ExpertEye European Automotive Report Q1 2017 | Page 12

European Passenger Car Residual Value Trends
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Residual values are continuing to rise in four out of the five biggest car
markets in Europe. The downturn seen in the UK post Brexit has gone into
full reverse and UK forecasters now seem to have a more positive view of
where values will be a year or so after the UK finally exits the EU.
As the largest car market in Europe, Germany is generally a prime target
for day registrations (pre-regs). This has been a key driver in new car
sales recovery since the economic crisis and this has muted the rate of
RV recovery compared to other European markets.
The growing uncertainty over Europe due to the populist political uprising
combined with Brexit posturing on both sides is putting negative pressure
on consumer confidence which in turn is bearing down on used values.
However, the biggest impact on carbon fuel type RVs over the coming
Source: ExpertEye AG
three to five years is the reduction in car ownership in major
conurbations, the war on diesel which will see diesel RVs fall by a minimum of 5%-10% over the next 2 years and up to 20% in the next 5 years
and the rise in alternative powertrains like Electric Vehicles “EVs” and hybrids.
Tax breaks and other legislation meant diesel took just ten years to go from low to mid-teens market share to being around 50% or more in
countries like the UK, Germany, Italy, Denmark and Ireland. Between 2002 and 2007 Norway went from diesel being 17.5% of the market to
74.4% of all car sales, but it is now the third largest EV market in the world. With most governments committed to reducing NOx emissions,
and still keen to keep CO 2 levels down, new incentives and changes in legislation along with major advances in technology will see the rise in
alternative powertrains and their RVs rise exponentially. The US has already seen used diesel car values drop by 20% according to BNP Paribas
and in France Autoscout24 has seen a 9% drop in diesel values in April 2017 so similar falls in Europe over the next 3 years is entirely possible.
European Automotive Report - 2017 Quarter 1
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