Amidst the pandemic, the traditional approaches to remarketing have seen a shift, with old rules seeming increasingly obsolete.

The European used car market is experiencing significant changes, with the rise of corporate fleets and the increasing adoption of electric vehicles (EVs) creating new dynamics.

Before the pandemic, the market was dominated by private customers, accounting for over 60% of new vehicle registrations. However, the trend has shifted, with the share of corporate fleets growing to approximately 35%, while the market share of private customers has fallen below 40%. This transition has boosted the demand for remarketing, as companies replace their vehicles more frequently than private owners.

The pandemic has had a profound impact on the new car market. In 2020, new car sales across Europe slumped by 27%. The Covid-related lockdowns, supply chain disruptions, and economic uncertainty of early 2020 led to a huge drop in new car sales. Despite this, the European new car market has partially recovered, with 2023 registrations showing a 14% increase compared to 2020, suggesting a gradual easing of the pandemic's effects. However, the market is still 2.9 million units below pre-2020 figures, indicating a slow recovery.

The decline in new car sales during the pandemic reduced demand in Europe's automotive sector, which negatively impacted the recycling and material recovery industries by lowering the volume of end-of-life vehicles and automotive waste fed into the circular economy.

The used car market, however, has benefited from this situation. The scarcity of younger used cars in Germany, for instance, has been observed in data from Germany. The absence of cars not registered from 2020 has led to a scarcity of younger used cars, causing buyers to switch to older used cars, especially from 2023. This scarcity has led to a surge in prices, with used car prices surging up to 50% in the early years of the pandemic.

The rise in BEVs and PHEVs is complicating the used car market. Used electric vehicles are tougher to sell due to their unique characteristics and the lack of a well-established secondary market. This is particularly challenging for remarketers going forward, as the key challenge for them is reselling BEVs from fleets.

Germany's new car sales have decreased from 3.5 million units per year pre-Covid to around 3 million units today, and are expected to remain at this level for the next five years. This decline in new car sales will continue to impact the used car market, as the scarcity of younger used cars persists.

The introduction of new CO targets in 2025 will create great tensions on the used car market from 2030 onwards, as there will be a large volume of cars coming onto the new car market in the timeframe between 2025 and 2027. This influx of new cars will further exacerbate the scarcity of younger used cars and put downward pressure on prices.

OEMs will be obliged to balance out their current underfulfillment in BEV shares from 2027, which will further impact the used car market. The transition to electric vehicles is expected to be a long and complex process, with many challenges and opportunities for the used car market in the years to come.

As Julian Litzinger, Automotive Analyst at Dataforce, states, "The old rules no longer apply" in the current used car market in Europe. The shifts in the market, driven by the rise of corporate fleets, the increasing adoption of electric vehicles, and the impacts of the pandemic, are reshaping the landscape of the used car market in Europe.

Amidst the pandemic, the traditional approaches to remarketing have seen a shift, with old rules seeming increasingly obsolete.