ageing vehicles spike - AutoScout24
* Buyers wary of public transport in the pandemic era
By Nick Carey and Inti Landauro
LONDON/MADRID, Nov 30 (Reuters) - Want a cheap used car to
nip around town without running the gauntlet of coronavirus on
public transport? Welcome to Pandemic Motors, we have just what
you need.
Across Europe, people are snapping up old bangers, clunkers,
Klapperkasten, tacots and catorci, desperate to avoid buses and
trains but wary of splashing out on a shiny new motor in
uncertain economic times.
"Public transportation is terrific here, but with the COVID
and all that, it's better to avoid it," said Robert Perez, who
recently moved to Spain's capital Madrid from Argentina.
On the hunt for work, Perez, a 33-year-old automotive
engineer, bought a red 2001 Seat Toledo for 2,000 euros ($2,370)
from OcasionPlus, a Spanish used car firm that has opened four
new dealerships since the lockdown due to soaring demand.
Data provided to Reuters by research firm IHS Markit and
online car market AutoScout24 showed there has been a marked
upward shift in registrations of older cars across Europe, as
well as a spike in internet searches for ageing vehicles.
The surge in interest in used cars is neither good news for
struggling mass transit networks nor the environment as dirty
old cars appear to be more in demand than new electric vehicles.
In the longer term, however, the shift away from public
transport towards "individual mobility" in the pandemic era is
expected to help carmakers, hit by a 27% slump in new vehicle
sales across Europe in the first 10 months of 2020.
At Nawaie Motoring's crammed lot in the west London suburb
of Hayes, general manager Ameen Sultani points out the older
cars selling for under 3,000 pounds ($3,985) that are in demand.
He said prices for the cars, mostly over a decade old, have
jumped by 25% as buyers who used to take trains and buses look
for affordable alternatives.
"Anything under 3,000 pounds has sold very quickly and is
very hard to replace in our inventory because everyone is
chasing the same vehicles," Sultani told Reuters. "Most of them
have bought because they wanted to avoid public transport."
CHEAP CARS
Stronger than expected demand for new cars in the United
States, Europe and especially China in recent months has helped
major automakers recover to some extent from the financial blows
pandemic lockdowns delivered in the spring.
But an analysis of car registration data in France, Germany,
Italy, Spain, Switzerland and the United Kingdom conducted for
Reuters by IHS Markit also shows there's a significant shift
toward older, used vehicles.
In France, for example, the IHS analysis showed used car
registrations rose nearly 16% in the third quarter while new
vehicle sales fell more than 5%. It also showed that in 2020 so
far, vehicles over 15 years old made up a higher proportion of
used car registrations than in 2019.
"It's fair to say in the time of corona that the amount of
vehicles older than 15 years has increased versus prior years,"
said Bjoern Huetter, an associate product director at IHS.
There was an even bigger jump in Spain, with used car
registrations up nearly 25%, according to the IHS analysis
Cristian Lopez, 34, is another buyer in Spain who went for
the cheaper second-hand option, partly thanks to having saved
some money during the country's strict lockdown.
"Enough to buy a cheap car in cash!" Lopez said.
Furloughed from his job at a catering company, he went back
to school to study tourism management. This month, he bought a
gray 2005 Renault Clio for 3,600 euros to get to classes from
his home in the Madrid suburb of Vicalvaro.
Vehicle sales portal Sumauto, part of Spanish media company
Vocento SA VOC.MC , told Reuters that sales of cars over 20
years old jumped 25% in Spain from June to October, while those
over 15 years old rose 16%.
'INDIVIDUAL MOBILITY'
In an analysis for Reuters, online car market AutoScout24,
which serves Austria, Belgium, Germany, Italy and the
Netherlands, said internet searches for older cars had spiked
since the summer.
The data showed, for instance, that in July through
September, online searches for vehicles over 20 years old jumped
80% in France, 77% in the Netherlands and 59% in Belgium.
AutoScout24 Chief Executive Edgar Berger said that while
"individual mobility" had become more important to consumers in
these markets because of the pandemic, they had also become more
cautious because of economic uncertainty.
But buyers are still shying away from second-hand electric
vehicles, according to used car dealer OcasionPlus. Of the 2,800
vehicles it currently has on sale, only six are electric.
"People are wary about batteries' performance in the long
run and are reluctant to invest in the charging cabling for a
second-hand car," marketing chief Fernando Rodriguez said.
Besides the potential setback to ambitious European targets
for cutting carbon emissions, there are other, longer-term
ramifications from keeping very old cars on the road longer.
Older vehicles with fewer safety features might cause more
accidents and lead to higher premiums, insurers said, though
that will take time to show up in statistics.
And the shift to cars is already hitting public transport.
The number of people using public transport in Spain fell
92% in April from the same month in 2019 and was still 44% lower
in September, several months after national lockdown
restrictions were eased.
In Britain, before the country's latest lockdown began at
the beginning of November, rail usage was about a third of 2019
levels, while personal car usage was close to 90%.
In September, London Mayor Sadiq Khan called for a 5.7
billion pound bailout package for the city's transport operator
as passenger numbers continued to plunge. urn:newsml:reuters.com:*:nL8N2GR8AO
Germany and France have also bailed out their state-owned
railways. urn:newsml:reuters.com:*:nL5N2EU1SO urn:newsml:reuters.com:*:nL8N2D84QH
Greenpeace political campaigner Sam Chetan-Welsh said the
shift away from public transport was a greater environmental
concern than having older cars on the road because higher sales
of new, larger sports-utility vehicles have left vehicle
emissions relatively flat anyway.
"Governments need to do everything they can to reduce
traffic on the road," Chetan-Welsh said. "That includes giving
people the confidence to get back on public transport safely."
($1 = 0.7529 pounds)
($1 = 0.8437 euros)
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GRAPHIC-Used car sales shake off pandemic effects https://tmsnrt.rs/3miStvm
Used car sales shake off pandemic effects https://tmsnrt.rs/3o179zp
GRAPHIC-Britain's pandemic car use versus rail https://tmsnrt.rs/3o16VZn
Britain's pandemic car use versus rail https://tmsnrt.rs/3m5u3oV
French online searches for old used cars jump https://tmsnrt.rs/37ab8Tp
German online older used car searches jump https://tmsnrt.rs/2HsUTIp
Dutch online searches for old cars jump https://tmsnrt.rs/3nWRYas
Belgians shop for old used cars https://tmsnrt.rs/2Jb3wb4
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(Reporting by Nick Carey in London and Inti Landauro in Madrid;
Additional reporting by Gilles Guillaume in Paris; Editing by
David Clarke)
((nick.carey@thomsonreuters.com; +44 7385 414 954;))