27 November 2024
The Spanish used-car market has seen the supply of younger vehicles increase in recent months. In a new podcast episode, Ana Azofra, Autovista Group’s regional head of valuations for Southwest Europe and Poland, explores the trend with Autovista24 editor Tom Geggus.
Spain is recognised as having one of the oldest car parcs in Europe. However, a recent trend has seen younger models supplied into the used-car market, marking an important change for the country. But what other major trends have been observed in Spain’s used-car market, and what is forecast to happen next?
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Show notes
Monthly Market Update: Car residual values descend across Europe during October
Europe’s biggest used-car markets remain strong in third quarter
No major improvement for EU new-car market in October
Blessing or curse: The impact of EU tariffs on BEVs made in China
Younger cars on offer in Spain
Spain’s used-car market has witnessed positive volume trends so far this year. Transactions increased by 15% year on year in October, Azofra highlighted. This puts the market on a path to return to pre-COVID-19 pandemic levels of transactions. For every new-car registration in Spain, there are now 2.1 used-car transactions.
However, the most significant metric in the market is not volume but the compositions of models sold. This includes the available technology and vehicle age, with used models getting younger in the country. Vehicles over 10 years of age now make up 50% of used-car sales.
‘At the end of 2023 and through 2024, the supply has been fed by younger models, especially those between one and three years of age,’ Azofra said. This rejuvenation is very important from an environmental point of view.’
Hybrids in demand
As more advanced technology makes it into Spain’s used-car market, full hybrid (HEV) powertrains are in demand. This mirrors a new-car market trend, with rapid turnover rates and resilient transaction prices for used HEVs.
Plug-in hybrids (PHEVs) have seen a more negative performance. However, this is far less pronounced than in other markets in Europe. Spain has become a strong sales destination for PHEVs. Imports increased by an estimated 30% in 2023, a rate which has only accelerated so far this year.
Azofra explained that the active-market volume index used to track supply has more than doubled compared to 12 months ago. In October’s Monthly Market Update, used-PHEV supply increased by nearly 130% year on year.
This increase in demand is partially due to incentive programmes covering both PHEVs and battery-electric vehicles (BEVs). The MOVES III package not only covers new models but young used ones up to 12 months old as well.
Forecast fortunes in Spain
By the end of 2024, BEVs are expected to see the downward price adjustment trend continue and potentially even accelerate. The reason behind this is that fleets will look to offload stock in the last quarter. Additionally, Corporate Average Fuel Economy (CAFE) regulations will enforce the registration of BEVs, which will then end up on the used-car market.
The PHEV market is expected to remain dynamic. However, the average residual value in absolute terms will keep dropping because of the advancement of this technology. More brands have now developed PHEV powertrains, with the technology appearing in smaller, more affordable vehicles.
Demand for HEVs is expected to keep growing. Azofra forecasts that the currently stable prices are likely to peak again towards the end of the year. Meanwhile, cars powered purely by internal-combustion engines will see their used-car market dip continue. Petrol will see a slightly negative pricing adjustment, while diesel’s decline will be greater.