May 25, 2024

The Catholic Transcript

Complete News World

With no car on the market, used car prices have gone up by up to 20% - News

With no car on the market, used car prices have gone up by up to 20% – News

Used car deals have boomed this year, taking up space for new models Disappeared from stores due to lack of chip for production. With demand rising, there is an increase in prices that we haven’t seen since the Cruzado plan (in the 1980s). There are models with an estimate of more than 20% in one year. In the normal market, a car loses between 15% to 20% of its value after one year of use.

Although this segment is also reporting product shortages, sales through August are record records, with 7.59 million cars and light commercial vehicles. The figure is 48.8% higher than in 2020, one of the weakest years for the sector due to the pandemic, but it is also 6.6% higher than the 7.12 million used cars sold in the same period in 2019, until then the best result in history, according to Fenabrave, which Representing franchisees.

The relationship between the sale of used and new cars is also at the height of the historical series that Bradesco has implemented since July 2004, working with seasonally adjusted data. For every zero cars sold in the year, 6.5 used cars were sold. The previous high was checked in the 2015 and 2016 crisis, when it was 5.5.

“In times of crisis, it is normal for this metric to rise, but this time the wage bill has been maintained through stimuli [do governo] Sales grew partly due to demand, and partly due to a lack of new products,” says Renan Pasoli Deniz, an economist in Bradesco’s research and economics division.

New car prices also increased throughout the year, but were lower than used car prices. According to the IPCA, an indicator that measures consumer price inflation, zero-cars accumulated 9.8% in the 12 months ending in August, while used cars rose 12.5%.


Finabrave’s vice president, José Maurício Andreta Júnior, says he believes the used market should end the year with more than 11 million vehicles sold, confirming the best result in the segment’s history.

As for the new stuff, he says, it’s hard to make predictions because it will depend on the automakers’ ability to get cars to dealerships. Market forecasts indicate that the semiconductor shortage is expected to continue at least until mid-2022.

More focused on new models, dealerships also hunt used models in the gates and offer owners more attractive prices. Before the pandemic, it was most common to receive a used one in exchange for a new one and take it to retailers in the field. Now, most dealerships are looking for used cars (up to three years of use) to take advantage of their business. There are even groups that open exclusive used car stores.

Price exceeds 0 km

Selling a used car for a year at a price better than the price paid to buy it is unprecedented in a time of economic stability. “I’ve only seen this at a time of hyperinflation,” says Eduardo Gursevich, president of Webmotors, the country’s largest car buying and selling platform.

See also  Ibovespa rises again and regains 105 thousand points; The dollar reverses its mark and falls after the stock exchange opens

High-demand models, such as the Volkswagen T-Cross and Gol, saw an increase of 27% and 24% in one year, respectively, according to data from KBB Brasil, an auto price research firm (see sidebar).

For Ana Renata Navas, general manager of Cox Automotive do Brasil, owner of KBB, the high demand for used cars – and the consequent increase in prices – is partly due to the immediate delivery that the sector offers to the consumer. Many new models have waiting lists of four to six months.

Another element, she says, is that the lack of new cars also reduces the supply of used cars, as they usually compensate for zero pay. “With fewer used and used cars in storerooms, there is more pressure on prices,” he explains.

According to Anna Renata, if the semiconductor crisis continues beyond the first half of 2022, or worsens in the short and medium term, the above factors “may increase pressure on prices, to the point of cooling demand for used cars”.

On the edge. In Jurcevic’s view, price elasticity rises to a certain point. “I think it’s very close to a level where the consumer decides to wait a little bit longer because the prices are so high,” he says. As new and used models in general become more expensive, the consumer will have to assess whether it pays to change the valuable car for another that is also valuable.

Jurcevic says this is indeed the best moment in Webmotors’ 25-year history in Brazil. The company’s financial result has grown more than 30% through August compared to the same period in 2020 and it is believed that this result will continue through December. The number of unique users will also be exceeded, 12 million monthly users.

It wouldn’t get any better, says the CEO, because the number of vehicles advertised has gone down. “Before the pandemic, 410,000 cars were announced, and today we have 330,000.”

AutoShow, a traditional used car fair moved a year ago from Anhembi to Expo Center Norte, in São Paulo, resumed sales in person on Sunday morning this year, after spending nearly the past year without the event being held.

Leandro Ferrari, AutoShow’s commercial director, says the number of cars for sale has gone down, as has the public, because of the pandemic. But it confirms that in 2018 and 2019 30% of the 15 thousand 18 thousand cars presented at the exhibition were sold. This year, through August, 52% of the 3,300 models on display have been sold out. Even as online sales platforms increase, he says, the show still attracts a large number of buyers, and visits should increase when the epidemic situation is under control.

