Used-Car Demand Reflects Spain’s Depressed Economy

MADRID – Spain’s economy may be reeling but consumers still are buying cars, whether from the showroom or the used-car lot.

Sales of used cars and vans likely will reach 1.64 million units this year, up 4.1% from 2012. Juan A. Sanchez, president of GANVAM, the main Spanish association of auto dealers, vendors and repairers, predicts the ratio of used- to new-vehicle sales will match last year’s record of 2.3:1.

Such a high ratio mainly is explained by the steady contraction of new-car demand which, according to GANVAM, will close this year with only 700,000 units sold, a plunge of 56.7% from 2007. The ratio of used- to new-vehicle sales that year was 1.1:1.

“Often, we forget that used vehicles are made with new vehicles, and the problem has been worsened in these last years by the car-rental companies, which, forced by the economic recession, have extended the possession periods of their vehicles,” Sanchez says.

The car-rental companies themselves have become used-car buyers as they renew their fleets with less-expensive models.

These and other factors have created a shortage of used vehicles 3 to 8 years old in Spain.

Financing difficulties stemming from the slumping economy have steered many Spanish car buyers toward the used-vehicle market, with about 73% of customers saying they considered the used-car option from the outset. Of those buyers, 71% said they paid cash and used personal savings in 93% of cases.

Those findings are included in the latest edition of GANVAM’s “White Book of the Used Motor Vehicle,” which features an in-depth analysis of the Spanish used-car market. The survey of 800 buyers and potential buyers of used cars was conducted in cooperation with the EurotaxGLASS market-research firm.

GANVAM’s Used Cars and Vans Show runs from May 24-June 2 in Madrid. Sixty-five companies will display more than 4,000 vehicles, and organizers hope sales will exceed the 2,300 units in 2012.