This year will see franchised dealers and supermarkets ‘scramble’ to find used cars to fill forecourts.
That’s the view of Swansway director Peter Smyth, speaking in the Zeus Motor Sector Podcast with long time motors analyst Mike Allen.
Smyth said talk about a price crash in 2023 did not make sense. “I can allay the fears of any investor. There will definitely not be a crash.
“If you think about it. During the Covid years there were 2m cars that were not produced. Those cars that were new back in 2020 and 2021 are now two and three year old cars.
“Quick frankly they are not there. All the Motability cars, not there. What we are finding is used car prices, certainly ICE cars are very stable. I think it will be a scramble for the used car supermarket and franchised dealers to fill their forecourts.”
Smyth said a 2 million new car market would be a good market for both dealers and carmakers but he was not sure that OEMs could resist churning out more cars.
“I would like to think it would rest around 2m vehicles. That allows the OEMs to be profitable and gives dealers a chance to be fairly profitable as well.
“The OEMs have said we have learnt the lessons of over production. If I am being completely candid with you, I am not sure they will. I think there will always be somebody who is on the main board of an OEM who wants to make a name for himself or herself by getting out more units.
“If you think of the way a factory works, they have a set over head and once they produce a set amount of vehicles the profit from the additional vehicles is huge. The last few are the ones that make the profit. So they are always going to be tempted by that.”
Check out the Zeus Podcast here