See also  What to Expect for the Stock Exchange and the Stock Exchange in Brazil This Tuesday By

“The location is secure, there are many options for cars, negotiations are done on the spot, without intermediaries, and we have all the services to support the purchase, such as preventive inspection, financing partners and the shipping agent,” Ferrari says.

Slower. Ferrari cites the 2019 Fiat Argo as an example of overpricing, especially for used cars. The model was displayed for 40.8 thousand Brazilian riyals in September of last year, and its price today is 52.4 thousand Brazilian riyals. “It starts to slow down in sales because today value doesn’t come from most consumers’ pockets.”

Kavak, a Mexican start-up that buys and sells cars online with up to 10 years of use, started operations in Brazil in July with 2,500 units in stock. Today there are 3.5 thousand. The initial investment of R$2.5 billion in the Brazilian operation should be expanded next year as operations expand.

Over the past four years, many startups have settled in the country to work in the used car market. In addition to Kavak, they reached Creditas – they bought Volanty – and InstaCarro, Carupi and Argentine Karvi.

slowdown in 2022

The forecasts of professional associations in the automotive sector and economists indicate that the used car market will grow at a more moderate pace in 2022, while the new market tends to improve its performance. The expectation is that in the second half, the shortage of semiconductors will be under control.

Bradesco expects a 2.5% increase in used car sales, to 12 million units, and 7.5% for new cars, for a total of 2.2 million units.

There is demand, but supply will continue to be affected in the first half, says Renan Pasoli Deniz, an economist in Bradesco’s Department of Economic Research and Studies.

It is estimated that the new market lost the best moment for a quick recovery and a return to the pre-pandemic level, when there were fiscal stimulus from the government for the population and interest rates were lower. “The year 2022 will see lower stimulus, higher interest rates, a period of electoral volatility, and GDP growth is expected to be lower than this year,” Denise asserts.

Eduardo Gursevich, of Webmotors, is more optimistic. A survey conducted by the company in July with 4,200 consumers showed that 75% of them intend to buy a new or used car this year, 7% have given up on buying and 18% will buy in 2022. “A car is more expensive, but there is still credit in the market.” .

Logistics manager Jose Candido, 44, gave up on buying a new JAC T50 due to the time he had to wait to receive it. After choosing the car he wanted, the seller informed him that the car imported from China would arrive in about four months.

See also  "The cut in the gas supply appears to be coordinated"

The long delivery period made Cândido choose another model, used, but with prompt delivery guaranteed by the dealer. “I use the car on a daily basis. And because the family has someone with a wheelchair, I can’t wait that long to get zero kilometers,” he says.

Only four months later, Candido decided to change his car again. Get rid of the Chevrolet Tracker he bought in April and use the value to pay for another used car, now a Chevrolet Cruze.

“The zero price has gone up a lot, and that doesn’t make up for me. With my car paid off, I handed it in and got another, which they left for them; I just had to pay for the documents,” Candido explains.

Like the manager, many consumers choose the used models because new models are not available, the waiting list is long and the prices are also going up.

At the moment, stocks of new cars in the yards of automakers and dealerships are enough for 13 days of sales, the lowest level in the history of the sector. The stock is considered balanced by the sector around 30 days.

With no inventories and low production due to difficulty in obtaining components, automakers are also readjusting prices, whether to pass on costs for parts and raw materials, due to a higher exchange rate or increased demand in times of low supply.

Automakers are also prioritizing production of models with greater financial returns, such as sport utility vehicles (SUVs) and pickup trucks, over compact hatchbacks.

New generation. The Brazilian consumer does not have a choice to buy the most popular models. Today, the cheapest cars cost 48 thousand Brazilian reals (Fiat Mobi and Renault Kwid). The new generation of cars has gained more connectivity, safety and energy efficiency and has tripled in price compared to a decade ago.

A survey conducted by KBB Brasil, a company specializing in car price research, showed that the 10 best-selling models in 2011 cost from R$ 24.7 thousand (Chevrolet Celta) to R$ 39.4 thousand (Volkswagen Voyage).

The prices of the ten best-selling cars this year start from 49,300 reais (Renault Kwid) and reach 187,200 reais (Jeep Compass). On average, the current list has 189.6% higher values ​​compared to 2011.

“Although it is more expensive, buying a new car today generates more (in a year) than savings and other applications,” says José Maurício Andreta Júnior, vice president of Fenabrave, an association that represents car dealers.