EXPORT BOOM DRIVING CRAZY PRICE USED CARS
DEMAND for used vehicles overseas is leading to cars targeted for export selling for up to twice their UK value or more at auction, say CAP – the independent car information experts.
But the used vehicle export phenomenon is not confined to cars, with CAP’s experts also reporting a constant flow of trucks, trailers, motorcycles and vans abroad as the export trade grows every day.
This trade, supplying almost every continent with used British vehicles, is pushing prices ever higher in the UK and creating shortages of certain models, according to CAP.
CAP researches the values of almost every kind of vehicle in the UK and its experts travel the country daily, researching prices for CAP’s benchmark valuation products. Researchers for Black Book Live – the only independent real-time used car price trending tool in Britain – report daily on the “crazy prices” achieved by cars destined for export to locations as far afield as Africa, New Zealand, Indonesia and even the Falkland Islands.
Recent examples have included a 6 year old Citroen C8 sold for £5,600, which CAP ‘books’ at £2,200 in the UK, a 5 year old Audi A4 selling for £15,400 – more than double it’s UK CAP trade value of £7,175 and a 4 year old Honda Civic diesel which went under the hammer at £20,600 – almost £12,000 more than its usual value at home.
Meanwhile CAP Green Book, the leading trade guide to used motorcycle values, regularly reports on the flow of bikes from Britain to Europe and has been highlighting the impact of this on bike dealers in the UK. Many are now struggling to find enough good used motorcycle stock to satisfy demand at home. In this market, used values are rising almost across the board thanks to the reduction in bike numbers while demand remains high. Following a lull at the end of last year, the faster weakening of sterling this year has reinvigorated demand from Europe and Green Book now also reports an increased flow of used bikes to Malaysia.
CAP Red Book’s expert editors also routinely comment on the number of used trucks and trailers they observe, commonly destined for African countries.
Nor are used vans immune to demand from abroad, with Ford Transits and Mercedes Sprinters frequently snapped up by exporters.
However, the ‘crazy prices’ are reserved for cars which are cheaper to run in countries where fuel costs are lower. This means large, petrol-engined ‘executive’ models enjoy especially high demand and some British leasing and vehicle remarketing companies are now cashing in on the phenomenon by cherry-picking suitable cars to specifically offer to exporters. In this case, New Zealand is a particularly profitable market – despite the costs of shipping and the depreciation that occurs while holding the cars on docksides, often for several months.
There are many reasons for the strength of overseas demand, depending on the type of vehicle leaving British shores. The 2011 Japanese tsunami devastated that country’s new car production capacity for months, while writing off an estimated 230,000 used cars and thousands more new cars which were destined for export. The British market has since been helping to make up for that country’s 80% reduction in exports since the 2011 tragedy.
In the truck and trailer market demand is particularly strong from sub-Saharan Africa but buyers from all over the globe are clamouring for tractor units and trailers. Here, overseas buyers have even stopped relying on British export specialists and are travelling to the UK to compete directly with the local traders on a regular basis.
There is even growing demand from eastern European countries for older and damaged cars – especially 4x4s – which are often snapped up for spares and the chance of cheap motoring for residents where the economy is often in even worse shape than Britain’s.
While the export phenomenon is causing supply shortage headaches for dealers and traders in some UK markets, in others it has been welcomed, with CAP Red Book’s truck editor Barrie Travis famously commenting “Great Britain would have sunk under the weight of scrap metal long ago, without the export trade.”
CAP’s Mike Hind said: “This is one of the biggest untold stories of recent years across the UK used vehicle markets. Our car, bike, truck and van experts are often astonished at the prices they see paid for vehicles destined for export and there is no sign that demand will dry up any time soon.
“Sometimes it is causing real issues for dealers and traders in our own markets, with real pain being felt by bike dealers in particular, at present. But elsewhere it is helping to remove a considerable number of vehicles that would otherwise struggle to attract any interest here.”
Typical target vehicles for export regularly seen commanding ‘crazy money’ by CAP Automotive’s experts:
Cars: Audi Q7, BMW Mini Cooper, Citroen C8.
Trucks: Mercedes Actros, MAN TGA, Scania R Series 380 (and Scania in general) plus all flat trailers.
Motorcycles: All Harley Davidson, BMW and most newer bikes over 600cc.
Vans: Mercedes Sprinter, Ford Transit, Toyota Hilux pick-up.
Top export destinations include : Ireland, Malta, Cyprus, New Zealand, Australia, Mauritius, Bulgaria, Poland, Romania, Sri Lanka, Indonesia, India, Pakistan, Abu Dhabi, Falkland Islands, Nigeria and much of sub-Saharan Africa.
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