Black Book Live editor, Lee Norbury, writes about the burgeoning export trade for cars that is seeing sale prices of up to 200% of CAP Clean.

In recent years it has become noticeable that more and more cars are being purchased through auction for export. Many examples are achieving double the expected trade value if they fit the criteria for export, but this criteria and destination is often a closely guarded secret especially on prestige and executive models. Some lease and remarketing companies have also decided to cash in on the export market and are selecting cars when de-fleeted to be sent to markets where a premium is achieved and demand is high, such as New Zealand.

This demand for right hand drive cars was created due to the unfortunate events in Japan in 2011, when an earthquake coupled with the resulting tsunami wrote off  at least 230,000 used cars, plus 1,000’s more new cars waiting on docks to be exported worldwide. This meant exports of cars from Japan fall by 80% in the following months so they could no longer meet demand from the right hand drive countries that Japan previously supplied. This supply shortage seems to have in the short term been relieved, as buyers are targeting the UK market. I have personally been in an auction hall and during one sale witnessed, “sold to New Zealand”, “sold to Malta” and “sold to Cyprus”, so UK buyers are now competing on the world stage.

There is also a growing demand for older/damaged cars and 4x4’s for spares and cheap motoring from eastern European countries, whose economies are in a far worse state than the UK and welcome the cars that are less desirable.

So, in summary, the UK used vehicle market is currently supplying; Ireland, Malta, Cyprus, New Zealand, Australia, Mauritius, Bulgaria, Poland, Romania, Sri Lanka, Indonesia, India, Pakistan, Abu Dhabi, Falkland Islands, Nigeria and several other African counties, to name but a few.

How long  the UK used vehicle market can cope with this export demand is hard to tell. But it is having an impact. Many used car values have been driven up to an all time high and competition to buy some cars in the trade is often fierce. Coupled with the constant need for desirable stock in the home market, the export trade  it is making the current used car marketplace even more challenging.

Even without the terrible events in Japan, countries such as New Zealand and Australia needed to find an additional supply of used vehicles anyway, as vehicles registered in 2013 onwards need to be Euro 5 emissions compliant and there is a shortage of these models available out of Japan.

So in the short term there seems no let up in demand for export cars and we will watch with interest how this develops because, as we know, things change very quickly within this trade and it could disappear overnight.

Notes:

CAP blogs can be freely reproduced on commercial or personal websites only if a link back to the original post is included within the re-published article. In the case of traditional print media, full credit for the source must be given as ‘CAP Automotive - www.cap.co.uk’

CAP blog entries represent the personal viewpoints of CAP staff. Business decisions should only be made on the basis of information published in CAP’s commercial products and not on the basis of information or opinion published on the CAP blog. For further information about CAP products call us on 0113 223 2111.